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SEA ProgramSEA ProgramSenior Executive AdvisorsSenior Executive Advisors

Red Hook CapitalRed Hook Capital

H

R

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SEA ProgramSEA ProgramAdvisor and InvestorAdvisor and Investor

• DifferentiatorsDifferentiators– Strong SEA candidates (42+ specific expertise)

– Developed from “Leadership Trust” Program Program

• FocusFocus– Strategy

– Capital

– International

SEA ProgramSEA Program

RHSRHS

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Collective ExperienceCollective ExperienceMore than 210 years from 7 key players

• DifferentiatorsDifferentiators– Management has Management has completed more than $35 billion in deals

– Diversified through recruitment of wide breadth of advisors

• Sample SEA Strategy Advisor success:Sample SEA Strategy Advisor success:

Strategic

Financial

Operational

Created spin-off of publicly traded technology company Resulting in $20 million investment for this new venture

Turnaround and merger of bundled service provider with $50 million in revenue

2x exit opportunity for $50 million backed venture capital deal after refocusing sales strategy

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Past Leadership Trust CandidatesPast Leadership Trust CandidatesVisionary to mentorVisionary to mentor

• Financial SEA Advisor: Ted is a former financial executive who has serve in the financial community as CFO of Fairchild Industries and AMF Incorporated, as an investment banker for F.S. Smithers and Morgan Stanley, and as an advisor to General Electric Capital’s Telecommunication Financing. He was responsible for the financing and building of ATS-6 communication satellite and the pioneering of American Satellite Corporation. He has served as head of Corporate Finance at F.S. Smithers, now part of Paine Webber, where he managed the Lockheed Martin account at the height of their problems. He has served as professor of finance at Columbia University. He has served on the board of companies and U.S. Government advisory boards. He is currently a board member of the Financial Executives Institute. He received a B.A. from Dartmouth College and M.B.A. from Harvard.

• Visionary SEA Advisor: JD leadership role for funds and corporations has resulted in many successful deals thanks to his strategic vision. JD advises clients ranging on business strategy, mergers and acquisitions, revenue models and future growth opportunities. He has been a speaker at various industry forums, has been quoted in numerous leading publications, such as the Wall Street Journal, and has made several appearances on CNET and CNBC. Mr. Morris has served on the advisory board and board of directors of several companies including Counterpart Publishing Ltd., Globeam Corp., Ferro S.A., I.T.C. Ltd., NCA S.A., etc. Mr. Morris received a B.A. in economics with mathematics from Hampden-Sydney College in Virginia and an Omega Rho Honor Student at #4 world ranked operations research doctorate program at the George Washington University in Washington, D.C.

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Past Leadership Trust CandidatesPast Leadership Trust CandidatesSample of diverse talent poolSample of diverse talent pool

• Global Policy & Regulation: Bill is an angel investor and international advisor to think tanks, US & foreign governments for 25+ years. He received his B.A. & J.D. from Duke University.

• Restructuring/LBO: Jim is a former Managing Director of Lehman Brothers restructuring group. He received a B.A. and M.B.A. from Harvard

• IPO: Brad has taken several companies public as CFO and continues to have access to debt markets as well as private equity firms. He received his B.S. from West Point and M.B.A. from Wharton

• Financial SEA Advisor: Ted is a former financial executive with 40 years investment banking experience for start-ups to billion dollar companies.

• PR: Suzanne has been in the PR business for more than 20 years advising executives on public affairs, media relations and other PR functions that have resulted in interviews and media coverage in the WSJ, NY Times, Washington Post, and other major print, tv, radio, online, and other media outlets.

• Staffing: Gary is an angel investor in IT companies, limited partner of several VC funds, and 25+ year veteran of staffing industry.

• Others: former fellow SRI, former Secretary of the Air Force, former high ranking government officials such as governors and U.S. Ambassadors, former fellow of Boeing, former angel investors/entrepreneurs, public & private CFOs, and other senior CXO candidates for the Senior Executive Advisor (SEA) program.

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Leverage Buy OutLeverage Buy OutOrOr

Management Buy OutManagement Buy Out

ByByJ. David MorrisJ. David MorrisGeneral PartnerGeneral Partner

Red Hook CapitalRed Hook Capital

1. PAST PRESENTATION1. PAST PRESENTATION

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1.2 OVERVIEW1.2 OVERVIEW

• Why buyoutWhy buyout

• What is your strategyWhat is your strategy

• Who is the teamWho is the team

• How do they get returnsHow do they get returns

• RHC case studiesRHC case studies– Consolidation IT service (LMT)Consolidation IT service (LMT)

– Consolidation Telecom (MCI)Consolidation Telecom (MCI)

– Consolidation Healthcare (HBO)Consolidation Healthcare (HBO)

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• Industry trendsIndustry trends

– Buyouts surpass 1980s levelsBuyouts surpass 1980s levels

– Venture Capital firms are moving into low end buyoutsVenture Capital firms are moving into low end buyouts

• Wealth of capitalWealth of capital

• Wealth of managementWealth of management

• Buyout expertiseBuyout expertise

– Advisor/ConsultantsAdvisor/Consultants

– Private Equity firm sponsor Private Equity firm sponsor

Buyouts are a current and long term trend

1.3 WHY BUYOUT?1.3 WHY BUYOUT?

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• Target companyTarget company

– ConsolidationConsolidation

– TurnaroundTurnaround

• Financial backersFinancial backers

– Buyout firm Buyout firm (KKR, Texas Pacific Group, Gore Technologies)(KKR, Texas Pacific Group, Gore Technologies)

– Equity Equity (Private Equity/GTCR, Pension/CALPERS)(Private Equity/GTCR, Pension/CALPERS)

– Debt Debt (Equity Line/Citibank, Senior/Citibank, Mez./Allied Capital)(Equity Line/Citibank, Senior/Citibank, Mez./Allied Capital)

• Management teamManagement team

Financials are key, but strategy will be the deal closer

1.4 WHAT IS YOUR STRATEGY?1.4 WHAT IS YOUR STRATEGY?

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• What type of a team do you have?What type of a team do you have?

– Strategic Strategic (Consolidation)(Consolidation)

– Tactical Tactical (Turnaround)(Turnaround)

• How does your client’s team fit?How does your client’s team fit?

– Central casting / Track recordCentral casting / Track record

– Industry visionary / Customer relationshipsIndustry visionary / Customer relationships

– A / ZA / Z

Management Team Should Fit Your Strategy

1.5 WHO IS YOUR TEAM?1.5 WHO IS YOUR TEAM?

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• Exit strategyExit strategy

– Acquisition (cash, stock, warrants)Acquisition (cash, stock, warrants)

– IPO (stock, warrants)IPO (stock, warrants)

• Exit successExit success

– Strategic Acquisition (Miami, FL) telecom consolidation company Strategic Acquisition (Miami, FL) telecom consolidation company resulted in return for investor and management of cash and liquid stock resulted in return for investor and management of cash and liquid stock (management owned 51% under claw-back);(management owned 51% under claw-back);

– Consolidator Acquisition (Irvine, CA): telecom turnaround sold to a Consolidator Acquisition (Irvine, CA): telecom turnaround sold to a consolidator resulting in cash and restricted stock for investors and consolidator resulting in cash and restricted stock for investors and management.management.

– IPO/Reverse Merger (Fairfax, VA): management retained owning 49% IPO/Reverse Merger (Fairfax, VA): management retained owning 49% wholly owned subsidiary with need for broker to provide loan based on wholly owned subsidiary with need for broker to provide loan based on locked up stock and help sell stock (SEC rules);locked up stock and help sell stock (SEC rules);

Lots of Exit Options with Different Returns

1.6 HOW DO YOU GET RETURNS?1.6 HOW DO YOU GET RETURNS?

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2. CASE STUDY2. CASE STUDY

Sample Case StudySample Case Study

Red Hook CapitalRed Hook CapitalNEWCO ConsolidationNEWCO ConsolidationPrivate Equity BackedPrivate Equity Backed

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• VisionVision

– Solutions Solutions

– TechnologyTechnology

• Experienced TeamExperienced Team

• M&A ExpertiseM&A Expertise

• Operation ExpertiseOperation Expertise

Highly Secure Communications Solutions

2.1 KEY FACTS2.1 KEY FACTS

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TechnologySolutions

• Turnkey solutions providerTurnkey solutions provider

• Highly secureHighly secure

• Customizable solutionsCustomizable solutions

• Platform integrationPlatform integration

Market Needs and DriversMarket Needs and Drivers

Source: Boston Consulting Group, CCV Website

ConclusionConclusion Emerging technologies drive highly secure global communications solution enterprise needs.

Emerging technologies drive highly secure global communications solution enterprise needs.

Enterprises Need Highly Secure Global Communication Solutions

2.2 WHY CREATE NEWCO?2.2 WHY CREATE NEWCO?

• Changing technology landscapeChanging technology landscape• Mission critical applications requirementsMission critical applications requirements• Multinational enterprisesMultinational enterprises

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• Highly Secure $1.5mHighly Secure $1.5m EBITDA 60%EBITDA 60%

• Secure $1.5mSecure $1.5m 30% 30%

• VAR $20mVAR $20m 10% 10%

• VAD $30mVAD $30m 5% 5%

2.3 VISION ON MARGINS2.3 VISION ON MARGINS

Move Business from Move Business from Value Added Dealer toValue Added Dealer to Highly Secure Solutions Highly Secure Solutions

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Management Team in Development

Interim CEOInterim CEOInterim CEOInterim CEO CFOCFOCFOCFO

• Visionary with M&A expertise ;Visionary with M&A expertise ;• More than 3 billion deals in 5 year periodMore than 3 billion deals in 5 year period

• Track record CFO of multinational companies Track record CFO of multinational companies with diverse portfolio of companies;with diverse portfolio of companies;

• Leadership roles in IPO early to billion USD Leadership roles in IPO early to billion USD companiescompanies

Board/SEA ChairBoard/SEA ChairBoard/SEA ChairBoard/SEA Chair BoardBoardBoardBoard

• Former Sec. Air Force;Former Sec. Air Force;• Former Venture Capitalist.Former Venture Capitalist.

• CFO with turnaround expert (Fairchild);CFO with turnaround expert (Fairchild);• More than 35 years investment banking More than 35 years investment banking

leadership.leadership.

President SolutionsPresident SolutionsPresident SolutionsPresident Solutions President TechnologyPresident TechnologyPresident TechnologyPresident Technology

• Leadership role McKinsey & Company;Leadership role McKinsey & Company;• Leader of industry associationsLeader of industry associations

• Top technology sales person;Top technology sales person;• Track record in sales with companies that had Track record in sales with companies that had

exit.exit.

2.4 MANAGEMENT2.4 MANAGEMENT

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2006 Revenue2006 Revenue(1)(1):: $125 million (Performa)$125 million (Performa)

Customers:Customers: Multinational corporations to the United States Multinational corporations to the United States government. government.

Two Operating Two Operating Divisions:Divisions:

Service (90% of revenue)Service (90% of revenue)Technology (10% of revenue)Technology (10% of revenue)

Acquisitions (10 targets)Acquisitions (10 targets)Organic (restructuring)Organic (restructuring)

(1) TBA1 2005 revenue casted by outside investment bank

(2) RHC, TBA1, TBA2

NEWCO at a Glance

2006 Earnings 2006 Earnings from Operationsfrom Operations(1)(1):: $15 Million (Performa)$15 Million (Performa)

Incorporated:Incorporated: TBATBA

EmployeesEmployees(2)(2):: 700 as of 2007 (from 1 in 2006)700 as of 2007 (from 1 in 2006)

Growth StrategyGrowth Strategy

2.5 OVERVIEW2.5 OVERVIEW

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• M&A 2q2005:M&A 2q2005: closingclosing $75 $75 million communications solution million communications solution provider.provider.

• M&A Pipeline:M&A Pipeline:

– Solutions: Solutions: cash flow positive (42+ targets)cash flow positive (42+ targets)

– Technology: Technology: market drivers (14+ targets)market drivers (14+ targets)

• M&A programM&A program

– Organic: Organic: synergistic growth & CCV Bus. Dev.synergistic growth & CCV Bus. Dev.

– Increased margins:Increased margins: Acquiring emerging technology companies that Acquiring emerging technology companies that can increase margins and provide competitive differentiators.can increase margins and provide competitive differentiators.

Multi-Strategy Approach

2.6 OUTLOOK2.6 OUTLOOK

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0

2

4

6

8

10

12

14

16

2004 2005 Year 1 Year 2 Year 3

0

100

200

300

400

500

600

Margin%

Organic Revenue: Technology 100% CAGRSolutions 20% CAGR

CCV Financial Performance(2004-2008)

SolutionsSolutions

TechnologyTechnology

2.7 FINANCIALS2.7 FINANCIALS

Technology Drives Solution’s Margins

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• VisionVision

– Solutions Solutions (Revenue)(Revenue)

– Technology Technology (Margins)(Margins)

• Experienced Team Experienced Team (Track Record)(Track Record)

• M&A Expertise M&A Expertise

• Operation ExpertiseOperation Expertise

Highly Secure Communications Solutions

2.8 KEY FACTS2.8 KEY FACTS