0402012 Informal Interpretation

From: (redacted)
Sent: Friday, February 20,2004 12.35PM
To: Verne,B. Michael
Subject: FW:Contingent Consideration

Per my voice mail message, I sentthe following message to Patrick Sharpe yesterday and left him a voice mailmessage this morning. Since he is usually very prompt in responding to myinquiries, I thought he may be out of the office. Accordingly, I would appreciateit if you could consider the question raised and let me know your thoughts.Thank you for your time.

> -----Original Message -----
>From: (redacted)
> Sent: Thursday,February 19, 2004,11:45 AM
> To: 'psharpe@ftc.gov'
> Subject: Contingent Consideration

> Patrick,

> A portion of the consideration to be paid for theacquisition of certain assets (primarily intangibles such as patent andtrademark rights associated with pharmaceutical products) includes paymentscontingent upon the achievement of sales objectives with respect to salesboth in the US and in the European Union. May the contingent payments withrespect to non-US sales be excluded for purposes of determining the size of thetransaction? We would value the contingent payments related to US sales andinclude that value in the acquisition price in accordance with ABA ManualInterpretation #116. Thank you for your response.