1. Zeta Services Inc. Supply Chain Application July, 2009

2. 2 Outline I. What Are The Objectives For Credit Ratings In Supply Chain Application? II. What Is ZETA ® ? III. What Is A Credit Rating? IV. ZETA ® Tools V. What Are The Benefits Of ZETA® Risk Control? VI. Companies Covered VII. Process

3. 3 I. What Are The Objectives For Credit Ratings in Supply Chain Application?

4. 4 First, Avoid Higher cost of replacement materials Delays in getting materials Delays in satisfying customers Contract penalties Wasted management time and effort sorting through the confusion of a failing supplier Wasted time by buyers as they re-source key components External workout expenses – specialty workout consultants, attorneys, court costs, etc. Difficulty retrieving tooling, inventories or intangible property – especially in foreign countries

5. 5 Second, Achieve Positive Goals Know that suppliers have the financial capacity to deliver Add the dimension of risk control to contractual relationships Understand the risk dimensions of the supplier portfolio Establish a measure of financial control over non-contractual costs of suppliers’ financial failure

6. 6 II. What Is ZETA ® ?

7. 7 ZETA ® is an objective methodology for quantifying credit risk based on inputs from financial statements.

8. 8 ZETA ® 's Objectivity is Achieved By: Defining risk as the risk of bankruptcy Statistical (unbiased) selection of the most discriminating factors Statistical (unbiased) weighting of these factors Thorough holdout testing

9. 9 A ZETA ® Credit Score Consists of: 7 credit concepts ~40 financial statement variables Most data is based on most recent year financial information 4 data items are used over 3 to 5 years Most emphasis is on the capital structure

10. 10 III. What Is A Credit Rating?

11. 11 How Do You Slice A Distribution?

12. 12 How Does S&P Slice The Distribution?

13. 13 Are S&P Ratings Ideal?

14. 14 ZETA ® the Objective Credit Ruler Links Between ZETA® and S&P Ratings ZETA ® Credit Score Break Points For Bond Rating Equivalents -15-11-6.5-0.62.64.97.510.8 -9.5-8.0-4.9-2.80.91.83.44.15.66.58.69.7 -+-+-+-+-+-+-+-+-+ ZcZccZcccZbZbbZbbbZaZaaZaaa

15. 15 ZETA ® the Objective Credit Ruler Links Between ZETA® and Client-Defined Ratings ZETA ® Credit Scores Break Points For Company Rating Equivalents -8.00-6.25 4.50 10.00 -4.50-2.75 0.752.75 6.258.00 - + - + - + 5- 5 4321

16. 16 How Does ZETA® Help a Company Create a Rating System?

17. 17 How Does ZETA® Help a Company Create a Rating System?

18. 18 How Does ZETA® Help a Company Create a Rating System? 1 2 3 4 5 6 7 8 9 10 1 2+ 2 2- 3+ 3 3- 4+ 4 4- 5 5-0% 10% 20% 30% 40% 50% 60% 70% Cumulative Percent Defaulting Duration of Bond Exposure in Years Company Rating Estimate Long-Term Default Experience for Company Ratings 12+22-3+33-4+44-55-

19. 19 IV. ZETA® Tools

20. 20 ZETA® Allows Users To Understand the financial strength of new and existing suppliers Quickly understand the strength of the entire supplier portfolio Evaluate how new suppliers affect the portfolio Translate ZETA® credit ratings into default probabilities Use default probabilities to model and manage risks Control trends in the supplier network

21. 21 V. What Are The Benefits of ZETA® Risk Control?

22. 22 Benefits of ZETA® Risk Control Create a financial quality metric (a common language) for the supplier “portfolio” Identify the weak links – the companies that need to be culled from the portfolio Model decision or exit strategies Maintain order in the supply chain Create goals for upgrading the supplier portfolio Measure progress toward meeting goals Avoid costs, including hidden costs, associated with failed suppliers

23. 23 VI. Companies Covered

24. 24 Applicability Companies that use accrual accounting Companies presenting classified balance sheets Public companies (~6000 North American companies and ADR’s) Private companies Small companies ($1,000,000) in sales

25. 25 Industry Exceptions ZETA ® is not to be used for: Banks Finance companies Insurance companies Municipalities Real estate development Real estate managers Savings and loans Broker/dealers and commercial banks Nonprofits based on fund accounting Companies that don’t provide accrual based financial statements

26. 26 VII. Process

27. 27 Public Companies Included in system: North American companies and ADR’s Updated for 10-Q information

28. 28 Private Companies – Choice 1 Company Finance Department Processes Data Confidentiality Agreement between Company and Supplier Company Finance Department will prepare Excel spreadsheets for input (or ask suppliers to do so) Company Finance Department will process spreadsheets Reports will be available on the system for buyers, sales, and finance

29. 29 Private Companies – Choice 2 Zeta Services Inc. Processes Data Confidentiality Agreement between ZSI and supplier Supplier will prepare Excel spreadsheets for input ZSI will process spreadsheets ZSI will provide reports to Company and add results to Company database Reports will be available on the system