Investments

Pegasus in merger for $275 mn.

Bank Of America Investment Pegasus Solutions has executed a definitive merger agreement with an equity group led by Prides Capital Partners, LLC, including entities affiliated with Prides, Tudor Investment Corporation and Belfer Management.

based Pegasus is a global leader in providing technology and services to hotels and travel distributors. On December 19, 2005, affiliates of Prides Capital Partners, LLC entered into a merger agreement with Pegasus to acquire the company in a transaction valued at approximately $275 million. Under the terms of the merger agreement, Pegasus stockholders not affiliated with the investment group will receive $9.50 in cash, without interest, for each share of Pegasus common stock.

Investment Opportunity The transaction is valued at approximately $275 million. Under the terms of the merger agreement, Pegasus stockholders not affiliated with the investment group will receive $9.50 in cash for each share of Pegasus common stock they hold.

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Banc Of America Investment We are very pleased with the results of our strategic alternative review, said John F. Davis III, president, chief executive officer and chairman of Pegasus Solutions. Our focus will continue to be on delivering technology and business process solutions that help hotels and travel distributors come together to maximize revenue and profitability.

(34) LLB (Hons), MA Sonja has been an executive director at WDB Investment Holdings since 2002 playing an important role in the design and execution of transactions and the management of ongoing investment relationships. She was previously a vice president in the investment banking division of Deutsche Bank, where she gained more than five years' experience in advisory work on Mergers & Acquisitions and Corporate Finance. She has specific experience in advising government on the sale of assets and potential investors on purchasing or disposing of equity stakes in companies.

Banking Investment After unanimous recommendation by the corporate strategy committee, which is made up entirely of non-management members of the board of directors, Pegasus board of directors approved the merger agreement and recommended to Pegasus stockholders that they adopt the agreement.

A 20 ounce energy drink states the calories per serving as 110 in 8 ounces. If you drink the entire bottle, which most do, third of consumers asked calculated the answer correctly as 275. A 20 ounce bottle equals 2.5 servings which necessitates either multiplying 110 times 2.5 to equal 275 calories, or adding 110 (8 ounces) + 110 (8 ounces) + 55 (4 ounces) to equal 275 calories in 20 ounces. Sounds simple but it really isn’t.

Investment Solution Strategic Completion of the transaction is contingent on, among other things, regulatory review, approval by the stockholders of Pegasus and funding of debt to complete the acquisition. The transaction is expected to close in the first half of 2006.

Investment Banking Services We will maintain the same service lines and products and will continue to focus on improving those products and the speed with which we bring them to market, noted Bob Boles, Pegasus chief operating officer.

Bank Investment Davis noted that Prides Capital and the other members of the investment groupmany of whom are existing Pegasus stockholdersare committed to long-term investing.

Alternative Investment This acquisition sends a clear message that we intend to renew our leadership within the travel industry, Davis said.

Online Investment Services Pegasus exemplifies the kind of company we look for as a part of our investment portfolio, said Kevin Richardson, Prides Capitals managing partner.

Accompany Essential Investment We have a high regard for the quality of the business and managements focus on meeting customer needs in the dynamic travel industry.

Investment Company Bear, Stearns & Co. Inc. acted as financial advisor to Pegasus and provided a fairness opinion to the board of directors of Pegasus in connection with the transaction. Locke Liddell & Sapp LLP acted as legal advisor to Pegasus in connection with the transaction. Simpson Thacher & Bartlett LLP acted as legal advisor to Prides Capital in connection with the transaction. J.P. Morgan Securities is arranging the debt financing.

Investment Management Solution Concurrently with the execution of the merger agreement, Pegasus amended the Rights Agreement between Pegasus and American Securities Transfer & Trust, Inc., the companys stock transfer agent, so that none of the execution, delivery or performance of the merger agreement, the consummation of the merger or any of the other transactions contemplated by and pursuant to the merger agreement will trigger the separation or exercise of the stockholder rights or any adverse event under the Rights Agreement.

Investment Management Services About Pegasus

Guide Investment Stock Dallas-based Pegasus Solutions, Inc. is a global leader in providing technology and services to hotels and travel distributors. Founded in 1989, Pegasus customers include a majority of the worlds travel agencies and more than 60,000 hotel properties around the globe.

Investment Manual Solution Pegasus services include central reservation systems, electronic distribution services, commission processing and payment services, and marketing representation services, including the consumer Web site, www.hotelbook.com.

Investment Stock The companys representation services, including Utell by Pegasus and Unirez by Pegasus, are used by nearly 7,000 member hotels in 140 countries, making Pegasus the hotel industrys largest third-party marketing and reservations provider. Pegasus has 18 offices in 13 countries, including regional hubs in London, Scottsdale and Singapore. For more information, please visit www.pegs.com.

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