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Date
Rule
801.10
Staff
Michael Verne
Response/Comments
Correct.

Question

From:(redacted)

Sent:Thursday, August 24, 2006 11:05 AM

To:Verne, B. Michael

Subject:question

Hi,Mike

Wehaving a debate here. If the total enterprise value of a transaction (which isan acquisition of voting securities) is $X and part of the proceeds will beused to retire $Y debt of the company so that the company is debt-free at thetime of closing, am I correct that x-y = transaction value, assuming thatpayment of debt is not a device for avoidance?

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