Tcg ventures limited
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| TCG VENTURES LIMITED
KIRK HOUSE, P.O. BOX 1100-G, GRAND CAYMAN, B.W.I. TELEPHONE (345) 949-7212 TELEFAX (345) 949-0993 TELEX CP4226 21 August 1997 VIA FAX TO : «Fax» Total Number of Pages : 6 (including this page) «ContactName» «Address1» «Address2» «Address3» «Country»
Commitment : US«Commitment_» Dear «Salutation», We are pleased to notify you of the final closing of Carlyle Venture Partners, L.P. (the “Partnership”). The Partnership’s commitments as of the second closing totaling US$160,867,347 increased to US$173,112,245, while its investing affiliates’ second closing commitments totaling US$23,282,653 increased to US$36,887,755. The Venture Fund’s (the “Fund”) combined commitments at this final closing total US$210,000,000. Funding Obligations As a result of your admission to the Partnership of US$«Commitment_», we are hereby calling for your pro rata portion of the investment in Neptune Communications, L.L.C. (“Neptune”), organization expenses, interest paid to the partners as of the second closing, and management fees. Your total funding obligation is US$«total_», as shown below: Investment in Neptune US$«neptune_» Organization Expenses US$«orgcosts_» Interest US$«interest_» Management Fees US$«mgtfees_» TOTAL US$«total_» Funding Obligations Please send US$«total_» (please include any applicable wiring fees in your payment) according to the following wiring instructions no later than September 4, 1997: Chase Manhattan Bank N.A. New York
ABA 021000021 For account Bank Julius Baer & Co. Ltd. New York account number 544 777 037 For onward credit Carlyle Venture Partners L.P.
Attn: Peter W.C. Goulden Additional Information If you have any questions regarding this capital call notice please contact Patty Watson at (202) 626-1277 or Reggie Escalante at (202) 626-1219. Attached is a detailed description provided to the initial investors regarding the investment in Neptune. If you have any questions regarding the investment in Neptune please contact Brian Bailey or Brooke Coburn at (202) 347-2626. Thank you for the faith you have placed in us and we appreciate your prompt attention in addressing this notice. Sincerely, TCG Ventures Limited TCG Ventures Limited General Partner Neptune Communications, l.l.c. On May 23, 1997, The Carlyle Group (“Carlyle”), on behalf of Carlyle Venture Partners, is scheduled to close an agreement under which it is to acquire a controlling interest in a newly formed venture, Neptune Communications, L.L.C. (“Neptune” or the “Company”). Carlyle has committed to invest up to $5.5 million for a 69.0% ownership interest in Neptune.N.B. Neptune is being formed to acquire, develop and manage a portfolio of FCC Cable Landing Licenses (the “FCC licenses”). The FCC licenses authorize the Company to construct, land and operate digital fiber optic submarine cable systems linking the United States and specific international destinations.(a) The submarine fiber optic cable systems designed and managed by the Company are intended to capitalize upon the rapidly growing demand for international telecommunications facilities as a result of regulatory changes, new interexchange (IXC) market entrants, and organic growth of data and voice telecommunications traffic. Neptune is being founded to leverage the expertise of certain of its principals, Donald Schroeder and David Walker, in the planning, design, construction and operation of major submarine cable projects. Neptune will provide turnkey submarine network development and management services to new market entrants by identifying high-volume international telecommunications routes that originate/terminate or interconnect with the United States, obtaining FCC landing licenses, providing engineering and related network development services, negotiating system construction and maintenance contracts with contractors, marketing system capacity to potential users and managing the operation of the network. At closing, Neptune will have the right to acquire, subject to FCC consent, the FCC licenses relating to the following portfolio of submarine cable networks:(b)
Additionally, Neptune is presently considering filing FCC license applications for several additional routes which it believes may be promising for development. Transaction Summary As currently contemplated, Carlyle will commit to invest $5.5 million for a 69.0% ownership interest in Neptune. The investment will be staged in five tranches of up to $1.1 million each, which will be funded over a two and one half year period. The continued funding of Neptune after April 1, 1998 is predicated upon the successful realization of a “revenue generating event” (defined as the sale of the Atlantic Express and/or Atlantic Express II cable systems or a Coming into Force (“CIF”) event) prior to April 1, 1998.(b) If a “revenue generating event” has not occurred by April 1, 1998, the Neptune Investors’ obligation to fund additional tranches will terminate. Carlyle’s ownership stake in Neptune will be established as if the entire capital commitment were funded at closing, and accordingly such ownership stake will not be subject to downward adjustment if Neptune’s funding requirements are lower than anticipated. Certain principals of Neptune, Donald J. Schroeder and David W. Walker, will contribute seven wholly owned FCC licenses in exchange for a 31.0% interest in Neptune. The investment will be structured as a senior equity security carrying a 13% annual preferred return. The Neptune Investors will be allocated 100% of the positive cash flows from Neptune until such time as the initial investment and preferred return have been fully realized. The proceeds contributed by Carlyle will be used to fund the development activities of Neptune, including finance and administration expenses, engineering and operations costs, and marketing expenses, over the next two to three years. Thereafter, Neptune is intended to be self-financed.
The submarine cable systems designed and managed by Neptune will be project financed at the operating company level. Third party investors will generally provide the equity and debt capital required to finance the construction of individual submarine cable systems. In most circumstances, Neptune will grant an IRU for the FCC license to the relevant operating company, although ownership of the FCC licenses will ultimately remain with Neptune. In exchange for transfer of the FCC licenses (or the right to use the capacity of the cables) and providing turnkey submarine network development and management services to the individual cable system operating companies, the business plan contemplates that Neptune will receive three types of revenue from the operating companies: franchise fee revenues (typically tied to network construction milestones), sales commissions (typically 3% to 4% of operating company revenues), and pre-tax income “carry” (typically 6% to 10% of operating company earnings before taxes). Additionally, Neptune will generally allocate some percentage of its operating and overhead expenses to the individual operating companies. The following chart outlines the economics to Neptune for a single cable system: 
Financial Projections and Assumptions The projected returns are based upon Carlyle’s Base Case projections for the Atlantic Ring (comprised of the Atlantic Express and Atlantic Express II projects), Asia Direct, United States-Guam (comprised of the Guam Telecom and Hawaii Express projects) and Orient Express cable systems. Carlyle’s Base Case projections have been developed by ascribing varying probability discounts to the revenue projections for each cable system. The discounts employed for each cable system are calculated based on the following methodology: first, the probability of the proposed cable system being constructed by any operator is estimated; and secondly, a “competition” discount is applied to reflect the number of potential competitors. For example, the Atlantic Ring network is estimated to have a 90% probability of being constructed, and Neptune is one of three competing operators (33.3% chance of Neptune completing). Accordingly, the probability that Neptune will realize revenues from the Atlantic Ring network is 30.0% (the product of 90% and 33.3%). Based on this methodology, the probabilities assigned to each of the cable systems are as follows: Atlantic Ring, 30.0%; Asia Direct, 26.6%; United States-Guam, 16.7%; and Orient Express, 16.7%. Based upon these assumptions, which Carlyle cannot guarantee but believes to be reasonable, the returns to Neptune Investors will be in excess of 35% per annum on an IRR basis. The following table illustrates the annual IRR to Neptune Investors based on varying probability assumptions: Sensitivity of Returns to Probability Assumptions 
Note: These returns would be higher if either: (a) individual project economics are more favorable than assumed in the Base Case, or (b) additional systems are developed beyond those for which licenses are currently available. * * * * * * * Carlyle has additional available information relating to the Neptune investment including management team biographies, cable system maps and a detailed financial model. If you would like copies of these materials, please contact Brooke Coburn at Carlyle at (202) 626-1213. N.B. The investment by Carlyle Venture Partners will be executed through a newly formed corporation, TCG-Neptune Inc. (a) Maps of each system are available from Carlyle upon request. (b) Neptune will hold IRUs for the FCC licenses until such time as the FCC approves the transfer of ownership from Schroeder/Walker to Neptune. The transfer process is expected to take approximately six months. (c) Collectively the “Atlantic Express Cable Network Project”. (d) Collectively the “Pacific Ocean Ring Network Project”. (a) Collectively the “Pacific Ocean Ring Network Project”. (b) A CIF event represents the point at which the following key agreements relating to a proposed network have been successfully negotiated: cable system supply contract, limited partnership agreements, operating agreements and project finance documents. Marine route surveys and cable system construction commence immediately subsequent to a CIF event. Directory: 2017 2017 -> 2017 afoCo Landmark Scholarship Program 2017 -> Florida Supplement to the 2015 ibc chapters 1-35 icc edit version note 1 2017 -> Florida Supplement to the 2015 ibc chapters 1-35 icc edit version note 1 2017 -> 2017 global korea scholarship korean Government Scholarship Program Application Guidelines for Undergraduate Degrees 2017 -> Department of natural resources 2017 -> Kansas 4-h shooting Sports Committee Application 2017 -> Astronomy (C) Teams will demonstrate an understanding of stellar evolution and Type Ia supernova. Bottle Rocket (B) 2017 -> Alabama Association of Educational Opportunity Program Personnel College Scholarship Competition 2017 -> Alabama Association of Educational Opportunity Program Personnel Survivor Scholarship Competition 2017 -> Recitals 2 Article 1 General Provisions 4 a 1 Purpose 4 b 2 Applicable Law and Regulation 4 Download 81.79 Kb. Share with your friends:
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