0405010 Informal Interpretation

From:(redacted)
Sent:Wednesday, May 26, 2004 11:52 AM
To:Verne, B. Michael
Subject: HSR question

Mike:

This is to confirm ourconversation in which you stated that the following transaction does notrequire an HSRfiling.

Description of the acquisition:

Corporation A, a non-manufacturingcompany, is the parent of Apple LLC. Apple LLC holds a 49% interest in ABC LLC.Corporation B or one of its controlled entities holds the remaining 51% of themember interests in ABC LLC. Corporation B intend to sell certain of its assetsto a third party and these assets include its 51% interest in ABC LLC. AppleLLC has a right of first refusal (ROFR) to acquire from Corporation B, its 51%member interest in ABC LLC.

For various reasons, not in thecontrol of Corporation A or Apple LLC, Apple LLC cannot assign its rights underthe ROFR to a third party. Although Corporation A and Apple LLC have decided toexercise the ROFR, they do not intend to own or hold the 51 % interest in ABCLLC that is currently held by Corporation B . For this reason, the acquisitionwill be accomplished through a newly formed LLC, Apple 2 LLC. Apple LLC willown 99% of Apple 2 LLC's member interests and C, an investment fund, will ownthe other 1 %. C will provide all of the funds used to make the acquisitionthrough a bridge loan to Apple LLC for 99% of the purchase price and 1% throughits equity investment in Apple 2 LLC. At closing, Apple 2 LLC will acquire fromCorproation B its 51 % member interest in ABC LLC for approximately $30 millionand the bridge loan that C made to Apple LLC will be forgiven in return forApple LLC's 99% interest in Apple 2 LLC. The end result will be that C willhold 100% of the member inerests of Apple 2 LLC which holds 51 % of the memberinterests in ABC LLC.

Please confirm that thisaccurately reflects your advice.