Machinery and Equipment Dispositions

Hilco's compensation is always based strictly on performance, and expense budgets are developed with discipline to optimize cost efficiencies and yield higher net recoveries.

We are always prepared to back up our work by putting ourselves in a financial risk position-by purchasing assets outright or guaranteeing a net return to your organization. Rest assured, Hilco Industrial has the liquidity and cash availability to pay these guarantees.

You will appreciate the flexibility we offer in structuring compensation arrangements. The most common options are:

• a buyout of assets
• a commission from the company plus a "Buyer's Premium"
• guaranteed participation, in which we establish our return expectations then pay a guarantee-up front.

Of course, Hilco will gladly work under the compensation arrangement that best suits the circumstances. In fact, we often structure arrangements involving aspects of all three options.

We begin with an inspection and review of the assets
Hilco will inspect and catalog all machinery, equipment or inventory. In the case of M&E, we will research the equipment, develop a value or benchmark price and identify end users for each piece of equipment. From this data we will create an appropriate marketing plan.

A marketing strategy is developed
Based on our knowledge of the assets and research into their nature, we devise a strategy for identifying and communicating with high-potential prospects. We will explore domestic as well as international prospects as well as potential alternative users. Among the sources of prospects will be industry association and dealer networks.

Simultaneous with our prospecting work, we will establish a marketing and sales platform to include dealers and brokers. A comprehensive support package will be developed and provided. It will include detailed information on the assets and a sales commission structure.

We define the marketing tactics
The chosen marketing strategy will help define the specific marketing and communications activities. These can include both personal and non-personal communications, including professional networking, telemarketing, direct mail, advertising, broadcast e-mail and fax, on-premises signage, web-based marketing and web cast selling, and more.

A budgeting is established
A preliminary budget for marketing will be developed. It will be based upon our experience with projects of similar scope and nature. As with any preliminary budget, it is subject to modification when final program elements have been identified and firm cost estimates have been obtained.

Marketing plan implementation
Hilco will implement the marketing plan in accordance with the project time schedule and budget. A few representative activities are listed, as follows:

• Design and order signs
• Prepare our web site with asset and sale event details, and enable a proxy bid function
• Design and produce marketing materials
• Develop primary and secondary prospect lists
• Establish direct mail lists
• Establish advertising program
• Begin reporting on progress of marketing plan activities and prospects

Purchaser Identification When a prospective purchaser/end user is identified, representatives of Hilco will ascertain whether the prospect is a qualified party, and what the party's objectives for the asset might be. In order to maximize returns, Hilco always attempts to sell the assets directly to purchasers before resorting to an auction, which is used only to dispose of the remaining assets.

Preparation for Auction
Prior to an auction, Hilco will:

• Assign a sale site coordinator to oversee all aspects of the auction.
• Sort remaining assets into appropriate lots and create a buyer's lot catalog with photos and manufacturer specifications.
• Advertise the upcoming auction to target prospective buyers through various forms of media and telecommunications.
• Provide information to prospective out-of-town buyers regarding time and travel information.
• Clean all machinery and equipment being auctioned an arrange in a manner designed to enhance its value.
• Conduct appointments for previewing the equipment for potential buyers
• Provide a fully qualified, licensed and experienced auctioneer who will auction lots to the highest bidder on an "as is, where is" basis.
• Provide an absentee bid process on Hilco's website to enable absentee bids secured by a deposit before processing.
• Make available to prospective buyers any drawings, mechanical specifications or any other information that Hilco has gathered.
• Contact local riggers to be available to assist buyers in the removal of machinery and equipment.

Management of Auction
At the auction, Hilco will:

• Charge and collect from purchasers any purchase price and all applicable taxes.
• Collect a minimum deposit of 25% from each buyer at the time of purchase and bar the removal of the purchased asset until full purchase price balance is received.
• Provide an auction crew to handle computerized accounting functions and to provide buyers with invoices.
• Deposit all auction proceeds into a trust account established for the benefit of the assets owner.

We devote the same high performance standards to every sale, large or small.