1004003 Informal Interpretation

From:

(Redacted)

Sent:

Wednesday, April 14, 2010 4:44 PM

To:

Verne, B. Michael

Cc:

(Redacted)

Subject: Hart Scott Rodino / QuestionRegarding Formation of Unincorporated Entity

Mr. Verne,

Company A and Company B are forming anew limited liability company ("Company C). Company A will contributeassets (over $63.4 million) to Company C in exchange for a 50% limitedliability company membership interest in Company C. Company B will contributecash (over $63.4 million) to Company C in exchange for a 50% limited liabilitymembership interest in Company C.

Pursuant to Section 801.50, "in theformation of an unincorporated entity, even though the persons contributing tothe formation of the unincorporated entity and the unincorporated entity itselfmay, in the formation transaction, be both acquiring and acquired persons, thecontributors shall be deemed acquiring persons only and the unincorporatedentity shall be deemed the acquired person only." Therefore, in connectionwith the formation of Company C, Company A and Company B, if necessary, wouldonly file as an acquiring person and not as an acquired person.

We believe Company A is exempt fromfiling a notification report as an acquiring person in connection with theformation of Company C. Company A contributed assets to Company C and pursuantto Section 802.30(c) "assets or voting securities contributed by theacquiring person to a new entity upon its formation are assets or votingsecurities whose acquisition by that acquiring person is exempt from therequirements of the Act". Therefore, the assets of Company C are exemptwith regard to Company A under Section 802.4. The assets contributed by CompanyA, however, are not exempt as to Company B. Therefore, because Company C hasnon-exempt assets in excess of $62 million with regard to Company B, B's acquisitionof the membership interests in Company C is not exempt under Section 802.4.Company B must file a notification to report its acquisition of the membershipinterests in Company C.

In conclusion, Company A is not requiredto file a notification report as an acquired person or as an acquiring personand Company B is required to file a notification report as an acquiring personand not as an acquired person in connection with the formation of Company C. Isthis conclusion correct? If correct, we believe that Company C would be its ownUPE in Company B's filing instead of Company A and Company B. Is this alsocorrect?