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2	Welcome to the 2009 Northwest Growth Financing Conference™ Conference Chairman Franz von Bradsky President, Green Tree Capital
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4	Tales From The Trenches – Financing Rapidly Growing Companies Emory Thomas, Jr. – Publisher, Puget Sound Business Journal Douglas Brown – CEO, All Star Directories Carla Corkern – CEO, Talyst Peter Norman – CEO, Bellevue Healthcare
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6	Cash Is King – The Frozen Credit Markets Stephen Lozano – Senior Vice President, Union Bank Glenn Burroughs – Senior Vice President, PNC Business Credit Thomas E. Cleveland – Managing Partner, Access Business Finance Curt B. Fraser – President of Middle Market Banking, WA, JPMorgan Chase
7	Bad Loans Are Mounting at Banks
8	Bank Loan Growth Has Slowed
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21	Things Heard at an ACG Conference
22	Things Heard at an ACG Conference Prior to the “Crash” “They’ve done studies, you know. Sixty percent of the time, it works every time.” - Anchorman
23	Things Heard at an ACG Conference Prior to the “Crash” “Don’t you think that idea is a little half-baked?” “Oh no, Dad, it’s completely baked.” - The Graduate
24	Things Heard at an ACG Conference Prior to the “Crash” “That’s the cool thing, if you can’t afford it, freakin’ finance it!” - Ruthless People
25	…After the “Crash” “You seem somewhat familiar; have I threatened you before?” - Captain Jack Sparrow Pirates of the Caribbean
26	…After the “Crash” “I’ll be taking these Huggies…and whatever cash ya got!” - Raising Arizona
27	…After the “Crash” “There’s only two men I trust. One of ‘em’s me, the other’s not you.” - Con Air
28	…After the “Crash” “I’ve got no where else to go” - Officer and a Gentleman
29	…After the “Crash” “I’m going to give them an offer they can’t refuse.” - Private Equity Fund
30	% of Total U.S. Loans Provided by Banks Prior to Credit Crisis? A) 75% B) 50% C) 33%
31	Answer: C) 33% $24 Trillion Loans (U.S.) – June 2007 $10 Trillion in Marketable Securitizations $5.5 Trillion in Bond Markets $8.5 Trillion in Bank Loans Federal Reserve – Flow of Funds Accounts of the United States; Securities Industry and Financial Markets Association; Standard & Poors
32	Future State of the Debt Markets… Where will the markets go from here ? More of the same until uncertainty subsides and liquidity returns…. Economy- implication of higher government involvement Default Rates Bankruptcies / Bailouts Housing Market Consumer Sentiment and spending – unemployment and taxes Bank regulatory environment Credit market liquidity Political environment- the new American capitalist market
33	“Stick to Basics” No magic pills Results, results, results! Maintain acceptable liquidity Have a backup and exit financial institution. Expect the unexpected COMMUNICATION Commitment to the business
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35	Mezzanine/Subordinated Debt – Perhaps the Only Game In Town Jeffrey J. Holland – Managing Director, Seacoast Capital Stephen W. Etter – Partner, Greyrock Capital Group Michael Kane – Managing Director, Caltius Mezzanine Steve R. Wilkins – Managing Director, Endeavour SEAM
36	"“Perhaps the Only Game..." “Perhaps the Only Game In Town”
37	Mezzanine/Subordinated Debt Panel Moderator Jeffrey Holland, Seacoast Capital Panelists Michael Kane, Caltius Mezzanine Steven Wilkins, Endeavour Seam Stephen Etter, Greyrock Capital
38	Caltius Mezzanine Fund History
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40	Caltius Investment Strategy
41	OVERVIEW OF ENDEAVOUR SEAM FUND
42	OVERVIEW OF ENDEAVOUR SEAM FUND
43	WHY PARTNER WITH ENDEAVOUR SEAM? MULTIPLE CAPITAL SOLUTIONS The Endeavour family of funds can provide growth capital both for today and tomorrow Non dilutive, flexible debt capital solutions based on clients current financing needs Equity capital for long term growth or liquidity to existing shareholders EXPERIENCE Nearly two decades and six funds dedicated to the Western US middle market SEAM Fund managers have nearly 50 years of debt capital expertise through many market cycles Deep and broad industry experience SPEED AND CERTAINTY OF EXECUTION SEAM Fund Managers sit on both management and investment committees Investments directly underwritten and managed by SEAM Fund Managers Stable, regional LP base REGIONAL AND LOCAL FOCUS Most all the Endeavour managers have made careers in the markets they serve and have deep ties to their communities
44	PHILOSOPHY-ENDEAVOUR SEAM REPUTATION Our reputation is our greatest asset. It is built and preserved by treating people fairly, being good partners, and delivering on the promises we make. TRUE PARTNERSHIP True partnerships are defined by mutual respect, a common commitment, and an open sharing of ideas. We believe that through an open sharing of ideas the best financing solution will consistently emerge. LONG-TERM COMMITMENT SEAM has long term, committed capital from stable LP’s to support our responsive and relationship-oriented approach to investing. BUSINESS ETHICS Sound business ethics and equitable financing solutions are consistent with the creation of long-term capital solution and business partnership. RELATIONSHIP CAPITAL SEAM Fund Managers invest meaningful capital into each deal and directly manage investments providing clients close access to decision makers.
45	"Overview" Overview Manage $350MM; 2^nd Fund Junior Capital (80% Debt / 20% Equity) Offices in San Francisco, Chicago & Westport, CT Experienced Team Industry Agnostic Size – EBITDA $5MM-$15MM Recurring Cash Flows Strong Competitive Advantage Proven Management Team Excellent Transaction Dynamics
46	"“Perhaps the Only Game..." “Perhaps the Only Game In Town”
47	Dividend Recapitalization with Mezzanine
48	Dividend Recap Case Study
49	Dividend Recap Case Study continued
50	Dividend Recap Case Study continued
51	Dividend Recap Case Study continued
52	"Leading developer" Leading developer, manufacturer and marketer of branded and private label consumer products #1 market share (>50%) in niche segment Strong historical growth - Adj. EBITDA ‘06-’08 CAGR: 16% Attractive free cash flow characteristics – >20% EBITDA margins with limited maintenance capex
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54	"Outlined below are a few..." Outlined below are a few of the unique structuring issues from the deal Call option on Warrants Owner wanted the ability to call Warrants in order to gain 100% control of the company at their option Callable after year 3 given repayment of the Note Minimum valuation of Warrants if called from month 36 through 66 Cash/PIK payment option on Seller Paper Company wanted the ability to pay interest in cash to avoid compounding effect of PIK interest Pricing of Seller Paper is 13%; 100% PIK with up to 100% cash-pay based on the following: Minimum fixed charge coverage Minimum EBITDA Minimum liquidity (Revolver capacity plus Cash) Subject to availability of cash after the effect of the excess cash flow sweep on Senior Debt Required performance thresholds are tested annually upon receipt of audited financials
55	Co-Sponsor Investment Example 2/3rds of revenue from replacement part sales Low-cost, mission-critical parts Management team staying in place and motivated by first time equity ownership Unique recessionary dynamics
56	Capital Structure for ABC Company
57	Co-Sponsor Relationship Provide Capital Knowledge Base and CEO Relationships Experience with Senior Providers Springing Control Capital Return before Carry Leverage Capital Earn Carry PEG Duties Control Build Track Record
58	"??" ?? Questions ??
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60	The Private Equity Landscape has Shifted Ed Drosdick – Business Assurance Partner, Moss Adams Chris Britt – Managing Partner, Marwit Capital Mark E. Morris – Partner, Blue Point Capital Partners Bradaigh O. F. Wagner – Principal, Endeavour Capital Robert A. Zielinski – General Partner, Riordan, Lewis & Haden