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SEASEASenior Executive AdvisorsSenior Executive Advisors

Red Hook Capital LLPRed Hook Capital LLP

San Diego, CASan Diego, CAinfo@RedHookCapital.cominfo@RedHookCapital.com

H

R

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Investor:Investor:Red Hook CapitalRed Hook Capital

• DifferentiatorsDifferentiators– Management has Management has completed more than $5 billion in deals

– Diversified through recruitment of wide breadth of advisors

• Sample TransactionsSample Transactions

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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SEA ProgramSEA ProgramAdvisor and InvestorAdvisor and Investor

• DifferentiatorsDifferentiators– Strong SEA candidates (28+ specific expertise)

– Developed SEA “Leadership Trust”

• FocusFocus– Equity

– Debt

– Mezzanine

SEA ProgramSEA Program

RHSRHS

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Building on past experiences

Investor:Investor:Red Hook Capital ServiceRed Hook Capital Service

RHC SEARHC SEA

5,000+ Rolodex Results5,000+ Rolodex Results

12 years12 years

++RHC AdvisorsRHC Advisors

20 years20 years

==

Total YearsTotal Years

32 years32 years

28+ people28+ people

Key ResourcesKey Resources

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SEA OverviewSEA OverviewBoard Positions (Directors & Advisors)Board Positions (Directors & Advisors)

Company

CEO

SEA Chairma

n

Strategy

4-5 other advisors

Shareholder

Other Partners

Bo

ard o

f Ad

vis ors

SEA Chairman

Bo

ard

of

Dir

ecto

rs

Shareholder

CEO

PR

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28+ Leadership Trust Candidates28+ 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 served in management roles in strategy and corporate and business development for MCI and Lockheed Martin where he played key roles in the creation and development of several new ventures. He has also served as an industry analyst for the leading Internet research company, Jupiter Communications, where he advised clients, including Internet start-ups and various Fortune 100 companies, on business strategy, mergers and acquisitions, revenue models, and future growth opportunities. JD 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 CNN and CNBC. Mr. Morris serves on the advisory board and board of directors of several technology companies including Counterpart Publishing, Globeam Corp., Ferro.net, ITC.net, and PromoNexus. He enjoys investing in start-ups, sailing, and windsurfing. Mr. Morris received a B.A. in economics with mathematics from Hampden-Sydney College in Virginia and a M.S. in operations research from the George Washington University in Washington, D.C

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SEA Leadership TrustSEA Leadership TrustDiverse talent poolDiverse talent pool

• CFO: Ted is the former financial executive has serviced the financial community as CFO of Fairchild Industries and AMF Incorporated, as well as 15+ year NYC investment banker veteran. He received a B.A. from Dartmouth College and M.B.A. from Harvard.

• International Capital: Jeff is a former Lehman Brothers banker and Director for Asia and South America for billion fund equity fund. He received a M.B.A. from Wharton.

• 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

• 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. He received B.S. from Virginia Tech.

• Strategy: JD served with MCI, Lockheed Martin, and Jupiter Communications in strategy and corporate development senior management capacities. He received as B.S. from Hampden-Sydney College and M.S. form the George Washington University.

• Others: former fellow of Boeing, former fellow SRI, former Secretary of the Air Force, former angel investors/entrepreneurs, public & private CFOs, and other senior CXO candidates for the Senior Executive Advisor (SEA) program.

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LBOsLBOs

Leverage Buy OutLeverage Buy Out(RHC Case Studies)(RHC Case Studies)

March 21, 2007March 21, 2007

J. David MorrisJ. David MorrisGeneral PartnerGeneral Partner

Red Hook CapitalRed Hook Capital

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OverviewOverview

• 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

WHY BUYOUT?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

WHAT IS YOUR STRATEGY?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

WHO IS YOUR TEAM?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

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

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CONSOLIDATIONCONSOLIDATION

RHC Case StudyRHC Case Study

J. David MorrisJ. David MorrisRed Hook CapitalRed Hook CapitalNEWCO ConsolidationNEWCO ConsolidationCASE STUDY #2CASE STUDY #2

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• VisionVision

– Solutions Solutions

– TechnologyTechnology

• Experienced TeamExperienced Team

• M&A ExpertiseM&A Expertise

• Operation ExpertiseOperation Expertise

Highly Secure Communications Solutions

KEY FACTSKEY 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

WHY CREATE NEWCO?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%

VISION ON MARGINSVISION 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 CEO, JDMInterim CEO, JDMInterim CEO, JDMInterim CEO, JDM CFO, BSCFO, BSCFO, BSCFO, BS

• Visionary with M&A experience ;Visionary with M&A experience ;• Leadership roles ranging from MCI to Lockheed Leadership roles ranging from MCI to Lockheed

Martin.Martin.

• 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 for MCI to other IPOs for Leadership roles in IPO for MCI to other IPOs for cutting edge technology companies.cutting edge technology companies.

President,/CAO TMPresident,/CAO TMPresident,/CAO TMPresident,/CAO TM Board, TSBoard, TSBoard, TSBoard, TS

• Former Sec. Air Force;Former Sec. Air Force;• More than 30 years government and contractor More than 30 years government and contractor

leadership roles.leadership roles.

• 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 Solutions, MFPresident Solutions, MFPresident Solutions, MFPresident Solutions, MF President Technology, TBOPresident Technology, TBOPresident Technology, TBOPresident Technology, TBO

• TBATBA• Interim RHC turnaround advisorInterim RHC turnaround advisor

• TBATBA• Interim RHC track record sale technology Interim RHC track record sale technology

(strategic exit VC deal)(strategic exit VC deal)

MANAGEMENTMANAGEMENT

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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

OVERVIEWOVERVIEW

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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

OUTLOOKOUTLOOK

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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

FINANCIALSFINANCIALS

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

KEY FACTSKEY FACTS