Momentex LLC

Business Plan

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Momentex LLC

Executive Summary

Imagine ... you have been driving along a toll road, and you are thirsty. As you approach a service area, you consider stopping for a beverage. However, when you think about the time getting off the highway will add to your trip, you decide to forego the 10-minute detour and to continue driving, thirst unquenched.

... As you pay your toll, you notice that you have the option of using the Gulp & Gosm service to purchase

a cool beverage, pay for the drink and the toll at the same time, and have it dispensed to you right at the tollbooth. You have your money in your hand, and the drinks look refreshing. Just think .. would you buy?

Momentex has identified a significant market opportunity and developed a new service designed to capture this market as the first mover. The market has a huge global potential... even with only 10 percent of U.S. toll road users purchasing a beverage, annual revenue opportunities are over $600 million.

Gulp & Gosm, a Momentex service, provides automated beverage ordering, billing and delivery at

tollbooths and other locations where a driver is already engaged in a monetary transaction. This high-tech beverage distribution system adapts existing technologies to meet the needs (convenience, speed, safety, capacity, and software interface) of toll road operators and drivers.

Momentex oversees the driver-interface retailing operations while outsourcing some functions, such as dispenser refilling. Momentex provides public relations and marketing services to facilitate adoption of Gulp & Go and to increase usage rates, comprehensive customer service, which creates a feedback loop to ensure continual usage, and systems integration, to design the service process. The chart below summarizes the Gulp & Go service package.

(1) Momentex develops and manages the tollbooth beverage system, working with toll road operators and systems integrators

(2) Momentex contracts with a wireless data service for remote audit and inventory control

(3) Momentex analyzes data received via the internet and relays information for beverage management

(4) Momentex supervises the out-sourced beverage management process

Market Potential. In a more conservative estimate, based on a purchase rate of 2%, a beverage can price of $1.25, and the 4.25 billion annual U.S. toll transactions, annual revenue is estimated at $128 million

1.

Purchase rate per tollbooth with Gulp & Go service

Service availability % of total tollbooths

Annual Revenue Potential ($MM)

40% $128 $255 $510 $765 $1,020

30% $96 $191 $383 $574 $765

20% $64 $128 $255 $383 $510

10% $32 $64 $128 $191 $255

5% $16 $32 $64 $96 $128

5% 10% 20% 30% 40%

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Gulp & Go Potential. In addition to the share of the U.S. market Momentex captures as a first mover, there is significant international expansion potential as well as additional revenue opportunities from advertising on the dispensers and exclusive contracts with beverage companies that can garner "rights-fees." Momentex also anticipates that its proprietary distribution system will provide a platform for other driver-interface retailing opportunities, such as at the gas pump or parking garage.

Profitability and Attractive Cash Flow. With attractive gross margins and significant volume, Momentex will ensure high profitability by minimizing operating costs through outsourcing non-core activities. As toll roads operate continuously and provide a constant flow of drivers, Momentex anticipates that its Gulp & Go business model will provide consistent and high cash flows. Momentex anticipates annual revenue growth of 342% (6-year CAGR) and an EBITDA after year 6 of $39.3 million.

Income Statement

1999 2000 2001 2002 2003 2004

Revenues

Beverage Sales 50,465 3,095,518 26,909,900 69,860,379 77,491,282 85,517,164

Commissions and Sales Tax (11,102) (681,014) (5,920,178) (15,369,283) (17,048,082) (18,813,776)

Total Revenues 39,363 2,414,504 20,989,722 54,491,095 60,443,200 66,703,388

Expenses

Raw Materials 12,112 742,924 6,458,376 16,300,755 18,081,299 19,954,005

Operating Expenses 374,939 4,534,601 8,939,114 9,297,322 8,041,672 8,417,283

Research and Development 469,500 400,000 400,000 400,000 400,000 400,000

Total Expenses 854,051 5,677,526 15,797,490 25,998,078 26,522,971 28,771,288

Operating Profit (814,688) (3,263,022) 5,192,231 28,493,018 33,920,229 37,932,100

Taxes 276,994 1,109,427 (1,765,359) (9,687,626) (11,532,878) (12,896,914)

Net Profit (537,694) (2,153,594) 3,426,873 18,805,392 22,387,351 25,035,186

Trends. Momentex has designed its Gulp & Go service to capitalize upon three key trends: (1) drivers are increasingly willing to utilize services that provide higher levels of convenience; (2) as toll road operators become more profit-minded and less bureaucratic, they are searching for new business opportunities that will both boost their profits and enhance customer satisfaction; and (3) intense competition amongst beverage companies has led these companies to place an increasing importance on impulse (single-serving) distribution channels.

Value to Customers. Gulp & Go is attractive to drivers, toll road operators, and beverage companies. Drivers value Gulp & Go's convenience and time-saving attributes. Gulp & Go enables toll road operators to increase profitability and customer satisfaction. Momentex expects beverage companies to welcome the opportunity to increase sales and to gain access to customers without having to develop in-house knowledge of toll systems.

Venture Strategy. Momentex will first secure a demonstration site at a smaller toll road and then roll out Gulp & Go service on commercially attractive tollbooth locations throughout the United States. In the medium term, Momentex will expand its services by developing other Gulp &Go platforms and extend its product range beyond beverages. Momentex's long-term objectives are to develop additional driver-interface retailing opportunities by anticipating the advent of various wireless technologies.

Management Team. The Momentex team consists of professionals with experience in financial advisory, strategy, business development, service process management, and transportation industries.

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Melissa Chadwick -- As President and CFO, Ms. Chadwick focuses on business development, financing and marketing. She has several years of corporate finance and financial advisory experience and an MBA from The Wharton School.

Zafar Khan - As Chief Executive Officer, Mr. Khan focuses on business development and operations. He has several years of strategy, public affairs and industry experience and an MBA from The Wharton School.

David Smith - As Director of Operations, Mr. Smith is actively engaged in developing prototype hardware and optimizing the service process. He has several years of strategy and process management experience and will graduate in 1999 with an MBA from The Wharton School.

Paul Glaab - As Director of Channel Development, Mr. Glaab will be responsible for developing political strategy and gaining footholds within toll agencies. He has 30 years of experience working in channel development and government affairs for the California DOT, a California toll road agency, and the international toll road association (IBTTA). (Contract under negotiation.)

In addition, Momentex has established a network of experts who advise in areas such as (1) automated product delivery, (2) system development and integration, (3) entrepreneurship, (5) traffic modeling, and (6) toll industry dynamics.

Funding Needs. Momentex has begun preliminary negotiations for a demonstration site with two private toll roads, the Dulles Greenway (located in Virginia) and Transportation Corridor Agencies (located in California). To secure approval for a demonstration site, Momentex anticipates that a physical demonstration of prototype hardware will be necessary and seeks capital to fund the research and development expenses associated with the prototype and ensuing pilot operation.

Required Investment and Use of Capital. Momentex seeks a commitment of $2 million to fund prototype hardware and software development, system integration, educational marketing, operating expenses, and legal fees for a demonstration site and pilot operation. This investment would position the Company to roll out operations to the major toll roads.

Exit Strategy. Momentex plans to grow the business until it is well received by public markets, then use an IPO as an exit. A second exit opportunity is through strategic buyers such as beverage or toll service companies.

Headquarters. 34 Lee Street, Cambridge, MA 02139. Telephone: 877.868.4857.

Gulp & Gosm Highlights

Strong Financial Potential

• Huge, untapped market - - 4.25 billion potential purchase opportunities in the United States • High gross margin, high volume • Scaleable operations - - nationally, internationally • High, predictable cash flows - - revenue potential of $600 million at 10% hit rate • Additional revenue streams from advertising and "rights fees" • IPOable business based on comparable public companies

High Return on Investment

• Early revenue stream • Low capital investment

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• High exit potential - - value multiples will "leap" after Momentex achieves operational milestones (securing contracts, proof of concept, beginning operations).

Low Marketing Costs

• High visibility and exposure to target customers 24-hours/day, 7-days per week • Captive customer base • Low cost method of creating brand recognition - - Momentex is essentially buying access to

customers from toll roads by giving the roads a percentage of revenues. Momentex's proposed commission structure is based on amount of purchases, rather than on total driver exposure.

Unique Service Aspects

• Service process and specialized hardware is patent pending • Captures a new piece of point-of-sale retail real estate with guaranteed customer flow • Establishes a new distribution channel - - potential to sell and introduce other products • Meets a basic consumer need - Improves customer satisfaction and driving experience • Essential but non value-added functions can be outsourced

Attractive Investment Opportunity

• Feasible business model - - tangible, new integration of off-the-shelf technology • Low risk, high growth potential with long-term contracts - - once operations are proven and

adopted • High visibility business • Innovative new concept - - rewarding

Uses of Capital

• Securing commitment from toll road executives • Negotiations with multiple parties • Hardware and software development • Developing and testing demonstration site • Demonstrating insignificant traffic impact • Developing and testing early adopter pilot operations • Educating drivers about the service

1 Transaction estimate Intelligent Transportation Systems 1998

Company Overview

Introduction

Momentex LLC was founded to exploit retailing opportunities by creating new distribution channels that enable the sale of beverage, snack and entertainment items to a previously under-served audience: automobile drivers.

Momentex is a marketing and service company that strives to provide Ultimate Conveniencesm for drivers.

Momentex accomplishes this goal by understanding customer needs, identifying and creating new convenience oriented distribution channels, and thus, advancing the evolution of driver services. The first channel that Momentex has developed for driver-interface retailing is at tollbooths, under the service mark "Gulp & Go."

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Gulp & Go. Momentex's cornerstone service, Gulp & GoSM, enables drivers to purchase canned

beverages at locations where the driver is already engaged in a monetary transaction, such as paying a toll. Momentex anticipates Gulp & Go will provide a basic platform for driver-interface retailing and significant additional opportunities will stem from this business model.

Investment Benefits. The Gulp & Go business will provide significant value appreciation to shareholders.

• Untapped market provides Gulp & Go with high growth prospects; • Convenience and impulse purchase characteristics promote high margin opportunities • Continuous, high volume traffic flow on the toll roads provide strong cash generation features; • Low capital investment project design positions for a high return on investment; • Exclusive distribution "rights fees" and targeted advertising opportunities increase the revenue

upside.

Strategy and Objectives. Momentex strives to be first-to-market with its core Gulp & Go service, control the point-of-sale retailing space at the tollbooth, and leverage existing relationships to facilitate a national service roll out. In the short term, Momentex will roll out Gulp & Go service on commercially attractive toll road locations throughout the United States. In the medium term, Momentex will expand its service range by developing other platforms for its Gulp & Go service, such as at the gas pump and parking garage. In addition, Momentex will look to further develop its relationship with beverage suppliers and extend its product range beyond beverages. Momentex's long-term objectives are to develop additional driver-interface retailing opportunities by anticipating the advent of innovative wireless technologies.

Origin and History

The Gulp & Go concept was conceived by Zafar Khan, CEO, in 1996 while driving from Washington, D.C. to Philadelphia, rushed to make a 9:00 a.m. class at The Wharton School. Hungry and thirsty, with no time to stop for a refreshment, Khan pulled into a toll plaza on Route 95. While stopped at the tollbooth to pay the toll, wallet in hand, Khan thought, "wouldn't it be great if I could get my refreshments right here ... with no time delay."

After describing the scenario to classmates and friends familiar with road trips in the Northeast, each seemed to remark, "if Gulp & Go was there, sure, I would use it every time!" People spoke of impulse buying, purchasing out of boredom, planning ahead to buy at the tollbooth... "it would definitely get me at least once ... possibly many times in one trip."

2 Khan was convinced that there was a segment of drivers

who would value such a service ... but would the toll roads accept such an innovation?

Wharton classmates Zafar Khan and Melissa Chadwick wanted to test the bureaucratic reputation of the senior executives at the major toll roads. To accomplish this, they decided to set out on a month-long, 5,000 mile "road show," from Massachusetts to Florida and as far west as Iowa ... with one key prop, a hand-made, cardboard and balsa wood model, depicting Gulp & Go service at a toll plaza.

The response was energizing..."I really like the concept. It is so clear, yet no one has ever considered it ... I can imagine in the future that it will be everywhere and no one will think twice about using it," exclaimed Bill Thorp, Director of Finance at the Florida Turnpike. "It's a 'no brainer' - high volume potential ... and it could integrate right into our electronic toll system," Leonard Fornier, a Director at the Massachusetts Turnpike claimed after walking through a toll plaza envisioning Gulp & Go in place. Khan and Chadwick could see the demand by drivers and acceptance by the toll roads ... but was it possible to build it?

By year-end 1998, they determined that Gulp & Go service could be successfully installed at the tollbooth and had incorporated the Company, refined operations, automated the service process, developed hardware designs, and protected key intellectual property. Currently, the team is working with David Smith, an MBA at Wharton, to revise the business plan for funding opportunities, prepare operations for

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pilot programs, and prepare for alliance negotiations. To date, Chadwick and Khan have self-funded the business.

Current Status

Momentex is developing a working prototype and seeks capital to fund the research and development expenses associated with the prototype and pilot operation. Momentex LLC has filed in the state of Massachusetts as a limited liability corporation (LLC) and its fiscal year is based upon the calendar year. Headquarters are located at 34 Lee Street, Cambridge, MA 02139 (877-868-4857).

2 Focus Group, Wharton Graduates, 1998

Service Description

Imagine ... you have been driving along a toll road, and you are thirsty, As you approach a serve area, you consider stopping for a beverage. However, when you think about the time getting off the highway will add to your trip, you decide to forego the 10-minute detour and to continue driving, thirst unquenched.

... As you pay your toll, you notice that you have the option of using the Gulp & Gosm service to

purchase a cool beverage, pay for the drink and the toll at the same time, and have it dispensed to you right at the tollbooth, You have your money in your hand, and the drinks look refreshing. Just think ... would you buy?

Features

Momentex brings Gulp & Go service to drivers and toll road operators by providing expertise in business activities that are key for successful implementation, while outsourcing non-critical functions that are not core competencies. Momentex believes that it currently possesses or can develop the six core competencies critical to its success.

Key Business Activities

Understand drivers' needs & design services to meet criteria needs

Secure exclusive right to sell on location and manage suppliers and delivery methods

Oversee development and implementation of automated services driver needs & trends

Oversee integration into electronic and traditional payment systems management, marketing & branding

Optimize traffic flow through service design and computer simulation

Supervise systems maintenance and beverage management

Design programs to educate drivers and institutionalize service

Market service to time-sensitive drivers to increase purchase rates

Train and motivate site staff who interface with the system

Core Competencies

Identifying emerging driver/customer

Pinpointing new distribution channels

Designing services to capitalize upon

Creating value through data

Designing optimal systems integration

Negotiating and structuring alliances

Service Description

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Momentex's Gulp & Go service provides driver convenience by enabling drivers to purchase and immediately receive items, through an automated process, at locations where they are already required to stop - tollbooths.

Service Locations. Momentex targets full service toll plazas within the 35 states that operate toll roads. Momentex uses traffic simulation models and driver data to select the best-suited plazas based on demographics, plaza volume, and traffic congestion.

Product Offering. Momentex will offer canned beverages. As a simple decision process is important to avoid disruptions in traffic flow, three to five beverage selections will be available and will include a cola and a diet cola.

Product Price. Market research indicates that drivers are willing to pay a premium for the convenience of Gulp & Go. Momentex anticipates at least a 25-90% price premium over the customary convenience store beverage price (an $0.80 can of soda could sell for $1.00 to $1.50).

Beverage Ordering. Drivers select their beverages at the toll collector's booth through an ergonomically-designed, user-friendly ordering interface.

Payment. Payment occurs at the same time as drivers pay their tolls. Momentex has developed the service to incorporate electronic toll collection (ETC) systems, thereby providing for not only cash payment to the toll collector, but also electronic payment via ETC transponder.

Beverage Delivery. Drivers attain their ordered beverages at a Gulp & Go dispenser which is located two car lengths past the tollbooth. Momentex has designed the beverage dispenser with a specialized delivery arm to facilitate quick retrieval and accommodate multiple beverages.

Current Stage of Development

Momentex has patented the product delivery mechanism and service process, developed the execution plan and software integration, and has begun preliminary negotiations for a demonstration site with two private toll roads, the Dulles Greenway (located in Virginia) and Transportation Corridor Agencies (located in California). To secure approval for a demonstration site, Momentex is conducting additional market research and refining operations.

On-going Concept Testing. The Momentex team has conducted focus groups, surveys, and extensive interviews, questioning stakeholders at all levels within all industry sectors related to their business. The following table identifies the breadth of discussions that influenced such areas as machine and process design, business model structure, negotiation planning, marketing strategy, profitability assessment, and feasibility. Generally, several levels and rounds of interviews and face-to-face meetings were held with each of the following groups.

Research Interviews and Concept Testing

Toll Road Operations Academics/Political Beverage/Dist. Toll Road Drivers Intelligent Transport.

Transp. Corridor (CA)

Versatile Control Systems

Wharton Faculty Coca Cola User Survey (100) Texas Instruments

Dulles Greenway Technique Applied Sciences

MIT Faculty Pepsi MA Driver Interviews (30)

Intelligent Transp. of Am

MA Turnpike Ergonomics Consultant Wharton SBDC Virgin Cola CA Driver Interviews (15)

Wayne-Dresser

Orlando-Orange TransCore MA Speaker Cadbury PA Driver Interviews Amtech Systems

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Gnty (50)

FL Turnpike TRMI MA House Starbucks Focus Groups (2) Sentinel ID

NH Turnpike Lockheed Martin IMS MA Senate Wittern Group MIT Transportation Eng.

NJ Turnpike SawNet MA Transp Committees

VendSource

NY Thruway Epic Cycle Interactive I BTTA - Trade Assoc. Canteen Vending

KS Turnpike Wada Metal of America Industry Retirees Royal

IL Turnpike ProModel/SimTech Mason & Martin Dixie Narco

PA Turnpike Prism Quantitative Methods

Cesari & McKenna Sevamco

Dulles Toll Road Peck & Associates Crane

Continual Operations Refinement. Since the Gulp & Go system integrates existing hardware and software components, Momentex works to tailor the service process design to specific toll road infrastructures.

Pilot Program. Momentex has worked with toll industry experts, business consultants, vending machine companies, lawyers, and engineers to create a detailed pilot implementation plan for a number of toll roads who have expressed an interest in a Gulp & Go pilot operation. The Dulles Greenway, for example, has offered operations data and has placed Momentex in contact with their systems integrator. The Company has prototype ordering and dispensing hardware and system designs for automated billing bundled into current electronic transactions. Refer to the hardware, software, and integration designs in the appendix.

Proprietary Position and Barriers to Entry

Momentex has designed its business model to create barriers to entry against potential competition and provide Momentex with a competitive advantage.

Breadth of Knowledge and Relationships. Momentex has spent 18 months building its knowledge of toll systems, drivers' needs, and beverage distribution. To build upon this knowledge, Momentex has formed a network of advisors who have extensive experience in these key areas and provide the capability for developing and securing a pilot operation and eventual roll out. In addition, Momentex management has introduced the Gulp & Go service platform to numerous toll roads and has begun to forge relationships with these groups and the politicians who will be instrumental for national roll out of the Gulp & Go platform.

Development Time and Cost. The costs to enter the target market include time and expense to design, develop, and manufacture the Gulp & Go dispenser and build the service infrastructure (installation, maintenance, and inventory management). A company entering the market must incur this investment before experiencing project revenue.

Complicated, Integrated Product. Momentex believes that large beverage companies would be the most likely market entrants. However, to implement the Gulp & Go business model, expertise outside of traditional beverage production, distribution and marketing is needed. With automation and integration into toll systems key to a successful execution, beverage companies would view this high-tech service as outside of their business scope.

First Mover Advantage. The Gulp & Go service creates a new scarce resource with economic value by creating a new distribution channel to leverage a captive customer base and the existing real estate at the toll plaza. Once Momentex installs the Gulp & Go service platform at a tollbooth, Momentex locks up the

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scare resource and effectively prevents competition since space limitations make the introduction of a competing service impractical. As the developer of the Gulp & Go business model, Momentex plans to leverage this first mover advantage by negotiating with toll authorities to secure exclusive rights to retail products at points of driver-interface.

Legal Barriers. Given the anticipated competition, the Company has created legal and contractual barriers to entry. Momentex has designed the Gulp & Go service platform to be automated using a proprietary process. The platform is protected through a series of patents and service marks on 1) the unique ordering and efficient beverage delivery process, 2) the unique product delivery interface, 3) the automated integration into toll and electronic payment systems, and 4) artwork which enhances the concept and creates a brand. Service marks include "Gulp & Go" and "Ultimate Convenience" and Internet domains include Momentex.com, GulpandGo.com, and GulpNGo.com.

Market and Marketing Strategy

Description of Market

The Gulp & Go service creates a new point of contact between the toll road industry and the beverage industry. Gulp & Go offers these mature industries a new source of revenue.

Toll Road Industry. Toll roads, although primarily governed by state organizations, are managed as private businesses responsible for operating the toll roads and generating enough toll revenue to cover their cost of operations and debt service. Toll contractors, such as market leader TransCore, install new toll plazas and new systems such as ETC and must bid competitively for new projects. Service plaza concessionaires, such as market leader Host Marriott Services, typically have long-term contracts to service all or part of a toll road with off-road services. Typically, concessionaires pay commissions to turnpikes ranging from 10% to 15% of revenues.

Momentex measures the market for Gulp & Go service in number of toll transactions, reflecting driver purchase opportunities. The number of tollbooths represents the market of point-of-sale real estate for Gulp & Go service.

State Tolls Annual Transactions Plazas Tollbooths Transactions/Booth Major Toll Operators

NY Toll Roads 787,000,000 87 790 2729 NY Thruway, MTA

NJ Toll Roads 772,000,000 77 711 2975 Turnpike, Highway, Transport. Auth.

IL Toll Roads 626,000,000 60 450 3811 Highway Authority

Florida Toll Roads 500,000,000 55 330 4151 Turnpike, Expressway Auth.

Texas Toll Roads 230,000,000 45 160 3938 North Dallas, Harris County

California Toll Roads 186,000,000 35 163 3126 CalTrans, TCA

MA Toll Roads 170,000,000 17 120 3881 Turnpike Authority

PA Toll Roads 140,000,000 18 108 3551 Turnpike Authority

NY-NJ Bridges/Tunnels 114,000,000 8 77 4056 Port Authority NY & NJ

Total Majors 3,525,000,000 402 2,909 3320

Others 725,000,000 80 600 3311 VA, OK, OR MD, ME, other (est.)

Total 4,250,000,000 482 3,509 3,318 United States (excludes int'l bridges)

Source: IBTTA; Electronic Toll and Traffic Management Note: 'Transactions per Booth' reflect daily average

Beverage Industry. The U.S. beverage industry, distributing 230 billion can-equivalents of soda annually, is intensely competitive and is dominated by the Coca-Cola Company and PepsiCo

3 Beverage companies

typically focus on the creation, production, and distribution of drink syrups, concentrates and beverage bases and the marketing/brand building of beverages. Bottlers take the flavor concentrate, mix it with

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sweetener and water, bottle the liquids, and then distribute it to retailers or to their own vending machines. Due to the importance of distribution, beverage companies typically hold equity stakes in key bottlers and also pay "rights fees," for exclusive access to captive customers, to those who control certain key distribution channels.

Market Potential

With 3,500 tollbooths in 35 states and over 4 billion toll transactions annually, the United States provides significant market potential. Internationally, another 5 billion toll transactions take place annually at 9,500 international tollbooths, which provides another avenue for substantial growth.

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With a usage rate near 10%, the total annual revenue potential for the Gulp & Go service on toll roads is estimated at over half a billion dollars. In a more conservative estimate, with a usage rate of 2% and a $1.25 price per beverage, annual revenue potential is estimated at $128 million

5,6 . A 2% usage rate

reflects two tollbooths in a ten booth plaza offering Gulp & Go service, and one in ten drivers who self-select these Gulp & Go toll lanes purchase. Pilot projects will provide better insight into the actual consumer adoption rate and price sensitivity. Momentex expects usage rates to increase as driver comfort for the service increases over time.

Estimate of Market Potential Calculation Notes

Toll Transactions

Total toll transactions (35 states in U.S.) 4.25 billion Source: Electronic Traffic Management of ITS

Tollbooths (U.S.) 3,509 Source: IBTTA 1996, ET`TM

Average daily toll transactions per booth 3,318 Calculation - note variation exists by location and day of week

Gulp & Go Transactions

Purchase rate per tollbooth with Gulp & Go service

10% Estimate of 1 in 10 cars self-selecting a Gulp & Go lane purchase

Gulp & Go daily transactions per booth with service

332 Calculation

Service availability (% of total tollbooths) 20% Estimate of 2 tollbooths with Gulp & Go service per 10 lane plaza

Service availability (4 of total tollbooths) 702 Calculation

Gulp & Go annual transaction estimate (U.S.) 85,000,000 Calculation reflecting a 2% hit rate per total toll transactions

Revenue Drivers

Purchases per transaction 1.2 Estimate of 1 in 5 buyers purchasing 2 drinks

Price per beverage $1.25 Price premium for convenience

Revenue and Profit

Total annual revenue $127,500,000 Calculation

Expected gross profit margin 60% Estimate: 20% to bottler for goods, 15% to toll road, 5% for refilling

Gross profit potential $76,500,000 Calculation

Growth Drivers

Company Growth. Momentex will grow its revenues by (1) increasing usage rates and (2) increasing service locations. Momentex will focus first on a sales effort to penetrate the tollbooth market by maximizing locations that host the service, followed by a marketing push to increase purchase rates per toll plaza. To achieve market penetration, Momentex must demonstrate the economic benefits of the Gulp & Go service and convince toll road operators that consumers will use the service if installed.

Market Growth. Key factors affecting growth in the market, measured in toll transactions, are gas prices, GDP growth and strong economic factors, legislation allowing tolls on interstate highways, and new

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private convenience highways. Additional growth can stem from new products such as snack foods, international tollbooth expansion (5 billion toll transactions internationally), or opportunity to retail in other locations, such as parking garage tollbooths and gas islands at gas stations and convenience stores

7.

Market Acceptance, Trends & Needs

Current trends in driver convenience, the toll industry and the beverage industry have created a window of opportunity for. Momentex's Gulp & Go service. Drivers will value Gulp & Go's convenience and time-saving attributes. Toll road operators will increase profitability and customer satisfaction. Beverage companies will welcome the opportunity to increase sales volumes and to gain access to customers without having to develop inhouse knowledge of toll systems.

Driver Convenience. Research indicates that 81% of today's consumers want more simplicity - - and more convenience - since time has become such an issue in their lives.

8 With today's time-sensitive

population and advancements in restaurant "drive-thrus", sound systems, cellular communications, and satellite navigation systems (i.e. GPS), the automobile is being transformed into a tool for not only traditional transportation, but also dining, entertainment, communication and navigation. Recognizing the convergence of technology and market need, Momentex has developed driver-interface retailing to deliver Ultimate Convenience

sm to drivers by adding automated retailing to the driver's portfolio of time-

saving accessories. Gulp & Go service is a phase shift change in the evolution of driver convenience.

Of the 160 million passenger car drivers on U.S. roads, the Gulp & Go service targets both drivers and passengers that have the following attributes and provides value to them

9:

• Daily Commuters. Rather than making an extra stop on the way to work, they would procure a beverage as they pass through the tollbooth, saving time and hassle.

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• Families. Families with small children will especially welcome the presence of Gulp & Go since it eliminates the chore of bringing children in and out of car seats and into stores.

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• Business Travelers. Extremely time-sensitive, interested in quickly getting a beverage to help them get to their next appointment or meeting.

• Stoics. This segment, typically men, know their fastest time to reach their destination, and once on the road, try to beat this record with determination. This group avoids unnecessary stops and would welcome the option to purchase beverages where they are required to not only stop, but also spend money.

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• Women and Elderly. Research has shown that this segment has concerns about unnecessary stopping at night for safety reasons. Gulp & Go will provide these thirsty drivers with a safer alternative.

Toll Industry Trends. For many toll roads, increasing fees is a politically damaging method of increasing revenues. They are under pressure to cover bond payments and increase spending on improvements to roads and customer service.

13 Therefore, to ensure viability, toll roads must look at methods of creating

additional revenue or increasing driver usage.14 As one of the leaders of toll road innovation explains:

"I am always thinking about new ways to make money." James Kerasiotes, Chairman of the Massachusetts Turnpike Authority

The Gulp & Go service addresses both of these needs by (1) adding an additional profit stream to the operator and (2) increasing customer satisfaction and the convenience of using the road vis a vis alternatives.

In addition, recent federal legislation calls for each state to choose whether to increase revenue for highway operations by building toll plazas on existing interstate highways. This could yield a proliferation of toll plazas and increase the available real estate for Gulp & Go service.

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Beverage Industry Trends. As traditional distribution channels mature, the large beverage companies have begun to focus on the higher-margin and growing convenience channels. With fierce competition among the major beverage companies, exclusive access to these distribution channels has become a source of competitive advantage. The beverage companies are paying multi-million dollar, multi-year "rights fees" for this exclusivity, often equating to $3-40 per potential customer.

15 Gulp & Go will provide

value by offering the opportunity for exclusive access to a new mass distribution channel, expanding the total size of the beverage market by reaching thirsty drivers.

Market test results

Momentex conducted a survey which documents (1) a need for the Gulp & Go service and (2) that customers are willing to pay a premium for the convenience that the service offers. Momentex conducted a survey of toll road users over the past two months and results are summarized in the Market Research appendix. Based upon 115 toll road user respondents, we estimate that the usage of the Gulp & Go service by our target market could be as high as 32%. (In our financial model, a usage rate of 10% is used based on more conservative scale factor of 0.25 vs. 0.75.) Refer to the Market Research Toll Survey appendix for details.

The survey confirms our hypothesis that most drivers (73%) do not stop for a beverage while they are on the toll road due to lack of time. The fact that over 60% of respondents do purchase a beverage on a regular basis during their commute to and from work indicates an opportunity to serve the needs of time sensitive customers. In addition, the survey results show that potential users consider the key attributes of Gulp & Go to be important: 88% of respondents rated convenience/speed as very important, 59% rated easy to use as very important or somewhat important, and 56% rated beverage variety as very important or somewhat important. The average price respondents are willing to pay for a 12 ounce beverage is $1.10, a 38% premium over the customary convenience store price. (Momentex anticipates a price premium of 25-90% and uses $1.25 in financial models.)

Competitive Position

While no direct competition currently exists, Momentex anticipates that once it introduces Gulp & Go service, competition will develop.

Opposition Potential. Competition, in the form of entry or opposition, will stem from companies whose revenue will be either significantly positively or negatively impacted by Gulp & Go's new distribution channel. The degree of competition will depend upon those companies' ability to respond to the introduction of Gulp & Go. Response ability would be measured by (1) level of past technological innovation; (2) degree of national presence (potential or existing); (3) knowledge level of toll systems, drivers' needs, beverage distribution; and 4) strength of toll authority relationships.

Competitive Landscape. The diagram below depicts the competitive landscape for Gulp & Go service. Momentex believes that companies whose market is expanded by Gulp & Go, such as the major beverage companies, may attempt to enter the market. The major beverage companies, however, lack technological innovation, knowledge of both toll systems and drivers' needs, and relationships with toll authorities. Companies who perceive that their revenue would be threatened, such as service plaza concessionaires, may attempt to block the development of Gulp & Go. While concessionaires do have relationships with toll authorities, their ability to leverage these relationships to block an agreement between Momentex and a toll authority is debatable. Momentex's meetings with toll authorities indicate that often the toll authority and concessionaire have tenuous relationships

16. Momentex considers entry

by Host Marriott, the largest concessionaire, unlikely, as it has stated that toll roads are not its focused area for growth

17 . For further details, refer to the Company and Competitor SWOT Analysis appendix for

a comparison of competitor strengths, weaknesses, opportunities and threats.

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Circle = Magnitude of "deep pockets" for project investment

+/- depicts positive/negative revenue impact

Determinants of Response Ability

• Past innovation • National presence • Relationships with multiple toll roads • Knowledge (customer, bev. dist., toll systems)

Sales and Promotion

Momentex will market its Gulp & Go service to two target groups: collaborators and consumers. Collaborators control sites on which the Gulp & Go machine will be located. Consumers are the ultimate users of the service.

The rate of return on investment and consumer demand will drive the purchase decision of collaborators. To achieve market penetration, Momentex must demonstrate the economic benefits of the Gulp & Go service and convince collaborators that consumers will use the service if installed.

Momentex expects that all prospective customers will already consume the beverages sold at the Gulp & Go machine through other channels. Rather than creating new beverage consumers, Momentex will provide existing beverage consumers with a new, more convenient channel to purchase beverages. The marketing challenges are providing the right products at the right price and educating consumers on how to use the service.

Attract Customers. First, by supplying drivers with the refreshing beverage of their choice, Momentex will attract customers by its Gulp & Go service. To create this draw, Momentex will offer popular beverages and install signage along toll roads to trigger thirst. To optimize beverage selections, Momentex has conducted market research and understands what its target market prefers. In addition, Momentex anticipates that the name-brand beverages offered will enhance the attractiveness of the Gulp & Go service. Momentex will also seek co-marketing opportunities with its beverage provider to further develop sales.

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Customer Education and Support. Momentex plans to conduct a pre-marketing campaign to introduce the Gulp & Go service and to create consumer interest. The initial campaign will consist of pamphlets or direct mailings to drivers in the area surrounding the toll road. The marketing materials will fully explain the mechanics of the service and introduce a consumer feedback loop for questions or complaints. Once Momentex installs Gulp & Go service in an area, it will continue to educate drivers about the service through advertising spots in print and broadcast press. Additionally, Momentex will continue to provide strong customer support through both a website and a toll-free telephone number. Customer service will not only educate drivers on the Gulp & Go service, but will also provide the avenue for rectifying any ordering or product problems. Refer to Marketing Plan Summary appendix.

3 1997 Figure. Hays, Constance L. "Bottlers Becoming Rivals To Vending-Sales Merchants," New York Times News Service (1999). 4 IBTTA 1996, ETTM of ITS 1998. 5 Momentex focus groups, (1) Wharton Graduate, (2) UPENN Undergraduate, 1998. 6 Momentex market interviews, Philadelphia and Boston area, 1998. 7 IBTTA 1996. 8 Convenience Store News, December 1998, 9 Federal Highway Administration, Selected Highway Statistics and Charts, October 1997. Nationwide Personal Transportation Survey, April 1998. 10 Momentex focus groups, (1) Wharton Graduate, (2) UPENN Undergraduate, 1998; Department of Transportation Nationwide Personal Transportation Survey April 1998, 11 Ibid. 12 Momentex focus groups, (1) Wharton Graduate, (2) UPENN Undergraduate, 1998. 13 Momentex interview with managers at MA Turnpike 1998. 14 Momentex interviews with management at MA, PA, NY, FL, NJ, VA, DE toll roads 1998; the toll industry trade association (IBTTA) 1998, TransCore 1998, TRMI 1998. 15 interviews with Coke, Pepsi 1999. 16 Jim Kane, Massachusetts Turnpike Authority 17 Host Marriott Services Annual Report 1997; DLJ Equity Analyst Jake Fuller

Business Model and Operations

Business Model

Momentex has designed the Gulp & Go business model to enable rapid penetration of the currently untapped driver-interface retailing market with minimal capital investment and limited on-going personnel requirements. The real estate provider (toll road operator) provides the right to use existing space and systems in exchange for Gulp & Go service and a percentage of revenue. The toll road's proposed commission will be based upon similar fees paid by service plaza concessionaires

18. While not crucial to

the viability of the business model, Momentex plans to contract with a major beverage company to secure its beverage supply and refilling services.

In addition, Momentex anticipates that the beverage companies will offer a "rights fee" for exclusive distribution and the potential for advertising. Momentex owns the dispenser and ordering hardware while the beverage company owns the inventory. The diagram below outlines the basic structure.

Additional Revenue Opportunities. Momentex recognizes that the Gulp & Go platform provides advertising potential, both on the machines and possibly on the signage. Momentex plans to lease this advertising space to either the beverage supplier or other companies interested in targeted advertising to drivers. Momentex will also seek co-marketing opportunities with companies, such as service plaza concessionaires, offering complementary products or services. In addition, Momentex plans to explore revenue opportunities via the Internet.

Technology Opportunities. By the year 2000, virtually every major toll road and service stations in 20 major markets will be equipped to charge customers' accounts through a seamless, and virtually timeless, electronic transaction

19. In the future, Momentex anticipates that Gulp & Go's retail transactions will

piggyback off these transponder- receiver payment systems to enable ordering retail products through the driver's on-board communication transponder and have this order beamed to the retailing system as they pull into the transaction area. By developing additional applications for this evolving technology, Gulp &

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Go will become the backbone of a truly cutting-edge new distribution platform - - high-tech driver-interface retailing.

Operations Strategy

Among key Momentex functions, the Company (1) develops and designs the Gulp & Go service, (2) launches and manages pilot operations, (3) collects and analyzes operations data to refine the service process, (4) markets and communicates to customers, and (5) negotiates for and implements roll out of service. Momentex manages expert contractors who conduct actual mechanical drawings, equipment manufacture, service installation, software integration, beverage refilling, and inventory management. By leveraging the technical know-how, assets and organizational processes of partners, Momentex lowers its operating risk and reduces its capital investment.

Operational Activity and Resources. The following chart summarizes the key operational activities and the partners/contractors that the Company plans to work with. Momentex will outsource the activities which do not lead to a competitive advantage for the Company. Key criteria to identify prospective partners are: (1) strategic fit; (2) quality of service; (3) service level (response time to customer problems); (4) entrepreneurial management; (5) geographic market coverage; (6) price; and (7) technical proficiency.

Operational Activity Description Potential Contractors

In-house

Design machine Customer needs, concept design and testing (Momentex)

Service process design Design service process flow and maintenance (Momentex)

Pilot operation Design, launch and manage pilot operations (Momentex)

Data collection and analysis Analyze operations data. refine service process (Momentex)

Customer education market and communicate to customers (Momentex)

Roll-out service negotiate for and implement roll-out of service (Momentex)

Manage Contractors

Manufacture machine Mechanical engineering and manufacturing Technique, VendSource, Wittern

Microprocessor design Software and electrical engineering Versatile Control Systems

Install machine** Toll systems integration TransCore, TRMI, Lockheed Martin IMS

Maintain and service machine Electronics servicing Local contractor or toll system integrator

Inventory management** Beverage distribution and route management Coke or Pepsi bottling company

Billing Toll systems integration TransCore, Lockheed Martin IMS

Internet Web development, hosting, maintenance SawNet, Epic Cycle Interactive

Data collection, transmission Wireless data service Isochron, Motorola

Note - ** Reflects key activity where a more formal alliance may exist.

Plan for Service Roll Out

To launch and roll out the Gulp & Go service, Momentex will (1) win approval for a demonstration site, (2) strengthen established relationships with major toll road executives, (3) launch the pilot, (4) demonstrate working model, live, to prospective toll road executives in anticipation of roll out, (5) negotiate contracts and permission for demonstration sites at major toll roads, and (6) build-out operations on major roads.

Pilot Approval. The process to win approval for a pilot operation, outlined below, differs for the different toll road categories; localized public/privates, private roads, and major public turnpikes. With each of the three roads mentioned in the chart, Momentex is progressing through Stage 2.

Pilot Approval Process Localized Public/Private Private Road Major Public Road

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Key Stages Trans. Corridor Agencies Dulles Greenway Mass Pike

Stage I

Political Goodwill CalTrans, Local Politicians Not applicable State Politicians

Senior Executive Interest CEO, Director or Operations CFO Chairman

Stage 2

Operational Concept Testing Traffic flow, site specifics Traffic flow, site specifics Traffic, concessionnaires

Systems Integrator Approval Lockheed Martin IMS TransCore TransCore

Labor Approval Not required Not required Labor Director & Teamsters

Driver Demand/Hit Rate Survey of local drivers Survey of local drivers Survey of local drivers

Stage 3

Senior Executive Approval CEO CFO Chairman

Contract Negotiation Negotiate terms Negotiate terms Negotiate terms

Strengthen Established Relationships. Momentex has met with the senior executives of eight major toll roads, representing 32% of our target market, to discuss the merit of Gulp & Go service on their roads. Each has expressed interest in the service and looks forward to a physical demonstration of the pilot. Before a pilot operation is implemented at a demonstration site, Momentex will refresh these relationships to emphasize the connection of d river- interface retailing with the Gulp & Go brand.

Launch Pilot. At a localized toll road, Momentex will launch a demonstration site as its first pilot operation. Momentex will collect and own the data from the pilot to further refine financial and operational assumptions.

Demonstrate Operations. With a working pilot operation, Momentex will have the opportunity to drive prospective toll road executives through the service so that they can experience Gulp & Go's Ultimate Convenience first-hand.

Negotiate with the Majors. Early in the pilot operation, Momentex will negotiate with the major toll roads (excess of 100 million annual transactions) to implement a pilot on their road with the option to roll the service out.

Build-out Operations on Major Roads. Roll out within a major toll road will involve a tailored pilot operation, specific systems integration, demographic and traffic flow analyses, and an awareness marketing campaign.

Competitive Reaction. Momentex views the beverage companies as potential competitors, with the threat heightened if they are excluded from the Gulp & Go distribution channel. For this reason, Momentex has designed the business model to attract an alliance with the strongest of the beverage companies and turn them into an ally. By gaining exclusive rights to the toll roads, Momentex plans to pre-empt competitive threats.

Contingency Plans. Momentex will monitor the political climate around toll road negotiations to determine whether to develop and shift toward contingency plans. This could include a tighter relationship with a major beverage company, a strong alliance with a systems integrator, or other strategic options to facilitate implementation of the Gulp & Go business model.

Alliances. In the key areas listed below, Momentex formalizes relationships to leverage the existing infrastructure and expertise while minimizing Momentex's capital investment.

Operational Complexity

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Gulp & Go integrates components of off-the-shelf technology to meet the demands or driver-interface retailing.

Process Flow. The Company has designed a process flow to accommodate Gulp & Go service in various toll system configurations. From the driver's perspective, the process flows as follows:

• Order Decision • Gulp & Go Lane Selection • Product Selection • Automated Ordering • Toll & Product Payment • Drive Forward to Pick-up Zone • Next Car Begins Order Process • Pick-up Beverage • Re-enter Traffic

The chart below depicts the operations perspective. The front end of the Gulp & Go service involves the driver-interfacing at the order and delivery points, as well as integration into the toll systems for automated payment. The wireless data service monitors inventory levels and dispenser performance, relaying information at set periods throughout the day to the data service's central computer, which, in turn, posts the data to the Momentex Intranet via the Internet. Beverage management analyzes this inventory and monitoring data to optimize refilling routes and machine maintenance. In the chart below, potential outsource and development partners are indicated for driver-interface retailing at the tollbooth.

Hardware Design and Software Integration. Momentex, along with its contracted partners, will design and develop a customized casing and ordering interface to enable efficient product order and delivery to drivers. The casing will house an off-the-shelf beverage dispensing machine and the ordering interface will be linked to the central processing unit that controls the Gulp & Go system operations. Software process flow has been designed to limit change to the current toll systems. The Gulp & Go central processing units will package the transaction information and relay it to the toll lane computer for toll lane functionality and audit reporting. Refer to the appendices for detailed schematics of the hardware designs, capabilities, and software integration flow.

Pilot Development Cost Estimates

Service Component Development Source & Notes

Ordering Interface $6,000 Versatile, Technique Applied Sciences

Control Panel & Microprocessor $30,000 Versatile Control Systems

Product Dispenser (off-the-shelf base) $5,000 Wittern Group

Base Dispenser Modifications $7,500 Wada Metal of America, VendSource

Product Delivery arm $9,000 Technique Applied Sciences

Dispenser Casing & Artwork $15,000 Technique Applied Sciences

Wireless Data Service $4,000 Isochron, DEX

First & -Second Stage Internet Site $45,000 Epic Cycle Interactive

Hardware Installation $6,000 TRMI

Software Integration (Non-ETC) $60, 000 TRMI, Lockheed Martin IMS, TransCore

Software Integration (ETC) $150,000 TRMI, Lockheed Martin IMS, TransCore

Testing Operations $180,000 Lockheed Martin IMS

Total $457,500

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Audit and Reconciliation. The retail operations are audited in two channels, through the current toll plaza computer software and via wireless data service inventory monitoring. Beverage sale revenue is recorded in tandem, with weekly reconciliation of toll revenue versus retail revenue. The toll road retains an agreed percentage of gross revenues.

Process Design. Beverage ordering and pick-up are de-coupled to minimize traffic impact, as the time to pick up a beverage is less than the time to order and pay. De-coupling occurs by locating the dispenser two car lengths beyond the tollbooth on the end of the tollbooth island. Momentex has conducted on-road, timed simulations to test this concept. In addition, toll collector training is geared toward increasing toll fare and beverage fee collection efficiency to maximize throughput.

Optimize Traffic Throughput. Momentex has used queuing theory, computer simulation, and animation to model the traffic flow with and without Gulp & Go service at the tollbooth. Computer simulation enables an understanding of the impact on the transaction processing time and the capacity/demand relationship at different periods throughout the day and week. Prior to roll out of Gulp & Go service, Momentex will model each toll plaza independently to account for distinct traffic patterns. The simulation model has been designed in a partnership with ProModel representatives, SimTech and Prism Quantitative Methods. Refer to the Traffic Flow appendix.

Inventory Management and Control. To ensure well stocked and high performing dispensers, wireless data service interfaces with the dispenser and the management software via the Internet, allowing dispensers to be monitored closely from the Momentex central office. Wireless data companies such as AES, Isochron, or Cellemetry are favored for their transmission capabilities, including broad geographic coverage and in some cases, a particular focus on the vending industry. Refer to the Internet Integration appendix for details.

Dispenser Refilling and Route Design. Upon roll out, Momentex will outsource beverage dispenser refilling and maintenance and has incorporated the latest inventory and logistics technology into its operational plan to facilitate this process and provide an audit trail. The dispenser design will allow the route driver to drive into the lane during off-peak hours, close the lane temporarily, and refill the dispenser from the truck parked next to it. With the opportunity for daily maintenance and the absence of money acceptors (which contribute to 90% of malfunctions), Momentex anticipates infrequent machine breakdowns

20 . Route design will center on maximizing efficiency and minimizing expense. Route drivers

will be responsible for dispenser refilling and simple preventive maintenance, and their daily route will be determined by tracking the number of cans sold each day at each location through the wireless data system.

Quality Control. Momentex has designed its operations to ensure seamless integration into existing systems, efficient beverage delivery, and quick acceptance by drivers. In the unlikely event of a problem, Momentex has built the necessary infrastructure, processes, and feedback loops to address issues. Refer to the Quality Control and Trouble Shooting appendix for details.

18 10 - 15% based on MA, PA Turnpike Marriott contracts 19 Momentex interviews with management at MA. PA, NY, FL NJ, VA, DE toll roads 1998 the toll industry trade association (IBTTA) 1998: Wayne-Dresser website 1999 20 The Wittern Group 1998 and Canteen Vending 1999.

Management

Momentex is founded by individuals with breadth and depth of experience in the key areas of finance, marketing, operations, negotiations and strategy. The Gulp & Go business model requires skill in negotiation and marketing because the success of the business hinges upon securing locations to install the Gulp & Go system. Due to the high profit potential and the competitive nature of the beverage industry, negotiation expertise must be coupled with strategy and finance skills. Since a new dispenser will have to be designed and integrated into the existing information systems, skills and experience in

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engineering and information technology will be necessary. Lastly, as the Gulp & Go service involves flows of traffic and multiple locations, expertise in operations and management will also be critical. The table below outlines key skills that are necessary to turn Gulp & Go into a successful long-term business and rates capabilities in these areas.

Key Skills Management Advisor Network Outsourced Overall Capability

Management & Strategy High High - High

Negotiation & Sales High High - High

Operations Medium High High High

Marketing & Channel Development High - - High

Information Systems & Automation Low High Medium High

Engineering Low Medium High Medium

Finance High - - High

Knowledge of Beverage Dist. High High - High

To accommodate this range of expertise, Momentex's in-house capabilities are enhanced through advisor and contractor relationships. The organizational structure is outlined in the following chart.

Management Team

Melissa Chadwick- President and Chief Financial Officer. Ms. Chadwick focuses on business development, finance and marketing as well as coordinating the raising of the Company's first round of funding. She has been with Momentex since inception in 1998.

Ms. Chadwick worked as an investment banker with Lehman Brothers and McDaniels S.A. In these positions, she met capital raising goals for both public and private sector clients and implemented growth strategies for them through her involvement in research, valuation and negotiations for several acquisitions. She holds a Masters of Arts degree in international relations and a Bachelor of Arts degree in economics from the University of Chicago, and recently completed a Masters of Business Administration degree in finance and entrepreneurial management from The Wharton School at the University of Pennsylvania.

Zafar Khan - Chief Executive Officer. Mr. Khan focuses on strategy, operations and developing partnerships with venture stakeholders. He has established a high quality advisor and consultant network and has designed-the service process. He has been with Momentex since inception in 1998.

Mr. Khan worked as a strategy consultant for Braxton Associates/Deloitte Consulting. In addition, as a manager for a chemical industry trade association, he helped businesses adapt technologies and develop new business lines, and interacted with federal government on the industry's behalf. He holds a Bachelor of Arts degree in biology and psychology from Wesleyan University and recently graduated with a Masters of Business Administration degree in finance and entrepreneurial management from The Wharton School at the University of Pennsylvania.

David Smith - Director of Operations. Mr. Smith is actively engaged in developing prototype hardware, optimizing the service process, and refining the business model. He joined the Momentex team at year-end 1998.

Mr. Smith has. worked as a strategy consultant with Bain & Company and a business advisor with Price Waterhouse LLP where he consulted firms in a wide range of industries on process management, business planning, and internal control procedures. He holds a Bachelor of Arts in economics and a Bachelor of Business Administration in accounting and international business from the University of

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Texas at Austin and will graduate in 1999 with a Masters of Business Administration degree in marketing and operations from The Wharton School at the University of Pennsylvania.

Paul Glaab - Director of Channel Development. Mr. Glaab will be responsible for developing political strategy and gaining footholds within toll agencies. He anticipates joining Momentex in 1999 (contract under negotiation).

Mr. Glaab has over 30 years of experience working in channel development and government affairs for the California Department of Transportation, Transportation Corridor Agencies (a California private toll road agency), the international toll road association (IBTTA), and Continental Airlines. During this time, he has successfully (1) launched the marketing program for the nations largest privately-funded public toll road, (2) spearheaded legislative efforts for critical toll industry legislation, and (3) managed negotiations for major CalTrans development projects. He holds a Bachelor of Arts degree in political science from California State University at Long Beach.

Advisors Network

The Company has sought and will continue to seek guidance in development and execution from a group of advisors experienced in starting companies. Momentex's network of advisors have expertise in toll road operations, intelligent transportation, engineering, entrepreneurship, and operations. Currently, Momentex is searching for a beverage industry veteran to advise on beverage-related issues.

Harry Hansen. Mr. Hansen advises on toll systems integration and intelligent transportation systems. He is the Manager of Systems Development and Integration for Lockheed Martin IMS and manages all California electronic toll collection projects for Lockheed. He has nearly 10 years of experience implementing Lockheed Martin technology into development projects and is one of the developers of their electronic toll collection system.

Ian MacMillan. Mr. MacMillan advises on entrepreneurial management matters. He is Executive Director of the Sol C. Snider Entrepreneurial Center and is a Professor of Entrepreneurial Studies at The Wharton School. In addition, he is the author of Corporate Venturing (Harvard Business School Press) and numerous articles on organizational politics, new ventures, and strategy formulation.

William Miller. Mr. Miller advises on driver-related and toll industry matters. He was formerly Executive Director of the Delaware River and Bay Authority and has been affiliated with the toll industry since 1957. Also, he was the 1971 President of the International Bridge, Tunnel, and Turnpike Association (IBTTA) and voted "l 994 Engineer of the Year" by the American Society of Highway Engineers,

Joseph Sussman. Mr. Sussman advises on "intelligent transportation" matters. He is a Professor of civil and environmental engineering at MIT and on the Board of Directors for Intelligent Transportation Systems of America.

Karl Ulrich. Mr. Ulrich advises on product development matters. He is an Associate Professor of operations and information management at The Wharton School. He is co-author of Product Design and Development (McGraw Hill) and has participated on development teams for products ranging from snack foods to surgical instruments,

John Woodruff. Mr. Woodruff advises on driver-related and toll industry matters. He was formerly Director of Engineering and Planning / Chief Engineer for the Delaware River Port Authority. He was also the 1987 President of IBTTA and currently serves on the IBTTA Past-Presidents Advisory Council.

Summary Financials

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Key Assumptions

The financial projections model the basic Gulp & Go service at the tollbooth and do not account for revenue from "rights fees," product expansion, or additional service platforms. The specific critical assumptions are highlighted in the appendix. Momentex assumes that a pilot begins in September 1999 and the first state will be rolled out at the beginning of 2000.

Revenue Drivers. Key drivers for revenues are the number of locations with Gulp & Go service, the hit or usage rate, and the number of beverages purchased in each transaction.

Margin Drivers. Gross margins reflect commissions paid to toll road operators and route drivers, as well as raw material costs. In addition, as some expenses are fixed, there is some operating leverage at the operating income level. Hence, as revenues increase, margins will increase disproportionately.

Cash Flow. Momentex will strive to manage working capital efficiently by negotiating favorable terms with suppliers and creditors and keeping inventory levels to a minimum. Momentex will seek capital to fund the purchase and installation of beverage dispensers necessary for Gulp & Go service roll out.

Required Investment and Uses of Capital

The financial projections center around funding the "Plan for Service Roll Out." This involves winning approval for a demonstration site, networking with major toll road executives, developing hardware and software, launching and testing the pilot operation, live demonstrations for prospective toll road executives, negotiating contracts and permission for demonstration sites at major toll roads and rights to roll out Gulp & Go service upon successful completion of pilot, and building-out operations on early adopter roads. Momentex anticipates that this stage of operations will require $2 million and seeks the necessary funding to cover this. The appendix provides detailed information on the financial projections and on the development stage that corresponds to the funding need. Refer to Major Milestone appendix for details.

Financial Resources

To date, Chadwick and Khan have self-funded the business. To raise the required investment, Momentex will introduce the Gulp & Go business model to Small Business Investment Companies (SBIC), "angel" investors and other zero stage venture capital firms, as well as the major beverage companies, to look for loans and/or equity financing. Momentex has identified certain firms that specialize in consumer related businesses and/or transportation. Financial investors should find the Gulp & Go business model attractive given the high margin and high volume potential, the Gulp & Go services' high visibility, and Momentex's competitive advantages.

Summary Income Statement

The following chart depicts a summary income statement for Momentex. A full income statement, balance sheet, and statement of cash flows are in the appendix along with a monthly, quarterly, and annual profit and loss analysis with assumptions and model drivers.

Income Statement

1999 2000 2001 2002 2003 2004

Revenues

Beverage Sales 50,465 3,095,518 26,909,900 69,860,379 77,491,282 85,517,164

Commissions and Sales Tax (11,102) (681,014) (5,920,178) (15,369,283) (17,048,082) (18,813,776)

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Total Revenues 39,363 2,414,504 20,989,722 54,491,095 60,443,200 66,703,388

Expenses

Raw Materials 12,112 742,924 6,458,376 16,300,755 18,081,299 19,954,005

Operating Expenses 374,939 4,534,601 8,939,114 9,297,322 8,041,672 8,417,283

Research and Development 469,500 400,000 400,000 400,000 400,000 400,000

Total Expenses 854,051 5,677,526 15,797,490 25,998,078 26,522,971 28,771,288

Operating Profit (814,688) (3,263,022) 5,192,231 28,493,018 33,920,229 37,932,100

Taxes 276,994 1,109.42 (1,765,359) (9,687,626) (11,532,878) (12,896,914)

Net Profit (537,694) (2,153,594) 3,426,873 18,805,392 22,387,351 25,035,186

Capitalization Strategy

Proposal to Investors

Momentex is a Massachusetts limited liability corporation in the process of raising its first round of external investment to fund development of a demonstration site and early stage service roll out. As a limited liability corporation, investors are legally awarded a percentage of equity rather than a number of shares as in a Corporation. In the first stage of funding, Momentex looks to raise $2,000,000 in 80 blocks of $25,000. Momentex anticipates investors would receive 22% of Momentex equity for this initial $2 million (non-dilutive). For the second stage of investment, Momentex will seek an additional $2 million in mid to late 2000 to fund rapid national expansion.

Investment Potential

Momentex anticipates the Gulp & Go service has a strong investment potential with 6 year revenue growth projected at 342% compounded annually. (Momentex uses a 6 year horizon as 1999 is a stub year.) In addition, EBITDA for year 6 is projected at $39,320,000. Based on an EBITDA multiple of 8x

21

and a 15% IPO discount, Momentex's 6 year valuation is estimated $315 million.

An example of equity investment value appreciation based on firm valuation follows. In the middle EBITDA scenario, a $100,000 first round investment for 1.1% of equity is anticipated to be valued at $3 million at the end of year 5 at the time of the anticipated initial public offering. This reflects a 5 year compound annual return on the initial investment of 80%, assuming that the equity is non-dilutive.

Sensitivity of Investor's Annual Return

2005 EBITDA Multiple Hit Rate

3% 4% 5% 6%

7.0 63% 72% 81% 86%

8.0 67% 76% 85% 90%

9.0 70% 79% 88% 94%

In the case of a strategic investor or buyer, equity value could increase dramatically as these buyers typically pay premiums of 25% or more.

Financing History

Momentex LLC was launched in August 1998 with a $20,000 start-up investment in January 1999 by the Company founders, Melissa Chadwick and Zafar Khan. The founders were each awarded 50% equity for

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their initial investment. To date, the venture has received no outside investment and prior to the ensuing first round, they have retained 100% of the equity combined.

Exit Strategy

investors in Momentex LLC would be able to realize a return on the appreciation of their investment under the following scenarios:

Initial Public Offering. If Momentex meets growth expectations and demonstrates cash flow and earnings characteristics attractive to the public markets, the Company may seek a public offering to raise capital for further rapid expansion as well as to add liquidity for founders and investors. Momentex anticipates that the high visibility of Gulp & Go service would create strong retail demand for the offering.

Rapid expansion in service locations will help Momentex to penetrate the market with Gulp & Go service, which if fully-penetrated by Momentex would achieve an attractive annual revenue stream in excess of $600 million, reflecting 10% of toll road users purchasing. If, for example, Gulp & Go service has broader availability, exposing more drivers to the service, annual revenues will near $1 billion with 15% of toll road users purchasing. In addition, Momentex views international toll roads, concentrated in Japan and Europe, as a significant source for expansion, with a combined market estimated to be 20% larger than the U.S. market.

Investment or Acquisition by a Strategic Player. Momentex believes that there are a number of beverage companies who would be potential investors or buyers for the Gulp & Go service platform as it offers an already developed operating model for a new distribution channel which can lock out competition and provides a pipeline for new service and product introductions. With the major beverage companies such as Coca-Cola and PepsiCo investing in equity of its bottlers (distributors), they may view an investment in Momentex as a method of securing access to a new distribution channel. In addition, Cadbury Schweppes and Virgin Cola may see this investment as a method of increasing the reach of their struggling beverage brands. Nestle and Starbucks may see Momentex as providing an ideal method to increase the popularity of their packaged coffees through mass distribution within the Gulp & Go service to commuters on the roads.

Momentex also believes that companies in the related areas of service plaza concessions and toll road systems integration would also be possible investors or acquirers. Service plaza concessionaires may view the Gulp & Go platform as an exciting new service offering which could provide the key differentiator in bidding for toll road concession contracts. Toll road systems operators, too, may consider the service as an attractive offering and a way to distinguish itself from other bidders.

21 Sodexho Marriott, Host Marriott Comparables.

Risk Factors

Managerial

1. Real Estate Use Approvals. As the Company must have the right to operate at toll plazas, its success in securing a pilot operation is dependent upon toll road approvals. With a limited operating history and bureaucratic management of some roads, there can be no assurance that the Company can secure such approvals quickly. To mitigate this, Momentex not only works with an influential network, but also understands the needs of the toll road operators and the benefits the Gulp & Go service brings to them.

2. Market Acceptance of Toll Plaza Retailing. Gulp & Go beverage service is an innovation that will be dependent upon driver adoption for its success. The Company's marketing and public relations campaign is designed to educate drivers and publicize the availability and convenience of Gulp & Go service. Market research indicates that the Gulp & Go target market segment is

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amenable to innovation but there can be no assurance of driver adoption of the service. To mitigate this, Momentex will conduct thorough market research on each road before roll out to identify local price and time sensitivity, and beverage selection preferences.

3. Dependence Upon Exclusivity. The business model is based upon the key assumption that Momentex can acquire exclusive rights from toll roads to retail products at points of driver interface. While Momentex has established relationships with the ten largest toll authorities in the United States, there is no assurance that it will be able to secure exclusive retailing contracts with these entities. To mitigate this, Momentex will continue to prove the operational model through live demonstrations and model the value it adds to specific roads.

4. Limited Track Record. The Company believes that it has assembled a management team with breadth and depth of expertise, yet has limited experience working together. To mitigate this, Momentex understands the needs of management and advisors and uses a strong team-based management style.

5. Competition. While the Company will take every step to protect its proprietary business model, there can be no assurance that competition will not ensue. The Company's potential competitors are much larger, with more resources, -and may have market power. To mitigate this, Momentex will form alliances with chief "deep pocket" competitor threats.

6. Labor Force. In certain toll configurations, the Company must develop an arrangement where the toll collectors will also process beverage orders in full service lanes. This will require a discussion with the toll authority as well as the Teamsters Union. It is possible that the union may demand that the toll collectors' job classifications be changed to accommodate the addition of Gulp & Go service. Demands such as these could add significant delay to or otherwise impede the pilot implementation or the ensuing roll-out. To mitigate this, Momentex aims to tie-in ideas of local workers and avoid surprising the local unions.

7. Cannibalization. In some configurations, the toll authority or food service providers at service plazas may perceive the Gulp & Go service as cannibalizing upon their sales. With market research demonstrating that restrooms are the largest draw to service plazas, and Gulp & Go providing more fluids and caffeine (a diuretic) to drivers, restroom stops at service plazas may increase, adding to their total foot traffic. To mitigate this, Momentex will relay the value proposition to stakeholders and understand their concerns.

8. Potential Legislation. In some states, there have been referendums to eliminate tolls on turnpikes. While initiatives such these are unlikely to be approved because of existing bondholder claims to future toll revenues, proposals such as these draw negative publicity to toll roads. Additionally, as toll authorities begin to raise funds through increased commercial use of the toll authority land, the public might see this as improper use of government resources. Toll authorities need only suggest the alternative of raising taxes, and most will prefer the commercialization of the land to generate the necessary revenues. To mitigate this, Momentex will monitor and use proactive tactics to influence new legislation.

9. Politics. If people start writing letters to their state representatives complaining about the Gulp & Go service, it may become a politically bad endeavor, regardless of how economically attractive it is. To mitigate this, Momentex will perform a detailed traffic analysis to localize service design and will perform a strategic driver education program prior to implementation,

0perational

1. Traffic Flow. The Company must ensure that its service does not increase traffic delays at the toll plazas. Momentex will use computer simulation and determine the optimal plaza configuration to accommodate Gulp & Go. However, there is no assurance that all traffic flow issues can be anticipated and adequately resolved. To mitigate this, Momentex will model plaza specific traffic flow using a proprietary computer simulation.

2. Technology. There are potential operational obstacles to instituting Gulp & Go service at toll plazas. In addition to modifying existing software, there are hardware requirements for beverage selection and dispensing. Until these systems are developed and tested, as well as during ongoing operations, they will pose the potential for technological uncertainty. To mitigate this, Momentex will contract to established toll systems integrators to integrate/install and thoroughly

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test the Gulp & Go service before installation and throughout pilot operation. In addition, Momentex will service the equipment frequently during on-going operations.

3. Safety and Liability. While the Company has developed Gulp & Go service to address safety issues, the Company has no assurance that safety issues will not arise. The Company plans to have liability insurance to cover expected risk. To mitigate this, Momentex has designed the service with features and a process to enhance safety.

4. Seasonality of Revenues. The Company expects that its operations will be concentrated in the Northeast portion of the United States. As a result, revenues may fluctuate with seasonal temperatures. To mitigate this, Momentex will look at offering service in stable climates such as California and Florida.

5. Intellectual Property Risk. The Company's ability to compete is in part dependent on resources to protect and enforce Momentex’s intellectual property rights. To mitigate this, Momentex will monitor infractions on its intellectual property and design a situation specific strategy with legal counsel to approach each infringement.

6. Dependence Upon Third Parties. With certain functions outsourced, the Company could become dependent upon certain contractors and be exposed to opportunistic renegotiations. To mitigate this, Momentex will aim to align incentives and continue discussions with their competitors.

Appendices (not provided for this exercise)

1. Market research survey 2. Hardware integration 3. Software integration 4. Internet integration 5. Traffic flow analysis 6. Income statement 7. Balance sheet 8. Cash flow statement