EFTA00593025.pdf

NEXT Discussion Materials Transaction Overview SOURCES USES Commentary C.) Debt $ 15 ()Enterprise Value $ 29 Transaction values Next at $29M, net () @Cash on B/S" ) 14 of cash, which implies a valuation of 5.6x LTM EBITDA. Cash on B/S(' ) $ 14 Equity Value $ 43 @Next has -$15M of cash on the Equity Fees & Expenses $ 0.3 balance sheet, of which $1M is New OpenGate Equity $ 6 estimated to be normal working capital. Rolled Faith / Joel Equity 8 Total Equity $ 14 °Transaction financed with $15M of debt, $14M of cash on the balance Total Sources $ 43 Total Uses $ 43 sheet and $14M of equity ($6M new equity from OpenGate; $8M rolled from Faith/Joel). Faith/Joel assumed PROCEEDS & PF OWNERSHIP VALUATION & LEVERAGE to roll equity to maintain 58% Cash Proceeds From: EV / LTM Revenue ($36M)(2) 0.8x ownership; OpenGate to own 42%. Debt/Cash Equity Total EV / LTM EBITDA ($5.2M)(2) 5.6x ®GGC $ 12 $ 6 $ 18 O D Transaction results in $18M cash proceeds to GGC and $17M to Faith/ Faith / Joel 17 17 @Debt / LTM EBITDA 2.9x Joel (Faith/Joel maintain their 58% 6 $ 35 ownership post transaction). Total $ 29 $ Est. Interest / LTM EBITDA(3) 5.0x OPFGGC Ownership 0O/O @Post transaction, leverage will be -c3x and interest coverage is estimated to Faith / Joel 58% be —5x. OpenGate 42% Total 100% (1) Assumes —$15M of cash on the balance sheet, of which $1M assumed to be normal working capital. (2) LTM financial stets as of 11/30/14. (3) Assumes interest rate of 7%. This Fformation is confidential and was prepared by Golden Gate Capital solely for internal use EFTA00593025 NEXT Discussion Materials Transaction Considerations Discussion Topic Considerations • Per the 2008 Operating Agreement, GGC has the right to transfer its ownership units to a third party Ability to Transfer Units of its choice (the "Substituted Member"). • The Substituted Member will assume the Operating Agreement and will be subject to its provisions. • The Substituted Member will have the ability to Board Seats appoint 2 of 4 Managers, consistent with GGC's current rights. • The transaction will be partially financed by raising third party debt to fund a dividend to all Leverage shareholders. • Pro forma for the transaction, Next's leverage will be <3x EBITDA, and interest coverage is estimated to be 5x. This li fonnation is confidential and was prepared by Golden Gate Capital solely for internal use EFTA00593026