ZYX COMPANY LOGO

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ZYX COMPANY LOGO
SAMPLE
Customer Due Diligence

• BY
• PENTOR Alliance Corporation
• 6363 TransCanada Highway, Suite 221
• Montréal, Québec
• Canada H4T 1Z9
• 514-748-8400
• 877-896-5800

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DISCLAIMER

• This Customer Due Diligence is intended for the
  sole use of ___ and ___, and is not intended for
  general circulation or distribution, nor is it to
  be reproduced or used for any purpose other than
  as indicated above.
• We will not assume any responsibility or
  liability for losses suffered by any parties as a
  result of the circulation, distribution,
  publication or reproduction, or other use of this
  report contrary to the provisions of this
  paragraph, without PENTORs prior written
  authorization.
• The fee for this Customer Due Diligence is
  not contingent upon the information reported.
• We reserve the right, but will be under no
  obligation to review all information included or
  referred to in this report. If we consider it
  necessary to revise our report, in light of any
  information existing as of todays date, which
  becomes known to us after the date of this
  report, we may do so.
• PENTOR conducted detailed interviews with the
  Investee Companys clients.
• This report and its contents are confidential.

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TABLE OF CONTENTS

• PAGE
• Mandate..4
• Methodology...5
• Interview List .....7
• Executive Summary..8
• Interviews..16

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MANDATE

• To assist our client in conducting a Customer Due
  Diligence on the Investee Company.
• Specifically, this mandate involved interviewing
• a list of the Investee Company clients
  provided by our client.

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METHODOLOGY

• Book interviews with a list of customers provided
  by our client.
• PENTOR conducted 23 telephone interviews with 15
  companies from a list of 19 companies and 30
  contacts between
• Friday July 21, 2000 and Thursday, August 7,
  2000.
• To obtain answers to questions provided by our
  client in
• order to help them make a more informed
  decision on their investment. Questions are to
  determine customer satisfaction levels and areas
  for improvement.

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METHODOLOGY (contd)

• Interview Approach  
• The Investee Company introduces PENTOR to its top
  clients/prospects and indicates that as part of
  the investment, the investor has undertaken a
  Customer Due Diligence initiative on the Investee
  Companys customers.
• It is explained that PENTOR is reviewing customer
  satisfaction levels and areas of improvement and
  that a non-disclosure agreement is in place.

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INTERVIEW LIST
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EXECUTIVE SUMMARY
SAMPLE
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EXECUTIVE SUMMARY

• 3 - 10 price pressure across the board except
  the Investee Company Company C (exclusive on
  both).
• Major competitor is Competitor B.
• Volumes are stable, however price reductions to
  be anticipated.
• Overall score 8.5
• To improve upon
• Price
• Pro-Activeness
• Partnership attitude
• Sharing of technical know how
• Technical support and responsiveness have been
  generally good and consistent over a 12 month
  period.
• Quality is a strong point. The Investee Company
  is known for good to excellent quality.

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24/8/00
SampleCONFIDENTIALSample www.pentor.com
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SampleCONFIDENTIALSample www.pentor.com
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SELECT CLIENT COMMENTS
SAMPLE
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Company JInterviewee 1
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SELECT COMMENTS Company J Interviewee 1

• General Company Information
• Company J
• Established in 1988
• What the company does ..
• Who are their customers
• 70 corporate
• 30 HSB home, small business
• Over the past 12 months, business has been
  growing
• 35 quarter over quarter
• Growth forecast for the next 12 months will be
• 50 - 55 growth
• Annual sales of his division
• 500,000 units / month
• 2 per quarter cost reduction target.

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SELECT COMMENTS Company J Interviewee 1

• Contact information
• Responsibilities
• Project manager tie in and assure that supplies
  are scalable to support the business growth.
• Interviewee 1 has been with the company for 5
  years and in this position for 1 year.

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SELECT COMMENTS Company J Interviewee 1

• Business Relationship
• Interviewee 1 says he has an excellent working
  relationship with the Investee Company. The
  Investee Company will always be one of their
  suppliers.
• On the visible horizon, we will have the
  Investee Company as one of our 2 suppliers. We
  know we pay more for their product but we can
  depend on their quality and ability to deliver.
• What they buy from the Investee Company
• For..line of products.

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SELECT COMMENTS Company J Interviewee 1

• Relationship with the Investee Company
• Have no contract with the Investee Company as the
  business is through the 1st tier supplier
  (Company K).
• In the future, Company J will buy directly from
  the Investee Company for a new platform in
  October.
• Old platform will continue until 2001.
• Presently 50 of the work is outsourced and the
  balance of assembly is done at Company J.
• Trying to decide if the entire assembly will be
  done
• at Company J.
• Pricing Issue
• Presently the Investee Company has 90 of the
  business but this will drop to 45 - 50 as price
  is 10 - 20 too high.

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SELECT COMMENTS Company J Interviewee 1

• Satisfaction Level
• Overall score for the Investee Company
• What to do, to become a 10
• Pricing model
• Inventory management issues
• Sometimes too much, sometimes not enough.
• Very responsive at development and prototyping
• Great at prototyping.

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SELECT COMMENTS Company J Interviewee 1

• Contact person at the Investee Company
• ..is very good and very capable.
• Competition
• Competitor A and Competitor B have 10 of the
  business but will get more as they are very
  aggressive and better priced than the Investee
  Company.
• Competitor A
• Recently purchased Competitor C
• Competitor A more advanced than Competitor C
• Competitor As technology is similar to the
  Investee Companys.
• Competitor B
• Technology is less advanced than the Investee
  Companys.
• More quality problems compared to the Investee
  Company.
• Very aggressive on price.
• Very aggressive on technical support.

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SELECT COMMENTS Company J Interviewee 1

• Growth Together
• Is there other business the Investee Company
  should be shooting for that they do not presently
  have?
• Already being invited
• How do you see your demand for the Investee
  Company products changing based on your own
  business dynamics?
• They see the Investee Company as a long term
  partner.
• Pricing issue. Will reduce the Investee Companys
  share to 45 - 50 from 90 but unit volume will
  remain same.
• Production is done in Mexico vs. competitors in
  Asia.
• Company J appreciates this as it allows for
  better quality control and scalability.

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THANK-YOU We Look Forward To Doing Business With
You Again!

• Joseph Galli
• Tony Corsillo
• Diane Gauthier
• Johane Gauthier Galli
• Renée Bonard

• Sylvie Moriarity
• Sylvaine Crépeault
• Toni Scopelleti
• Other Independent Professionals