GLOBAL TRADE SOLUTIONS, INC

1. GLOBAL TRADE SOLUTIONS, INC OFFSET OVERVIEW

2. OFFSET DEFINITIONS DIRECT OFFSETS • THE OEM OBLIGATOR AND ITS SUPPLIERS’ BUSINESS TRANSACTIONS WITH FOREIGN INDUSTRY RELATING DIRECTLY TO THEIR PRODUCTS INDIRECT OFFSETS • THE OEM OBLIGATOR AND ITS SUPPLIERS’ BUSINESS TRANSACTIONS (THIRD PARTY PRODUCTS, TECHNOLOGY TRANSFER, TRAINING, INVESTMENT) WITH FOREIGN INDUSTRY

3. WHAT IS OFFSET? A TRANSACTION WHEREIN A CONTRACTOR (OEM) PROVIDES A PRODUCT TO A FOREIGN COUNTRY,AND IN RETURN, ACCEPTS AN OBLIGATION TO PROVIDE THE FOREIGN COUNTRY WITH INDUSTRIAL COMPENSATION EQUAL TO: (1) AN AGREED-UPON PERCENTAGE OF THE ORIGINAL CONTRACT PRICE (2) A SPECIFIED DOLLAR AMOUNT OFFSET IS ALSO CALLED: • INDUSTRIAL COOPERATION • CO-PRODUCTION • COUNTER PURCHASE/COUNTERTRADE • COMPENSATORY TRANSACTION • BUY BACK • SWAP • BARTER

4. RESOLVING OFFSET OBLIGATIONS MULTIPLE PATHS CAN BE PURSUED -MANUFACTURING -INDIRECT PROJECTS -TRADING CREDITS -PARTNERS’ ACTIVITIES -PARENT CORP PURCHASES -NON-PRODUCT PURCHASES -TECHNOLOGY TRANSFER -PRODUCT SUPPORT -SOFTWARE APPLICATIONS

5. STRATEGY CAPTURE WHAT YOU ARE DOING • LINK ALL PURCHASES, ACTIVITIES, AND INVESTMENTS TO LOCAL INDUSTRIAL COOPERATION PROGRAMS (ICP) OR OFFSET OBLIGATIONS. • IF NOT, THEN OBLIGORCOMPANIES WILL EXPEND ADDITIONAL RESOURCES TO MEET OBLIGATIONS THAT COULD HAVE BEEN SATISFIED BY OTHER TRANSACTIONS…….AND THIRD PARTIES LOSE POTENTIAL REVENUES BY NOT ASSISTING THE OEM OBLIGATOR. • FBJ94-65

6. GTS MISSION - OFFSET ASSUMPTIONS • THAT MANY OF COMPANIES HAVE THE POTENTIAL TO EARN OFFSET CREDITS BASED ON THEIR CURRENT ACTIVITIES AND FUTURE STRATEGIES • THAT GTS CAN BRING VALUE TO BOTH THE OEM OBLIGATOR AND THE COMPANY DOING QUALIFIABLE INTERNATIONAL ACTIVITIES.

7. OFFSET RECOGNITION PROCESS TIMING IS EVERYTHING FINAL APPROVALS NEWCO BUSINESS PLAN DEVELOPMENT LOCAL PARTNER SUPPORT EXCHANGE OF DATA LOI OR MOU AGREEMENT PRE APPROVAL REQUEST SCREENING PROCESS NON-DISCLOSURE AGREEMENT TIME

8. CLASSIC TRADING SCENARIO THIRD PARTY ACTIVITIES ASSISTING OEM COMPANY X NEEDS CREDITS, BUT CANNOT PERFORM THE OBLIGATION GTS COORDINATING WITH THE COUNTRYOFFSET AUTHORITIES, AND BOTH COMPANIES COMPANY Y HAS NO OBLIGATION, BUT IS DOING AN ACTIVITY THAT WOULD EARN CREDIT

9. HOW MULTIPLIERS WORK COUNTRIES VALUE ACTIVITIES DIFFERENTLY • EACH COUNTRY TARGETS DESIRED ACTIVITIES AND APPLIES INCENTIVES ( OR MULTIPLIERS ) TO ENCOURAGE THOSE ACTIVITIES • EXAMPLES (EACH COUNTRY IS DIFFERENT) • 1 to 1 FOR PROCUREMENTS • 1 to 3 FOR TRAINING • 1 to 5 LOW TECH XFERS • 1 to 7 LOCAL INVESTMENTS • 1 to 10 HIGH TECH XFERS

10. WHO HAS OFFSET OBLIGATIONS ?? MOSTLY FORTUNE 100 COMPANIES • US DEFENSE • BOEING, GENERAL ELECTRIC, LOCKHEED MARTIN, UNITED TECHNOLOGIES, NORTHROP GRUMMAN, BAe SYSTEMS, HARRIS……. • TIER ONE AND TWO SUPPLIERS TO THE OEMs • MANY EUROPEAN COMPANIES

11. STRATEGIC BENEFITS MORE THAN JUST OFFSET • CREATES NEW CORE BUSINESS OPPORTUNITIES • OPENS NEW GLOBAL CHANNELS • BENCHMARK INTERNATIONAL COMPETITION • SUPPORT CURRENT RELATIONSHIPS

12. COUNTRIES DOING OFFSET SOME OF THE MOST ACTIVE • TURKEY • UAE • ITALY • CZECH REPUBLIC • ISRAEL • TAIWAN • S. KOREA • ROMANIA • S. AFRICA • UK • SPAIN • NETHERLANDS • GREECE • NORWAY • SWEDEN • DENMARK • BULGARIA • POLAND

13. OFFSET TRANSACTION UNIQUE SOURCE OF REVENUES BUSINESS ACTIVITY CREDITS OEMs GTS REVENUES YOUR COMPANY OBJECTIVE - TO LEVERAGE YOUR BUSINESS DEALS TO DEVELOP NEW RELATIONSHIPS OR PROFIT

14. HOW TO LEVERAGE OFFSET GAINING OFFSET CREDITS • ASSUMING THAT THE PARTIES CAN DETERMINE • A COURSE OF ACTION……. • A STATEMENT OF WORK IS DEVELOPED • YOU PRICE OUT THE EFFORT • CALCULATE THE CORRESPONDING AMOUNT • OF OFFSET CREDITS TO FUND PROJECT • PROPOSE TRANSACTION TO THE COUNTRY • LINK OBLIGOR TO THIS OPPORTUNITY

15. PROCUREMENT TRANSACTIONS DO WHAT MAKES SENSE • PROCUREMENT ACTIVITIES • MARK ALL POs • STRATEGIC RELATIONSHIPS • SUPPLIERS • CUSTOMERS • MISC COMPETITIVE INITIATIVES

16. COUNTRY CRITERIA FOR CREDIT • INCREMENTAL…new or increased work? • CASUALTY…is the link to the obligor clear? BOTTOM LINE: COUNTRIES BELIEVE THAT U.S. COMPANIES WILL NOT PLAY HARDBALL FOR OFFSET CREDIT RECOGNITION

17. CAPTURING CURRENT EFFORTS MARK PURCHASE ORDERS FOR OFFSET ----------- MAY USE ALL OR ANY PART OF THE VALUE OF ITS PURCHASE ORDER(S) WITH SUPPLIER FOR OFFSET PURPOSES; INCLUDING BUT NOT LIMITED TO, (1) FULFILLING ----------’S OFFSET OR INDUSTRIAL BENEFIT OBLIGATIONS, (2) TRANSFERRING OFFSET CREDITS GRANTED AS A RESULT OF SUCH PURCHASE ORDER(S) TO THIRD PARTIES, AND (3) RETAINING CREDITS GRANTED FOR USE IN SATISFYING FUTURE OFFSET OBLIGATIONS

18. DOING INTERNATIONAL BUSINESS INCREMENTAL PROCESS MULTIPLE COUNTRY OPERATIONS INVOLVEMENT JOINT VENTURE DISTRIBUTORSHIP BILATERAL MANUFACTURING MARKET SURVEY EXPORTING TIME

19. SUPPORT AVAILABLE GTS CAN HELP • GTS INTRODUCTIONS TO OTHER COMPANIES THAT MAY OFFER NEW OPPORTUNITIES FOR YOU. • - TECHNOLOGY • - MARKET • - COUNTRY SPECIFIC INTERESTS

20. OPPORTUNITY SELECTION CREDIT TRANSACTIONS • GTS CAN ASSIGN OFFSET CREDITS TO OTHER COMPANIES IF YOUR ACTIVITIES CAN BE IDENTIFIED AS QUALIFYING FOR CREDIT. • ANY ACTIVITY MUST MAKE GOOD BUSINESS • NEVER DO ANYTHING JUST FOR OFFSET CREDITS

21. SUMMARYLEVERAGING OFFSET • OPPORTUNITIES ARE INCREASING • NOTHING IS EASY • NEED STRATEGY AND FOCUS • MUST ASSESS BOTH RISKS AND REWARDS

22. FOR MORE INFO OR QUESTIONS CONTACT FRED JOHNSON GLOBAL TRADE SOLUTIONS, INC. office 615-541-2523 fax 615-469-4563 email fbjj@earthlink.net on the web at www.gtsworldwide.com

23. Typical Offset Transaction Obligors 1 Procurements 4 2 2 1 Country Offset Authorities PROCESS 1.Client provides documents 2.Obligor submits for their offset obligation. 3.GTS negotiates credits 4.Fee paid to Client 3 GTS 3

24. Global Procurement Process LOCAL COMPANY SELECTION COUNTRY SELECTION DEVELOP STRATEGY CURRENT SUPPLIERS PRODUCT DELIVERIES QUALIFY SUPPLIER BID OPPORTUNITIES  PLACE ORDERS OFFSET CREDITS

25. OFFSET RELATIONSHIPS Foreign Company Local Company Obligor Offset Authorities Third Parties