0806011 Informal Interpretation

From: (redacted)
Sent: Tuesday, June 10, 2008 3:53 PM
To: Verne, B. Michael

Subject: FormationTransaction

Mike,

Should thefollowing scenarios be analyzed under 801.50 or could they also be deemeda consolidation for 801.2 purposes?

Scenario 1. Funds A, Band C will form a US Limited Partnership("Newco") as follows:

--FundA will contribute to Newco 100% of the interests in Company A (a U.S. entity) in exchange for 50% of Newco.

--FundB will contribute to Newco 20% of the shares of Company B in exchange for 12.5%of Newco.

--FundC will contribute cash to Newco in exchange for 37.5% of Newco.

Simultaneously withthese contributions, Newco will acquire for cash the remaining 80% of theshares of Company B from a third party, using as the purchase price the cashcontributed by Fund C. As a result, Newco will hold 100% of both Company A andCompany B.

Company B's assetsare primarily located outside the U.S. and these foreign assets did notgenerate sales in or into the US of more than $63.1 million during their mostrecent fiscal year. Company B's US assets have a fair market value of less than$63.1 million.

Under the formationanalysis:

--Funds B and C arenot required to file because they will not control Newco as a result of theirinvestment.

--Fund A'sinvestment in Newco is exempt under 802.4 because the assets of Newcowill consist only of: (a) cash; (b) 100% of the interests in Company A, whichFund A already owns; (b) the foreign assets of Company B, the acquisition ofwhich would be exempt under 802.50; and (d) U.S. assets of Company B,which have a fair market value of less than $63.1 million.

Newco's acquisitionof the remaining 80% of Company B is exempt under 802.4.

Is this analysiscorrect?

Scenario 2. Same facts except that upon formation, no one willhold 50% or more of Newco and Newco will be its own ultimate parent entity.

Is the analysis thesame as in Scenario 1 (802.50 for the formation and 802.4 for theacquisition) or should this scenario be viewed as a consolidation of Company Aand Company B?

Many thanks,