SEA Program

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  • 1.SEA Senior Executive Advisors Red Hook Capital LLP San Diego, CA [email_address] H R

2. Investor: Red Hook Capital

  • Differentiators
    • Management hascompleted more than $5 billion in deals
    • Diversified through recruitment of wide breadth of advisors
  • Sample Transactions

Strategic Financial Operational Created spin-off of publicly traded technology companyResulting in $20 million investment for this new venture Turnaround and merger of bundled service providerwith $50 million in revenue 2x exit opportunity for $50 million backedventure capital deal after refocusing sales strategy 3. SEA Program Advisor and Investor

  • Differentiators
    • Strong SEA candidates (28+ specific expertise)
    • Developed SEA Leadership Trust
  • Focus
    • Equity
    • Debt
    • Mezzanine

SEA Program RHS 4. Investor: Red Hook Capital Service Building on past experiences RHC SEA 5,000+ Rolodex Results 12 years + RHC Advisors 20 years = Total Years 32 years 28+ people Key Resources 5. SEA Overview Board Positions (Directors & Advisors) Company CEO SEA Chairman Strategy 4-5 other advisors Shareholder Other Partners Board ofAdvisors SEA Chairman Board ofDirectors Shareholder CEO PR 6. 28+ Leadership Trust Candidates Visionary to Mentor

  • Financial SEA Advisor :Ted is a former financial executive who has serve in the financial community asCFOof Fairchild Industries and AMF Incorporated, as an investment banker for F.S. Smithers and Morgan Stanley, and as an advisor to General Electric Capitals 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 instrategyand 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.,,, 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

7. SEA Leadership Trust Diverse talent pool

  • CFO: Ted is the former financial executive has serviced the financial community asCFOof 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 othersenior CXO candidates for the Senior Executive Advisor (SEA) program.

8. LBOs Leverage Buy Out (RHC Case Studies) March 21, 2007 J. David Morris General Partner Red Hook Capital 9. Overview

  • Why buyout
  • What is your strategy
  • Who is the team
  • How do they get returns
  • RHC case studies
    • Consolidation IT service (LMT)
    • Consolidation Telecom (MCI)
    • Consolidation Healthcare (HBO)


  • Industry trends
    • Buyouts surpass 1980s levels
    • Venture Capital firms are moving into low end buyouts
  • Wealth of capital
  • Wealth of management
  • Buyout expertise
    • Advisor/Consultants
    • Private Equity firm sponsor

WHY BUYOUT? Buyouts are a current and long term trend 11.

  • Target company
    • Consolidation
    • Turnaround
  • Financial backers
    • Buyout firm(KKR, Texas Pacific Group, Gore Technologies)
    • Equity(Private Equity/GTCR, Pension/CALPERS)
    • Debt(Equity Line/Citibank, Senior/Citibank, Mez./Allied Capital)
  • Management team

WHAT IS YOUR STRATEGY? Financials are key, but strategy will be the deal closer 12.

  • What type of a team do you have?
    • Strategic(Consolidation)
    • Tactical(Turnaround)
  • How does your clients team fit?
    • Central casting / Track record
    • Industry visionary / Customer relationships
    • A / Z

WHO IS YOUR TEAM? Management Team Should Fit Your Strategy 13.

  • Exit strategy
    • Acquisition (cash, stock, warrants)
    • IPO (stock, warrants)
  • Exit success
    • Strategic Acquisition (Miami, FL)telecom consolidation company resulted in return for investor and management of cash and liquid stock (management owned 51% under claw-back);
    • Consolidator Acquisition (Irvine, CA): telecom turnaround sold to a consolidator resulting in cash and restricted stock for investors and management.
    • IPO/Reverse Merger (Fairfax, VA): management retained owning 49% wholly owned subsidiary with need for broker to provide loan based on locked up stock and help sell stock (SEC rules);

HOW DO YOU GET RETURNS? Lots of Exit Options with Different Returns 14. CONSOLIDATION RHC Case Study J. David Morris Red Hook Capital NEWCO Consolidation CASE STUDY #2 15.

  • Vision
    • Solutions
    • Technology
  • Experienced Team
  • M&A Expertise
  • Operation Expertise

KEY FACTS Highly Secure Communications Solutions 16. WHY CREATE NEWCO? Technology Solutions

  • Turnkey solutions provider
  • Highly secure
  • Customizable solutions
  • Platform integration

Market Needs and Drivers Source: Boston Consulting Group, CCV Website Conclusion Emerging technologies drive highly secure global communications solution enterprise needs. Enterprises Need Highly Secure Global Communication Solutions

  • Changing technology landscape
  • Mission critical applications requirements
  • Multinational enterprises


  • Highly Secure $1.5m EBITDA 60%
  • Secure $1.5m 30%
  • VAR $20m 10%
  • VAD $30m 5%

VISION ON MARGINS Move Business fromValue Added Dealer toHighly Secure Solutions 18. MANAGEMENT Management Team in Development Interim CEO, JDM CFO, BS

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