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The Herbalife Genie-> 7/2/01 - [GENI] Bloomberg: Icahn Gets $74 Mln Package From GenesisIntermedia (Update2) Icahn Gets $74 Mln Package From GenesisIntermedia (Update2) By David Evans Van Nuys, California, July 3 (Bloomberg) -- Financier Carl Icahn will be paid $275,000 by money-losing telemarketing company GenesisIntermedia Inc. to help it raise cash for acquisitions, the first piece of a compensation package worth more than $74 million at current prices, regulatory filings say. GenesisIntermedia, whose biggest outside shareholder is financier and arms merchant Adnan Khashoggi, last week said it received a ``conditional commitment'' from Icahn for a $100 million line of credit. His obligation remains ``conditional,'' said yesterday's 8-K filing with the Securities and Exchange Commission. Icahn must approve terms of any loan. ``I only really make money here if the company makes it,'' said Icahn in a telephone interview. ``I've got to spend a fair amount of time to make these acquisitions happen.'' He said there could be a number of compatible business links between Genesis and Lowestfare.com, his Internet travel services company. Genesis will pay Icahn $275,000 immediately and an additional $900,000 after the company receives a loan, the filing said. Under a two-year consulting contract, Icahn's Riverdale LLC also received the right to purchase 5.5 million shares of Genesis at a 73 percent discount from yesterday's closing price of $18.60. The options, with an average strike price of $5.09 per share, represent a 20 percent stake in Genesis, the company said. If exercised now, the options would give Icahn a paper profit of $74 million -- 5.5 million shares times the $13.51 difference between the strike price and the market value of the shares. Genesis shares fell 10 cents to $18.50. Icahn, Genesis Chief Executive Ramy El-Batrawi and Khashoggi agreed not to sell their Genesis shares for one year, subject to certain conditions. ``Nobody's going to buy my stock a year from now if the company hasn't made it,'' said Icahn. A spokesman for GenesisIntermedia, Robert Bleckman, didn't return calls. Details GenesisIntermedia gave Icahn 4 million options with an average strike price of $6 per share. El-Batrawi gave Icahn another 1.5 million options to buy Genesis at $2.67 a share. Riverdale may choose to convert the 4 million warrants issued directly from Genesis into 2.7 million shares, worth about $50 million, without putting up any cash, according to the filing yesterday. Any loan to Genesis would give Icahn ``sole discretion'' to determine the adequacy of collateral for any loan, according to the filing. ``We're looking at certain possible acquisitions'' to finance, said Icahn. The Van Nuys, California-based company lost $33.5 million in 2000, on sales of $42.3 million. Genesis lost $7.9 million in the first quarter of 2001, on sales of $12.5 million. Genesis, which has a market value of about $380 million, had a negative net worth of $15 million as of March 31. Genesis had already borrowed $38 million from Khashoggi under an existing line of credit, as of May 17, according to the company's proxy statement. Buy Recommendations Most of Genesis' revenue comes from telemarketing and infomercials for products, including ``Ab Twister'' exercise machines and tapes with advice on love and personal finance. It also operates Internet kiosks in more than 30 shopping malls. On May 11, Bloomberg reported that Genesis gave shares now worth more than $3 million, to money manager Courtney Smith, who helped send the stock soaring after he recommended it 18 times on CNN, CNBC and Bloomberg Television. Genesis disclosed the payment of 216,000 shares more than a year after Genesis purchased and closed a Web site developed by Smith. The shares were routed to Smith, through a vitamin exporting company owned by a friend of Smith. The disclosure of the payment in an annual report with the SEC makes no mention of Smith, a TV stock picker who became one of Genesis' largest outside stockholders when he received the shares in exchange for a Web site he owned. His stake is now worth about $3.9 million. Genesis shares soared 24 percent on May 9 following a buy recommendation from Rafi Khan, an ex-Los Angeles stockbroker banned from the securities industry for stock manipulation and now on probation after a felony conviction for income tax evasion. http://quote.bloomberg.com/fgcgi.cgi?T=marketsquote99_news.ht&s=AO0H_BBQCSWNhaG4g

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Carl C. Icahn's Riverdale LLC and GenesisIntermedia Inc. Enter Into Agreement for $100 Million Credit Facility and Investment Banking Services.Business Editors

LOS ANGELES--(BUSINESS WIRE)--June 29, 2001

GenesisIntermedia Inc. (Nasdaq:GENI) today announced that it has received a conditional commitment from Riverdale LLC (Logical Link Control) See "LANs" under data link protocol.
LLC - Logical Link Control , a company owned by Carl C. Icahn, the New York-based financier, to provide for a $100 million credit facility.

The purpose of the credit facility is to finance acquisitions as part of GenesisIntermedia's business plan of aggressive growth through acquisition.

The agreement also calls for Riverdale LLC, or its affiliates, to provide investment-banking services related to the acquisition plan, including:

-- Advising on GenesisIntermedia's acquisition strategy    -- Sourcing acquisition candidates    -- Structuring acquisitions    -- Proposing alternative financing sources    -- Undertaking due diligence of proposed acquisitions  

Consummation of the financing transactions is subject to the negotiation and execution of definitive credit and security documents. Consummation of any financings under the facility is also subject to a number of conditions, including credit review of potential acquisition targets, lender due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. of the acquisitions and other conditions to be set forth in the definitive credit agreement.

"We're excited by the opportunities that this credit facility and investment banking relationship afford us. We expect to be able to act quickly as we continue to identify acquisition opportunities that will grow revenues and enhance value," stated Ramy El-Batrawi, chairman and chief executive officer of GenesisIntermedia.

"We expect that this arrangement should facilitate our ability to complete acquisitions of businesses that expand and enhance our operations while benefiting from the acumen and expertise of the Icahn group."

GenesisIntermedia continually reviews acquisition opportunities as part of its growth plan and is actively pursuing several acquisition targets at this time. GenesisIntermedia and Riverdale LLC are now studying these transactions under consideration.

The company believes that completion of targeted acquisitions will bolster the company's cash position and revenues. No assurance can be given that any acquisitions will be consummated. The company believes that the $100 million credit facility will enable GenesisIntermedia to more easily and rapidly complete transactions that are accretive to the company's earnings.

As described in the Form 8-K Form 8-K

The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock.

Form 8-K

See 8-K. filed today by the company, in conjunction with the $100 million credit facility and investment banking services, the company issued warrants to acquire 4 million common shares and El-Batrawi has granted options to acquire a total of 1.5 million of his common shares to the Icahn entities.

If all of the warrants and options were to be exercised, Riverdale LLC would hold an approximate 20 percent stake in the company. All of the shares underlying the warrants and options will be subject to a one-year lock-up described in the commitment.

Concurrent with the company's grant of the options, El-Batrawi and Ultimate Holdings Ltd., a principal stockholder in the company, agreed to grant to the company similar options to purchase shares held by them in the event Riverdale LLC exercises the warrants issued by the company.

The exercise prices of these options equal the price to Riverdale LLC, so dilution for existing stockholders will be minimized as a result of the transaction.

About GenesisIntermedia Inc.

GenesisIntermedia Inc. is involved in several business lines revolving around the marketing and advertising of consumer goods consumer goods

Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and and services.

The company's main business lines are a) direct sales and marketing of consumer products, b) interactive advertising and data mining in retail malls under the Centerlinq brand, and c) car rentals for the replacement market under the Car Rental Direct brand.

The company strives to create a portfolio of complementary business activities that build on the company's traditional strengths in marketing consumer goods and services. GenesisIntermedia markets through several channels including television, print, radio, telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. and retail outlets retail outlet n ? punto de venta

retail outlet n ? point m de vente

retail outlet retail n ? .

The company believes that significant opportunities exist to build new platforms around e-commerce activities. As such, the company has recently dedicated significant financial and human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. to develop and commercialize its Centerlinq product, three-time recipient of Microsoft Corp.'s (Nasdaq: MSFT MSFT Microsoft (stock symbol)
MSFT Movimento Sociale Fiamma Tricolore (Italy)
MSFT Multi-Stage Fitness Test
MSFT Master of Science in Family Therapy
MSFT Macalester Students for Fair Trade ) Retail Application Developer " RAD (1) (Rapid Application Development) Developing systems incrementally and delivering working pieces every three to four months, rather than waiting until the entire project is programmed before implementing it. " award for "Best Retail Headquarters Application" in the category of Core Retail Marketing.

The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a " safe harbor Safe Harbor

1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated.

2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for forward-looking statements forward-looking statement

A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Certain information included in this news release (as well as information included in oral statements or other written statements made or to be made by GenesisIntermedia Inc.) contains statements and other matters that are forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, actual results may differ materially from those expressed in any forward-looking statements made by GenesisIntermedia Inc. For a description of additional risks and uncertainties, refer to the GenesisIntermedia Inc. filings with the Securities and Exchange Commission, including GenesisIntermedia Inc.'s Form 10-K Form 10-K

A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.
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Form 10-K

See 10-K. .

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