JAPAN EARTHQUAKE AND TSUNAMI 2011 INTRODUCTION AND CURRENT SITUATION

On March 11, 2011, a magnitude 9.0 earthquake struck the Island of Honshu, Japan with its epicenter in the Sendai province. This earthquake triggered a 12 meter high tsunami event along the eastern coast of Honshu. The combined force of these two catastrophic events, and further exacerbated by a continuous cycle of daily earthquakes measuring between 4.5 and 7.1 in intensity, as defined by the Richter scale, has caused significant damage throughout Japan. The degree of damage suffered by the cities, villages and industrial facilities of Japan is significant and Japans economy was severely affected. As a result of these events, Japan suffered significant damage, disruptions, costs and risks.
The Bank of Japan has injected over $700 billion since the catastrophe to support business and the economy. Whole communities and their supporting facilities were virtually destroyed. Casualties in terms of confirmed loss of life has totaled 10,000 mark as of Friday, April 9th and was still climbing. As of today, hundreds of thousands of survivors are still encamped in temporary shelters. Some 660,000 households do not have water; more than 209,000 do not have electricity. Earthquake related damage claims could rise as high as $310 billion, Japans government said, making it the most costly natural disaster on record. The total death toll from the disaster could rise much higher. Japans National Police Agency said that more than 17,400 people are still missing. The actual totals are difficult to project, as for example police from one of the hardest-hit prefectures, Miyagi, estimate that the deaths will top 15,000 in that region alone. In addition to the direct human and economic costs from the event and resulting disruptions. Japan faces significant threats and risks due to the significant damage sustained by (1) its nuclear power plant complexes, (2) oil refineries, (3) petrochemical facilities and (4) industrial chemical factories. It appears certain that the failure of several nuclear reactors at the Fukushima Nuclear Power facility will occur and very soon. There could be a substantial release of radioactive material including very dangerous and deadly isotopes of Plutonium, Cesium, Iodine and Strontium. Given the proximity of Fukushima, which is located 140 miles (220 kilometers) northeast of Tokyo, to Japans major cities approximately 80% of the population of Japan will likely suffer some level of injury, both temporary and permanent, and death either immediately or far sooner than the victims expected lifetimes. Tokyo itself has a population of approximately 13.7 million in the city and over 35 million in the metropolitan area). The population of Japan is approximately 135 million.

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JAPAN EARTHQUAKE AND TSUNMAI 2011 INTRODUCTION AND CURRENT SITUATION (CONTINUED)
Japan has been successful internally and recognized and respected as a world power. Japans strong and well-developed institutions play an essential role. These institutions have formed the backbone of Japans efforts to assert itself as a constructive, respected but peaceful leader in the international arena. During normal times the cooperative spirit between the government and business has supported the strong growth and leading position that Japan has historically earned. However, the recent catastrophe and collateral damage has exposed Japans and its major institutions to a high degree of impairment. This has increased the level of risk globally. If Japans institutions were to fail because they were not properly supported by a resilient infrastructure then Japan would not be able to meet either its domestic or international obligations. If Japan fails to deliver on its obligations to the world community, there would be significant consequences that would result in world economic disruptions, business failures and other costly gaps in terms of world political leadership, systems, social processes, etc. which are valuable but not necessarily quantifiable. Given the extremely fragile state of its nuclear facilities, particularly Fukushima, Japan is highly likely to experience a catastrophic event. This will result in the long term impairment of approximately 70% to 80% of its land, air and water supply, never mind the projected casualty rates and economic damage. This could force up to 70% of Japans industrial capacity to be shut down. Pollution from the release of radioactive matter, particularly Plutonium, Cesium and Strontium will render the environment of Japan as hostile and uninhabitable for time period of tens up to thousands of years. The importance of Japans institutions, the risk to its population and the short time frame remaining before the likely catastrophic event at Fukushima, make the need for Japan to act quickly to develop and implement strategies that will preserve as much of what makes up Japan as possible. A way to do this is to employ the concept of Resilience, which large management consulting firms such as McKinsey, Booz Allen & Hamilton and Accenture are well known as influential leaders in its application. Through Resilience, Japan will be able to ensure the continuity of its institutions and the protection of its population and its way of life. A comprehensive, well-coordinated effort is required to quickly develop and implement Resilience and its supporting strategies, investments and implementation steps. We propose to coordinate and provide valuable leadership to this intensive effort. Time is not on our side, as the state of the Fukushima facility, particularly reactors 1, 2 and 3, is very fragile and vulnerable to experiencing a catastrophic event . This event is highly likely to occur within a time period we do not believe will exceed thirty (30) days, Given the lack of historical reference for this type of disaster, the risk of multiple reactors failing and the unusual nature of this incident, we have no way to confirm the exact date and time. Global Resilience Advisors 2

Resilience incorporates necessary strategy, systems, structures, processes and supporting investments that enable Japan to achieve its goals, protect its institutions, resume growth and manage risk.
Resilience, according to IBM, is the ability to rapidly adapt and respond to risks and opportunities, in order to maintain continuous business operations, be a more trusted partner, and enable growth. Resilience protects the most important institutions that define Japan, and minimizes critical risks. Given Japans inherent geological instability and exposure to regular tsunamis, Japanese must implement a high degree of readiness. The interruption and impairment of the globally important and influential Japanese institutions, particularly Japans , economy and business operations, will expose the world to a high degree of risk and loss. The current state of the world without considering the effects of the Japanese disaster is already tenuous at best due to global economic issues, wars and social unrest. Japan must carefully consider the national and international risks to its economy, business infrastructure, political institutions and systems, social institutions and other contributions and influences such as art, literature, music, scientific, intellectual, leadership, religious/spiritual, philosophy etc. Resilience will leverage available systems and technologies as well Japanese-owned foreign real estate and human resources to provide a platform on which migrate as many of its core operations, systems and finances to safer havens. Execution of a Resilience engagement for the benefit of Japans leading commercial and governmental institutions will required an intensive and well-coordinated effort to ensure success. It is likely that only a short time frame is available to approve and initiate the Resilience effort.

Source: IBM Corporation, MdKinsey & Co., GRA analysis

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Tepco and government reports show the main areas of radiation exposure to be primarily outside of Japan's major population centers. However, verified authoritative reports show these initial reports to be largely understated. Further, this is not a static or stagnant situation. This incorporates a dynamic series of events that will effect large portions of Japans population, economy, institutions and infrastructure.
JAPAN EARTHQUAKE AND TSUNAMI HONSHU AREAS AFFECTED SINCE EARTHQUAKE From 11 MARCH To 8 APRIL, 2011 Preliminary Working Draft

LEGEND: POLLUTED/IMPAIRED AREAS Per Official Announcement Actual Area of Damage

Fukushima Nuclear Complex (6 Reactors) Tokyo

Source: International Atomic Energy Agency

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Due to the damage and resultant release of hazardous and toxic materials, substantially 70% to 80% of the Japanese mainland will be substantially polluted by a combination of radiation, oil refinery and industrial chemical related accidents. Nuclear power plant related pollution could take up to thousands of years to dissipate while other damage such as industrial, chemical and sea water will take between 10 to 50 years to clean up. JAPAN EARTHQUAKE AND TSUNAMI HONSHU: KEY NUCLEAR AND CHEMICAL AT RISK SITES As of 7-April 2011

Rokkasho RP

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Onagawa Nuclear Site

Sendai

Iwaki Onahama
Fukushima Nuclear Power Complex

Ibaraki Kashima Tokyo

Tokai Nuclear Power Complex

Negishi Chiba

Shikoku Kawasaki

Nuclear Release Site Petro/Chemical Release Site

For Reference see Appendix A-2 Source: Chemical Industry News and Intelligence

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80% of the population of Japan lives within Harms Way, that is within the range of greatest impact of the impending nuclear disaster at Fukushima. At least three nuclear reactors have a high probability of self-destruction. THE PREDICTED CASUALTY RATE FOR THE JAPANESE POPULATION IS VERY HIGH.

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JAPAN EARTHQUAKE AND TSUNAMI PROJECTED RADIATION EXPOSURE TO POPULATED AREAS Post Predicted Fukushima Catastrophic Event LEGEND: Affected Areas Assumes Weather at Site: Wind S/SW @ 10 km/h

Fukushima Nuclear Power Complex: 3 Critically Damaged Reactor Units

Chart Symbols Locators Nuclear Reactor Unit

Source: Institut de Radioprotection, et de Surete, Nuclearie GRA analysis

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80% of the arable and habitable land area of Honshu will be unusable and even hostile. The human and other living creatures casualty rate will be historically high. THE POTENTIAL CASUALTY RATE FOR THE JAPANESE POPULATION IS VERY HIGH.

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JAPAN EARTHQUAKE AND TSUNAMI IMPENDING FUKISHIMA NUCLEAR CATASTROPHE ESTIMATED RADIATION COVERAGE AND IMPACT
Sendai

Iwaki
Onahama
Fukushima I Nuclear Power Plant

Ibaraki Kashima Tokyo Negishi

Chiba

Shikoku Kawasaki

Levels of Contamination
Prohibited: 15 miles (500 years plus) Exclusion: 180 miles (15-50 years)
Exposure: Long Term Health Consequences

Source:

Department of Physics and Center for Experimental Nuclear Physics and Astrophysics, University of Washington

The consequences of the environmental damage and other disruptions already sustained by Japan, to be further magnified by the predicted catastrophe at Fukushima, will critically Impair key Japanese institutions, particularly its economy and business community. This will negatively affect countries and international institutions, economically, financially and otherwise. JAPAN EARTHQUAKE AND TSUNMAMI DIMENSIONS OF JAPANESE INSTITUTIONS SUMMARY OF MAJOR DOMESTIC AND INTERNATIONAL RISKS

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INSTITUTION

DOMESTIC RISK

INTERNATIONAL IMPACT

Economy

Default of a significant portion of Public Debt at $2.3 Trillion (70% held by Japanese citizens)
Default of a significant share of Private Debt and the evaporation of Public Equity of approximately $7.5 Trillion Loss of Private Equity Value of approximately $ TBD (multi-trillions of US dollars) Loss of value of international trade, funds flows, foreign exchange transactions, multiplier effects > $25 Trillion per year Loss of ability to grow and produce nearly 100% of food supply higher prices, and supply shortages

Loss of Yen value in foreign exchange reserves

Negative Impact on world money supply, currency markets, money flows, public equity values and balance of payments International trade disruptions leads to shortages of goods Sharp decrease in the value of Japan-related investments both direct and indirect Loss of specialized and commodity food exports

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JAPAN EARTHQUAKE AND TSUNMAMI DIMENSIONS OF JAPANESE INSTITUTIONS SUMMARY OF MAJOR DOMESTIC AND INTERNATIONAL RISKS (CONTINUED)
INSTITUTION Business DOMESTIC RISK Impairment of Capital Markets sharp reduction of value and impairment of Japanese institutions and their ability to access the capital markets domestically and internationally Sharply higher cost of capital Halt of to up to 70% of manufacturing and services industries activities for potentially many years Supply chain disruption. Loss of Privately-held total Equity Value $TBD Exodus of, injury to, and death of managers, executives, bankers and investors INTERNATIONAL IMPACT

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Domestic supply chain disruptions lead to international subsidiary shutdowns Disruptions of capital and operating cash flows to foreign subsidiaries, affiliates, other business partners impact international subsidiaries and foreign partners performance Foreign subsidiaries will become dysfunctional at the management levels Foreign governments will lose tax revenues Japanese operations of foreign companies have already begun to shut down and may report write-downs and write-offs

Political

Japanese government stability will be jeopardized. There will be calls to dissolve the current government and replace it with a new institution. This could be continuous and less peaceful. Key institutions (e.g., political parties, government agencies, MITI and JETRO) will be unable to function and will not be able to provide the traditional expected stability that comes from the cooperative relationships between government and industry. Government will be unable or largely ineffective in dealing with the aftermath of this crisis and likely future crises.

Japanese government no longer to can sustain its role as a supporter and participant in a wide range of important international institutions on a regional, global or economic basis The ability for allies and members of international organizations to rely on Japan as a stable, strong country will be impaired.

JAPAN EARTHQUAKE AND TSUNMAMI DIMENSIONS OF JAPANESE INSTITUTIONS SUMMARY OF MAJOR DOMESTIC AND INTERNATIONAL RISKS (CONTINUED)

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INSTITUTION Social

DOMESTIC RISK Ability to support the core values of Japanese societies will be more difficult. Japans citizens may accelerate the current tendency to adopt Western style values and practices. Social institutions including family, religion, school, the media, government, and corporations all affect culture. The family, social classes, group behavior, age groups, and how societies define decency and civility will change as Japanese people have cope with challenges on their homeland, and struggle to maintain their identity. This will be particularly due to the imperative for an exodus of a substantial part of Japans population to other countries. Japan, currently benefits from a 98.5% concentration of ethnic Japanese. The population diversity will increase as its citizens interact with and intermarry with other ethnic groups, particularly in other countries. Family, religious values, school and education, and literacy rates which are cornerstones of Japanese culture and society will be impaired and diluted. Media (magazines, TV, the Internet) will change and possibly weaken as Japanese identity is diluted and challenged.

INTERNATIONAL IMPACT Social institutions including family, religion, school, the media, government, and corporations all affect culture The ability of Japan to protect, promote and support its various world-wide social institutions will be impaired as the population is physically dispersed and interrelations and inter-marriage with other ethnic groups occur.

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JAPAN EARTHQUAKE AND TSUNMAMI DIMENSIONS OF JAPANESE INSTITUTIONS SUMMARY OF MAJOR DOMESTIC AND INTERNATIONAL RISKS (CONTINUED) OTHER/CULTURAL

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INSTITUTION Other/Cultural (Includes Arts, Literature, History, Sciences, Philosophy, Religion)

DOMESTIC RISK Japans proud and distinct arts, architecture, literature, media, philosophies and religion will be challenged as Japanese both grow disillusioned and succumb to the forces to assimilate with other peoples and cultures

INTERNATIONAL RISK The world will miss the distinct proud and defined Japanese cultural, scientific, philosophical and religious characteristics and contributions.

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Fukushima reactors 1, 2 & 3 have each sustained substantial damage. They are UNSAFE. JAPAN EARTHQUAKE AND TSUNAMI 2011 FUKUSHIMA REACTORS 1, 2 & 3: CURRENT MEASUREMENTS VS. OPERATING STANDARDS Preliminary Working Draft

* Temperature sensors fail at temperatures > 1,000 C, therefore the actual reactor temperature is unknown but apparently well above the maximum allowed temperature
Sources: US Army Corps of Engineers, Tokyo Electric Power Company Inc, and Japan Federal Ministry for Environment, Nature Conservation and Nuclear Safety

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Not only are the reactors at Fukushima UNSAFE, they are likely to experience a catastrophic event within a short time frame, potentially 30 days from today. JAPAN EARTHQUAKE AND TSUNAMI 2011 FUKUSHIMA REACTORS 1, 2 & 3: LIKELY CATASTROPHIC EVENT JUSTIFICATION SOURCE: SATELLITE RECONNAISSANCE DATA INFORMATION SOURCES RECONNASSANCE SATELLITE INFORMATION Thermal Imaging shows that the level of heat emanating from the reactors is significant. Image of Fukushima #3 from 350 miles above the Earth. White represents extreme heat.

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IMPLICATIONS FOR REACTORS 1, 2 & 3 Steel liners in the containment building are ruptured (concrete is absorbing heat directly from fission activity). Salinification of the reactor core (hard salt encasement) has occurred around control rods, making them less effective. ALL 3 REACTORS ARE UNSTABLE AND THE SITUATION IS DETERIORATING RAPIDLY.

Sources: TEPCO, Federal Ministry for Environment, Nature Conservation and Nuclear Safety Institut de Radioprotection et de Surete Nuclearie, Japan Atomic Industrial Forum, IAEA, US Air Force, US Army Corps of Engineers, US Army NBC Command, NHK, CNN, and Bloomberg Images: Manufacturer T-Hawk, NRO, TEPCO, IAEA, GRA Analysis

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JAPAN EARTHQUAKE AND TSUNAMI 2011 FUKUSHIMA REACTORS 1, 2 & 3: LIKELY CATASTROPHIC EVENT JUSTIFICATION T-HAWK UNMANNED DRONE AIRCRAFT SURVEILLANCE (CONTINUED)
INFORMATION SOURCE T-HAWK UNMANNED AIRCRAFT (USAF) INFORMATION Fission continues to take place in the cores of Units 1, 2 & 3. Fission in storage pools for Reactors 1, 2, 3, & 4 is still occurring. There is not enough cold water flowing into the reactor buildings to stop or "cool" fission. IMPLICATIONS FOR REACTORS 1, 2 & 3 The fission process in the reactors was not stopped when the reactors were scrammed. Accumulated heat will "cook the concrete which will further fracture. Increase in water loss leads to faster Domino Effect: Heat => reactions => more decay => hydrogen gas build up in the containment structure. Build up of Hydrogen gas will cause explosion. UNSTABLE REACTORS WILL RUNAWAY AND POTENTIALLY SELF-DESTRUCT.

Sources: TEPCO, Federal Ministry for Environment, Nature Conservation and Nuclear Safety Institut de Radioprotection et de Surete Nuclearie, Japan Atomic Industrial Forum, IAEA, US Air Force, US Army Corps of Engineers, US Army NBC Command, NHK, CNN, and Bloomberg Images: Manufacturer T-Hawk, NRO, TEPCO, IAEA, GRA Analysis

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JAPAN EARTHQUAKE AND TSUNAMI 2011 FUKUSHIMA REACTORS 1, 2 & 3: LIKELY CATASTROPHIC EVENT JUSTIFICATION (CONTINUED)

INFORMATION SOURCE INFORMED OFFICIALS (Un-named due to nature of their roles and responsibilities for the purposes of this presentation)

INFORMATION Several governmental and corporate sources confirmed that Fukushima reactors 1, 2 & 3 are likely to experience as catastrophic, destructive event. Reactors 2 & 3 are widely believed to be destined for a bad end for a variety of reasons. leading Energy expert Unfortunately, it seems your predictions are becoming real. I just wish the worst could be avoided. Leading Japanese Executive

IMPLICATIONS FOR REACTORS 1, 2 & 3 There is broad consensus as to the likelihood of a catastrophic outcome in Fukushima and its near-term timing. There will be a release of radioactive gas at Fukushima. Some of this particulate matter will find its way to the U.S. Mainland.

Sources: TEPCO, Federal Ministry for Environment, Nature Conservation and Nuclear Safety Institut de Radioprotection et de Surete Nuclearie, Japan Atomic Industrial Forum, IAEA, US Air Force, US Army Corps of Engineers, US Army NBC Command, NHK, CNN, and Bloomberg Images: Manufacturer T-Hawk, NRO, TEPCO, IAEA, GRA Analysis

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JAPAN EARTHQUAKE AND TSUNAMI RESILIENCE INITIATIVE RECOMMENDATIONS REASONS FOR ADOPTING A RESILIENCE STRATEGY AND DISCIPLINE, NOW

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Japan will more than Save Face in what appears to be a very difficult and even hopeless situation the leaders, executives and managers of both industry and government will appear heroic to the Japanese people and the international community . Japan will likely merit a level of respect and reverence equivalent to modern Samurai and Shoguns
By migrating the key systems and other information that define Japan, Resilience will protect a large proportion of Japans' $30 trillion-plus world economic role as well as its other important world affairs leadership, financial and social/cultural contributions, participation and influence Maintaining the Resiliency of Japan's political and social institutions will support the continuation and reinforcement of the many unique and highly valued aspects of Japan, including its society, culture, values, religion, philosophy, media and trends The cost of adopting and implementing Resilience for Japan will be far less than the $700 billion + that has been injected by the Bank of Japan since March 11th to support Japans priorities including the economy, stock market and Tepco

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Japan, including its leading companies (Zaibatsus) and government, has limited risk and much to gain and protect by embracing and incorporating Resilience into its core practices.

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JAPAN EARTHQUAKE AND TSUNAMI RESILIENCE EFFORT BENFITS AND RISKS TO JAPAN
BENEFITS/UPSIDES Fukushima disaster is averted yet Japan still has a viable plan for the future as there are many dangers and unknowns facing Japan and others in the future The world community appreciates the products of Japans resilience initiatives and elevates Japan and its leaders to a high level, possibly equivalent to the Shoguns and Samurai of ancient Japan. As a result Japans leaders may earn recognition for their strength, leadership, vision and discipline.

RISKS/DOWNSIDES
The highly probable Fukushima Nuclear Reactor Explosion event may have a worse impact than forecast on Japan and possibly internationally. Project management issues including cost overruns, billing receivables issues, client communications, etc. The timeline for planning and implementing Reslience is stretched out due to issues in the economy, businesses and/or skill set of the selected consulting firm.

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Preliminary Working Draft

JAPAN EARTHQUAKE AND TSUNAMI RESILIENCE CONCEPTS, STRATEGY AND IMPLEMENTATION NEXT STEPS

Gain consensus with clients, current and potential in Japan and/or working closely with Japanese companies and institutions to gain consensus on the need for Resilience for Japan.

Agree on the scope of the initial phase of this project as timely

Prepare and finalize the requisite agreements Proceed with starting to plan and structure a Resilience initiative

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Biography /CV WARREN C. NAGLER, FOUNDER, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
WARREN NAGLER has over 20 years of business experience as a management consultant, private equity professional and executive. Mr. Nagler has worked for leading international management consulting firms Booz, Allen & Hamilton, Inc. and Accenture, Inc. (formerly Andersen Consulting). He has held financial director, vice president of finance and chief financial officer positions with Pizza Hut, Inc. (a subsidiary of PepsiCo, Inc. (now YUM Brands, Inc.)), Liberty Hardware, a division of the Masco Corp., Kemper National Services, Inc. (a division of the Kemper Insurance Company), and JB Oxford & Company. He has. many years of experience in Strategy, Finance and Information Technology. Consulting and private equity engagements experience include: Founded and developed GlobalBanc, LLC which is designed to change consumer savings and payments systems similar to a bank, all over the world Served as Chief Operating Officer of the Western Hemisphere subsidiary of the worlds second largest manufacturer of disposable shaving razors and related personal care products Developed a marketing and product distribution strategy for a Japanese manufacturer of sporting goods equipment Served as an interim Controller of a telecommunications firm Assisted in the acquisition of a number of medical properties for a publicly traded REIT Recommended a new investment selection, review and management processes for the $1.8 billion pension plan of a major Japanese automobile manufacturer Raised equity and debt capital for a European travel company and a worldwide distributor of aviation industry metals Assisted in the negotiation in the $40 + million acquisition of and the due diligence for an acquisition of a dairy processing plant by a large foreign-owned dairy products manufacturer During the Hurricane Andrew Disaster in Florida in 1992 Mr. Nagler assisted PepsiCo in bringing generators, food and water to residents of hurricane ravaged South Miami, FL and established a private equity fund that acquired and rebuilt homes that had been damaged by a Force 5 (maximum) hurricane. Mr. Nagler earned his MBA from the Harvard Business School . He received his BA in Economics from the University of California, Berkeley where he served as student government Chief Financial Officer and a member of a Chancellors Advisory Committee. He has earned Series 7, 66 and 27 license designations from FINRA (formerly the NASD).

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