Jefferson Capital Partners, Ltd. ("JCP"), located in Richmond, Virginia, is a private equity firm that invests in growth financings, management buyouts, and recapitalizations of well managed, rapidly growing companies.

JCP's primary focus is to identify investment opportunities within the business services, consumer, education, health care, and selected information technology industries.

JCP's principals possess over 45 years of complementary skills, experience, and industry knowledge.

Jefferson Capital Partners I, L.P. ("JCP I"), JCP's first private equity fund, has $51 million of committed capital and is fully invested.

Jefferson Capital Partners II, L.P. ("JCP II"), JCP's second private equity fund, held a final closing in October 2001 with committed capital totaling $57.5 million.

INVESTMENT PHILOSOPHY

INDUSTRY FOCUS


JCP focuses on identifying investment candidates in industry segments that have the following characteristics:

• Attractive growth prospects
• High level of fragmentation with multiple participants and no clear market leaders
• Considerable change or transformational activity
• Significant segment consolidation, which presents the opportunity to buy and build a market leader



JCP's principals believe the business services, consumer, education, health care, and selected information technology industries possess many of these characteristics and, consequently, JCP primarily focuses its investment activity on these industries.

INVESTMENT CHARACTERISTICS


Transaction Size - JCP typically targets investment candidates with less than $75 million of annual revenues.

Investment Amount - JCP prefers to invest between $2 to $7 million. However, larger capital commitments can be secured through co-investments by JCP's limited partners and/or through partnerships with one or more additional private equity funds. JCP's principals have extensive contacts and excellent working relations with general partners at several private equity funds.

Role - JCP acts as the sole investor or assembles syndicates of equity and/or debt investors. Although JCP is typically the lead institutional investor, it will also consider opportunities to invest side-by-side with other private equity firms.

Typical Structure - Preferred stock or other equity related securities.

Management Role - JCP's principals are active members of the board of directors for each portfolio company.

Ownership - JCP does not require majority ownership. Through board membership and, in the case of minority ownership, through shareholder agreements, JCP plays a meaningful role in the development and implementation of its portfolio companies' strategic plans.

Partnerships with Management Teams - JCP will only pursue investments in which it believes it can develop productive partnerships with management teams. Also, management is expected to have significant equity exposure to align their interests with those of JCP.

INVESTMENT CRITERIA


JCP seeks to achieve long-term capital appreciation through equity investments in companies by application of the following investment criteria:

Management - For JCP, the most important factor when evaluating a prospective investment is management's experiences and abilities.

Stage of Development - JCP seeks to invest in companies that have an established market position and prospects for strong growth. JCP does not invest in start-ups.

Competitive Advantage - Proprietary products or services, exceptional cost efficiency, or a unique channel of distribution are positive evaluation factors.

Communication - JCP seeks to partner with management at each portfolio company. JCP is prepared to work closely with management teams to ensure that each company's objectives are achieved.

Economic Factors - JCP is flexible with regard to the development of deal structures that can accommodate the needs of all stakeholders as long as the transaction is based on a reasonable valuation.

Exit Strategy - JCP is a long-term investor with a three to seven year time horizon. JCP will pursue transactions with a variety of exit strategies including divestitures, recapitalizations, and initial public offerings.

PARTNERSHIP


JCP is more than a source of equity capital. After making an initial investment, JCP's principals work closely with portfolio company management to assist them in executing their business plan. JCP is able to assist portfolio companies in areas such as:

• Strategic planning
• Mergers and acquisitions
• Initial public offerings
• Relationships with lending sources
• Financing strategies
• Executive recruiting
• Compensation and benefits programs
• Internal controls and procedures



Finally, JCP facilitates networking among its portfolio companies and provides introductions to a diverse group of professional and business resources.

Copyright © 2001
Jefferson Capital Partners, Ltd.