Quadrangle Capital Partners 375 Park Avenue Telephone 212 418 1700 New York, NY 10152 Facsimile 212 418 1701

December 6, 2010 Dear Limited Partner: We would like to update you on our portfolio, developments at our firm, and our plans for the future. As always, our plans are designed to align our interests with those of our Limited Partners and enhance the long-term value of our portfolio. First and foremost, we are pleased that our portfolio continues to perform well, as measured by increases in value, new realizations and continued operating performance. QCP I and QCP II were up 2% and 7% respectively in the third quarter, and up 39% and 18% respectively for the year-to-date through the third quarter. In addition, recent and potential realizations continue to be significant and EBITDA growth across our portfolio continues to be strong, up 5.4% over the last twelve months. As you know, two years ago we underwent a change in leadership at the firm. At that time, we laid out a clear plan for what we planned to accomplish and we have made significant strides against this plan. • We have added significant value to the portfolio. QCP I and II have

increased in value by $200.8 million, or 45%, and $447.8 million, or 37%, respectively since December 31, 2008.

• We have returned capital to our Limited Partners. QCP I and II have

returned $632 million, or 35% of combined invested capital, since December 31, 2008 (including the sale of Bresnan, which is schedule to close this month).

• We have resolved our regulatory matters. The firm settled with the SEC

and the New York Attorney General, who stated that no one currently at the firm was involved in the matters under investigation.

• We have improved the firm’s financial position. During the Key Man

Event in 2009, we reported to you that the firm had incurred debt in 2008. We have repaid all of the firm’s debt.

• We have better aligned GP and LP interests. We unilaterally reduced

management fees and created incentives to better align GP and LP goals. • We have improved transparency and investor communication.

Specifically, we revised our reporting, instituted quarterly QCP II LPAC meetings and completely overhauled our communications and in-person meetings with our Limited Partners.

In anticipation of our investment period ending on December 28, 2010, we evaluated a number of strategic options with the overriding objective of ensuring an appropriate level of support for our portfolio going forward.

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While we were pleased to see significant interest in a new fund and believe that we could have achieved a first closing on a new fund in 2011, we have opted to take a different path due to the uncertainty of the timing and size of subsequent closes and other factors unrelated to performance. Consistent with the rest of the private equity industry, market conditions will guide the firm in determining the timing and nature of future fundraising. We also explored various strategic alternatives, including strategic partnerships and investments, which would allow us to enhance the firm’s platform and access to capital. While we were gratified by the interest we received, ultimately we did not believe any of the alternatives presented the opportunity to create greater value for, and alignment with, our Limited Partners than the strategy we are pursuing at this time. Nevertheless, as we enter 2011, the firm may continue to explore various strategic opportunities, including with various potential minority investors who have already expressed interest in the firm. Our focus at this time is on maximizing and realizing the value of your existing investment with the firm. We are confident that the changes we are making will provide a stable platform for future performance, led by a team of motivated investment professionals whose interests align closely with our investors. Our team will continue to manage our portfolio to maximize its long-term realized value over the remaining five years of the life of QCP II. Investment Team and Portfolio Management Going forward, our firm will be led by Michael Huber, President and Managing Principal, and Peter Ezersky, Managing Principal. Michael and Peter are currently the lead partners on two thirds of the portfolio’s unrealized value and have worked together for over 10 years. Joshua Steiner will transition to the role of Senior Advisor, will maintain his investment in the fund and will participate in the funding of the firm going forward. While over time he will reduce his involvement in the firm, he will continue to be a valuable resource, and we look forward to continuing to draw on his experience and relationships going forward. With the conclusion of the investment period, this is the natural time to begin a transition. Andrew Frey and Ed Sippel, who had principally focused on new investments, will transition out of the firm in 2011. Consistent with our desire to ensure that our portfolio companies receive the continuity and guidance they deserve, Ed and Andrew have graciously agreed to continue their involvement in their portfolio companies for an appropriate transition period. In particular, Ed will continue to serve on the Board of Tower Vision. We wish to express our deep gratitude and appreciation for the contributions that Ed and Andrew have made to our firm. In addition to their lead roles on specific investments, they have made significant contributions to many of our portfolio companies, and we appreciate their continued involvement in our portfolio during

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this transition period. They have been terrific colleagues. We wish them all the best and look forward to their future accomplishments. In order to support the firm’s current focus on portfolio management and realizations, we are announcing today two new hires with extensive operating and M&A experience: • Steven Felsher will join as Senior Advisor. Until 2007, Steve was Vice

Chairman and Chief Financial Officer of Grey Global Worldwide Group Inc., a $1.5 billion global advertising and marketing services firm that he joined in 1979. In his role, Steven will join the firm’s investment committee and serve on the boards of several portfolio companies.

• Thomas Kohut will join as Principal. Tom has twenty-five years of broad based financial advisory and operating experience for both public and private companies. Prior to Quadrangle, Tom worked as a senior executive in financial and operating capacities at Ernst & Young and MacAndrews & Forbes. Tom will focus on portfolio management and will advise on the firm’s finance and administrative operations.

Assisted by the firm’s other investment professionals, our team will have the experience, skills and commitment to maximize the portfolio value. The firm expects to hire a select number of additional investment professionals in 2011. Alignment of Interests We continue to focus on aligning our interests with yours as Limited Partners. Accordingly, we have instituted a number of new measures on top of those already in place to better align our interests: • The current Managing Principals of the firm will invest significant capital

back into the firm in order to provide additional financial flexibility and further align our interests with those of our Limited Partners. While we could operate exclusively using the management fees, we did not feel that over the near term these fees alone would support the staffing the portfolio deserves.

• The current Managing Principals of the firm will contribute a portion of their carried interest (e.g., of all remaining deals from QCP I and II) to the continuing and new investment professionals to ensure that the team members are incentivized to create value across the portfolio regardless of when they joined the firm. We believe the fund’s relatively young age and existing performance will result in carried interest with significant value.

• Going forward, the Managing Principals’ cash compensation will be largely determined by the return of invested capital. This incentive structure is designed to balance maximizing long-term value with realizing investments on a timely basis.

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• Going forward, we will not distribute any carry in QCP II until we have returned 100% of the invested capital.

• We will reduce the Limited Partner commitment reserve for QCP II from an estimated $366 million at December 31, 2010 to $300 million with an expectation that we will reduce it further as we realize more of the portfolio. This will provide a prudent reserve of capital for potential follow-on investments in our existing portfolio companies. We expect to consider follow-on investments in our portfolio in the normal course and consistent with past practice.

Transparency and Reporting We will continue to make transparency and investor communication and responsiveness central elements of our firm. To offset the expected declines in our operating scale as we realize the portfolio over time, we believe it is preferable to make changes immediately to ensure continuity and the continued application of best practices to our administrative operations. We are in the process of outsourcing our fund accounting functions to JP Morgan. Outsourcing will ensure that the fund accounting continues to receive robust support and industry best practices in this crucial function. We will also make changes to the team to reflect this new model: • Steve Davidson and L.J. McKay will transition out of the firm to new

opportunities. We thank Steve and LJ for their significant contributions to the firm and their collegiality over the years.

• Karen Graham, Alicja Slusarski and Marvin Alfaro will accept broader responsibilities. Karen Graham will oversee the administrative functions of the firm and report directly to Michael Huber

• Susan Yee will be the day-to-day contact for Limited Partner relations and will work directly with Michael Huber and Karen Graham regarding Limited Partner matters.

Regulatory and Legal Update As we have previously reported, we have settled with the SEC and NY Attorney General. Those settlements made clear that no one currently at the firm was involved in the matters under investigation. Unfortunately, our former partner, Steven Rattner, has decided to bring an arbitration claim against the firm despite our efforts to reach a negotiated settlement with him. We believe his claims are groundless and will defend ourselves vigorously. None of the regulatory payments or legal costs associated with defending against our former partner have come from our Limited Partners.

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Paul Weiss and Deloitte & Touche will continue to provide legal and accounting services to the firm. Looking Ahead Going forward, Quadrangle will be the control or largest outside investor in companies with enterprise value over $4.5 billion. The enterprise value of all of our portfolio companies is over $20 billion. We believe that this portfolio offers significant future opportunities for value appreciation, and we will have a motivated and capable team focused on making a significant impact on the performance of our companies. Our portfolio has been active in 2010, and that activity has continued this quarter. In recent weeks, Cequel has announced the acquisition of NPG Cable for $350 million, and NTELOS has closed on the $170 million acquisition of Fibernet. In December, Dice filed to sell 10 million secondary shares valued at announcement at approximately $110 million, of which Quadrangle represents a significant portion, and we expect the sale to be completed this week, subject to market conditions. Additionally, the sale of our stake in Bresnan Communications, as part of its $1.4 billion sale to Cablevision, is expected to close this month. Despite the difficult economic environment, we look forward to continuing to manage our portfolio and expect continued positive developments and realizations in 2011. Summary We are confident in the future of our firm and our ability to deliver value for our Limited Partners. We believe that this plan will provide the portfolio with the attention and focus it deserves, while providing the firm with the flexibility to continue to pursue other strategic options or future fundraising. We are grateful for all of your support and advice as we pursue the best course for our portfolio and our limited partners. As always, we are eager to speak with you on an individual basis whenever convenient for you.

Peter Ezersky Managing Principal

Andrew Frey Managing Principal

Michael Huber Co-President & Managing Principal

Edward Sippel Managing Principal

Joshua Steiner Co-President & Managing Principal