1. 0 JOINT VENTURES THAT WORK IDENTIFYINVESTIGATEINTEGRATEIMPLEMENT “THE JOURNEY TO SUCCESSFUL JOINT VENTURES” 4200 Montrose, Suite 590  Houston, TX 77006 (713) 522-9656 Phone  (713) 522-9661 Fax www.wjmurray-assoc.com

2. 1 BENEFITS OF THE W J MURRAY & ASSOCIATES’ PROCESS: Fewer False Starts Shorter Cycle Times Joint Ventures That Create Value For All Parties ( Or Don’t Do It) An Organization To Accomplish The Joint Venture Successful Approaches To Search For And Value Potential Partners Proven Due Diligence Techniques Effective Integration Techniques Manage The Conflicts Effective Governance Models Avoid The Pitfalls LEADING TO: SUCCESSFUL JOINT VENTURES IDENTIFYINVESTIGATEINTEGRATEIMPLEMENT JOINT VENTURES THAT WORK

3. 2 Enterprise Strategy * The Customer, Vision, Goals, The Path Forward Alternatives * Internal Development * Alliance * Acquisition How Does Joint Venture Fit The Playbook? Costs/Benefits of JV Type of Alliance That Match Costs/Benefits * Cross Selling/Distribution * Joint Development * Supplier - Customer * Strategic Alliance * Joint Venture Initial Screening Criteria Partnership Executive Team (PET) Partner Selection Criteria * Strategic Compatibility * Commitment * Cultural Fit * Ability to Add Value Over The Long Term * Past History Engage The Search Engine Complete Initial Screening Gain Consensus On The Short List Complete Benefits Contributions Matrix If not balanced stop! Clearly articulate what you want, what you won’t give up and what you will give up. Company Contact Shared Business Plan Understand each party’s expectation’s Structure of Joint Venture Operating Procedure * Metrics * Make It Work Provisions Customer, Competitor, Regulatory Reactions Risk/Reward Sharing Methodology Manage Employee Concerns Harvest The “Low Hanging Plums” Communication: Roles and Responsibilities Staffing Linking Budgets/ Processes Driving Costs Out Of The Systems Managing The Path Forward The “Scorecard” THE JOURNEY TO SUCESSFUL JOINT VENTURES IDENTIFYINVESTIGATEINTEGRATEIMPLEMENT

4. 3 IDENTIFY WHAT TO DO Confirm The Enterprise Strategy The Business The Vision The Goals The Competitors The Value Proposition The Critical Success Factors Gain Consensus That Joint Venture Is Better Than Acquisition/Sale, Internal Development or Strategic Alliance Demonstrate How The Joint Venture Supports The Critical Success Factors Strategic Alliance Versus Joint Venture Expectations - Contributions - Benefits Select Partnership Execution Team (PET) Initial Screening Criteria WHO DOES IT Senior Managers Senior Managers & PET OUTPUTS Internal Commitment Reconfirmation of, And Consensus For Partnership Decision on Strategic Alliance Or Joint Venture Expected Benefits/Costs Initial Selection Criteria PET Team membership

5. 4 WHY JOINT VENTURE RATHER THAN INTERNALLY DEVELOP OR ACQUIRE? FAVORS INTERNAL DEVELOPMENT COST LOWERHIGH TIME AVAILABLE FOR EXECUTION SHORTERLONGER NATURE OF ACTIVITY COMPLEMENTARYCORE VENTURE EXPERIENCE/ EXPERTISE HIGHLOW AMOUNT OF CONTROL LOWERHIGHER JOINT VENTURE IDENTIFY

6. 5 SAMPLE INITIAL SCREENING CRITERIA IDENTIFY

7. 6 WHAT TO DO Partner Selection Criteria Engage The Search Vehicle * Customer/Supplier * Business Network * Board Members * Law/Accounting firm * Banks * Business Network Complete Initial Screen Gain Consensus On Short List Second Phase Screen Based On Partner Selection Criteria Benefits/Contributions Evaluation Discuss With Management Memorandum Of Understanding WHO DOES IT Senior Managers & PET PET Senior Managers & PET PET Senior Managers & PET OUTPUTS Criteria For Ranking Candidates Consensus On Top Candidates Advantages/Disadvantages Associated With Prospective Partner Alliance Costs * Management Time * Dollars, Other Resources Reaffirmation Of Purpose /Goals Commitment To Continue INVESTIGATE

8. 7 SAMPLE SECOND-PHASE SCREENING CRITERIA INVESTIGATE

9. 8 SAMPLE SECOND PHASE SCREEN: COMPATIBILITY AND CULTURAL ASSESSMENT GOAL ROIGROWTH STRATEGY COSTQUALITYINNOVATION DECISION MAKING PLANCRISIS COMMANDCONSENSUS ENVIRONMENTAL/OSHA RECORD GOODPOOR ORGANIZATION STABLEHIRE/FIRE TEAM BASED INDIVIDUAL EXCELLENCE INVESTIGATE

10. 9 WHAT TO DO Complete Negotiations Sign Joint Venture Agreement Create Shared Business Plan Agree On Structure of JV Agree On Exit Provisions Align Operating Procedures/ Metrics (Balanced Scorecard ) Address Customer/Competitor Regulatory Concerns WHO DOES IT PET Senior Managers PET Senior Managers & PET PET Senior Managers & PET OUTPUT Joint Venture Agreement Business Plan Joint Venture Structure and Governance Metrics For Tracking Performance Clarity Of Contributions And Benefits INTEGRATE

11. 10 WHAT TO DO Internal Communication * Scope Of Alliance * Expectations * How It Will Work External Communication * Customers * Suppliers Staffing * People * Rotation Schedule Linking Budgets / Process To Alliance Managing “The Path Forward” * Meeting Schedules * Processes Building Trust WHO DOES IT PET Senior Managers & PET Senior Managers Senior Managers & PET PET Senior Managers & PET OUTPUT Integrated Alliance * Direction * Commitment * Metrics in Place * Budgets * Key issues Defined * Roles and Responsibilities Defined * Expectation are clear IMPLEMENT

12. 11 IMPLEMENT SAMPLE ELEMENTS OF BUILDING TRUST HIGH TRUSTLOW TRUST LEADERSHIP SHAREDUNILATERAL COMMUNICATION FREQUENTOCCASIONAL FACE-TO-FACEARMS LENGTH PROBLEM SOLVING ROOT CAUSESUBJECTIVE,QUALITATIVE TOP MANAGEMENT VISIBLE SUPPORT HIGHLOW