KRG Capital Management LP

FEES AND COMPENSATION

       In general, Mountaingate Capital receives a management fee and a carried interest in
connection with advisory services. Mountaingate Capital receives additional compensation in
connection with management and other services performed for portfolio companies of Fund I and
such additional compensation will offset in whole or in part the management fees otherwise
payable to Mountaingate Capital. Investors in Fund I also bear certain fund expenses.

Management Fees

        Fund I will pay Mountaingate Capital Management, quarterly in advance, an annual
management fee (the “Management Fee”) equal to a maximum of 2.0% of the capital commitments
of any fund investor (subject to reduction over time and to potential reductions due to waivers and
offsets under certain circumstances) commencing from the initial closing of Fund I (whether or
not a fund investor was admitted at an initial or subsequent closing) and continuing until the
expiration of Fund I’s partnership term. Mountaingate Capital Management has waived receipt of
a portion of the Management Fee, and in lieu thereof received an interest in future profits earned
by Fund I. Pursuant to the Partnership Agreement, such an interest in profits is derived from
capital contributions deemed to be made by Mountaingate Capital Management, which are
invested in Fund I by the limited partners of Fund I on Mountaingate Capital Management’s behalf,
and which operate to reduce the amount of capital Mountaingate Capital Management would
otherwise be required to contribute to Fund I. Mountaingate Capital Management will be required
to return any distributions received in respect of such deemed capital contributions to the extent
Fund I does not generate sufficient profits over its lifetime. In addition, one-hundred percent
(100%) of all transaction fees, monitoring fees and break-up or similar fees paid to Mountaingate
Capital Management or its affiliates (“Offset Fees”) by, or that relate to, the portion of any portfolio
company or any prospective portfolio company owned by Fund I will offset the Management Fee
otherwise payable. Portfolio company-related fees may also include amounts prepaid in
anticipation of future services or otherwise accelerated, which will be offset against the
Management Fee.

Carried Interest

        Mountaingate Capital Management will receive a carried interest with respect to Fund I
equal to 20% of all realized profits in excess of an 8% compound preferred return as more fully
described in the Partnership Agreement. The carried interest distributed to Mountaingate Capital
Management is subject to a potential giveback at the end of Fund I’s partnership term if
Mountaingate Capital Management has received excess cumulative distributions and at certain
interim intervals as provided by the Partnership Agreement.

Expenses

         Fund I bears certain expenses relating to the operations, activities and investments of Fund
I to the extent not paid by portfolio companies or applied to reduce Offset Fees, all as more fully
described in the Partnership Agreement. Such expenses include (i) legal, filing, accounting,
auditing, consulting, financing, broker, finder’s, financing commitment fees, real estate title,
appraisal costs, printing, custodian, depositary, agent bank, transfer, registration and other similar
fees and expenses, (ii) expenses incurred in connection with third-party valuations; (iii) expenses
associated with Fund I’s financial statements and other reports, tax returns, tax estimates and
Schedule K-1s (including software, hardware and intangible costs incurred in the preparation of
such materials and the costs of third-party administrators); provided that for the avoidance of
doubt, such expenses shall not include any costs associated with Mountaingate Capital’s (or any
of its affiliates’) compliance with the Investment Advisers Act with respect to providing
investment management services or advice generally and not specifically to Fund I; (iv) expenses
of advisory board and annual meetings of Fund I’s investors; (v) air travel, hotel and other

transportation and lodging expenses; (vi) insurance (including directors and officers, errors and
omissions liability and other insurance); and (vii) other expenses associated with the evaluation,
investigation, analysis, negotiation, acquisition, structuring, organization, management, operation,
holding, valuation, winding up, liquidation, dissolution and disposition of its investments (whether
consummated or unconsummated, including broken deal expenses relating to transactions that
have been offered to co-investors), including follow-on investments and refinancings (including
interest on borrowed money by or on behalf of Fund I and costs and expenses of any consultants
(including consulting and retainer fees paid to third-party consultants), lenders, investment banks
and other financing sources, including interest on money borrowed by Fund I or the General
Partner on behalf of Fund I); (viii) extraordinary expenses under GAAP (such as litigation,
judgments, fines, damages, settlement payments and indemnification, if any); (ix) the Management
Fee; (x) any taxes, fees or other governmental charges levied against Fund I; (xi) private placement
fees; (xii) all costs and expenses of the foregoing description that are incurred in connection with
the organization, management, operation, and dissolution, liquidation and final winding up of any
alternative investment vehicles; (xiii) costs in connection with limited partner transfers; and (xiv)
the costs of dissolving or winding up Fund I. As is typical for private equity funds, Fund I will
bear additional and greater expenses, directly or indirectly, than many other pooled investment
products, such as mutual funds. Brokerage fees may be incurred in accordance with the practices
set forth in “Brokerage Practices.”
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TYPES OF CLIENTS

        Mountaingate Capital provides investment advice to Fund I, a partnership formed under
domestic laws and operated as an exempt investment pool under the Investment Company Act of
1940, as amended. The investors in Fund I may include individuals, banks or thrift institutions,
other investment entities, university endowments, sovereign wealth funds, family offices, pension
and profit-sharing plans, trusts, estates or charitable organizations or other corporations or business
entities and may include, directly or indirectly, principals or other employees of Mountaingate
Capital and its affiliates. From time to time, investors in Fund I, affiliates of the Adviser, and/or
other persons may co-invest side–by-side with Fund I in portfolio companies. Under certain
circumstances, the Adviser may have discretion with respect to co-investment acquisitions or
dispositions. Co-investors do not pay a fee for services or a carried interest to Mountaingate
Capital.

        Fund I has a minimum investment amount of $5 million for third-party investors, and
interests are offered and sold solely to qualified purchasers, accredited investors who are also
qualified clients or qualified knowledgeable Mountaingate Capital personnel. Such minimum
investment amount may be waived by Mountaingate Capital in its capacity as general partner of
Fund I.

             METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS

General

        Mountaingate Capital is a private equity investment firm specializing in acquiring
controlling interests in middle-market companies and growing them into significantly larger
enterprises through the combination of internal growth and selective strategic add-on acquisitions.
There can be no assurance that Mountaingate Capital will achieve the investment objectives of
Fund I or any other Private Investment Fund and a loss of investment is possible.

Investment and Operating Strategy

       Mountaingate Capital’s investment strategies are focused primarily on buy-and-build
investment opportunities. It is expected that Fund I will focus on investments in middle-market
companies primarily within the specialty distribution, marketing services, specialty manufacturing
and business services industries.

        Mountaingate Capital seeks to identify attractive platform companies in these sectors for
investment by Fund I. After an initial investment in a platform company, the Adviser generally
will seek to participate with management of the company to formulate a growth and acquisition
strategy. The Adviser will often seek management rights in connection with its investments,
including board or observer rights.

        Investment opportunities for Fund I are captured in a continuously updated database, and
discussed each week in regularly scheduled meetings of all Mountaingate Capital investment
professionals. Weekly meetings create a forum for preliminary evaluation of every potential
platform company investment opportunity, encouraging early strategic discussion about
investment risks and merits inherent in each opportunity and facilitating the prioritization of
opportunities to ensure that resources are directed to the highest potential opportunities. All
potential investments that are judged to meet the Adviser’s stated investment objectives for Fund
I are then subject to a due diligence review. In connection with an investment opportunity, the
Adviser assembles a due diligence team, which includes two Managing Directors and a group of
external specialists in areas such as environmental, insurance, accounting, legal and employee
benefits. Investments are subject to final approval by the Investment Committee based on an
internally prepared memorandum that details, among other factors:

                  projected return on the investment,
                  industry attractiveness review,
                  competitive review of industry,
                  valuation of company,
                  management team depth and experience assessment, and
                  type of security offered.

        The Adviser may also receive information regarding investment opportunities from
financial services companies or intermediaries, including companies and individuals affiliated
with the Adviser.

Risks of Investment

        Fund I’s investors bear the risk of loss that Mountaingate Capital’s investment strategy
entails. The following risk factors are generally applicable to Mountaingate Capital’s investment
strategy. However, additional risk factors, including risk factors that are a specific to a particular
Private Investment Fund’s, including Fund I’s, investment strategy are described in each Private
Investment Fund’s private placement memorandum, subscription agreement, or risk disclosure
statement.

Business Risks
       Because Fund I’s investments primarily consist of securities issued by privately-held,
unseasoned companies, operating results will be difficult to predict. Such investments involve a
high degree of business and financial risk that can result in substantial losses.

Leveraged Investments
        Fund I’s portfolio companies may be highly leveraged. Leverage generally magnifies both
the Fund’s opportunities for gain and its risk of loss from a particular investment. Leverage often
imposes restrictive financial and operating covenants on a company, in addition to the burden of
debt service, and may impair its ability to operate its business as desired and/or finance future
operations and capital needs. The leveraged capital structure of portfolio companies will increase
the exposure of Fund I’s investments to any deterioration in a company’s condition or industry,
competitive pressures, an adverse economic environment or rising interest rates (which recently
have been at or near historic lows) and could accelerate and magnify declines in the value of the
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