1007007 Informal Interpretation

From: Redacted
Sent: Thursday, July 15, 2010 7:26 PM
To: Verne, B. Michael

Mike,

I am preparing anHSR filing with respect to two transactions based on the same PurchaseAgreement. The first transaction ("Transaction #1 ") involves the acquisitionof non-corporate interests. My client, X, is the UPE of the acquired person inTransaction #1.

The PurchaseAgreement contemplates the possible formation by Buyer and X of a new LLC("Newco"), 51 % of which will be owned by Buyer and 49% of which willbe owned by X ("Transaction #2"). In the event certain parameters andcriteria are met, Buyer has the option to elect to participate with X in theformation of Newco. In the event Buyer elects to participate in the formationof Newco with X, Buyer would contribute cash and X would contribute tradesecrets and know-how in exchange for their respective interests in Newco.

With respect toTransaction #1 (the acquisition of the non-corporate interests), X is filingthe report as an acquired person. In Transaction #2, under Section 801.50, Xwould be an acquiring person. However, since X is acquiring only a 49% interestin, and not acquiring control of, Newco, X's acquisition of the 49% interest inNewco would not be reportable. Further, the assets contributed by X to Newcoare exempt under Section 802.30(c) and the cash contributed by Buyer isexcluded under Section 801.21, resulting in the acquisition of the interestsbeing exempt under Section 802.4.

I believe that Xneeds to complete its HSR report only as an acquired person with respect toTransaction #1 and does not need to complete the report as both an acquiringand an acquired person with respect to both transactions since its acquisitionof the 49% interest in Newco is exempt. Please let me know if you agree.