SC 13D/A

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

SOLE VOTING POWER:

0

SHARED VOTING POWER:

317,455

SOLE DISPOSITIVE POWER:

0

SHARED DISPOSITIVE POWER:

317,455

0001193125-23-130440.txt : 20230501 0001193125-23-130440.hdr.sgml : 20230501 20230501161358 ACCESSION NUMBER: 0001193125-23-130440 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20230501 DATE AS OF CHANGE: 20230501 GROUP MEMBERS: BCOM GP LLC GROUP MEMBERS: BCOM HOLDINGS, LP GROUP MEMBERS: BUSINESS SERVICES HOLDINGS, LLC GROUP MEMBERS: CRAIG COGUT GROUP MEMBERS: PEGASUS CAPITAL, LLC GROUP MEMBERS: PEGASUS INVESTORS IV GP, L.L.C. GROUP MEMBERS: PEGASUS INVESTORS IV, L.P. GROUP MEMBERS: SLIPSTREAM COMMUNICATIONS, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CREATIVE REALITIES, INC. CENTRAL INDEX KEY: 0001356093 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 411967918 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-82237 FILM NUMBER: 23873806 BUSINESS ADDRESS: STREET 1: 13100 MAGISTERIAL DRIVE STREET 2: SUITE 100 CITY: LOUISVILLE STATE: KY ZIP: 40223 BUSINESS PHONE: 502-791-8800 MAIL ADDRESS: STREET 1: 13100 MAGISTERIAL DRIVE STREET 2: SUITE 100 CITY: LOUISVILLE STATE: KY ZIP: 40223 FORMER COMPANY: FORMER CONFORMED NAME: WIRELESS RONIN TECHNOLOGIES INC DATE OF NAME CHANGE: 20060313 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Slipstream Funding, LLC CENTRAL INDEX KEY: 0001616224 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O PEGASUS CAPITAL ADVISORS, L.P. STREET 2: 750 EAST MAIN STREET, SUITE 600 CITY: STAMFORD STATE: CT ZIP: 06902 BUSINESS PHONE: 212.915.2490 MAIL ADDRESS: STREET 1: C/O PEGASUS CAPITAL ADVISORS, L.P. STREET 2: 750 EAST MAIN STREET, SUITE 600 CITY: STAMFORD STATE: CT ZIP: 06902 SC 13D/A 1 d487211dsc13da.htm SC 13D/A SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 4)*

Creative Realities, Inc.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

97652A 302

(CUSIP number)

Brian Friedman

c\o Pegasus Capital Advisors, L.P.

750 East Main Street

Suite 600

Stamford, CT 06902 (203) 869-4400

(Name, address and telephone number of person authorized to receive notices and communications)

May 1, 2023

(Date of event which requires filing of this statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

*	The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 97652A 302


1.		NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Slipstream Funding, LLC
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ☐ (b) ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS* OO
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

(1)

Based on 7,394,407 shares of Common Stock outstanding as of March 29, 2023, as reported in the Company’s Form 10-K filed with the SEC on March 30, 2023, plus 2,309,379 shares of Common Stock issuable upon exercise of an equivalent number of warrants directly held by Slipstream Communications, LLC (“the Warrants”).

CUSIP No. 97652A 302


1.		NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Slipstream Communications, LLC
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ☐ (b) ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS* WC
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION Anguilla

(1)	Includes 2,309,379 shares of common stock issuable upon exercise of the Warrants directly held by Slipstream Communications, LLC.

(2)	Based on 7,394,407 shares of Common Stock outstanding as of March 29, 2023, as reported in the Company’s Form 10-K filed with the SEC on March 30, 2023, plus 2,309,379 shares of common stock underlying the Warrants.

CUSIP No. 97652A 302


1.		NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) BCOM Holdings, LP
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ☐ (b) ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS* OO
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

(1)	Includes 2,309,379 shares of common stock issuable upon exercise of the Warrants directly held by Slipstream Communications, LLC.

(2)	Based on 7,394,407 shares of Common Stock outstanding as of March 29, 2023, as reported in the Company’s Form 10-K filed with the SEC on March 30, 2023, plus 2,309,379 shares of common stock underlying the Warrants.

CUSIP No. 97652A 302


1.		NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) BCOM GP LLC
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ☐ (b) ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS* OO
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

(1)	Includes 2,309,379 shares of common stock issuable upon exercise of the Warrants directly held by Slipstream Communications, LLC.

(2)	Based on 7,394,407 shares of Common Stock outstanding as of March 29, 2023, as reported in the Company’s Form 10-K filed with the SEC on March 30, 2023, plus 2,309,379 shares of common stock underlying the Warrants.

CUSIP No. 97652A 302


1.		NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Business Services Holdings, LLC
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ☐ (b) ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS* OO
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

(1)	Includes 2,309,379 shares of common stock issuable upon exercise of the Warrants directly held by Slipstream Communications, LLC.

(2)	Based on 7,394,407 shares of Common Stock outstanding as of March 29, 2023, as reported in the Company’s Form 10-K filed with the SEC on March 30, 2023, plus 2,309,379 shares of common stock underlying the Warrants.

CUSIP No. 97652A 302


1.		NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Pegasus Investors IV, L.P.
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ☐ (b) ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS* OO
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

(1)	Includes 2,309,379 shares of common stock issuable upon exercise of the Warrants directly held by Slipstream Communications, LLC.

(2)	Based on 7,394,407 shares of Common Stock outstanding as of March 29, 2023, as reported in the Company’s Form 10-K filed with the SEC on March 30, 2023, plus 2,309,379 shares of common stock underlying the Warrants.

CUSIP No. 97652A 302


1.		NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Pegasus Investors IV GP, L.L.C.
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ☐ (b) ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS* OO
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

(1)	Includes 2,309,379 shares of common stock issuable upon exercise of the Warrants directly held by Slipstream Communications, LLC.

(2)	Based on 7,394,407 shares of Common Stock outstanding as of March 29, 2023, as reported in the Company’s Form 10-K filed with the SEC on March 30, 2023, plus 2,309,379 shares of common stock underlying the Warrants.

CUSIP No. 97652A 302


1.		NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Pegasus Capital, LLC
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ☐ (b) ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS* OO
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION Connecticut

(1)	Includes 2,309,379 shares of common stock issuable upon exercise of the Warrants directly held by Slipstream Communications, LLC.

(2)	Based on 7,394,407 shares of Common Stock outstanding as of March 29, 2023, as reported in the Company’s Form 10-K filed with the SEC on March 30, 2023, plus 2,309,379 shares of common stock underlying the Warrants.

CUSIP No. 97652A 302


1.		NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Craig Cogut
2.		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ☐ (b) ☐
3.		SEC USE ONLY
4.		SOURCE OF FUNDS* OO
5.		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ☐
6.		CITIZENSHIP OR PLACE OF ORGANIZATION United States

(1)	Includes 2,309,379 shares of common stock issuable upon exercise of the Warrants directly held by Slipstream Communications, LLC.

(2)	Based on 7,394,407 shares of Common Stock outstanding as of March 29, 2023, as reported in the Company’s Form 10-K filed with the SEC on March 30, 2023, plus 2,309,379 shares of common stock underlying the Warrants.

Amendment No. 4 to

Schedule 13D

Explanatory Note

On March 27, 2023, Creative Realities, Inc., formerly Wireless Ronin Technologies, Inc (the “Issuer” or the “Company”), effected a reverse stock split (the “Reverse Stock Split”) of the Company’s common stock, par value $0.01 per share (“Common Stock”), at a ratio of 3:1. The share and per share amounts reported in this Schedule 13D (as defined below) give effect to the Reverse Stock Split for all periods presented herein.

ITEM 1.

Security and Issuer.

This Amendment No. 4 (“Amendment No. 4”) amends the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on August 29, 2014, as amended by Amendment No. 1 filed with the SEC on September 22, 2014, Amendment No. 2 filed with the SEC on December 16, 2022 and Amendment No. 3 filed with the SEC on February 3, 2023 (the “Schedule 13D”), with respect to the Common Stock of the Company. Capitalized terms used herein and not otherwise defined in this Amendment No. 4 have the meanings set forth in the Schedule 13D. Except as specifically amended herein, the Schedule 13D shall otherwise remain in effect.

ITEM 4.

Purpose of Transaction

Item 4 of the Schedule 13D is hereby supplemented to incorporate the following at the end thereof:

On February 3, 2023, an affiliate of the Reporting Persons, Pegasus Capital Advisors, LP (“PCA LP”), on behalf of itself and certain of its affiliates (collectively, “Pegasus”), delivered to the Board a letter setting forth a proposal (the “Initial Proposal”) for Pegasus to acquire all of the outstanding shares of Common Stock that are not owned by the Reporting Persons for a purchase price of $0.83 per share in cash (or, as a result of the Reverse Stock Split, $2.49 per share) in cash. On March 28, 2023, the Special Committee of the Board of Directors of the Issuer (the “Special Committee”) issued a press release rejecting the Initial Proposal. On May 1, 2023, Pegasus delivered to the Special Committee a letter setting forth a proposal (the “Second Proposal”) for Pegasus to acquire all of the outstanding shares of Common Stock that are not owned by the Reporting Persons for a purchase price of $2.85 per share in cash. A copy of the Second Proposal is filed as Exhibit 99.6 to this Amendment No. 4, and the information set forth in the Second Proposal is incorporated by reference herein.

The Second Proposal may result in one or more of the transactions, events or actions specified in clauses (a) through (j) of Item 4 of Schedule 13D, including, without limitation, an acquisition of additional securities of the Issuer, an extraordinary corporate transaction (such as a merger) involving the Issuer, delisting of the Common Stock from The Nasdaq Stock Market LLC and other material changes in the Issuer’s business or corporate structure. No assurances can be given that the transaction contemplated by the Second Proposal or any other potential transaction involving Pegasus or its affiliates (or any other Reporting Person) and the Issuer will be consummated, or, if a transaction is undertaken, as to its timing or terms, including price. Pegasus reserves the right to modify or withdraw the Second Proposal at any time. While the Second Proposal remains under consideration or negotiation by the Issuer and the Special Committee, Pegasus and/or the Reporting Persons expect to respond to inquiries from, and negotiate the terms of the Second Proposal with, the Issuer and the Special Committee or their respective representatives. These negotiations may include changes to the Second Proposal, including the price. Pegasus does not intend to update additional disclosures regarding the Second Proposal until a definitive agreement has been reached, or unless disclosure is otherwise required under applicable U.S. securities laws. Pegasus and the Reporting Persons reserve the right to formulate other plans or make other proposals which could result in one or more of the transactions, events or actions specified in clauses (a) through (j) of Item 4 of Schedule 13D, and to modify or withdraw any such plan or proposal at any time.

ITEM 7.

Material to be Filed as Exhibits

Item 7 of this Schedule 13D is hereby supplemented by adding the following exhibits at the end thereof:


Exhibit Number		Description of Exhibits

99.6		Non-binding Proposal Letter, dated as of May 1, 2023, from Pegasus Capital Advisors, L.P. to the Members of the Special Committee of the Board of Directors of Creative Realities, Inc.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: May 1, 2023


SLIPSTREAM FUNDING, LLC

By:		/s/ Brian Friedman
Name: Brian Friedman
Title: General Counsel

SLIPSTREAM COMMUNICATIONS, LLC

By:		/s / Brian Friedman
Name: Brian Friedman Title: General Counsel

BCOM HOLDINGS, LP

By:		BCOM GP LLC, its general partner

By:		/s/ Brian Friedman
Name: Brian Friedman Title: General Counsel

BCOM GP LLC

By:		/s/ Brian Friedman
Name: Brian Friedman Title: General Counsel

BUSINESS SERVICES HOLDINGS, LLC

By:		/s/ Brian Friedman
Name: Brian Friedman Title: General Counsel

PEGASUS INVESTORS IV, L.P.

By: Pegasus Investors IV GP, L.L.C., its general partner

By:		/s/ Brian Friedman
Name: Brian Friedman Title: General Counsel

PEGASUS INVESTORS IV GP, L.L.C.

By:		/s/ Brian Friedman
Name: Brian Friedman Title: General Counsel


PEGASUS CAPITAL, LLC

By:		/s/ Craig Cogut
Name: Craig Cogut
Title: Managing Member

/s/ CRAIG COGUT
CRAIG COGUT

EX-99.6 2 d487211dex996.htm EX-99.6 EX-99.6

Exhibit 99.6

Privileged & Confidential

LOGO

Pegasus Capital Advisors, LP

750 East Main Street, Suite 600

Stamford, CT 06902

May 1, 2023

VIA E-MAIL

Special Committee of the Board of Directors

Creative Realities, Inc.

13100 Magisterial Drive, Suite 100

Louisville, KY 40223

STRICTLY CONFIDENTIAL

Dear Members of the Special Committee:

On behalf of Pegasus Capital Advisors, L.P. (“Pegasus” or “we”), we are pleased to submit this non-binding proposal (the “Proposal”) to acquire Creative Realities, Inc. (the “Company” or “you”).

Based on our review of public information and our deep understanding of the Company’s business, we believe the Company represents a unique and attractive opportunity for us and that we are well positioned to provide maximum value to your shareholders. As you know, Pegasus currently beneficially owns approximately 38.49% of the Company’s common stock on a fully-diluted basis as well as $19.2 million of the Company’s outstanding debt; accordingly, we have a deep appreciation of your business.

We believe our Proposal is the best path forward for all stakeholders. The proposal provides shareholders with an opportunity to de-risk future financing needs and exposure to share price volatility with immediate liquidity and certainty of value at a significant premium to the current share price. Our Proposal also facilitates the Company’s long-term success, eliminating the challenges that come with operating as a public company. Moreover, we envision that the transaction described herein will result in a debt-free enterprise post transaction, improving the Company’s wherewithal to finance future organic and inorganic growth.

Pegasus is the 100% owner of Slipstream Communications, LLC, the Company’s largest source of financing over the last decade. Founded in 1996, Pegasus has invested over $2.6 billion across five private equity funds. Our primary objective is to be the partner of choice for companies looking to realize their full potential as they grow, while creating a lasting positive impact to their customers and communities. We believe that our long relationship with the Company speaks to our loyalty and long-term commitment to Creative Realities.

Page 1 of 4

Terms of Proposed Transaction. We would be prepared to acquire all of the outstanding shares of the Company’s common stock that we do not already own for cash consideration of $2.85 per share. In calculating our proposal, we have assumed there to be (i) 7,394,407 shares outstanding and (ii) net debt outstanding in the amount of $20.6 million.

Our proposed price per share represents a substantial premium for your shareholders, including (a) a premium of 11% to the closing price of the Company’s common stock on the last trading day before submission of this proposal, (b) a premium of 25% to the Company’s volume weighted average closing price over the 30 day period prior to the submission of this proposal, (c) a premium of 37% to the Company’s volume weighted average closing price over the 180 day period prior to the submission of this proposal, and (d) a premium of 39% to the Company’s volume weighted average closing price over the 365 day period prior to the submission of this proposal.

This revised proposal also reflects a 14% increase to our proposal submitted on February 3, 2023, which was submitted on an unaffected share price of $2.13. The new offer represents a 34% premium to this unaffected price.

Process. Please note that, as we previously informed you at the outset of our exploratory discussions regarding a potential transaction, we will only be willing to consider a transaction that is expressly conditioned on the procedures described in Kahn v. M&F Worldwide Corp. and its progeny. Accordingly, any potential transaction would (among other things) have to be (1) approved by a fully empowered special committee of non-management directors that are independent of us and our affiliates and (2) subject to a non-waivable condition requiring the approval of the holders of a majority of the shares of the Company’s common stock that are not owned by us or our affiliates. Consistent with those prior discussions, we reiterate that our proposal is expressly conditioned on these procedures.

We would also like to take this opportunity to confirm that at this time we are only interested in acquiring all of the Company’s common stock that we do not already beneficially own, and we are not interested in pursuing any potential alternative transaction. We emphasize that neither the failure of the Special Committee to recommend a potential transaction under our Proposal nor the failure of the Company’s public shareholders to approve a potential transaction under our Proposal would adversely affect our ongoing relationship with the Company.

We currently intend to remain shareholders of the Company if a potential transaction cannot be completed under our Proposal.

Page 2 of 4

Due Diligence Requirements. As is customary in transactions of this type, our proposal is subject to the satisfactory completion of confirmatory due diligence, including having access to the Company’s management team and review of customary business, financial, accounting and legal due diligence with respect to the Company. We are prepared to engage immediately with you and your advisors to complete our confirmatory due diligence review. With your cooperation, we are confident that we can complete this process within an expedited timeframe, given our significant experience with the Company.

Conditions. This non-binding proposal has been reviewed by, and has the full support of, our investment committee. Entering into definitive agreements providing for the Proposal remains subject to satisfactory completion of our confirmatory due diligence, receipt of final internal approval from our investment committee and the negotiation by us and the Special Committee of mutually acceptable definitive transaction agreements. Closing of the proposed Transaction would be subject to customary conditions, including approval by a majority-of-the-minority of the Company’s stockholders and receipt of any required regulatory and governmental approvals.

Timing. We are focused on moving quickly to enter into and complete the proposed transaction. We are confident that, with the Special Committee’s cooperation, we can move very quickly to complete our confirmatory due diligence. Finalization of definitive agreements can be completed in parallel with the confirmatory due diligence process. We are confident that the parties will be able to finalize transaction terms efficiently and on an expedited timeline.

Financing. We anticipate financing the transaction solely through equity financing, from our affiliated private equity funds and from certain other third parties. We are highly confident to secure fully equity financing, and we will not require a financing condition in our contract.

Clarification/List of Contacts. The list of individuals at Pegasus with whom you may discuss this non-binding Proposal is as follows:

Anuj Kamdar

Email: ****

Phone: ****

David Cogut

Email: ****

Phone: ****

We have retained Kirkland & Ellis LLP as outside legal counsel in connection with the proposed Transaction.

* * * * *

This is a non-binding Proposal and, unless and until a definitive agreement regarding a transaction is executed by the parties, no party will be obligated with respect to any transaction and, except as set forth in the following sentence, no obligation or rights or liabilities of any kind are created as a result of this non-binding Proposal.

Page 3 of 4

We and our advisors are prepared to meet with you and your advisors at your convenience to answer any questions you might have regarding this non-binding Proposal, and we look forward to a response to our non-binding Proposal at your earliest convenience.


Very truly yours,

PEGASUS INVESTORS, IV
By: Pegasus Investors IV GP, LLC

By:		/s/ Brian Friedman
Name: Brian Friedman
Title: General Counsel

Page 4 of 4

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