Hart Scott Rodino Questionnaire

Hart-Scott-Rodino Questionnaire

Target Company

TO:

FROM:

DATE:

RE:

Following is a listing of certain information we require in order to assess the competitive consequences of the proposed acquisition, and, if appropriate, to begin preparation of any required Hart-Scott-Rodino filing. In answering the following questions, please clearly specify whether the information provided relates to the Target Company, or to both the Target Company and the Acquiror. This information is outlined below.

1. Identify any product/geographic overlaps. It is our understanding that both the Target Company and Acquiror sell to large customers such as Alpha, Bravo and Charlie similar products throughout the United States. Please identify the SIC codes in which the revenues from the sale of those products or services are reported and provide the SIC revenue data for 199_ and for the most recent fiscal year.

SIC codes:

Revenue data:

2. Market definition. Identify any other products that can be used to perform the same functions as the overlap products. (For example, could any alternative or related product be considered a competitive equivalent of the product?) Would customers be likely to switch to these products in response to a 5% increase in price? Please be specific.

Response:

3. Structure of the relevant market(s). It is our understanding that the following firms design, manufacture and market products similar to those offered by the Target Company and Acquiror:

Product #1 / Product #2 market share estimates:

One Industries: / One:

Two: / Two:

Three Corp: / Three Corp:

Four Partners: / Four Partners:

Five Ltd: / Five Ltd:

Please confirm or revise as appropriate the market share estimates above.

Additional firms able to begin producing within one year without significant sunk costs:

4. Competitive effects.

a. Unilateral effects

1. Is the transaction likely to give the merged firm the ability to raise prices unilaterally? Yes No

2. Are the merging firms particularly close competitors? Yes No

3. What would customers be likely to do in response to an attempted price increase by the merged entity?

4. How easy would it be for other firms to reposition their products to defeat a price increase by the merged firm? Easy Difficult

5. Have there been any monopolization or other antitrust complaints against either of the parties in this line of business? Yes No

b. Coordinated Effects

1. Will the transaction likely make it easier for the merged firms to coordinate pricing and output with other firms in the market? Yes No

2. Is the market conducive to such coordination? Yes No

3. Are the products homogeneous or differentiated? Homogeneous Differentiated

4. Are transaction prices hidden or open? Hidden Open

5. How easy would it be for smaller firms to expand their output in response to a price increase by the leading firms?

6. Is there any history of collusion in this line of business? (For example, have there been any government antitrust investigations or enforcement actions or any private suits alleging antitrust violations?) Yes No

c. Innovation

1. Is our understanding that the technology is relatively mature and stable correct? Yes No

2. Are the parties to the transaction unique in any way with respect to innovation? Yes No

5. Entry.

1. Has there been a recent history of actual or attempted entry into the market? Yes No

2. What is the recent history of exit from the market?

3. Is our understanding that demand for the products is increasing correct? Yes No

4. Is there excess capacity in the industry (or, conversely, supply shortages or capacity constraints)? Yes No

5. What post-transaction changes, if any, will be made in the operations and marketing of the companies?

6. Who are the most likely potential entrants?

7. How long would it take, and what would be the cost to enter into the market at a minimum efficient scale?

6. Reasons for transaction. What are the business reasons for the proposed transaction? Please be specific and reference any written or electronic documents which exist describing these business reasons:

7. Efficiencies.

1. Do the parties expect to realize any significant efficiencies (such as economies of scale, plant specialization, lower transportation costs, etc.) or other benefits from the transaction? Yes No

2. Is it likely that any such cost savings will be passed on to customers in the form of lower prices or better products? Yes No

8. Customers.

1. How are customers likely to react to the proposed transaction?

2. For each relevant line of business, list the ten largest customers of each of the merging firms, and for each such customer, provide an estimate of their annual purchases.

9. Documents. Provide copies of the following documents:

a. A purchase agreement or letter of intent, if any presently exists;

b. The most recent 10-K and annual report; the most recent proxy statement; all 10-Qs and 8-Ks filed since the last 10-K; and any Schedule 14D-1 or registration statement filed with the SEC in connection with the proposed transaction;

c. Any documents prepared in connection with the proposed transaction that: (1) describe the business being acquired (such as bankers' books or offering memoranda); or (2) discuss (i) markets, market structure, competition, or the likely competitive effects of the transaction, (ii) the business reasons for the transaction, (iii) the cost savings and other efficiencies expected to be realized, and (iv) plans for integrating the two firms;

d. The most recent business and marketing plans for the relevant lines of business for both companies;

e. Any recent market studies of the relevant lines of business;

f. The most recent year-end income statements and balance sheets for the relevant lines of business;

g. Sample product brochures and advertising and marketing materials for the relevant products;

h. Recent analyst reports, press releases and news clippings on the company or the transaction;

i. The most recent HSR filing made by the companies, if any.

After you have considered the above information requests, perhaps we should discuss the most efficient manner (e.g., telephone conversation, written response) for us to obtain the needed information. Please call if you have any questions regarding the foregoing.