Question
July 25, 2008
Mr. Michael Verne
Premerger Notification Office
Bureau of Competition, Room 303
Federal Trade Commission
Washington, D.C. 20580
Dear Mr. Verne:
The purpose of thisletter is to summarize our conversation of July 24, 2008 in which I describedthe following facts: Our client, Company A, is purchasing all of the stock ofCompany B (a privately held company) and all of the partnership interests inPartnership C. Band C have the same ultimate parent. The term sheet speaks interms of a "total aggregate purchase price of $97.5 million" (the"Starting Amount") which will be reduced by (i) the amount of debt ofB and C and their subsidiaries and (ii) by the amount of certain transactioncosts of the sellers (attorney's fees, accountant fees, investment advice fees,etc.), and related extraordinary costs (severance, changes in control, stayingbonuses, etc.) (the "Seller Transaction and Related Expenses"). Basedon the current debt situation of B and C it is expected that at the closing Awill payoff to lenders debt of Company B and Partnership C totaling about $39.0million (the "Debt Pay Off Amount") and will then pay the sellingshareholders and partners an amount less than $63.1 million (the "CashPayment Amount").
Based on ourdiscussion, it is my understanding that in the circumstances described above wecan ignore the Debt Pay Off Amount for purposes of calculating whether thetransaction meets the HSR size of transaction test of $63.1 million, with theresult that no filing will be required. I
Although notdiscussed with you, I also understand that the Seller Transaction and RelatedExpenses do not count toward the HSR size of transaction test calculation.
Please advise assoon as possible if you should disagree with the understandings reflectedabove. Thank you for your assistance in this matter.
Sincerely yours,
Footnote
1 If plans should change and the debt of B and C remains on theirrespective books after the closing, the amount of such debt would still bededucted from the Starting Amount, with the result that the Cash Payment Amountwould still be below $63.1 million and no filing would be required.