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Date
Rule
801.10
Staff
Janice Johnson
Response/Comments
The analysis is correct. Do not include the capital lease in valuing the voting stock. MV agrees.

Question

From: (redacted)

Sent: Monday, December 17, 2007 5:13 PM

To:Johnson, Janice C.

Subject: Capital leasesare treated as debt when buyer assumes
them in stock deal

DearMs. Johnson,

Thankyou for speaking with me earlier today about how to treat capital leases incalculating the HSR notification threshold. This is to confirm your answer onthat. In stock deals, the acquisition price is the value of the votingsecurities being acquired. Thus, when part of the buyer's consideration in anacquisition of voting securities is to go toward assuming the seller's capitalleases, the capital leases can be treated as debt and the entire outstandingamount of the leases can be excluded in determining if the notificationthreshold is met.

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