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Date
Rule
801.10
Staff
Michael Verne
Response/Comments
Will the 30 year lease term exhaust the useful life of the underlying assets? If so, it would be considered an installment purchase and the lease payments would be aggregated.

Question

From:

(Redacted)

Sent:

Wednesday, March 02, 2011 4:07 PM

To:

Verne, B. Michael

Subject: HSRquestion

Mike,

Our client plans tobuy mining assets for $50 million. At the time of the purchase, buyer will alsoenter into a 30-year lease for real estate on whicl1 quarrying operations arelocated. The lease payments will be approximately $700,000 per year. I amtrying to understand whether the lease payments should be aggregated with thepurchase price for purposes of calculating whether the transaction clears the$66 million size-of-transaction threshold. Any thoughts?

About Informal Interpretations

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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