0704010 Informal Interpretation

From:(redacted)

Sent:Monday, April 23, 2007 3:47 PM

To:Verne, B. Michael

Cc:(redacted)

Subject:Confirmation of 802.4 discussion

Mike,

I am writing to memorialize our telephoneconversation of this morning. The facts we discussed are as follows:

We are representing Company A that is acquiringmembership interests in Company B and voting securities of Company C. CompaniesB and C have the same ultimate parent entities. Company B is a U.S. LLC holdingmore than $59.8 million in non-exempt U.S. assets. Company C has itsheadquarters in the U.S. but has no U.S. sales and its U.S. assets, if any,would be less than $59.8 million.

802.4(b) provides that "the assets of allissuers and unincorporated entities that are being acquired from the sameacquired person are included in determining whether the limitation fornon-exempt assets is exceeded."

You stated that when applying 802.4 and 802.50 to theacquisition of multiple entities with foreign and U.S. assets from the sameUPE(s) that the foreign assets of all issuers must be aggregated and the U.S.assets of all issuers must be aggregated in order to determine the amount ofnon-exempt assets to be acquired. Even though the foreign assets to be acquired(in this case, held entirely by Company C) did not generate in excess of $59.8million in their most recent fiscal year, the acquisitions of both Company Band Company C are reportable because Company B alone (by virtue of its holdingsof U.S. assets) exceeds the threshold for non-exempt assets. In other words,the reference to non-exempt assets in 802.4(b) relates to the limitation onnon-exempt assets in 802.4 (a), and not to the limitations, for example, in 802.50.