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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: Sir Auric Goldfinger who wrote (7864)	6/2/2001 1:26:55 PM
From: RockyBalboa	Respond to of 19428

is a liability, first hand, but, like TALK they could issue stock ona variable basis, so, not really BK but spiralling once the gravity sets in.

To: Sir Auric Goldfinger who wrote (7864)	6/2/2001 1:46:29 PM
From: RockyBalboa	Respond to of 19428

AOL is insured, it is a liability: In April 2000, we entered into a five-year marketing and distribution agreement with America Online, Inc., or AOL. In exchange for entering into this agreement, we paid AOL $20.0 million in cash and issued to AOL approximately 3.9 million shares of our common stock. In the agreement, we have guaranteed that the 30-day average closing price, related to 60%, 20% and 20% of the shares we issued, will be $68.50 per share on the third, fourth and fifth anniversaries of the agreement, respectively. This guarantee only applies to shares that continue to be held by AOL at the end of each respective year. At March 31, 2001, we recorded $193.6 million in other non- current liabilities, which represents the fair market value of the 3.9 million shares of our stock issued upon entering the agreement and the guarantee of the stock. The difference between the total guaranteed amount and the liability recorded is being recorded as other expense over the term of the agreement. In connection with the guarantee, we have established a $90.0 million letter of credit and are required to pledge an amount equal to the unused portion of the letter of credit. As of March 31, 2001, we have pledged $90.0 million in cash equivalents towards this letter of credit which is classified as restricted cash on the balance sheet. AOL can draw against this letter of credit in the event that our 30-day average closing price is less than $68.50 at the end of each respective guarantee date. The letter of credit will be reduced to $50.0 million at the end of the third anniversary of the agreement. The term of the agreement may be reduced if AOL draws more than $40.0 million from the letter of credit at the end of the third year anniversary of the agreement. -------> Result: The cash, the credit line, the pledge of $90M cash for the credit line, and the AOLs right to draw down makes me thinking. It would have been easier for HOMS simply to fork over $110M in cash (+ a staggered $68.50 incentive stock warrant...)