Present were: ZY, HB, VS, and AM

The meeting was held at the restaurant of HB and VS from 8:00PM to 11:30PM.

Although more than two hours were spent attempting to install "money-generating net-based downloads" into VS’ new high performance computer, for purposes of offsetting miscellaneous expenses, at least one hour was spent discussing the state of Transnational’s various initiatives.

Brief review of previously attempted business transactions resulted in all present noting that no progress had been forthcoming since January 24^th on these matters. For purposes of the record, the following status-reports were offered by AM and VS:

1. Casa Mexicana Tile Import-Export Initiative: MP of Casa Mexicana has not, to date, responded to Transnational correspondence, either formally or informally. Limited interest in the imported Chinese tile concept has been verbally expressed by Casa Mexicana employee SP, but absolutely no tangible indication of purchase intention has been forthcoming. Contact with Casa Mexicana personnel has not materialized, in spite of attempts in recent days.

2. Due to illness in VS’ family in Guatemala City, no information regarding the purchase of computers by his cousin is currently available. The volcanic eruption has also complicated matters logistically.

3. Similarly, no information from Guatemala is available concerning the chicken breeding panels for AVICOLA which were to have been imported from Mainland China. E-mail messages concern only matters of family health at this time.

4. KM has not provided information to date concerning his contacts in Japan.

5. No information from KUWAIT on the purchase of tiles or other merchandise has been forthcoming from HA.

6. Perfume trading was ruled out by VS’ relatives in El Paso, due to pre-established purchase patterns.

7. All other previously discussed business was tabled, due to lack of input or required data at this time.

New Business was subsequently discussed:

The major topic of discussion this evening concerned VS’ aunt’s offer of capital for investment in a small business enterprise, probably to be located in New Mexico. VS explained that a choice had to be made between (1) a small store specializing in imported merchandise from China or (2) an established food franchise operation.

VS explained that several advantages were inherent in both options.

A. After lengthy discussion, a consensus was reached provisionally ruling out the Chinese import-export outlet option, particularly due to the limited population base in the Las Cruces area, and a reluctance to break into existing major urban markets in cities like El Paso or Albuquerque.

Other objections were raised in passing by AM and ZY:

• Standard operating procedures did not exist for such an outlet and would have to be prepared.
• Existing demand patterns had not been established.
• No name-recognition was possible under this option.
• Other disadvantages, particularly logistical and expense-related, were also noted.
• Figures on failure rate of new businesses of this type were raised (9 out of 10 fail within 2 years)

B. Attention subsequently turned to food franchises. VS enthusiastically presented his case for a SUBWAY SANDWICH outlet, stating that, of all franchises explored, this was the most likely to succeed and the most investor-friendly model.

Speaking of Subway, VS noted in rapid succession:

• Information obtained on the Internet had been perused and studied.
• A virtually guaranteed level of income was assured
• A training session, in Memphis, for the management team was necessary

• VS’ aunt was enthusiastically behind such a concept and would invest in the vicinity of $45,000 in a SUBWAY outlet. (30K for the franchise fee, 15K for set up of the outlet)
• Gross daily income averaged $2000, or $60,000 per month, at Las Cruces Subway outlets.
• A meeting with the local subway owner could be arranged to discuss the cash-flow and purchase patterns of his stores in this area.
• Net Profit (after 10% to SUBWAY Corp) would be divided among VS’ aunt and the members of the Management Team (VS,AM,HB,ZY).

• Low overhead costs were typical of Subway Outlets.

• A Management Team Member would have to be present on the premises for six months.

Discussion of these points ensued. Mention was made by AM of the percentage of the net profits that would flow to VS’ aunt, and the percentage that would be available to the four-member Management Team.

It was thought that VS’ aunt would accept 78% of net profits, leaving 22% for the 4-management members. Quick calculation of figures, based on the lucrative Las Cruces revenue pattern, indicated that, assuming net profit of 5% of gross (i.e. $3000), each team member would receive only $165 per month…possibly as much as $200 per month. This did not seem worthwhile in the eyes of AM or ZY.

Salary for time worked at the outlet would be available, of course, but each Team Member had agreed to work only 1.5 months, thus constituting SUBWAY CORPORATION’s requirement of a 6-month physical presence.

VS mentioned that ultimately multiple outlets could be opened with reinvested capital and that each Team Member’s share would gradually increase.

Attention turned to where the outlet could be reasonably located.

• ZY mentioned that, in China, a formula for determining customer purchase patterns was used. One in twenty customers entered a mall-based store and a fixed percentage of those made purchases. This formula is validated and reliable, he pointed out, although it pertains to Chinese buying patterns.

• Discussion of the El Paso Airport ensued. AM pointed out, among other negative factors, regulatory restrictions and multiple levels of governmental control at airport facilities. Those present eliminated El Paso Airport as a possible site of the Subway outlet.

• AM suggested Anthony, New Mexico as a possible location due to demographic growth in this area. VS supported this location, as did ZY and HB. Specific locations were mentioned in relation to key points in Anthony: the freeway, the high school and the supermarket.

VS asked that a SCHEDULE of tasks to be undertaken be prepared. Several steps have already been achieved and others should be accomplished in the near future, he pointed out.

Among schedule items mentioned as being critical were:

1. Web Site Research with 800 Number (already obtained)
2. Field Research in Anthony, NM
3. Complete Subway Application
4. Visit with VS’ aunt to discuss disbursement and profit-sharing
5. Meeting with local Subway owner
6. Arrange tentative appointment with the Memphis Headquarters

These, and all other required project steps, could be completed by April 30^th 2000, it was estimated by VS and ZY.

It was thought necessary to appoint a Manager of this particular project within Transnational. After discussion, HB was selected as the manager-coordinator for purposes of delegating tasks associated with start-up of the SUBWAY OUTLET venture in Anthony.

The meeting adjourned at approximately 11:30PM.

All Transnational members will receive either hard-copies or URLs for these February 11^th minutes, and prior meeting minutes.