arg presentation

“…never, never, never give up.”

ARG Educational Program - Confidential

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“LIFE CONSISTS NOT IN HOLDING GOOD CARDS, BUT IN PLAYING THOSE

YOU HOLD WELL .”

JOSH BILLINGS


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ARG


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ARG Restructure Partners ARG Appraisal Group ARG Asset Recovery Group ARG Wholesale Group ARG Capital Group

Byron Clark 972-335-2090 – [email protected] [email protected] Morris 972-562-6613 – [email protected] Welsh 214-604-5457 – [email protected] Lally 480-313-1588 – [email protected]

3308 Preston Road, Ste 350-215Plano, Texas 75093

ARG Recovery and ARG Partners

mailto:[email protected]





ARG - Business Sectors Served


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Manufacturing Wholesale, Distribution Transportation Retail Direct Mail & Catalogue Direct TV and Internet Marketers Financial Receivables Oil and Gas Services and Operations

ARG - Inventory Appraisal


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Definition of Eligible and Ineligible in consort with Lender Inventory Analysis at SKU level - investment and sales. Detailed Aging and/or slow moving Discussion of Liquidation Process and Channels of Distribution Key Personnel Customer Profile and Sales Concentrations Build-Out, if requested Seasonality (Sales and Recovery) Accounts Receivable as pertains to Liquidation Process Identification of Critical Inventory Detail of Liquidation Expenses Phasing of Liquidation / Cash Flow Monitoring Points (Benchmarking Risk)

Inventory Appraisal – Sales to Inventory


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Inventory Sales Inventory Cost Sales

SKUs Ranked by Sales Cost Wholesale

12 Months 2012 % of Total Cumul % % of Total Cumul %

Top 10 SKUs 1,875,736 2,134,678 67,567,230 16.7% 16.7% 51.6% 51.6%11-20 2,029,225 2,309,357 20,412,404 18.0% 34.7% 15.6% 67.1%21-30 1,386,813 1,578,260 10,139,060 12.3% 47.0% 7.7% 74.9%31-50 1,612,957 1,835,623 11,250,287 14.3% 61.4% 8.6% 83.4%51-100 1,856,742 2,113,062 12,691,476 16.5% 77.9% 9.7% 93.1%11-200 1,864,844 2,122,283 7,310,497 16.6% 94.5% 5.6% 98.7%201-405 592,481 674,272 1,692,947 5.3% 99.7% 1.3% 100.0%No Sales 30,017 34,161 - 0.3% 100.0% 0.0% 100.0%Grand Total 11,248,816 12,801,698 131,063,901 100.0% 100.0% 100.0% 100.0%

Inventory Appraisal – Weeks Supply on Hand


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Inventory Inventory Sales Gross Recovery

Weeks Supply Category Quantity Cost Wholesale 2012 Sales Weeks Supply

Less than 1 Week 681,895 436,560 496,827 46,572,262 0.6 1 Week > 3 Weeks 438,009 1,344,220 1,529,788 45,336,471 1.8 3 Weeks > 5 Weeks 97,293 333,425 379,454 5,369,536 3.7 5 Weeks > 10 Weeks 219,682 1,686,275 1,919,063 13,675,987 7.3 10 Weeks > 26 Weeks 422,737 3,943,983 4,488,444 15,586,648 15.0 26 Weeks > 52 Weeks 343,750 2,276,573 2,590,850 3,696,424 36.4 52 Weeks > 104 Weeks 62,019 988,554 1,125,023 749,192 78.1 Over 104 Weeks 28,620 209,208 238,089 77,382 160.0 No Sales 4,772 30,017 34,161 - - Grand Total 2,298,776 11,248,816 12,801,698 131,063,901 5.1

Inventory Appraisal – Methodology/Cash Flow


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Target Sales Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8 Wk 9 Wk 10 Total% of Inventory SoldExisting Customers 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 5.0% 65.0%New Customers 2.5% 2.5% 2.5% 2.5% 2.5% 12.5%Wholesalers 5.0% 5.0% 2.5% 2.5% 15.0%Close-Out Specialists 5.0% 2.5% 7.5%Total 10.0% 10.0% 12.5% 12.5% 12.5% 17.5% 12.5% 2.5% 7.5% 2.5% 100.0%

Wholesale Recovery %Existing Customers 100.0% 95.0% 90.0% 85.0% 80.0% 75.0% 70.0% 86.2%New Customers 85.0% 80.0% 75.0% 70.0% 62.0%Wholesalers 75.0% 70.0% 60.0% 25.0% 62.5%Close-Out Specialists 25.0% 10.0% 20.0%Total 100.0% 95.0% 72.0% 85.0% 80.0% 75.0% 70.0% 60.0% 25.0% 10.0% 74.6%

Sales ($000s)Existing Customers 5,121 4,865 4,609 4,353 4,097 3,841 1,792 28,676 New Customers 1,088 1,024 960 896 3,969 Wholesalers 1,920 1,792 768 320 4,801 Close-Out Specialists 640 128 768 Total Sales 5,121 4,865 4,609 5,441 5,121 6,721 4,481 768 960 128 38,213



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Why get an inventory appraisal?Guidance in setting advance rates based on NOLVDefine slow moving and other unnecessary inventoryDefine and quantify ineligiblesDetermine seasonalityProject liquidation expensePhasing of liquidation / Cash flowAnalyze inventory vs. Sales productivityExit strategyThe Appraisal sets the Baselines for “go-

forward” monitoring to mitigate risk.



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Quotes from appraisals“Any material changes to information provided by the Company such as

gross margins, inventory mix, or pricing could materially affect liquidation values.”

“These appraisals are based on the value of assets as of the date of this report and any changes could have a significant effect on values.”

“Any change in circumstance relating to the company, the inventory or the market sector may result in material changes in recoveries.”

“Significant changes in inventory mix (including, but not limited to type, breadth and depth), operating or promotional strategy from the time of the appraisal can have a significant impact on recovery values.”



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Further ARG Statement“This report was based on the condition of the

Company at a specific point in time.Typically as conditions in a company

deteriorate, so does the value of the inventory.”

Benchmarking Risk® is ARG’s proprietary tool that allows lenders to monitor collateral value in ever-changing companies.



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Statistical projections regularly benchmarked by ARG Changes in Inventory Dollars Changes in Mix of Finished Goods Changes in Finished Goods vs. Raw Materials Changes in Productive SKUs Changes in Sales Changes in Margin %

Varying Inventory


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$000s Inventory Total Net Recovery IncrementalDescription Cost Sales $ % Change

Increased 52,995 44,802 35,745 67.5% 2.4%Increased 50,995 43,111 34,122 66.9% 1.9%Increased 48,995 41,420 32,499 66.3% 1.3%Increased 46,995 39,730 30,876 65.7% 0.7%Current 44,995 38,039 29,253 65.0% 0.0%Decreased 42,995 36,348 27,630 64.3% -0.8%Decreased 40,995 34,657 26,006 63.4% -1.6%Decreased 38,995 32,967 24,383 62.5% -2.5%Decreased 36,995 31,276 22,760 61.5% -3.5%Decreased 34,995 29,585 21,137 60.4% -4.6%Decreased 32,995 27,894 19,514 59.1% -5.9%Decreased 30,995 26,203 17,891 57.7% -7.3%Decreased 28,995 24,513 16,267 56.1% -8.9%Decreased 26,995 22,822 14,644 54.2% -10.8%

Varying Gross Margin


14$000s Inventory GM % from Net Recovery Incremental

Cost Wholesale P&L $ % Change44,995 54,296 17.1% 31,456 69.9% 4.9%44,995 53,649 16.1% 30,994 68.9% 3.9%44,995 53,017 15.1% 30,544 67.9% 2.9%44,995 52,399 14.1% 30,103 66.9% 1.9%44,995 51,796 13.1% 29,673 65.9% 0.9%44,995 51,207 12.1% 29,253 65.0% 0.0%44,995 50,631 11.1% 28,842 64.1% -0.9%44,995 50,067 10.1% 28,440 63.2% -1.8%44,995 49,516 9.1% 28,047 62.3% -2.7%44,995 48,977 8.1% 27,663 61.5% -3.5%44,995 48,450 7.1% 27,287 60.6% -4.4%44,995 47,934 6.1% 26,919 59.8% -5.2%44,995 47,428 5.1% 26,558 59.0% -6.0%44,995 46,934 4.1% 26,205 58.2% -6.8%44,995 46,449 3.1% 25,860 57.5% -7.5%

Varying Sales


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$000s Inventory Annual Net Recovery IncrementalCost Wholesale Sales $ % Change

44,995 51,207 684,444 31,196 69.3% 4.3%44,995 51,207 659,444 30,549 67.9% 2.9%44,995 51,207 634,444 29,901 66.5% 1.4%44,995 51,207 609,444 29,253 65.0% 0.0%44,995 51,207 584,444 28,605 63.6% -1.4%44,995 51,207 559,444 27,957 62.1% -2.9%44,995 51,207 534,444 27,309 60.7% -4.3%44,995 51,207 509,444 26,661 59.3% -5.8%44,995 51,207 484,444 26,013 57.8% -7.2%44,995 51,207 459,444 25,365 56.4% -8.6%44,995 51,207 434,444 24,717 54.9% -10.1%

Changes in Components of Value


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Benchmark Original 4 Months Later DifferenceInventory 44,995,000 36,995,000 8,000,000 Gross Margin 12.1% 9.1% 3.0%TTM Sales 609,444,000 534,444,000 75,000,000 Current NOLV 65.0%

Two Months Later Loss of NOLVInventory -3.5%Gross Margin -2.7%TTM Sales -4.3%Total Change -10.5%

Advance Rate Calculation Original4 Months No Adjustment

4 Months With Adjustment

Cost Inventory 44,995,000 36,995,000 36,995,000 NOLV 65.0% 65.0% 54.5%80% for Advance Rate 52.0% 52.0% 43.6%Maximum Inventory Advance 23,397,400 19,237,400 16,129,820 Overadvance 3,107,580

Advance Rate Exposure

Change in NOLV

Changes in Operational Results

ARG - Benchmarking Matrix


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Operations MetricData From Prior

Appraisal Current DataCost Value of Eligible Finished Goods Plus InTransit if applicable 8,253,982 7,500,000 Cost Value of Eligible Raw Materials Plus InTransit if applicable 1,341,736 1,000,000 Gross Margin % from the most recent YTD or FYE P&L. If the gross recovery %s in the appraisal are estimated at "cost" rather than "wholesale" or "retail", enter zero in the Margin. (Changes in Gross Margin % is one of the primary indicators of changes in the value of the inventory.) 25.0% 20.0%Gross Recovery $ from the most recent appraisal (GOLV$). This is the total Gross Recovery for both Finished Goods and Raw Materials before expenses. 8,085,232 Percent of Inventory that is Slow Moving. If it is just for Finished Goods, use that % for entire inventory. This is a required piece of information in most lender's appraisal guidelines and is a must in a well-prepared appraisal. 20.0% 25.0%Gross Recovery % on Cost on Slow Moving Inventory. Some appraisals will not have this %. Estimate low. A good recommendation would be in the 10% to 15% area. If this is a true commodity type item, be more generous, 25% to 30%. 15.0%Fixed Expense $. You should be able to tell the difference between the fixed and variable expenses from the most recent appraisal. Fixed is everything except Variable. Enter Fixed Expense as a $ amount. Fixed expenses are rents, utilities, salaries that are not commission or production based, insurance, etc. 1,101,774 Variable Expense - The total of the expense %s expressed as a % of GOLV$. These are typically advertising, credit card, freight, consolidation, miscellaneous, Liquidation Fees, anything that is charged as a % of sales. Enter this as a %. 6.5%Number of weeks estimated in the sale in the last appraisal 12 Net Sales from the Company's most recent TTM or FYE sales 45,000,000 40,000,000 Net Recovery % 67.3%Potential Net Recovery %* 58.0%Potential Change* -9.3%Advance 5,489,230.48 4,191,299.14 Potential Overadvance (1,297,931.34)



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“Even if you are on the right track, you will get run over if you just sit there.”

Will Rogers

“ INSANITY: DOING THE SAME THING OVER AND OVER AGAIN AND EXPECTING D IFFERENT

RESULTS.”

ALB ERT E I NST E I N


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ARG Partners

ARG Partners


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Viability Analysis / Cash Flow Are the company’s current operations and industry

viable? What changes in sales, operations, and/or expenses need

to be made to make cash flow viable? Do collateral and assets viably cover lender’s exposure? Can current management formulate viable plan? Can current management execute viable plan?

ARG’s Viability Analysis provides a concise plan with borrower’s management and lender for a fixed cost. With consensus from borrower and lender, ARG will execute the Viability Analysis plan (i.e. Restructuring Plan).

ARG Partners


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Viability Analysis Components: Projected balance sheet and P&L projections with quality

measures for FCC and operating and balance sheet leverage. Detailed cash flow with sources and uses of cash. Collateral, asset, liability, and fixed charge planning. Detailed borrowing base with LTV. Sales channel analysis, contribution margin by customer, and PM

Modeling. Summary reporting with Quick Look and industry/company

specific metrics such as sales psf or capacity utilization to fixed costs.

Executive Summary – Viability Analysis summarized.

ARG’s Goal is to add value, not tell you what you already know.

ARG Partners


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Viability Executive Summary and Cash Flow Model The executive summary highlights the cash flow model and

quantifies the plan of restructuring. Provides a consensus benchmark to manage to, and lender

measures for progress and period to period risk mitigation. ARG will execute the plan with agreement from the company

and lender to rebuild the borrower’s viability. ARG will rebuild company’s viability for current lender, or will

put together a deal book to get the deal refinanced with a new lender and/or raise capital.

If the consensus is that there is not a strategy to employ and return the borrower to viability, then other alternatives will be offered.

ARG Partners


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“The current quality of balance sheet assets (collateral) determines the future quality of

cash flows.”Chris Welsh

ARG Partners


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Wind Down vs. Liquidation Wind downs require operational, cash flow, and asset sale

process expertise in order to maximize asset returns, whereas a liquidation only requires asset sale process expertise.

How assets are sold in distressed situations really does matter, regardless whether it is a wind down or a liquidation.

If ARG has completed a Viability Analysis, then the wind down and/or liquidation plan and cash flow model to execute and quantify these plans is already complete.

If no Viability Analysis has been completed, then ARG will complete one as a means to maximize returns on asset sales and advise as to whether a wind down or liquidation is best.

ARG Partners


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Communications between you and the restructuring firm is critical. Restructuring firms can be engaged by the Client or Lender;

however, the lender has the right to review management’s information in a timely manner.

Scope and planning of client engagement is critical for the success of advisor, client, and lender.

Majority of client management does not want to share the true nature of their issues; however, in order for any planning to be effective, identification and communication of client issues are the initial steps in plan execution. Misnomers need to be set aside and the business of correction addressed and communicated.

Lender should insist that advisor-client agreements contain language that allows advisor-lender communications.

ARG Partners


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What if there is fraud or malfeasance? If there is fraud or malfeasance, the effectiveness of asset

recovery or even restructuring still needs to be considered. Current management actions or lack of action should not be the

sole determining factor of asset value and/or plan viability. Depending on the level of fraud and/or malfeasance and

management/ownership’s reactions to such issues, much value can be preserved as an on-going entity or in an orderly wind-down.

The importance of having good information under these sorts of issues is critical in moving forward.

Fraud and malfeasance mitigation and plan execution. Plan execution preserves collateral and potential on-going

viability.

ARG Partners


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Oil and Gas Services and Operations: Managing Company Growth Managing Management Expectations Appraisals Inventory, Raw materials, Machinery and

Equip., Tools, Rolling Stock, etc. Manage Cash Flow

Life style financing Payroll Margins Royalty payment Managing A/R Managing A/P Liens

ARG Partners Expertise


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Wind Down Strategies (Partial and Full) Out of Court – sometimes just a portion of the

company needs working out. Assignment for Benefit of Creditors Liquidating 11 Chapter 7

Stakeholders and Creditors Ongoing communications processes with key

stakeholders Collateral protection and marshalling Managing creditor communication and

negotiation Capital Markets communication and negotiations

Court Based Resolution Pre-bankruptcy planning (if required) – 13 Week

Cash Flow Monitor development and treatment of the Bank

Group relative to Plan of Reorganization and Disclosure Statement

Assisting with bankruptcy case administration

Constantly Reanalyze Viability Weekly Cash Flow includes Borrowing Base viability Liquidation values updated weekly Weekly revision on appropriateness of Go-Forward

Decision

Other Services and Expertise Manage work-out, wind-down or liquidation process Monitor development and treatment of the Bank

Group relative to Plan of Reorganization and Disclosure Statement

DIP or cash-collateral budgeting Key employee retention and critical-vendor plans Marketing of all fixed assets, inventory, and

intellectual property Manage 363 sale or out-of-court sales Bankruptcy schedules and operating reports Litigation support and expert-witness testimony Preference analysis and recovery Manage insurance, security, employee issues, etc. Manage the collection of Accounts Receivable Manage and coordinate related professionals Assistance with final accounting and tax issues

ARG - Asset Recovery Group


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ARG identifies underperforming or non-core inventory from discontinued operations and sells it at the highest and best price. ARG Asset Recovery Group prepares a sales book and applicable asset listings and other marketing information and contacts multiple buyers in order to maximize the recovery for the borrower and/or lender. If the borrower can not sell the underperforming inventory in normal

course, then why should the lender expect to be able to sell it? Selling inventory that is no longer eligible for the borrowing base can

provide needed liquidity for borrowers with limited liquidity. No upfront costs to borrower for ARG Asset Recovery Group to sell

inventory. Asset Recovery Group is compensated on a success basis once the

inventory is sold.

Asset Recovery Group – Receiver/Assignee


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ARG will act as the Receiver or Assignee on behalf of the estate at the Lender’s recommendation. Areas of concentration that would lend themselves to maximizing returns:

Ability to act quickly Asset Valuation Isolating problem assets Identifying assets or business divisions that are salvageable and salable. Projecting Cash Flows for ongoing units Providing interim management Large domestic networking base Contacts in all asset areas on a nationwide basis.

Real world experience in management, operations and finance Partnered Legal Team to insure quick efficient enactment Approaching each project individually and from a common sense perspective

ARG – Commodity Pricing Summary


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Commodity Type Specific Source Type of Quote 3/11 6/11 9/11 12/11 3/12 6/12 9/12 12/12 3/13 4/13 5/1330 Day Chg%

12 Mo Chg%

Metal Steel - US Hot Rolled Band Steel Benchmarker US$/met ton 970 834 767 802 763 670 692 702 678 660 637 -3.5% -11.0%Cold Rolled Coil Steel Benchmarker US$/met ton 1067 941 876 915 863 779 804 814 787 772 749 -3.0% -9.0%Scrap Steel Benchmarker US$/met ton 439 433 435 458 428 359 362 375 387 353 353 0.0% -14.3%

Steel - China Hot Rolled Band Steel Benchmarker US$/met ton 606 620 617 558 582 546 475 525 529 511 484 -5.3% -12.3%Cold Rolled Coil Steel Benchmarker US$/met ton 717 708 729 689 691 644 591 620 645 640 628 -1.9% -5.3%Rebar Steel Benchmarker US$/met ton 596 633 624 561 574 534 484 488 494 485 477 -1.6% -10.8%

Steel, Galvanized Cold Rolled Coil USA E. + $.25/ lb est. galvanizing cost US$/ lb 0.73 0.68 0.65 0.65 0.64 0.60 0.61 0.62 0.61 0.60 0.59 -1.7% -5.4%Aluminum LME metalprices.com US$/ lb 1.18 1.14 1.00 0.89 0.95 0.83 0.95 0.93 0.85 0.84 0.85 1.6% -5.0%Aluminum Alloy metalprices.com US$/ lb 1.08 1.06 1.02 0.89 0.92 0.79 0.89 0.84 0.82 0.81 0.82 0.8% -4.8%Aluminum UBC metalprices.com US$/ lb 0.96 0.91 0.78 0.72 0.80 0.71 0.82 0.81 0.77 0.79 0.79 0.6% 5.0%Copper LME metalprices.com US$/ lb 4.26 4.22 3.23 3.43 3.85 3.45 3.75 3.59 3.44 3.21 3.28 2.4% -3.7%Gold NYC metalprices.com US$/ozt 1439 1502 1620 1566 1669 1604 1771 1675 1595 1472 1393 -5.4% -10.9%Lead LME metalprices.com US$/ lb 1.23 1.19 0.93 0.90 0.92 0.81 1.04 1.06 0.95 0.92 0.99 8.6% 14.1%Molybdenum Oxide metalprices.com US$/ lb 16.65 15.63 14.15 13.38 14.05 13.00 11.38 11.40 10.88 10.95 11.10 1.4% -20.0%Molybdenum Unit Contained in 316 Steel metalprices.com US$/ lb 13.63 12.63 11.50 11.25 11.38 11.13 9.63 8.80 9.75 8.63 8.13 -5.8% -28.6%Nickel LME metalprices.com US$/ lb 11.83 10.49 8.30 8.29 7.91 7.47 8.40 7.75 7.50 6.89 6.64 -3.7% -10.6%Silver NYC metalprices.com US$/ozt 37.87 34.81 30.04 27.88 32.47 27.58 34.52 30.17 28.29 24.14 22.23 -7.9% -19.9%Tin LME metalprices.com US$/ lb 14.35 11.75 9.46 8.60 10.52 8.52 9.82 10.66 10.50 9.43 9.45 0.1% 5.6%Titanium Ingot metalprices.com US$/ lb 12.13 12.38 12.63 12.00 11.50 11.25 10.63 10.38 10.25 10.25 10.13 -1.2% -10.0%Titanium Scrap Grade 1 metalprices.com US$/ lb 4.40 4.50 4.70 4.15 3.95 3.05 2.75 2.55 2.23 2.03 1.83 -9.9% -50.0%Tungsten Pure Chinese Bar metalprices.com US$/ lb 26.00 30.63 31.25 30.13 28.75 27.50 25.50 24.00 24.50 26.00 26.00 0.0% -7.1%Zinc LME metalprices.com US$/ lb 1.05 1.05 0.86 0.83 0.91 0.84 0.95 0.92 0.85 0.84 0.85 1.5% -0.9%

Plastic HDPE Injection Grade plasticsnews.com ¢/ lb avg 91.0 99.0 93.0 88.0 99.0 85.0 90.0 88.0 97.0 97.0 97.0 0.0% 5.4%LDPE Extrusion Film liner plasticsnews.com ¢/ lb avg 107.5 115.5 106.5 101.5 112.5 98.5 103.5 101.5 106.5 110.5 110.5 0.0% 4.7%LLDPE Butene-1 comonomer Inj GP plasticsnews.com ¢/ lb avg 89.0 97.0 91.0 86.0 97.0 83.0 88.0 86.0 91.0 91.0 91.0 0.0% 1.1%PET Bottle resin plasticsnews.com ¢/ lb avg 94.0 103.0 108.0 101.0 100.0 91.0 95.0 104.0 106.0 106.0 99.0 -6.6% 1.0%PVC Suspension resin Pipe grade plasticsnews.com ¢/ lb avg 89.5 100.5 100.5 96.5 99.5 96.5 99.5 102.5 109.5 109.5 109.5 0.0% 7.9%PVC Dispersion resin Homopolymerplasticsnews.com ¢/ lb avg 74.0 102.0 102.0 102.0 102.0 102.0 102.0 102.0 102.0 102.0 102.0 0.0% 0.0%Polypropylene Homopolymer Injection plasticsnews.com ¢/ lb avg 119.5 124.5 120.5 100.5 120.5 95.5 93.5 100.5 116.5 116.5 105.5 -9.4% -4.5%

Wood Birch Northern Green 4/4 FAS Hardwood Market Report 1155 1130 1125 1125 1125 1125 1125 1125 1125 1125 1125 0.0% 0.0%Hard Maple #1&2 white Northern Green 4/4 FAS Hardwood Market Report $/mbf 1225 1250 1320 1410 1430 1475 1475 1500 1725 1800 1825 1.4% 23.7%Red Oak Northern Green 4/4 FAS Hardwood Market Report $/mbf 985 985 900 835 835 870 870 895 1005 1030 1100 6.8% 26.4%White Oak Northern Green 4/4 FAS Hardwood Market Report $/mbf 1020 1020 1000 1000 1000 1000 1000 1000 1000 1000 1050 5.0% 5.0%Walnut Appalachian Green 4/4 FAS Hardwood Market Report $/mbf 2130 2155 2155 2070 2000 1910 1795 1795 1795 1795 1795 0.0% -7.2%KD Western S-P-F #2&Btr 2x4 R/L Mill price randomlengths.com $/mbf 284 237 240 261 279 283 285 388 408 355 298 -16.1% -3.6%KD Eastern S-P-F #1&2 2x4 R/L, delivered randomlengths.com $/mbf 370 329 325 343 374 385 385 471 503 463 409 -11.7% 0.7%Southern Pine (Westside) #2 2x4 R/L randomlengths.com $/mbf 273 257 268 288 309 328 383 430 477 445 360 -19.1% 0.0%Ponderosa Pine (Inland) #2&Btr 1x12 R/L randomlengths.com $/mbf 645 590 575 580 650 550 487 500 630 625 600 -4.0% 1.7%Plywood Southern 15/32-inch 3-ply randomlengths.com $/mbf 338 298 348 329 385 392 418 428 500 513 430 -16.2% 9.4%Western Red Cedar Coast Mills KD T&G 1x6 Random Lengths $/mbf 1225 1200 1150 1125 1175 1225 1225 1260 1310 1310 1345 2.7% 12.1%Western Red Cedar Inland Mills #3&Btr 1x10 Random Lengths $/mbf 1215 1230 1240 1240 1220 1220 1220 1230 1260 1260 1265 0.4% 3.7%

Commodity Pricing SummaryCompiled by ARG Recovery LLC - as of May 31, 2013

Additional Commodities will be added upon request.

ARG – Commodity Pricing Summary


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Commodity Type Specific Source Type of Quote 3/11 6/11 9/11 12/11 3/12 6/12 9/12 12/12 3/13 4/13 5/1330 Day Chg%

12 Mo Chg%

Paper Pulp Benchmark Index NBSK in the U.S. paperage.com US$/met ton 985 1,035 971 890 885 899 833 870 901 919 930 1.2% 3.3%Newsprint Benchmark Index Std. Newsprint 30lb US paperage.com US$/met ton 627 624 623 624 623 621 620 620 608 604 600 -0.6% -3.5%Paper Benchmark Index Coated WF 100g reels paperage.com Euro/met ton 716 718 710 717 708 706 704 697 676 679 682 0.5% -4.0%Paper Benchmark Index A4 B-copy 80g sheets paperage.com Euro/met ton 862 875 875 869 859 860 866 862 849 849 850 0.1% -1.5%Packaging Benchmark Index Kraftliner, brown paperage.com Euro/met ton 597 581 568 535 521 540 556 584 580 586 590 0.6% 10.5%Packaging Benchmark Index RB fluting paperage.com Euro/met ton 445 479 451 394 412 396 377 386 402 404 407 0.8% -2.5%

Scrap Mixed paper LOW Loose, at generator's dock The Paper Stock Report $/short ton 40 40 35 10 10 15 0 0 0 0 0 -100.0%Paper Mixed paper HIGH Loose, at generator's dock The Paper Stock Report $/short ton 110 110 95 50 50 50 0 10 25 25 25 0.0% -50.0%

Corrugated containers LOW Loose, delivered to dealer The Paper Stock Report $/short ton 75 70 100 45 45 50 0 5 15 15 15 0.0% -70.0%Corrugated containers HIGH Loose, delivered to dealer The Paper Stock Report $/short ton 145 145 170 90 90 90 40 65 75 75 75 0.0% -16.7%

Dairy All Milk average, U.S. USDA NASS $/cwt 20.40 21.20 21.10 19.80 17.20 16.20 19.60 20.90 19.10 19.50 19.80 1.5% 22.2%Butter average, U.S. USDA Agricultural Mkt Svc $/ lb 2.06 2.13 1.99 1.61 1.43 1.40 1.83 1.60 1.61 1.68 1.65 -1.7% 20.7%Nonfat Dry Milk average, U.S. USDA Agricultural Mkt Svc $/ lb 1.49 1.65 1.54 1.42 1.33 1.10 1.38 1.54 1.52 1.53 1.64 6.9% 41.8%Cheddar Cheese average, U.S. USDA Agricultural Mkt Svc $/ lb 1.97 1.90 1.86 1.81 1.52 1.58 1.86 1.79 1.65 1.73 1.83 5.6% 20.1%Dry Whey average, U.S. USDA Agricultural Mkt Svc $/ lb 0.46 0.52 0.59 0.65 0.61 0.50 0.58 0.66 0.60 0.57 0.58 0.4% 7.0%Cream Fluid cream butterfat avg Urner Barry $/ lb 2.58 2.77 2.21 1.71 1.75 2.12 2.39 1.32 1.89 2.17 1.89 -13.1% 10.6%

Other AG Sugar Free market Coffee,Sugar, Cocoa Exchg (indexmundi.com)US cents/ lb 25.90 24.92 26.64 23.42 23.79 20.10 20.21 19.20 18.34 17.66 17.08 -3.3% -15.7%Cocoa Beans Int'nl Cocoa Org (indexmundi.com) US$/met ton 3,393 3,016 2,874 2,201 2,359 2,266 2,620 2,432 2,153 2,295 2,346 2.2% 11.0%Soybeans US No. 2 Yellow USDA Market News (indexmundi.com)US$/met ton 499 500 491 420 496 522 615 535 536 518 542 4.7% 4.1%Cotton Upland cotton USDA Market News (indexmundi.com)US cents/ lb 229.67 160.65 116.65 95.45 99.52 82.18 84.15 83.37 94.45 92.54 92.62 0.1% 4.6%Yellow Grease Central US USDA Livestock & Grain Mkt News $/cwt 45.00 46.50 43.25 33.50 39.50 36.00 35.75 36.50 36.00 34.50 n/aEggs Midwest shell white large Urner Barry $/dozen 1.23 1.11 1.28 1.50 1.38 1.09 1.44 1.26 1.48 1.02 1.15 12.7% 5.5%

Seafood Shell-On Headless ShrimpFarm Raised Asian White 16-20 Urner Barry $/ lb 6.48 6.35 5.78 5.65 5.15 4.95 4.35 4.65 5.90 6.05 6.05 0.0% 17.5%

26-30 Urner Barry $/ lb 4.55 4.50 4.50 4.40 4.30 4.10 3.85 4.15 5.15 5.25 5.10 -2.9% 20.0%36-40 Urner Barry $/ lb 3.75 3.75 3.80 3.75 3.75 3.70 3.65 3.65 4.15 4.30 4.30 0.0% 14.7%41-50 Urner Barry $/ lb 3.70 3.65 3.65 3.65 n/a n/a 3.45 3.45 3.75 4.20 4.20 0.0%

Average 4.62 4.56 4.43 4.36 4.40 4.25 3.83 3.98 4.74 4.95 4.91 -0.8% 12.1%Wild Gulf White <12 Urner Barry $/ lb 10.35 10.75 9.80 10.20 10.65 10.10 10.15 11.10 11.90 11.95 12.35 3.3% 16.5%

<15 Urner Barry $/ lb 10.00 9.50 8.20 8.15 7.65 6.50 6.45 7.10 7.55 7.65 8.20 7.2% 21.5%16-20 Urner Barry $/ lb 7.75 6.25 6.35 6.65 6.50 5.80 5.75 6.15 6.50 6.70 7.20 7.5% 17.1%26-30 Urner Barry $/ lb 5.65 5.15 5.40 5.75 5.85 5.20 5.20 5.30 5.60 5.65 6.05 7.1% 10.0%36-40 Urner Barry $/ lb 3.85 3.85 4.25 4.35 4.60 4.50 4.70 4.75 4.90 4.95 5.10 3.0% 10.9%41-50 Urner Barry $/ lb 3.65 3.55 3.75 3.90 3.90 3.90 3.95 4.05 4.15 4.20 4.40 4.8% 10.0%

Average 6.88 6.51 6.29 6.50 6.53 6.00 6.03 6.41 6.77 6.85 7.22 5.4% 15.2%Crab Meat Thai/ Indo Pasteurized BackfinUrner Barry 16 oz. 10.88 10.63 10.63 10.63 10.63 10.63 0.0% -2.3%

Thai/ Indo Pasteurized C law Urner Barry 16 oz. 7.38 6.75 7.00 6.75 6.75 6.75 0.0% -8.5%SalmonFarmed Fresh Whole-Seattle 6-8 Urner Barry $/ lb 3.45 2.75 2.45 2.40 2.38 2.08 1.80 2.08 3.23 2.95 3.35 13.6% 34.0%

12-14 Urner Barry $/ lb 4.10 3.25 2.95 2.45 2.53 2.58 2.13 2.30 3.33 3.40 3.80 11.8% 43.4%Wild Coho Gillnet Frozen 4-6 Urner Barry $/ lb 2.65 2.65 2.78 2.78 2.78 2.78 2.78 2.78 2.78 2.78 2.78 0.0% 0.0%

6-9 Urner Barry $/ lb 2.88 2.88 2.95 3.15 3.15 3.15 3.15 3.15 3.15 3.15 3.15 0.0% 0.0%Wild Sockeye Gillnet Frozen 4-6 Urner Barry $/ lb 3.30 3.30 3.53 3.53 3.53 3.53 3.53 3.68 3.68 4.38 4.38 0.0% 24.1%

6-9 Urner Barry $/ lb 3.40 3.40 3.73 3.73 3.73 3.73 3.73 3.83 3.83 4.48 4.48 0.0% 20.1%Swai (Striped Pangasius) Bnls & Sknls Filet, Vietnam Urner Barry $/ lb up to 11 oz. 1.85 1.80 1.70 1.80 1.80 1.80 0.0% -2.7%Tuna Yellowfin No. 1 Urner Barry $/ lb 8.13 10.13 9.25 8.38 9.75 7.63 -21.7% 0.0%

60 lbs. & Up Yellowfin No. 2 Urner Barry $/ lb 4.13 5.75 5.00 5.63 5.75 4.25 -26.1% 0.0%

Prices will vary from one data source to the other depending upon the demographics of the sample and on the specifics on the request. An example is that some price reports depend more heavily on asked and others on bid. Also some reports are more heavily focused on futures pricing. The primary observation to be made is the general trending of the prices. Regardless of the sample or specifics, the trends should mirror each other.Disclaimer - ARG Recovery did not validate or independently verify any of the prices in this summary. The prices are solely the product of the referenced in the column labeled "Source". ARG depended upon these Sources and urges any user of the data herein to perform their own due diligence prior to taking action. Any use of the data herein is at the user's risk.While actual prices are used in most of the commodities above, the price trends are more important than the specific prices. All commodities have vagaries and current pricing that is specific to the desired commodity should be found. This summary is an indication only.


33

ARG Recovery and ARG Partners

“YOU MAY DELAY, BUT TIME WILL NOT.”

BENJAMIN FRANKLIN

arg presentation

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