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Date
Rule
802.9
Staff
Michael Verne
Response/Comments
The exemption is still available.

Question

From: (Redacted)

Sent: Friday,March 23, 2012 2:10 PM

To: Verne,B. Michael

Subject: HSRQuestion

Mike,

I have a question relatedto the "solely for purposes of investment" exemption. AcquiringPerson A plans to acquire less than 10% of the outstanding voting securities ofCompany B. Assume that the acquisition would be reportable unless the"solely for purposes of investment" exemption applies.

Acquiring Person A hasrequested the right to have a non-voting board observer present at boardmeetings of Company B. The non-voting board observer would have the followingrights:

Company B mustprovide notice of meetings of the Board and its committees to the Boardobserver;

Company B must provideall information delivered to the Board and its committees to the Boardobserver;

Company B mayexclude an observer for portions of a meeting if the observer's presence wouldlikely result in the waiver of attorney-client privilege;

The board observerdoes not vote at meetings of the Board and its committees.

I know that the PNO hastaken the position in the past that requesting information from managementabout a company is not inconsistent with an investment "solely forpurposes of investment." It seems as if the request for a board observerseat is similar to a request for information from management, and should betreated in the same manner. Is a request for a non-voting board observer withthe rights described above consistent with the "solely for purposes ofinvestment" exemption?

I look forward to yourreply.

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Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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