0505014 Informal Interpretation

From: (redacted)

Sent: Monday, May 02, 2005 2:07 PM
To: Verne, B. Michael
Subject: Permitted Conduct?

Mike: Please confirm whether the following is permitted conduct under the HSR, and not impermissible "avoidance" conduct:

1. Co. A is negotiating to acquire assets ofCo. B., for an "acquisition price" of $45MM + specific AssumedLiabilities (bank debt and trade payables).

2. Such an "acquisition price" would be greater than the fair marketvalue of the assets.

3. With respectto Co. A's negotiation of which AssumedLiabilities (trade payables) it will assume, Co. A ispermitted to closely analyze the amount of the Assumed Liabilities with anintent to keep such figure, when combined with the cash paid for the assets,below $53.1 MM, and thereby not have a reportable transaction. This is notre-shaping a reportable transaction, rather determining which liabilities itwill assume so as to not reach a filing threshold.

I think that covers it, but feel free to call if you need more information.

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