Guaranty
EXHIBIT 4.2
For value received and in consideration of advances made or to be made, or credit given or to
be given, or other financial accommodation afforded or to be afforded to Lighting Science Group
Corporation, a Delaware corporation (hereinafter designated as “Borrower”), by Bank of
Montreal, Chicago, Illinois (hereinafter called the “Lender”), from time to time,
Pegasus Partners IV, L.P. (the “Undersigned”) hereby guarantees the full and prompt
payment to the Lender at maturity and at all times thereafter of any and all indebtedness,
obligations and liabilities of every kind and nature of the Borrower to the Lender, pursuant to
that certain Loan Authorization Agreement of even date herewith between the Lender and the Borrower
(the “Loan Agreement”), including, without limitation, any reimbursement obligations in connection
with letters of credit issued by the Lender on behalf of the Borrower, howsoever evidenced, whether
now existing or hereafter created or arising, whether direct or indirect, absolute or contingent,
or joint or several, and howsoever owned, held or acquired, whether through discount, overdraft,
purchase, direct loan or as collateral, or otherwise (hereinafter all such indebtedness,
obligations and liabilities being collectively referred to as the “Indebtedness”); and the
Undersigned further agrees to pay all actual and documented expenses, legal and/or otherwise
(including court costs and reasonable attorneys’ fees), paid or incurred by the Lender (i) in
endeavoring to collect the Indebtedness, or any part thereof, and (ii) in protecting, defending or
enforcing this Guaranty in any litigation, bankruptcy or insolvency proceedings or otherwise
(collectively with the Indebtedness, the “Guarantied Obligations”). To the extent that funds are
not otherwise readily available for payment on the Guarantied Obligations, the Guarantor shall
cause its general partner to promptly make, in any event within two (2) business days after written
demand is issued by the Lender under the Loan Agreement for payment of loans or cash
collateralization of letters of credit, a capital call as permitted under the Guarantor’s Second
Amended and Restated Agreement of Limited Partnership dated as of September 28, 2007, as amended,
modified or restated from time to time (the “LP Agreement”) in order to satisfy payment of such
demand. The Undersigned shall provide a copy of such capital call notice to the Lender immediately
after issuance. Notwithstanding anything to the contrary contained herein, prior to the 14th
business day following written demand pursuant to the Loan Agreement for payment of the loans
and/or cash collateralization of letters of credit thereunder, the Lender shall not exercise any
rights or remedies hereunder to collect amounts owing under this Guaranty.
The Undersigned further acknowledges and agrees with the Lender that:
1. This Guaranty is a continuing, absolute and unconditional guaranty, and shall remain in
full force and effect until written notice of its discontinuance shall be actually received by the
Lender, and also until any and all of the Indebtedness created, existing or committed to before
receipt of such notice shall be fully paid. The dissolution of the Undersigned shall not terminate
this Guaranty until notice of such dissolution shall have been actually received by the Lender, nor
until all of the Indebtedness created or existing before receipt of such notice shall be fully
paid.
2. In case of the dissolution, liquidation or insolvency (howsoever evidenced) of, or the
institution of bankruptcy or receivership proceedings against the Borrower or the
Undersigned, all
of the Indebtedness then existing shall, at the option of the Lender, immediately become due
or accrued and payable from the Undersigned. All dividends or other payments received from the
Borrower or on account of the Indebtedness from whatsoever source, shall be taken and applied as
payment in gross, and this Guaranty shall apply to and secure any ultimate balance that shall
remain owing to the Lender.
3. The liability hereunder shall in no way be affected or impaired by (and the Lender is
hereby authorized to make from time to time, without notice to anyone), any sale, pledge,
surrender, compromise, settlement, release, renewal, extension, indulgence, alteration,
substitution, exchange, change in, modification or other disposition of any of the Indebtedness,
either express or implied, or of any contract or contracts evidencing any of the Indebtedness, or
of any security or collateral therefor. The liability hereunder shall in no way be affected or
impaired by any acceptance by the Lender of any security for or other guarantors upon any of the
Indebtedness, or by any failure, neglect or omission on the part of the Lender to realize upon or
protect any of the Indebtedness, or any collateral or security therefor, or to exercise any lien
upon or right of appropriation of any moneys, credits or property of the Borrower, possessed by the
Lender, toward the liquidation of the Indebtedness, or by any application of payments or credits
thereon. The Lender shall have the exclusive right to determine how, when and what application of
payments and credits, if any, shall be made on the Indebtedness, or any part thereof. In order to
hold the Undersigned liable hereunder, there shall be no obligation on the part of the Lender, at
any time, to resort for payment to the Borrower or to any other guaranty, or to any other persons
or corporations, their properties or estates, or resort to any collateral, security, property,
liens or other rights or remedies whatsoever, and the Lender shall have the right to enforce this
Guaranty irrespective of whether or not other proceedings or steps seeking resort to or realization
upon or from any of the foregoing are pending.
4. All diligence in collection or protection, and all presentment, demand, protest and/or
notice, as to any and everyone, whether or not the Borrower or the Undersigned or others, of
dishonor and of default and of non-payment and of the creation and existence of any and all of the
Indebtedness, and of any security and collateral therefor, and of the acceptance of this Guaranty,
and of any and all extensions of credit and indulgence hereunder, are waived. No act of commission
or omission of any kind, or at any time, upon the part of the Lender in respect to any matter
whatsoever, shall in any way affect or impair this Guaranty.
5. The Undersigned will not exercise or enforce any right of exoneration, contribution,
reimbursement, recourse or subrogation available to the Undersigned against any person liable for
payment of the Indebtedness, or as to any security therefor, unless and until the full amount owing
to the Lender on the Indebtedness has been paid and the payment by the Undersigned of any amount
pursuant to this Guaranty shall not in any way entitle the Undersigned to any right, title or
interest (whether by way of subrogation or otherwise) in and to any of the Indebtedness or any
proceeds thereof or any security therefor unless and until the full amount owing to the Lender on
the Indebtedness has been paid.
6. The Lender may, in accordance with, and subject to the terms of, the Loan Agreement, sell,
assign or transfer all of the Indebtedness, or any part thereof, or grant participations therein,
and in that event each and every immediate and successive assignee,
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transferee, or holder of or
participant in all or any part of the Indebtedness, shall have the right to
enforce this Guaranty, by suit or otherwise, for the benefit of such assignee, transferee, holder
or participant, as fully as if such assignee, transferee, holder or participant were herein by name
specifically given such rights, powers and benefits; but the Lender shall have an unimpaired right
to enforce this Guaranty for the benefit of the Lender or any such participant, as to so much of
the Indebtedness that it has not sold, assigned or transferred.
7. The Undersigned waives any and all defenses, claims and discharges of the Borrower, or any
other obligor, pertaining to the Indebtedness, except the defense of discharge by payment in full.
Without limiting the generality of the foregoing, the Undersigned will not assert, plead or enforce
against the Lender any defense of waiver, release, discharge in bankruptcy, statute of limitations,
res judicata, statute of frauds, anti-deficiency statute, fraud, incapacity, minority, usury,
illegality or unenforceability which may be available to the Borrower or any other person liable in
respect of any of the Indebtedness, or any setoff available against the Lender to the Borrower or
any such other person, whether or not on account of a related transaction.
8. If any payment applied by the Lender to the Indebtedness is thereafter set aside,
recovered, rescinded or required to be returned for any reason (including, without limitation, any
payment set aside, recovered, rescinded or required to be returned (i) pursuant to any
intercreditor or subordination entered into in connection with the Indebtedness, or (ii) due to the
bankruptcy, insolvency or reorganization of the Borrower or any other obligor), the Indebtedness to
which such payment was applied shall for the purposes of this Guaranty be deemed to have continued
in existence, notwithstanding such application, and this Guaranty shall be enforceable as to such
of the Indebtedness as fully as if such application had never been made and whether or not this
Guaranty purports to be released.
9. The liability of the Undersigned under this Guaranty is in addition to and shall be
cumulative with all other liabilities of the Undersigned to the Lender as guarantor of the
Indebtedness, without any limitation as to amount, unless the instrument or agreement evidencing or
creating such other liability specifically provides to the contrary.
10. Any invalidity or unenforceability of any provision or application of this Guaranty shall
not affect other lawful provisions and applications hereof, and to this end the provisions of this
Guaranty are declared to be severable. This Guaranty shall be construed according to the law of
the State of New York, in which State it shall be performed by the Undersigned and may not be
waived, amended, released or otherwise changed except by a writing signed by the Lender.
11. This Guaranty and every part thereof shall be effective upon delivery to the Lender,
without further act, condition or acceptance by the Lender, shall be binding upon the Undersigned,
and upon the successors and assigns of the Undersigned, and shall inure to the benefit of the
Lender, its successors, legal representatives and assigns. The Undersigned waives notice of the
Lender’s acceptance hereof.
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12. So long as this Guaranty is in effect, the Guarantor agrees to furnish financial
information of the Guarantor to the Lender upon reasonable request of the Lender from time to time.
Such information shall be furnished as soon as reasonably possible, but in any event within
30 days after request by the Lender (to the extent that such financial information is readily
available or can reasonably be prepared within such 30-day period, otherwise as soon as practicable
thereafter). Without any such request but only so long as this Guaranty is in effect, the
Guarantor shall furnish, or cause to be furnished, to the Lender:
(a) as soon as available, and in any event (i) each time Borrower requests a Loan
(other than a Loan to pay accrued and unpaid interest, unreimbursed draws under a letter of
credit or letter of credit fees) or letter of credit from the Lender and (ii) within 30 days
after the last day of each quarter, a certificate as of such date in the form, or
substantially the form of Exhibit A hereto, properly completed and certified by the
Guarantor;
(b) as soon as available, and in any event within 60 days after the close of each
fiscal quarter of the Guarantor (other than the last fiscal quarter of each fiscal year), a
copy of the Guarantor’s balance sheet as of the last day of such fiscal quarter and its
statements of income and partners’ capital for the fiscal quarter and for the fiscal
year-to-date period then ended, prepared by the Guarantor in accordance with GAAP (subject
to the absence of footnotes and normal year-end adjustments) and certified to by its chief
financial officer or such other officer reasonably acceptable to the Lender; and
(c) as soon as available, and in any event within 150 days after the close of fiscal
year 2008 and within 120 days after the close of each fiscal year of the Guarantor
thereafter (or, if later, such date by which such financial statements are reasonably
expected to be available, as specified by the Guarantor to the Lender prior to the 120th day
after the close of the relevant fiscal year), a copy of the Guarantor’s balance sheet as of
the last day of the fiscal year then ended and its statements of income and partners’
capital and cash flows for the fiscal year then ended, and accompanying notes thereto,
accompanied by an unqualified (as to going concern) opinion of Deloitte & Touche or another
firm of independent public accountants of recognized standing, selected by the Guarantor and
reasonably satisfactory to the Lender to the effect that the financial statements have been
prepared in accordance with GAAP and present fairly in all material respects in accordance
with GAAP the consolidated financial condition of the Guarantor as of the close of such
fiscal year and the results of our operations and cash flows for the fiscal year then ended.
14. So long as this Guaranty is in effect, the Undersigned shall not incur any additional debt
or guarantees other than the loans and the guarantees in favor of the Lender except guarantees or
other credit support supporting the obligations of its portfolio companies so long as the aggregate
amount of outstanding indebtedness and all outstanding guarantees (or other credit support) of the
Undersigned does not exceed 80% of the Guarantor’s uncalled Capital Commitments (as defined in the
LP Agreement). So long as this Guaranty is in effect, neither the Undersigned nor the general
partner of the Undersigned shall grant or permit to exist any lien, security interest, encumbrance
on, or an assignment of (a) the Capital Commitments,
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(b) the Undersigned’s or the general partner
of the Undersigned’s right to issue Call Notices (as defined in the LP Agreement), or (c) proceeds
of any Capital Contributions (as defined in the LP Agreement) to secure any loans or for any other
purpose without the prior written approval of the
Lender, such approval to be granted at the sole discretion of the Lender; provided, however, that
the Undersigned or the general partner of the Undersigned may grant such a security interest so
long as the Undersigned’s obligations to the Lender are equally and ratably secured with such
security interest and an intercreditor agreement is in place with the other lender that is
reasonably satisfactory to the Lender. This provision is subject to amendment upon the written
consent of both the Lender and the Undersigned.
[Signature Page Follows]
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Signed and delivered by the Undersigned, at Chicago, Illinois, this 25th day of July,
2008. The Undersigned acknowledges receipt of a completed copy of this Guaranty as of the time
of execution.
| Pegasus Partners IV, L.P. | ||||
| By: | Pegasus Investors IV, L.P., its | |||
| general partner | ||||
| By: | Pegasus Investors IV GP, L.L.C., its | |||
| general partner | ||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Printed Name: Xxxxxxx Xxxxxxxx | ||||
| Its: Vice President | ||||
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| Solely as to Section 14: | ||||
| Pegasus Investors IV, L.P. | ||||
| By: | Pegasus Investors IV GP, L.L.C., its | |||
| general partner | ||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Printed Name: Xxxxxxx Xxxxxxxx | ||||
| Its: Vice President | ||||
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Certificate of Status
of
Pegasus Partners IV, L.P.
of
Pegasus Partners IV, L.P.
Date: July 25, 2008
Pegasus Partners IV, L.P., a Delaware limited partnership (the “Guarantor”), does
hereby certify that:
1. Xxxxxxx Xxxxxxxx is Vice President (the “Vice President”) of Pegasus Investors IV
GP, L.L.C., a Delaware limited liability company (the “Ultimate GP”), which is the general
partner of Pegasus Investors IV, L.P. (the “General Partner”), which is the general
partner of the Guarantor.
2. This Certificate is being delivered to BMO Capital Markets Financing, Inc. and Bank of
Montreal (each a “Lender” and together the “Lenders”) in connection with, and may be relied upon by
the Lenders in connection with, their extension of credit from time to time to the Guarantor, or
any Portfolio Company of the Guarantor and the guaranty of that credit by the Guarantor to the
Lenders (the “Guaranty”). This Certificate of Status supersedes any Certificate of Status
previously delivered by the Guarantor to the Lenders or any of their affiliates in connection with
any loans or other extensions of credit from time to time to the Guarantor or any Portfolio Company
of the Guarantor by the Lenders or any affiliate thereof or any Guaranty thereof by the Guarantor.
3. Xxxxxxx Xxxxxxxx, as the Vice President and authorized signatory of the Ultimate GP (the
“Authorized Signatory”), only in his capacity as the Vice President of the Ultimate GP and not in
his individual capacity, and the Ultimate GP, in its capacity as general partner of the General
Partner, and the General Partner, in its capacity as general partner of the Guarantor, have each
secured proper authorization to enter into the Guaranty and to execute all instruments and
documents in connection therewith, in compliance with the Guarantor’s Second Amended and Restated
Agreement of Limited Partnership, dated as of September 28, 2007 (as amended from time to time, the
“Guarantor’s Agreement of Limited Partnership”). The Guarantor has incurred indebtedness and
become liable on guarantees, and will continue to incur indebtedness and become liable on
guarantees, in each case only to the extent the same can be done in compliance with the Guarantor’s
Agreement of Limited Partnership. The Authorized Signatory’s actions on behalf of the Ultimate GP
(as the general partner of the general partner of the Guarantor) and the General Partner’s actions
on behalf of the Guarantor, have been taken in compliance with the following agreements true and
correct copies of which have been previously delivered to the Lenders: (a) the Guarantor’s
Agreement of Limited Partnership, (b) the General Partner’s Limited Partnership Agreement, dated as
of September 29, 2006 (as amended from time to time, the “General Partner’s Limited Partnership
Agreement”) and (c) the Ultimate GP’s Amended and Restated Limited Liability Company Agreement
dated as of January 29, 2007 (as amended from time to time, the “Ultimate GP’s Operating
Agreement”).
4. The aggregate amount of outstanding indebtedness of the Guarantor as of the date hereof is
$5,783,333.
5. The aggregate amount of Capital Commitments to the Guarantor as of the date hereof is
$750,000,000.
6. The aggregate amount of outstanding guarantees (after giving effect to the Guaranty) on
which the Guarantor is liable as of the date hereof is $30,000,000.
7. The aggregate amount of uncalled Capital Commitments to the Guarantor as of the date hereof
is $452,662,414 (including $1,221,490 of distributions to the Guarantor’s Limited Partners subject
to recall pursuant to the Guarantor’s Agreement of Limited Partnership).
8. The aggregate amount of Capital Contributions made to the Guarantor as of the date hereof
is $298,091,147.
9. (a) The aggregate amount of outstanding investments that the Guarantor has in any one
Portfolio Company does not as of the date hereof and will not at any time hereafter exceed the
investment limitation on the Guarantor’s aggregate Capital Commitments as set forth in
Section 2.1(c) of the Guarantor’s Agreement of Limited Partnership (as in effect from time to
time).
(b) The aggregate amount (without duplication) of outstanding indebtedness of the Guarantor
(and together with the aggregate amount of outstanding guarantees of Guarantor) does not as of the
date hereof and will not at any time hereafter exceed 80% of the Guarantor’s available uncalled
Capital Commitments.
10. The aggregate amount of Call Notices made on the Guarantor’s Limited Partners since the
most recently completed fiscal quarter of the Guarantor is $20,004,012.
11. Intentionally deleted.
12. We will promptly notify you upon our becoming aware (i) of the occurrence of any event
which would give any one or more of our Limited Partners the right to terminate or suspend its
Capital Commitment, whether in whole or in part and whether or not contingent upon the passage of
time or the giving of notice or both, (ii) of any event which would permit a Limited Partner to
withdraw from the Guarantor, (iii) of the occurrence of a Defaulting Partner as defined in Section
3.1(e) of the Guarantor’s Agreement of Limited Partnership, (iv) of any event or agreement which
would excuse or exclude a Limited Partner from participating in any capital call relating to the
Guarantor, (v) of the formation of any Parallel Vehicle or Alternative Investment Vehicle or
Co-Investment Vehicle or Special Purpose Investment Vehicle or Feeder Fund, (vi) of the occurrence
of any event of dissolution as described in Section 9.1 of the Guarantor’s Agreement of Limited
Partnership and (vii) of the termination or suspension of the Commitment Period whether in
accordance with Guarantor’s Agreement of Limited Partnership or otherwise.
13. The Lenders may rely conclusively upon the General Partner’s certification that it is
acting on behalf of the Guarantor and that its acts are authorized. The Ultimate GP’s signature on
behalf of the General Partner’s signature is sufficient to bind the Guarantor for all purposes.
14. The undersigned is an officer of the Ultimate GP.
15. We will promptly notify you upon the death, incapacitation or cessation of involvement in
the management of Guarantor of Xxxxx X. Xxxxx and Xxxxxx Xxxxx.
16. The Commitment Period shall end on October 24, 2012, unless earlier terminated or extended
in accordance with the terms of the Guarantor’s Agreement of Limited Partnership. We will promptly
notify you upon such early termination or extension of the Commitment Period.
17. The Guarantor’s Agreement of Limited Partnership, the General Partner’s Limited
Partnership Agreement and the Ultimate GP’s Operating Agreement have not been amended or otherwise
modified since June 16, 2008, except by instruments, true and correct copies of which have been
previously delivered to the
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Lenders. There are no side letters or other agreements (as referred to in Section 11.6 of the
Guarantor’s Agreement of Limited Partnership) which would prohibit the Guarantor from entering into
or performing its obligations under the Guaranty or affect the applicable Limited Partners’
obligations to honor capital calls as set forth in such Agreement of Limited Partnership or create
obligations on the Guarantor to repurchase partnership interests or redeem the interest of a
Limited Partner in the Guarantor, in each case except as provided in such Agreement of Limited
Partnership.
18. So long as the Guaranty is in effect, the Guarantor shall not incur any additional debt or
guarantees other than loans from and guarantees in favor of the Lenders, except for guarantees or
other credit support supporting the obligations of its Portfolio Companies so long as the aggregate
amount of all outstanding indebtedness and outstanding guarantees (or other credit support) of the
Guarantor does not exceed 80% of the Guarantor’s aggregate uncalled Capital Commitments. So long
as the Guaranty is in effect, neither the Guarantor nor the General Partner shall grant or permit
to exist any lien, security interest, encumbrance on, or an assignment of, the Capital Commitments,
the Guarantor’s or the General Partner’s right to call capital or to issue Call Notices, or
proceeds of any Capital Contributions to secure any loans or for any other purpose without the
prior written approval of the Lenders, such approval to be granted at the sole discretion of the
Lenders; provided, however, that the Guarantor or the General Partner may grant such a security
interest so long as the Guarantor’s obligations to the Lenders are equally and ratably secured with
such security interest and an intercreditor agreement is in place with the other lender that is
reasonably satisfactory to the Lenders. The requirements set forth in this paragraph #18 are
subject to amendment upon the written consent of both the Lenders and the Guarantor.
19. The General Partner represents and warrants that it will not consent to or act in its
discretion to effect an early termination of the Commitment Period or an early dissolution of the
Guarantor at any time that the Guarantor has any outstanding indebtedness or guarantees to the
Lenders. If the Guarantor does not have any outstanding indebtedness or guarantees to the Lenders,
the General Partner will not consent to or act in its discretion to effect an early dissolution or
termination of the Guarantor without first providing the Lenders written notice of its intention to
do so.
20. The General Partner represents and warrants that it will not act in its discretion to
reduce the aggregate Capital Commitments if after giving effect thereto the aggregate uncalled
Capital Commitments of the Guarantor would not be in compliance with the provisions of this
Certificate. If the Guarantor does not have any outstanding indebtedness or guarantees to the
Lenders, the General Partner will not act in its discretion to reduce the Capital Commitments
without first providing the Lenders written notice of its intention to do so.
21. The General Partner shall promptly notify the Lenders of any assignments of limited
partnership interests in the Guarantor.
22. No Investment or action has been made by the Guarantor in contravention of the Guarantor’s
Agreement of Limited Partnership.
23. Promptly after receipt, we will provide you with copies of all agreements for capital
subscriptions, and upon the Lenders’ reasonable request any other documentation, received in
connection with the admission of an additional Limited Partner to the Guarantor (to the extent that
such information can be shared without violations of confidentiality provisions binding on us).
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24. The General Partner has not excused or excluded any Limited Partner from participating in
an Investment whether pursuant to Article 4 of the Guarantor’s Agreement of Limited Partnership or
otherwise other than those disclosed to the Lenders prior to the date hereof.
25. No Limited Partner has been required or permitted to withdraw from the Guarantor whether
pursuant to Section 3.1(c)(vi) of the Guarantor’s Agreement of Limited Partnership or otherwise
other than those disclosed to the Lenders prior to the date hereof.
26. Within two (2) business days after written demand for payment by the Lenders in connection
with the obligations of the Guarantor, the General Partner or the Portfolio Companies under the
Loan Documents, to the extent that funds are not otherwise available to the Guarantor to satisfy
such obligations, the General Partner shall immediately make a capital call on the Limited Partners
of the Guarantor in order to satisfy payment of such demand, provided that the Guarantor shall have
fourteen (14) business days to honor any such demand.
27. The Guarantor hereby agrees to notify the Lenders in the event of any change of which it
becomes aware which would reasonably be expected to cause any of the above representations and
warranties to cease to be true and correct in any material respect.
[Signature Page to Follow]
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All capitalized terms used above without definition shall have the same meanings herein as
such terms have in the Guarantor’s Agreement of Limited Partnership. This agreement is dated as of
the date first written above.
| Pegasus Partners IV, L.P. | ||||||
| By: | Pegasus Investors IV, L.P., its | |||||
| general partner | ||||||
| By: | Pegasus Investors IV GP, L.L.C., its | |||||
| general partner | ||||||
| By: | ||||||
| Printed Name: Xxxxxxx Xxxxxxxx | ||||||
| Its: | Vice President | |||||
| Solely as to Sections 18, 19, 20, 21, 24 and 26: | ||||||
| Pegasus Investors IV, L.P. | ||||||
| By: | Pegasus Investors IV GP, L.L.C., its | |||||
| general partner | ||||||
| By: | ||||||
| Printed Name: Xxxxxxx Xxxxxxxx | ||||||
| Its: | Vice President | |||||
Exhibit A
