DS9 Document EFTA00593025

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