<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 5, 2000
PEGASUS COMMUNICATIONS CORPORATION
---------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-21389 51-0374669
----------------- ---------------- ---------------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
c/o Pegasus Communications Management Company, 225 City Line Avenue,
Suite 200, Bala Cynwyd, Pennsylvania 19004
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 888-438-7488
------------
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Pegasus Communications Corporation's registration statement on form S-4
(file no. 333-31080) containing substantially the same information required in
this form to report the acquisition of Golden Sky Holdings, Inc., became
effective on February 29, 2000 and accordingly the acquisition of Golden Sky was
"previously reported" within the meaning of the General Instructions to Form
8-K. Since the number of shares actually issued to stockholders and former
employees of Golden Sky does not materially affect the pro forma financial
information set forth in the registration statement, the acquisition of Golden
Sky is reported under Item 5 below.
Item 5. Other Events.
Acquisition of Golden Sky
On May 5, 2000, Pegasus acquired Golden Sky through the merger of a
subsidiary of Pegasus into Golden Sky. Prior to the merger, Golden Sky was the
second largest independent provider of DIRECTV. Golden Sky operated in 23 states
and its territories included approximately 1.8 million households and 345,000
subscribers.
In connection with the merger, Pegasus issued 6,090,145 shares of its
Class A common stock to stockholders and former employees of Golden Sky at a
price of $95.07 per share, the average closing price per share, five days prior
and subsequent to the merger announcement. In addition, holders of Golden Sky
options received options to purchase an aggregate of 348,964 shares of Pegasus'
Class A common stock. Pegasus also granted registration rights to certain of
Golden Sky's stockholders, including Alta Communications VI, L.P. and two of its
affiliates and Spectrum Equity Investors L.P. and one of its affiliates.
Pursuant to the acquisition of Golden Sky, the registration rights
agreement and amended voting agreement were entered into and Robert F. Benbow,
William P. Collatos and Ted S. Lodge were elected to Pegasus' board of directors
as the designees of Alta, Spectrum and Marshall W. Pagon, respectively, under
the amended voting agreement.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Business Acquired.
Not Applicable
(b) Pro Forma Financial Information.
Not Applicable
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated January 10,
2000, as amended on January 25, 2000, by and
among Pegasus Communications Corporation,
Golden Sky Holdings, Inc. Pegasus GSS Merger
Sub, Inc., a wholly-owned subsidiary of Pegasus
and certain stockholders of Pegasus and Golden
Sky (which is incorporated by reference herein
to Exhibit 2.1 to Pegasus' Registration
Statement on Form S-4 (File No. 333-31080)).
<PAGE>
10.1 Amended and Restated Voting Agreement, dated
May 5, 2000, among Pegasus Communications
Corporation, Fleet Venture Resources, Inc.,
Fleet Equity Partners VI, L.P., Chisholm
Partners III, L.P., and Kennedy Plaza Partners,
Spectrum Equity Investors, L.P. and Spectrum
Equity Investors II, L.P., Alta Communications
VI, L.P., Alta Subordinated Debt Partners III,
L.P. and Alta-Comm S BY S, LLC, and Pegasus
Communications Holdings, Inc., Pegasus Capital,
L.P., Pegasus Scranton Offer Corp, Pegasus
Northwest Offer Corp, and Marshall W. Pagon, an
individual.
10.2 Registration Rights Agreement dated May 5, 2000
among Pegasus Communications Corporation and
the parties thereto.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PEGASUS COMMUNICATIONS CORPORATION
By: /s/ Scott A. Blank
-----------------------------
Scott A. Blank
Vice President
May 19, 2000
-3-
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Document
- -------------- -----------------------
2.1 Agreement and Plan of Merger, dated January 10, 2000,
as amended on January 25, 2000, by and among Pegasus
Communications Corporation, Golden Sky Holdings, Inc.
Pegasus GSS Merger Sub, Inc., a wholly-owned subsidiary
of Pegasus and certain stockholders of Pegasus and
Golden Sky (which is incorporated by reference herein
to Exhibit 2.1 to Pegasus' Registration Statement on
Form S-4 (File No. 333-31080)).
10.1 Amended and Restated Voting Agreement, dated May 5,
2000, among Pegasus Communications Corporation, Fleet
Venture Resources, Inc., Fleet Equity Partners VI,
L.P., Chisholm Partners III, L.P., and Kennedy Plaza
Partners, Spectrum Equity Investors, L.P. and Spectrum
Equity Investors II, L.P., Alta Communications VI,
L.P., Alta Subordinated Debt Partners III, L.P. and
Alta-Comm S BY S, LLC, and Pegasus Communications
Holdings, Inc., Pegasus Capital, L.P., Pegasus Scranton
Offer Corp, Pegasus Northwest Offer Corp, and Marshall
W. Pagon, an individual.
10.2 Registration Rights Agreement dated May 5, 2000 among
Pegasus Communications Corporation and the parties
thereto.
-4-
<PAGE>
AMENDED AND RESTATED VOTING AGREEMENT, dated May 5, 2000, among PEGASUS
COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company"); FLEET
VENTURE RESOURCES, INC., a Rhode Island corporation, FLEET EQUITY PARTNERS VI,
L.P., a Delaware limited partnership, CHISHOLM PARTNERS III, L.P., a Delaware
limited partnership, and KENNEDY PLAZA PARTNERS, a Rhode Island general
partnership; SPECTRUM EQUITY INVESTORS, L.P. and SPECTRUM EQUITY INVESTORS II,
L.P. (each a Delaware limited partnership and together referred to herein as
"Spectrum"), ALTA COMMUNICATIONS VI, L.P., a Delaware limited partnership, ALTA
SUBORDINATED DEBT PARTNERS III, L.P., a Delaware limited partnership and
ALTA-COMM S BY S, LLC, a Massachusetts limited liability company (together
referred to herein as "Alta"); and PEGASUS COMMUNICATIONS HOLDINGS, INC., a
Delaware corporation, PEGASUS CAPITAL, L.P., a Pennsylvania limited partnership,
PEGASUS SCRANTON OFFER CORP, a Delaware corporation, PEGASUS NORTHWEST OFFER
CORP, a Delaware corporation, and MARSHALL W. PAGON, an individual.
The Company, Pegasus DTS Merger Sub, Inc., a Delaware corporation ("DTS
Merger Sub"), Digital Television Services, Inc., a Delaware corporation ("DTS"),
and certain shareholders of the Company and of DTS are parties to an Agreement
and Plan of Merger dated January 8, 1998 (the "DTS Merger Agreement"). At the
closing held on April 28, 1998, under the DTS Merger Agreement, (1) DTS Merger
Sub was merged with and into DTS, (2) DTS thereby became a wholly-owned
subsidiary of the Company, (3) the Fleet Parties (this and certain other terms
are defined in Section 1) received shares of Class A Common Stock as the DTS
Merger Consideration, and (4) the Company, the Pegasus Parties, the Fleet
Parties, and Whitney Equity Partners, L.P., a Delaware limited partnership
("Whitney"), Columbia Capital Corporation, Virginia corporation ("Columbia
Capital"), and Columbia DBS, Inc. a Virginia corporation, entered into a Voting
Agreement dated April 27, 1998 (the "Original Voting Agreement"). Whitney and
Columbia Capital no longer have the right to designate a director of the
Company, pursuant to Section 4.1(b)(1) and Section 4.1(a)(1) of the Original
Voting Agreement.
The Company, Pegasus GSS Merger Sub, Inc., a Delaware corporation ("GSS
Merger Sub"), Golden Sky Holdings, Inc., a Delaware corporation ("GSS"), and
certain shareholders of the Company and GSS (including Spectrum and Alta) are
parties to an Agreement and Plan of Merger dated January 10, 2000, as amended
January 25, 2000 (the "GSS Merger Agreement").
At the Closing held today under the GSS Merger Agreement, (1) GSS
Merger Sub is being merged with and into GSS, (2) GSS is thereby becoming a
wholly-owned subsidiary of the Company, and (3) Spectrum and Alta are receiving
shares of Class A Common Stock. It is a condition precedent to the Closing that
the parties hereto execute and deliver this Agreement.
PCH, PCLP, PSOC and PNOC hold all the issued and outstanding shares of
Class B Common Stock. Pagon controls PCH, PCLP, PSOC and PNOC.
<PAGE>
NOW, THEREFORE, in consideration of the completion of the transactions
contemplated by the DTS Merger Agreement and the GSS Merger Agreement and of the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, the parties amend and restate the Original Voting
Agreement, effective the date first written above, to read as follows.
SECTION 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms have
the following terms have the following meanings:
"Alta": as defined in the recitals.
"Alta Designee": a person designated by Alta to serve as a
director in accordance with this Agreement.
"Audit Committee": the audit committee of the Board of Directors
referred to in Section 3.4.
"Board of Directors": the board of directors of the Company.
"Chisholm": Chisholm Partners III, L.P., a Delaware limited
partnership.
"Chisholm Designee": a person designated by Chisholm to serve as
a director in accordance with this Agreement.
"Class A Common Stock": the Company's Class A Common Stock, par
value $0.01 per share.
"Class B Common Stock": the Company's Class B Common Stock, par
value $0.01 per share.
"Committee": the Audit Committee, the Compensation Committee or
the Nominating Committee.
"Compensation Committee": the compensation committee of the
Board of Directors referred to in Section 3.4.
"Covered Shares": (a) the shares of Class A Common Stock
received as the DTS Merger Consideration by the shareholders of DTS that are
parties to this Agreement; (b) the shares of Class A Common Stock received as
the GSS Merger Consideration by Spectrum and Alta; and (c) all shares of voting
<PAGE>
securities of the Company now or hereafter beneficially owned (within the
meaning of the Securities Exchange Act of 1934) by PCH, PCLP, PSOC, PNOC or
Pagon.
"Designation Right Loss Event": With respect to any person, any
of the following, as determined by a majority of the Independent Directors
(whose determination shall be conclusive):
(a) such person's designee as a director commits a breach of
fiduciary duty to the Company or a material violation of any federal or
state securities law in connection with the purchase or sale of any of
the Company's securities;
(b) such person commits a material violation of any federal or
state securities law in connection with the purchase or sale of any of
the Company's securities;
(c) in the case of the Fleet Parties, any such person materially
breaches its confidentiality agreement with the Company;
(d) such person shall own, control, manage or be financially
interested, directly or indirectly, in any business (other than a less
than 5% interest in a publicly held company) that competes with the
Company or any of its Subsidiaries in any geographic area in which the
Company does business; but this paragraph (d) shall not apply (1) to
any investment held on November 5, 1997, by any of the Fleet Parties or
their Affiliates or any investment held on January 10, 2000, by any of
the GSS Parties or their respective Affiliates, (2) to any investment
in a business that comes into competition with the Company or any of
its Subsidiaries as a result of the Company's acquisition or
establishment of a new business or its expansion into a geographic area
in which it did not previously operate if such person shall have held
such investment before the Company's management proposes to the Board
of Directors such acquisition, establishment or expansion, (3) to any
investment in an investment fund or pool that itself makes or holds an
investment in a competitive business if such person (A) is regularly
engaged in making investment of that kind and (B) does not have the
power to, and does not in fact, exercise an influence on the decision
of the fund or pool in making the investment in the competitive
business, and (4) unless prior to the exercise by a majority of the
Independent Directors of the right to terminate the relevant person's
right to designate a director, such person is given notice of the
potential applicability of this paragraph (d) and fails to cure or
modify the relationship to the satisfaction of a majority of the
Independent Directors within 30 days after the notice is given;
provided, however, that in no event shall this subsection (d) apply to
any Person associated with, related to, affiliated with, controlled by,
controlling or under common control with, Alta or Spectrum other than
Spectrum Equity Investors II, L.P., Spectrum Equity Investors, L.P.,
Alta Communications VI, L.P., Alta Subordinated Debt Partners III, L.P.
and Alta-Comm S by S, LLC;
(e) such person shall violate Section 2; or
-3-
<PAGE>
(f) any director designated by such person shall take or omit to
take any action in his capacity as a director or Committee member in a
manner materially inconsistent with this Agreement, and the Person who
has the right to designate such director has not obtained such
director's resignation as a director within 30 days after being
requested to do so by the Board of Directors.
"Director" or "director": a member of the Board of Directors.
"DTS": as defined in the recitals.
"DTS Merger Agreement": as defined in the recitals.
"DTS Merger Consideration": the "Merger Consideration" as
defined in the DTS Merger Agreement.
"Fleet Parties": Chisholm, Fleet Venture Resources, Inc., a
Rhode Island corporation, Fleet Equity Partners VI, L.P., a Delaware limited
partnership, and Kennedy Plaza Partners, a Rhode Island general partnership.
"GSS": as defined in the recitals.
"GSS Designee": a Spectrum Designee or an Alta Designee.
"GSS Merger Agreement": as defined in the recitals.
"GSS Merger Consideration": the "Merger Consideration" as
defined in the GSS Merger Agreement.
"GSS Parties": Spectrum and Alta.
"Independent Director": a natural person who (a) is not Marshall
W. Pagon or an officer, employee or principal of the Company, PCH, PCLP, PSOC,
PNOC, any of the Fleet Parties, DTS, Spectrum, Alta, GSS, or any of their
subsidiaries or affiliates, or any spouse or sibling, or any ancestor or lineal
descendant of any such person, spouse or sibling ("immediate family"), (b) is
not a former officer or employee of any such person, (c) does not in addition to
such person's role as a director, act on a regular basis, either individually or
as a member or representative of an organization, serving as a professional
adviser, legal counsel or consultant to any such person, if, in the reasonable
discretion of the Nominating Committee, such relationship is material to any
such person, and (d) does not represent, and is not a member of the immediate
family of, a person who would not satisfy the requirements of the preceding
clauses (a), (b) and (c) of this sentence. A person who has been or is a
partner, officer or director of an organization that has customary commercial,
industrial, banking or underwriting relationships with any of the persons named
in clause (a) of the preceding sentence that are carried on in the ordinary
course of business and on an arms-length basis and who otherwise satisfies the
requirements set forth in clauses (a), (b), (c) and (d) of the first sentence of
-4-
<PAGE>
this definition, may qualify as a Independent Director unless, in the reasonable
discretion of the Nominating Committee, such person is not independent or may
not be independent with respect to the management of the business and affairs of
the Company. A person shall not be disqualified as an Independent Director under
clause (b), (c) or (d) above solely because of such person's (or a member of
such person's immediate family's) having served in any capacity with a business
(other than DTS or GSS) acquired by the Company, or solely because such person
is a representative or designee of any such business (whether or not the Company
shall enter into a consulting agreement with such person in connection with such
acquisition).
"Pagon": Marshall W. Pagon, an individual.
"Pagon Designee": a person designated by Pagon (or, in the event
of his death or incapacity, by PCLP or another person appointed by Pagon for
this purpose) to serve as a director in accordance with this Agreement.
"PCH": Pegasus Communications Holdings, Inc., a Delaware
corporation.
"PCLP": Pegasus Capital, L.P., a Pennsylvania limited
partnership.
"PNOC": Pegasus Northwest Offer Corp, a Delaware corporation.
"PSOC": Pegasus Scranton Offer Corp, a Delaware corporation.
"Permitted Transferee": as defined in the Company's certificate
of incorporation on the date hereof.
"Person" or "person": an individual, a partnership (general or
limited), corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
"Spectrum": as defined in the recitals.
"Spectrum Designee": a person designated by Spectrum to serve as
a director in accordance with this Agreement.
-5-
<PAGE>
SECTION 2
VOTING
Section 2.1 Each party warrants to the others that, as of the date of
this Agreement, it has voting control over the number of Covered Shares set
forth opposite its name on Exhibit A. Each party shall vote all Covered Shares
held by it, or over which it has the power to direct the voting, as specified in
this Agreement and shall take any and all other action necessary or appropriate
to implement the provisions of this Agreement, including without limitation
proposing and voting on amendments to the Company's certificate of incorporation
and by-laws as may be necessary to fully implement the provisions hereof. No
party shall permit any Covered Shares held by it, or over which it has the power
to direct the voting, to be voted in any manner inconsistent with this
Agreement. "Voting" includes the execution of written consents.
SECTION 3
COMPOSITION OF BOARD OF DIRECTORS
AND COMMITTEES
Section 3.1 Board of Directors. Except as otherwise provided in Section
3.3, the Board of Directors shall consist of eleven members, of whom:
(a) four will be Pagon Designees;
(b) one will be a Chisholm Designee until Chisholm ceases to
have the right to designate a director under Section 4.1(b);
(c) one will be a Spectrum Designee until Spectrum ceases to
have the right to designate a director under Section 4.1(c);
(d) one will be an Alta Designee until Alta ceases to have the
right to designate a director under Section 4.1(d); and
(e) all directors other than the Pagon Designees, the Chisholm
Designee, the Alta Designee and the Spectrum Designee will be
Independent Directors, who shall be the persons identified in Section
3.5(e) (so long as they continue to satisfy the definition of
"Independent Director") or their successors (who satisfy the definition
of "Independent Director") nominated by the Nominating Committee.
Section 2.1 shall apply to the election of directors specified in this Section
3.1.
Section 3.2 Vacancies Caused by Resignation, etc. of Designated
Directors. Any vacancy in the Board of Directors or a Committee caused by the
resignation, removal, incapacity or death of a Pagon Designee, a Chisholm
-6-
<PAGE>
Designee or a GSS Designee shall be filled by a person designated by the party
that had the right to designate the resigned, removed, incapacitated or dead
director or Committee member, except as provided in Section 3.3. Section 2.1
shall apply to the election of directors and Committee members specified in this
Section 3.2.
Section 3.3 Other Vacancies.
(a) If Chisholm, Spectrum or Alta ceases to have the right to
designate a director pursuant to Section 4.1, such party shall promptly cause
the director designated by it to resign if so requested by Pagon (or, in the
event of his death or incapacity, by PCLP or another person appointed for Pagon
for this purpose), except that in case of the loss pursuant to Section 4.1(a)(1)
or of the right of Chisholm to designate a director, as the case may be, which
also results in the termination of this Agreement pursuant to Section 4.3, such
party shall cause the director designated by it to resign not later than the
date on which this Agreement terminates.
(b) Failing any resignation required by subsection (a), the
affected director or directors may be removed in the manner provided by law.
(c) If a vacancy occurs in the Board of Directors by reason of
any required resignation or permitted removal described in subsection (a) or
(b), the Board of Directors (as constituted after giving effect to such vacancy)
shall either (1) reduce the number of directors to eliminate the vacancy or (2)
instruct the Nominating Committee to nominate an Independent Director to fill
the vacancy.
(d) The size of the Board of Directors may be increased as
provided by law. Each director elected to fill any position created by an
increase in the size of the Board of Directors shall be an Independent Director.
(e) No party to this Agreement will take any action to fill a
vacancy created under this Section 3.3 by a person who is not an Independent
Director. Otherwise, Section 2.1 shall not apply to the election of directors to
fill vacancies created under this Section 3.3.
Section 3.4 Committees. The existence of the Audit Committee, the
Nominating Committee and the Compensation Committee shall continue. Subject to
any requirement of law or regulation or of any securities exchange or
interdealer quotation system on or in which securities of the Company are listed
or traded, each Committee shall consist of three directors who shall be (1) a
director designated by Pagon, (2) a director designated by a majority of the
Chisholm Designees and GSS Designees then serving as directors; and (3) one of
the Independent Directors specified in Section 3.1(e) designated by the Board of
Directors in the manner provided by law. The Audit Committee and the
Compensation Committee shall have the powers and functions of the present audit
committee and compensation committee of the Board of Directors, subject to any
requirement of law or regulation or of any securities exchange or interdealer
quotation system on or in which securities of the Company are listed or traded.
The Nominating Committee shall nominate all persons (other than the Pagon
Designees, the Chisholm Designee and the GSS Designees) to serve as directors,
-7-
<PAGE>
which nominee shall be subject to election by the shareholders of the Company or
subject to appointment by the Board of Directors to fill vacancies. The Company
shall not establish a committee with the authority to act on all or
substantially all matters on which the Board of Directors may act (commonly
known as an "executive committee") without the consent of a majority of the
Chisholm Designee and the GSS Designees as a single group.
Section 3.5 Initial Designations. The parties make the following
designations pursuant to this Section 3:
(a) The Pagon Designees are Pagon, Robert N. Verdecchio, Ted S.
Lodge and Harry F. Hopper, III.
(b) The Chisholm Designee is Riordon B. Smith.
(c) The Spectrum Designee is William P. Collatos.
(d) The Alta Designee is Robert F. Benbow.
(e) The Independent Directors specified in Section 3.1(f) are
James J. McEntee, III, Mary C. Metzer, William P. Phoenix and Donald W.
Weber, each of whom is currently a director of the Company.
Immediately following the execution of this Agreement, the Board of Directors
shall take such action as shall be required to create vacancies on the Board of
Directors and to elect persons to the Board of Directors as specified in this
Section 3.5. The parties will make their designations to the Committees at a
later date.
Section 3.6 Subsequent Designations. Except as provided in Section 3.5,
each party to this Agreement that is entitled to designate one or more directors
or Committee members shall do so by written notice to each of the other parties
to this Agreement and to the Secretary of the Company, signed by the Person
making such designation.
Section 3.7 Removal. Any director may be removed by the shareholders of
the Company in the manner provided by law, except that no Chisholm Designee or
GSS Designee may be removed without the written consent of the party that
designated him unless such party shall have ceased to have the right to
designate a director pursuant to Section 4.1. Section 2.1 shall apply to this
Section 3.7.
Section 3.8 Chairman, President and Chief Executive Officer. For so
long as this Agreement is in effect, Pagon will be elected by the Board of
Directors as Chairman, President and Chief Executive Officer of the Company,
except in case of incapacity.
Section 3.9 Separate Voting Rights of Other Classes of Stock. If the
holders of any class of the Company's preferred stock shall become entitled to
elect directors in accordance with the terms of such preferred stock, this
Agreement shall not apply to any additional directorships to which their rights
apply.
-8-
<PAGE>
Section 3.10 Failure or Delay in Making Designations. No failure or
delay by any party in making any designation of a director or Committee member
shall constitute a waiver of such party's right to make designations in the
future.
SECTION 4
TERMINATION
Section 4.1 Termination of Designation Rights.
(a) Chisholm shall cease to have the right to designate a
director if at any time (1) the Fleet Parties collectively own less than half
the Covered Shares received by them pursuant to the DTS Merger Agreement, or (2)
a Designation Right Loss Event occurs with respect to any Fleet Party.
(b) Spectrum shall cease to have the right to designate a
director if at any time (1) Spectrum owns less than half the Covered Shares
received by Spectrum pursuant to the GSS Merger Agreement, or (2) a Designation
Right Loss Event occurs with respect to Spectrum.
(c) Alta shall cease to have the right to designate a director
if at any time (1) Alta owns less than half the Covered Shares received by Alta
pursuant to the GSS Merger Agreement, or (2) a Designation Right Loss Event
occurs with respect to Alta.
(d) For purposes of this Section 4.1, a party no longer owns
shares of Class A Common Stock distributed to its equity holders unless the
distributee is also a party to this Agreement on the date hereof. Continuing
ownership of Covered Shares shall be determined by the specific identification
method.
(e) At the Company's request from time to time, Chisholm,
Spectrum and Alta shall certify (and Chisholm shall cause the Fleet Parties to
certify) to the Company in writing, the number of shares of Class A Common Stock
received as part of the DTS Merger Consideration or the GSS Merger
Consideration, as the case may be, that each such person continues to own. If
requested by the Company, each such person will provide the Company with
evidence reasonably substantiating such person's continuing ownership of such
shares. If any such person fails to deliver such certification or evidence to
the Company within ten days after the Company delivers its written request
therefor to Chisholm, Spectrum or Alta, such person shall be deemed for all
purposes of this Agreement not to own any such shares of Class A Common Stock.
-9-
<PAGE>
Section 4.2 Termination of Voting Obligations.
(a) The obligations of any party under Section 2.1 shall
terminate with respect to any Covered Share upon the sale or other transfer of
such Covered Share to any person who is not a party to this Agreement and is not
required by subsection (b) to become a party to this Agreement.
(b) PCH, PCLP, PSOC or PNOC shall not sell or otherwise
transfer any Covered Shares to a Permitted Transferee unless the Permitted
Transferee agrees in writing to be bound by, and to become a party to, this
Agreement (including the requirements of this subsection) to the same extent as
its transferor, as it relates to the Covered Shares so transferred.
(c) The obligations of Spectrum and Alta under Section 2.1
shall terminate upon the resignation of the Spectrum Designee or the Alta
Designee, as the case may be, from the Board of Directors, provided that the
vacancy caused thereby is not filled by Spectrum or Alta, as the case may be,
pursuant to Section 3.2 within five days of such resignation.
Section 4.3 Termination of Agreement. This Agreement shall terminate as
to each of Chisholm, Spectrum and Alta as of the date that such party ceases to
have the right to designate a Director pursuant to Section 4.1. This Agreement
shall terminate in its entirety on the later of (1) the date of the meeting of
the Company's shareholders at which directors are scheduled to be elected next
following the date on which Chisholm shall cease to have the right to designate
a director pursuant to Section 4.1, or (2) the last date on which either
Spectrum or Alta has the right to designate a director pursuant to Section 4.1.
Neither Section 2 nor the requirements of this Agreement relating to actions by
the Nominating Committee shall apply to the election of directors to occur at
such meeting.
SECTION 5
MISCELLANEOUS
Section 5.1 Notices. Except as otherwise provided below, whenever it is
provided in this Agreement that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties hereto, or whenever any of the parties hereto, wishes to provide
to or serve upon the other party any other communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be delivered in person or sent
by telecopy, as specified in the DTS Merger Agreement or the GSS Merger
Agreement, as the case may be.
Section 5.2 Entire Agreement. This Agreement represents the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersedes any and all prior oral and written agreements,
arrangements and understandings among the parties hereto with respect to such
subject matter; and this Agreement can be amended, supplemented or changed, and
-10-
<PAGE>
any provision hereof can be waived or a departure from any provision hereof can
be consented to, only by a written instrument making specific reference to this
Agreement signed by all parties to this Agreement other than (a) the Fleet
Parties if Chisholm shall no longer have the right to designate a director
pursuant to Section 4.1, (b) Spectrum if Spectrum shall no longer have the right
to designate any director pursuant to Section 4.1, or (c) Alta if Alta shall no
longer have the right to designate any director pursuant to Section 4.1.
Section 5.3 Paragraph Headings. The paragraph headings contained in
this Agreement are for general reference purposes only and shall not affect in
any manner the meaning, interpretation or construction of the terms or other
provisions of this Agreement.
Section 5.4 Applicable Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of Delaware applicable to
contracts to be made, executed, delivered and performed wholly within such state
and, in any case, without regard to the conflicts of law principles of such
state.
Section 5.5 Severability. If any provision of this Agreement shall be
held by any court of competent jurisdiction to be illegal, void or
unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon and
shall not impair the enforceability of any other provision of this Agreement.
Section 5.6 No Waiver. The failure of any party at any time or times to
require performance of any provision hereof shall not affect the right at a
later time to enforce the same. No waiver by any party of any condition, and no
breach of any provision, term, covenant, representation or warranty contained in
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
Section 5.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same original instrument. Not all
parties need sign the same counterpart. Delivery by facsimile of a signature
page to this Agreement shall have the same effect as delivery of an original
executed counterpart.
-11-
<PAGE>
Section 5.8 Successors and Assigns. Subject to Section 4.1(d), this
Agreement shall inure to the benefit of and be binding upon the successors,
assigns and transferees of each of the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed the date first written above.
PEGASUS COMMUNICATIONS CORPORATION
By: /s/ Ted S. Lodge
----------------------------------------
Ted S. Lodge,
Senior Vice President
PEGASUS CAPITAL, L.P.
By: Pegasus Capital, Ltd., General Partner
By: /s/ Ted S. Lodge
----------------------------------------
Ted S. Lodge,
Senior Vice President
PEGASUS COMMUNICATIONS HOLDINGS, INC.
By: /s/ Ted S. Lodge
----------------------------------------
Ted S. Lodge,
Senior Vice President
PEGASUS SCRANTON OFFER CORP.
By: /s/ Ted S. Lodge
----------------------------------------
Ted S. Lodge,
Senior Vice President
PEGASUS NORTHWEST OFFER CORP.
By: /s/ Ted S. Lodge
----------------------------------------
Ted S. Lodge,
Senior Vice President
/s/ Marshall W. Pagon
----------------------------------------
Marshall W. Pagon
-12-
<PAGE>
FLEET VENTURE RESOURCES, INC.
By: /s/ Riordon B. Smith
----------------------------------------
Riordon B. Smith
Senior Vice President
FLEET EQUITY PARTNERS VI, L.P.
By: Fleet Growth Resources II, Inc.
Its General Partner
By: /s/ Riordon B. Smith
----------------------------------------
Riordon B. Smith
Senior Vice President
CHISHOLM PARTNERS III, L.P.
By: Silverado III L.P., its general partner
By: Silverado III Corp., its general partner
By: /s/ Riordon B. Smith
----------------------------------------
Riordon B. Smith
Senior Vice President
KENNEDY PLAZA PARTNERS
By: /s/ Riordon B. Smith
----------------------------------------
Riordon B. Smith
Senior Vice President
-13-
<PAGE>
SPECTRUM EQUITY INVESTORS, L.P.
By: Spectrum Equity Associates, L.P.,
its general partner
By: /s/ William P. Collatos
----------------------------------------
William P. Collatos
General Partner
SPECTRUM EQUITY INVESTORS II, L.P.
By: Spectrum Equity Associates II, L.P.,
its general partner
By: /s/ William P. Collatos
----------------------------------------
William P. Collatos
General Partner
ALTA COMMUNICATIONS VI, L.P.
By: Alta Communications VI Management
Partners, L.P., its general partner
By: /s/ Eileen McCarthy
----------------------------------------
Eileen McCarthy
General Partner
-14-
<PAGE>
ALTA SUBORDINATED DEBT PARTNERS III, L.P.
By: Alta Subordinated Debt Management
Partners, L.P., its general partner
By: /s/ Eileen McCarthy
----------------------------------------
Eileen McCarthy
General Partner
ALTA-COMM S BY S, LLC
By: /s/ Eileen McCarthy
----------------------------------------
Eileen McCarthy
Member
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
Covered Shares
--------------------------------------------------
Shareholder Class A Common Stock Class B Common Stock
- ----------- -------------------- --------------------
<S> <C> <C>
Fleet Venture Resources, Inc. 276,853
Fleet Equity Partners VI, L.P. 118,593
Chisholm Partners III, L.P. 100,584
Kennedy Plaza Partners 6,745
Spectrum Equity Partners, L.P. 404,183.808
Spectrum Equity Partners II, L.P. 806,122.071
Alta Communications VI, L.P. 939,589.271
Alta Subordinated Debt Partners III, L.P. 564,892.104
Alta-Comm S By S LLC 21,400.058
Pegasus Capital, L.P. 1,217,348
Pegasus Communications Holdings, Inc. 3,123,856
Pegasus Northwest Offer Corp. 122,338
Pegasus Scranton Offer Corp. 118,358
Marshall W. Pagon 15,863
</TABLE>
<PAGE>
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated May 5, 2000 (the
"Agreement"), among PEGASUS COMMUNICATIONS CORPORATION, a Delaware corporation
(the "Company"), and the Persons executing this Agreement as Holders.
The Company, Pegasus GSS Merger Sub, Inc., a Delaware
corporation ("Merger Sub"), Golden Sky Holdings, Inc., a Delaware corporation
("GSS"), and certain shareholders of the Company and of GSS are parties to an
Agreement and Plan of Merger dated January 10, 2000 (the "Merger Agreement").
The Holders (this and certain other terms are defined in Section 1) are
shareholders of GSS.
At the Closing held today under the Merger Agreement, Merger
Sub is being merged with and into GSS, GSS is thereby becoming a wholly-owned
subsidiary of the Company, and the Holders are receiving shares of Class A
Common Stock as the Merger Consideration. It is a condition precedent to the
Closing that the parties execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the completion of the
transactions contemplated by the Merger Agreement and of the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows,
intending to be legally bound.
Section 1. Definitions. As used in this Agreement, the
following terms have the following meanings:
"Alta": Alta Communications, VI, L.P., a Delaware limited
partnership, Alta Subordinated Debt Partners III, L.P., a Delaware limited
partnership, and Alta-Comm S by S LLC, a Massachusetts limited liability
company.
"Business Day": any day on which the New York Stock Exchange
is open for trading.
"Class A Common Stock": the Company's Class A Common Stock,
par value $0.01 per share.
"Closing Date": the date of this Agreement.
"Exchange Act": the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the relevant time.
<PAGE>
"Holder": each Person (other than the Company) executing this
Agreement and each Permitted Transferee of a Holder, for so long as (and to the
extent that) such Person or Permitted Transferee owns any Registrable
Securities.
"Holders' Agent" means the Holders' Agent appointed pursuant
to Section 13, or any successor Holders' Agent appointed pursuant to such
Section.
"Merger Agreement": as defined in the recitals.
"Merger Consideration": as defined in the Merger Agreement;
any reference in this Agreement to a number or percentage of Registrable
Securities initially included in the Merger Consideration shall be appropriately
adjusted to reflect stock dividends, stock splits, reverse stock splits,
recapitalizations and similar transactions that occur after the Closing Date.
"Permitted Transferee": (a) in the case of an individual (1) a
family member of such individual, (2) a charitable organization (including a
private foundation) described in Section 501(c)(3) of the Internal Revenue Code
of 1986, as amended, to which a Holder may transfer any Registrable Securities,
(3) a trust for the benefit of any of such individual, such charitable
organizations or any family member of such individual, or (4) a Person
substantially all of the equity interests in which are owned by such individual
or by Persons described in clauses (a)(1), (2) and (3); and (b) in the case of a
Person that is not an individual, (1) any shareholder, partner, member or other
owner of equity interests in such Person, or (2) a Person all of the equity
interests in which are owned by such first Person.
"Person": an individual, a partnership (general or limited),
corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
"Registrable Securities": (1) the Class A Common Stock
included in the Merger Consideration and (2) any additional shares of Class A
Common Stock or other equity securities of the Company issued or issuable after
the Closing Date in respect of the Class A Common Stock included in the Merger
Consideration (or other equity securities issued in respect thereof) by way of a
stock dividend or stock split, in connection with a combination, exchange,
reorganization, recapitalization or reclassification of Company securities, or
pursuant to a merger, division, consolidation or other similar business
transaction or combination involving the Company; provided that as to any
particular Registrable Securities, such securities shall cease to constitute
Registrable Securities (a) when a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of thereunder, (b) when such securities
shall have been disposed of pursuant to Rule 144 (or any successor provision to
such Rule) under the Securities Act, (c) when such securities shall have been
disposed of to a Person other than a Permitted Transferee, or (d) when such
securities shall have ceased to be outstanding.
-2-
<PAGE>
"Registration Expenses": all expenses incident to the
Company's performance of or compliance with the registration requirements set
forth in this Agreement including, without limitation, the following: (a) the
fees, disbursements and expenses of the Company's counsel, accountants, and
experts in connection with the registration under the Securities Act of
Registrable Securities; (b) all expenses in connection with the preparation,
printing and filing of the registration statement, any preliminary prospectus or
final prospectus, any other offering document and amendments and supplements
thereto, and the mailing and delivering of copies thereof to underwriters and
dealers, if any; (c) the cost of printing or producing any agreement(s) among
underwriters, underwriting agreement(s) and blue sky or legal investment
memoranda, any selling agreements, and any other documents in connection with
the offering, sale or delivery of Registrable Securities to be disposed of; (d)
the fees and expenses incurred in connection with the listing of Registrable
Securities on each securities exchange on which Company securities of the same
class are then listed or with the Nasdaq National Market System; (e) the
reasonable fees and expenses of a single counsel retained by the Holders
participating in a particular registration pursuant to this Agreement, (f) any
SEC or blue sky registration or filing fees attributable to Registrable
Securities or transfer taxes applicable to Registrable Securities, (g) any other
expenses in connection with the qualification of Registrable Securities for
offer and sale under state securities laws, including the fees and disbursements
of counsel for the underwriters in connection with such qualification and in
connection with any blue sky and legal investment surveys; and (h) the fees and
expenses incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of Registrable Securities to
be disposed of (including, if applicable, the reasonable fees and expenses of
any "qualified independent underwriter" and its counsel); but the term
"Registration Expenses" does not include (i) underwriters' discounts or
compensation, brokers' commissions or similar selling expenses attributable to
the sale of Registrable Securities.
"Registration Statement": a registration statement under the
Securities Act filed by the Company pursuant to this Agreement, including all
amendments thereto, all preliminary and final prospectuses included therein and
all exhibits thereto.
"SEC": the United States Securities and Exchange Commission,
or such other federal agency at the time having the principal responsibility for
administering the Securities Act.
"Securities Act": the Securities Act of 1933, as amended, and
the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the relevant time.
"Spectrum": Spectrum Equity Investors, L.P., and Spectrum
Equity Investors II, L.P. (each a Delaware limited partnership).
Section 2. Underwritten Demand Registration.
(a) At any time on or after November 5, 2000, and before the
fifth anniversary of the Closing Date the Holders' Agent may (by written notice
delivered to the Company) require registration of all or any portion of the
Registrable Securities for sale in an underwritten public offering. In each such
case, such notice shall specify the number of Registrable Securities for which
such underwritten offering is to be made and identify the Holders thereof.
-3-
<PAGE>
Within three Business Days after the time when other Persons having rights to
include securities in such offering pursuant to agreements with the Company are
required to notify the Company of their intention to do so, the Company shall
notify the Holders' Agent of (1) the aggregate number of securities proposed to
be included in the offering by such other Persons and (2) the proposed
commencement date of the offering, which shall be a date not more than thirty
days after the Company gives such notice. The managing underwriter for such
offering shall be chosen by the Holders' Agent and shall be reasonably
satisfactory to the Company.
(b) If any request for an underwriting shall have been made
pursuant to subsection (a), the Company shall, at the request of the managing
underwriter for such offering, prepare and file a Registration Statement with
the SEC as promptly as reasonably practicable, but in any event within thirty
days after the managing underwriter's request therefor.
(c) The Company shall not have any obligation to permit or
participate in more than two underwritten public offerings pursuant to this
Section, or to file a Registration Statement pursuant to this Section with
respect to less than ten percent of the Registrable Securities initially
included in the Merger Consideration.
(d) The Company shall have the right to defer the filing or
effectiveness of a Registration Statement relating to any registration requested
under this Section for a reasonable period of time not to exceed 90 days if (1)
the Company is, at such time, working on an underwritten public offering of its
securities for the account of the Company and is advised by its managing
underwriter in writing (with a copy to the Holders' Agent) that such offering
would in its opinion be materially and adversely affected by such filing; or (2)
the Company in good faith determines that any such filing or the offering of any
Registrable Securities would (A) materially impede, delay or interfere with any
proposed financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction involving the Company or (B)
require the disclosure of material non-public information, the disclosure of
which would have a material adverse effect on the Company. If the Company shall
exercise its deferral right under this subsection, it may not do so again until
90 days shall have elapsed since the expiration of such deferral.
(e) The Company shall have no obligation to file a
Registration Statement pursuant to this Section earlier than 360 days after the
effective date of a prior registration statement of the Company, if any,
covering an underwritten public offering of common equity securities for the
account of the Company the closing date of which is after the Closing Date if
(1) the Company shall have offered pursuant to Section 4 to include the Holders'
Registrable Securities in such Registration Statement; (2) the Holders (through
the Holders' Agent) shall not have elected to include in such Registration
Statement at least ten percent of the Registrable Securities initially included
in the Merger Consideration; (3) no Registrable Securities requested to be
included in such registration statement shall have been excluded therefrom
pursuant to Section 4(c) or 4(d); and (4) if such registration statement is
filed before November 5, 2000, the offering price per share of Class A Common
Stock is not less than $100.
(f) The Holders of any Registrable Securities requested to be
included in any offering pursuant to this Section may elect by written notice to
-4-
<PAGE>
the Company (given through the Holders' Agent) not to include their Registrable
Securities in the offering. If they do so, the Company shall be obligated to
proceed with the registration relating to the offering only if the offering
continues to include at least the number of shares of Registrable Securities
specified in Section 2(c). In any such case in which the Company is not
obligated to and does not proceed with the registration, the Holders on whose
behalf the Holders' Agent shall have requested Registrable Securities to be
included in the offering but that shall have elected not to include their shares
shall pay all Registration Expenses incurred by the Company in connection with
such offering.
(g) Neither the Company nor any other Person not party to this
Agreement (collectively with the Company, "Third Parties") shall be entitled to
include any securities held by any of them in any underwritten offering pursuant
to this Section, unless all Registrable Securities for which inclusion has been
requested are also included and unless the managing underwriter concludes that
the inclusion of such securities of Third Parties will not interfere with an
orderly sale and distribution of Registrable Securities being sold in such
offering or adversely affect the price of such Registrable Securities; provided,
however, that if the managing underwriter concludes that the inclusion of less
than all of such securities of Third Parties will not interfere with the orderly
sale and distribution of the Registrable Securities being sold in the offering
or adversely affect the price of such Registrable Securities, the number of
shares to be included in the registration by the Third Parties shall be reduced
among the Third Parties in accordance with the agreements that allow the
inclusion of such shares in the registration.
(h) No registration of Registrable Securities under this
Section shall relieve the Company of its obligation to effect registrations of
Registrable Securities pursuant to Sections 3 and 4.
Section 3. Shelf Registrations.
(a) At any time on or after November 5, 2000, and before the
fifth anniversary of the Closing Date, the Holders' Agent may (by written notice
to the Company) require registration of all or any portion of the Registrable
Securities for sale through broker-dealers, through agents or directly to one or
more purchasers in one or more transactions in the over-the-counter market,
through writing of options or otherwise effected at market prices prevailing at
the time of sale, at prices related to such prevailing prices, at negotiated
prices or at fixed prices. Within three Business Days after the time when other
Persons having rights to include securities in such registration pursuant to
agreements with the Company are required to notify the Company of their
intention to do so, the Company shall notify the Holders' Agent of the aggregate
number of securities proposed to be included in the registration by such other
Persons.
(b) If any request for registration shall have been made
pursuant to subsection (a), the Company shall prepare and file a Registration
Statement with the SEC as promptly as reasonably practicable, but in any event
within thirty days after the expiration of the time within which other Persons
having rights to include securities in such registration pursuant to agreements
with the Company were required to request inclusion in the registration.
-5-
<PAGE>
(c) The Company shall not have any obligation under this
Section to file a Registration Statement with respect to fewer than 100,000
shares of Registrable Securities.
(d) The Company shall have no obligation to file a
Registration Statement pursuant to this Section earlier than 180 days after the
effective date of any earlier Registration Statement filed pursuant to this
Section.
(e) The Holders of any of Registrable Securities requested to
be included in any registration pursuant to this Section may elect by written
notice to the Company (given through the Holders' Agent) not to include their
Registrable Securities in such registration. If they do so, the Company shall be
obligated to proceed with the registration only if it continues to include at
least the number of shares of Registrable Securities specified in Section 3(c).
In any such case in which the Company is not obligated to and does not proceed
with the registration, the Holders on whose behalf the Holders' Agent shall have
requested Registrable Securities to be included in the registration but shall
have elected not to include their shares shall pay all Registration Expenses
incurred by the Company in connection with such registration.
(f) No registration of Registrable Securities under this
Section shall relieve the Company of its obligation to effect registrations of
Registrable Securities under Sections 2 and 4.
Section 4. Incidental Registration.
(a) From and after the Closing Date, if the Company proposes,
other than pursuant to Section 2 or 3, to file a Registration Statement under
the Securities Act to register any of its common equity securities for public
sale under the Securities Act (whether proposed to be offered for sale by the
Company or by any other Person), it will give prompt written notice (which
notice shall specify the intended method or methods of disposition) to the
Holders of its intention to do so, and upon the written request of the Holders'
Agent delivered to the Company within ten Business Days after any such notice
(which request shall identify the Holders that wish to dispose of Registrable
Securities pursuant to such Registration Statement and specify the number of
Registrable Securities intended to be disposed of by each such Holder), the
Company shall, subject to the other provisions of this Section 4, include in
such Registration Statement all Registrable Securities which the Company has
been so requested to register by the Holders' Agent.
(b) If at any time prior to the effective date of any
Registration Statement described in subsection (a), the Company shall in good
faith determine for any reason not to proceed with such registration, the
Company may, at its election, give written notice of such determination to the
Holders' Agent and thereupon the Company shall be relieved of its obligation to
register such Registrable Securities in connection with such registration.
(c) The Company will not be required to effect any
registration of Registrable Securities pursuant to this Section in connection
with an offering of securities for the account of the Company if the Company
shall have been advised in writing (with a copy to the Holders' Agent) by a
nationally recognized investment banking firm (which may be the managing
underwriter for the offering) selected by the Company that, in such firm's
opinion, registration of Registrable Securities and of any other securities
-6-
<PAGE>
requested to be included in such registration by other Persons having rights to
include securities therein at that time may interfere with an orderly sale and
distribution of the securities being sold by the Company in such offering or
adversely affect the price of such securities; but if the inclusion of less than
all of the Registrable Securities requested to be registered by the Holders'
Agent and other securities requested to be included in such registration by
other Persons having rights to include securities therein at that time would
not, in the opinion of such firm, adversely affect the distribution or price of
the securities to be sold by the Company in the offering, the aggregate number
of Registrable Securities requested to be included in such offering by the
Holders (through the Holders' Agent) shall be reduced pro rata in accordance
with the proportion that the number of shares proposed to be included in such
registration by Holders bears to the number of shares proposed to be included in
such registration by Holders and all other such Persons having rights to include
securities therein at that time. The reduction attributable to the Holders shall
be allocated among Holders by the Holders' Agent, whose determination shall be
conclusive.
(d) The Company will not be required to effect any
registration of Registrable Securities pursuant to this Section in connection
with an offering of securities for the account of any former stockholders of
Digital Television Services, Inc. (the "DTS Holders"), pursuant to the
Registration Rights Agreement dated April 27, 1998, among the Company and
certain former stockholders of Digital Television Services, Inc. (the "DTS
Registration Rights Agreement") if the Company shall have been advised in
writing (with a copy to the Holders' Agent) by a nationally recognized
investment banking firm (which may be the managing underwriter for the offering)
selected by the DTS Holders that, in such firm's opinion, registration of
Registrable Securities and of any other securities requested to be included in
such registration by other persons having rights to include securities therein
at that time may interfere with an orderly sale and distribution of the
securities being sold by the DTS Holders in such offering or adversely affect
the price of such securities; but if the inclusion of less than all of the
Registrable Securities requested to be registered by the Holders and other
securities requested to be included in such registration by other Persons having
rights to include securities therein at that time would not, in the opinion of
such firm, adversely affect the distribution or price of the securities to be
sold by the DTS Holders in the offering, the aggregate number of Registrable
Securities requested to be included in such offering by the Holders shall be
reduced pro rata in accordance with the proportion that the number of shares
proposed to be included in such registration by Holders bears to the number of
shares proposed to be included in such registration by Holders and all such
other Persons (other than the DTS Holders) having rights to include securities
therein at that time. The reduction attributable to the Holders shall be
allocated among Holders by the Holders' Agent, whose determination shall be
conclusive.
(e) The Company shall not be required to give notice of, or
effect any registration of Registrable Securities under this Section incidental
to the registration of any of its securities on Form S-4 or S-8 or in connection
with dividend reinvestment plans.
(f) No registration of Registrable Securities effected under
this Section shall relieve the Company of its obligations to effect
registrations of Registrable Securities pursuant to Sections 2 and 3.
Section 5. Holdbacks and Other Transfer Restrictions.
-7-
<PAGE>
(a) No Holder shall sell, transfer or otherwise dispose of any
Registrable Securities or any interest therein before November 5, 2000, except
to a Permitted Transferee or pursuant to an effective Registration Statement
described in Section 4 that includes the Registrable Securities to be disposed
of.
(b) No Holder shall, if requested by the managing underwriter
in an underwritten offering that includes such Holder's Registrable Securities,
effect any public sale or distribution of securities of the Company of the same
class as the securities included in such Registration Statement (or convertible
into such class), including a sale pursuant to Rule 144(k) under the Securities
Act (except as part of such underwritten registration), during the ten day
period prior to, and during the 90-day period (or such longer period, not to
exceed 180 days, as the managing underwriter shall request) beginning on the
closing date of each underwritten offering made pursuant to such Registration
Statement, to the extent timely notified in writing by the Company or the
managing underwriter. If the Company or such managing underwriter so requests,
each Holder shall enter into a holdback agreement reflecting such restrictions.
(c) No Holder shall, during any period in which any of its
Registrable Securities are included in any effective Registration Statement, (1)
effect any stabilization transactions or engage in any stabilization activity in
connection with the Class A Common Stock or other equity securities of the
Company in contravention of Regulation M under the Exchange Act; or (2) permit
any Affiliated Purchaser (as that term is defined in Regulation M under the
Exchange Act) to bid for or purchase for any account in which such Holder has a
beneficial interest, or attempt to induce any other person to purchase, any
shares of Common Stock or Registrable Securities in contravention of Regulation
M under the Exchange Act.
(d) The Company, upon request by the Holders' Agent, shall, at
the Company's expense, in the case of a registration including Registrable
Securities to be offered by Holders for sale through brokers transactions,
furnish each broker through whom such Holders offer Registrable Securities such
number of copies of the prospectus as the broker may require, and such Holders
shall otherwise comply with the prospectus delivery requirements under the
Securities Act, and the Company shall comply with Rule 153 under the Securities
Act.
Section 6. Registration Procedures. If and whenever the
Company is required by the provisions of this Agreement to effect a registration
of Registrable Securities:
(a) The Company shall prepare and file with the SEC, within
the time periods specified herein, a Registration Statement on Form S-3 or its
equivalent (or on such other registration form available to the Company that
permits the greatest extent of incorporation by reference of materials filed by
the Company under the Exchange Act or, if no incorporation by reference is
permitted, any form then available to the Company), and will use its best
efforts to cause such registration statement to become effective as promptly as
practicable (and, in any event, within sixty days) thereafter and to remain
effective under the Securities Act until (1) the earlier of such time as all
securities covered thereby have been disposed of pursuant to such Registration
Statement or 90 days after such Registration Statement becomes effective, in the
-8-
<PAGE>
case of registrations pursuant to Section 2, or (2) 180 days after such
Registration Statement becomes effective, in the case of registrations pursuant
to Section 3, in every case as any such period may be extended pursuant to
subsection (h) or Section 8.
(b) The Company shall prepare and file with the SEC such
amendments, post-effective amendments and supplements to such Registration
Statement and the prospectus used in connection therewith as may be necessary to
keep such Registration Statement effective for such period of time required by
subsection (a), as such period may be extended pursuant to subsection (h) or
Section 8.
(c) The Company shall comply in all material respects with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the period during which
any such Registration Statement is required to be effective.
(d) The Company shall furnish to any Holder whose Registrable
Securities are being registered hereunder and any underwriter of Registrable
Securities (1) such number of copies (including manually executed and conformed
copies) of such Registration Statement and of each amendment thereof and
supplement thereto (including all annexes, appendices, schedules and exhibits),
(2) such number of copies of the prospectus used in connection with such
Registration Statement (including each preliminary prospectus, any summary
prospectus and the final prospectus and including prospectus supplements), and
(3) such number of copies of other documents, in each case as such Holder or
such underwriter may reasonably request.
(e) The Company shall use its best efforts to register or
qualify all Registrable Securities covered by such Registration Statement under
the securities or "blue sky" laws of such states of the United States as any
Holder whose Registrable Securities are being registered or any underwriter
shall reasonably request, and do any and all other acts and things which may be
reasonably requested by such Holder or such underwriter to consummate the
offering and disposition of Registrable Securities in such jurisdictions; but
the Company shall not be required to qualify generally to do business as a
foreign corporation or as a dealer in securities, subject itself to taxation, or
consent to general service of process in any jurisdiction wherein it is not then
so qualified or subject.
(f) The Company shall use its best efforts to cause the
Registrable Securities covered by such Registration Statement to be registered
with, or approved by, such other United States public, governmental or
regulatory authorities, if any, as may be required in connection with the
disposition of such Registrable Securities.
(g) The Company shall list the Registrable Securities covered
by such Registration Statement on any securities exchange (or if applicable, the
Nasdaq National Market System) on which any securities of the Company are then
listed.
(h) The Company shall notify the Holders' Agent as promptly as
practicable and, if requested by Holders' Agent, confirm such notification in
writing, (1) when a prospectus or any prospectus supplement has been filed with
the SEC, and when a Registration Statement or any post-effective amendment
-9-
<PAGE>
thereto has been filed with and declared effective by the SEC, (2) of the
issuance by the SEC of any stop order or the coming to its knowledge of the
initiation of any proceedings for that purpose, (3) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of any of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, (4) of the
occurrence of any event which requires the making of any changes to a
Registration Statement or related prospectus so that such documents will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (and
the Company shall promptly prepare and furnish to each Holder (through the
Holders' Agent) a reasonable number of copies of a supplemented or amended
prospectus such that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading), and (5) of the Company's determination
that the filing of a post-effective amendment to a Registration Statement shall
be necessary or appropriate. Upon the receipt by the Holders' Agent of any
notice from the Company of the occurrence of any event of the kind described in
clause (4), the Holders shall forthwith discontinue any offer and disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until all Holders shall have received copies of a
supplemented or amended prospectus which is no longer defective and, if so
directed by the Company, shall deliver to the Company all copies (other than
permanent file copies) of the defective prospectus covering such Registrable
Securities which are then in the Holders' possession. If the Company shall
provide any notice of the type referred to in the preceding sentence, the period
during which the Registration Statement is required by subsection (a) to be
effective shall be extended by the number of days from and including the date
such notice is provided, to and including the date when Holders shall have
received copies of the corrected prospectus.
(i) The Company shall enter into such agreements and take such
other appropriate actions as are customary and reasonably necessary to expedite
or facilitate the disposition of such Registrable Securities, and in that
regard, deliver to the Holders such documents and certificates as may be
reasonably requested by the Holders of a majority of the Registrable Securities
being sold or, as applicable, the managing underwriters, to evidence the
Company's compliance with this Agreement, including, in the case of any
underwritten offering, using commercially reasonable efforts to cause its
independent accountants to deliver to the managing underwriters an accountants'
comfort letter substantially similar in scope to that customarily delivered in
an underwritten public offering and covering audited and interim financial
statements included in the registration statement, or if such letter can not be
obtained through the exercise of commercially reasonable efforts, cause its
independent accountants to deliver to the managing underwriters a comfort letter
based on negotiated procedures providing comfort with respect to the Company's
financial statements included or incorporated by reference in the registration
statement at the highest level permitted to be given by such accountants under
the then applicable standards of the American Institute of Certified Public
Accountants with respect to such Registration Statement.
-10-
<PAGE>
Section 7. Underwriting.
(a) If requested by the underwriters for any underwritten
offering of Registrable Securities pursuant to a registration under Section 2,
the Company will enter into and perform its obligations under an underwriting
agreement with the underwriters for such offering, such agreement to contain
such representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, customary provisions
relating to indemnities and contribution and the provision of opinions of
counsel and accountants' comfort letters. If Registrable Securities are to be
distributed by such underwriters on behalf of any Holder, such Holder shall also
be a party to any such underwriting agreement; provided, however, that no Holder
shall be required to make representations or warranties concerning the Company
or any other Holder.
(b) If any registration pursuant to Section 4 shall involve an
underwritten offering, the Company may require Registrable Securities requested
to be registered pursuant to Section 4 to be included in such underwriting on
the same terms and conditions as shall be applicable to the securities being
sold through underwriters under such registration. In such case, each Holder
requesting registration shall be a party to any such underwriting agreement.
Such agreement shall contain such representations and warranties by the Holders
requesting registration and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
including, without limitation, provisions relating to indemnities and
contribution; provided, however, that no Holder shall be required to make
representations or warranties concerning the Company or any other Holder.
(c) In any offering of Registrable Securities pursuant to a
registration hereunder, each Holder requesting registration shall also enter
into such additional or other agreements as may be customary in such
transactions, which agreements may contain, among other provisions, such
representations and warranties as the Company or the underwriters of such
offering may reasonably request (including, without limitation, those concerning
such Holder, its Registrable Securities, such Holder's intended plan of
distribution and any other information supplied by it to the Company for use in
such registration statement), and customary provisions relating to indemnities
and contribution.
Section 8. Information Blackout.
(a) At any time when a Registration Statement is effective,
upon written notice from the Company to the Holders' Agent that the Company has
determined in good faith that sale of Registrable Securities pursuant to the
Registration Statement would require disclosure of non-public material
information, the disclosure of which would have a material adverse effect on the
Company, all Holders shall suspend sales of Registrable Securities pursuant to
such Registration Statement until the earlier of (1) 90 days after the Company
notifies the Holders' Agent of such good faith determination, and (2) such time
as the Company notifies the Holders that such material information has been
disclosed to the public or has ceased to be material or that sales pursuant to
such Registration Statement may otherwise be resumed (the number of days from
such suspension of sales by the Holders until the day when such sales may be
resumed hereunder is hereinafter called a "Sales Blackout Period").
-11-
<PAGE>
(b) The time periods set forth in Section 6(a)(1) or (2) shall
be extended for a number of days equal to the number of days in each Sales
Blackout Period.
(c) No Sales Blackout Period shall be commenced by the Company
within 60 days after the end of a Sales Blackout Period.
Section 9. Rule 144. The Company shall take all actions
reasonably necessary to comply with the filing requirements described in Rule
144(c)(1) under the Securities Act so as to enable the Holders to sell
Registrable Securities without registration under the Securities Act. Upon the
written request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with the filing requirements under such
Rule 144(c)(1).
Section 10. Preparation; Reasonable Investigation;
Information. In connection with the preparation and filing of each Registration
Statement registering Registrable Securities under the Securities Act, (a) the
Company will give the Holders' Agent, on behalf of the Holders, and the
underwriters, if any, and their respective counsel and accountants, drafts of
such registration statement for their review and comment prior to filing and
(during normal business hours and subject to such reasonable limitations as the
Company may impose to prevent disruption of its business) such reasonable and
customary access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
reasonable opinion of the Holders' Agent and such underwriters or their
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act and (b) as a condition precedent to including any Registrable
Securities of any Holder in any such registration, the Company may require such
Holder to furnish the Company such information regarding such Holder and the
distribution of such securities as the Company may from time to time reasonably
request in writing or as shall be required by law or the SEC in connection with
any registration.
Section 11. Indemnification and Contribution.
(a) In the case of each offering of Registrable Securities
made pursuant to this Agreement, the Company shall indemnify and hold harmless
each Holder, its officers, directors, members and partners, each underwriter of
Registrable Securities so offered and each Person, if any, who controls any of
the foregoing persons within the meaning of the Securities Act ("Holder
Indemnitees"), from and against any and all claims, liabilities, losses,
damages, expenses and judgments, joint or several, to which they or any of them
may become subject, including any amount paid in settlement of any litigation
commenced or threatened, and shall promptly reimburse them, as and when
incurred, for any legal or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as such losses,
claims, damages, liabilities or actions shall arise out of, or shall be based
upon, any violation or alleged violation by the Company of the Securities Act,
any blue sky laws, securities laws or other applicable laws of any state or
county in which the Registrable Securities are offered, and relating to action
taken or action or inaction required of the Company in connection with such
offering, or shall arise out of, or shall be based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or in any preliminary or final prospectus included therein) relating
to the offering and sale of such Registrable Securities, or any amendment
-12-
<PAGE>
thereof or supplement thereto, or in any document incorporated by reference
therein, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; but the
Company shall not be liable to any Holder Indemnitee in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement, or any omission
or alleged omission, if such statement or omission shall have been made in
reliance upon and in conformity with information furnished to the Company in
writing by or on behalf of such Holder (including information furnished by the
Holders' Agent) specifically for inclusion in the Registration Statement (or in
any preliminary or final prospectus included therein), or any amendment thereof
or supplement thereto. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any Holder and shall
survive the transfer of such securities. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any Holder
Indemnitee.
(b) In the case of each offering of Registrable Securities
made pursuant to this Agreement, each Holder whose Registrable Securities are
included in such offering shall indemnify and hold harmless the Company, its
officers and directors and each person, if any, who controls any of the
foregoing within the meaning of the Securities Act (the "Company Indemnitees"),
from and against any and all claims, liabilities, losses, damages, expenses and
judgments, joint or several, to which they or any of them may become subject,
including any amount paid in settlement of any litigation commenced or
threatened, and shall promptly reimburse them, as and when incurred, for any
legal or other expenses incurred by them in connection with investigating any
claims and defending any actions, insofar as any such losses, claims, damages,
liabilities or actions shall arise out of, or shall be based upon, any violation
or alleged violation by such Holder or the Holders' Agent of the Securities Act,
any blue sky laws, securities laws or other applicable laws of any state or
country in which the Registrable Securities are offered and relating to action
taken or action or inaction required of such Holder or the Holders' Agent in
connection with such offering, or shall arise out of, or shall be based upon,
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or in any preliminary or final prospectus included
therein) relating to the offering and sale of such Registrable Securities or any
amendment thereof or supplement thereto, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, but in each case only to the extent that such untrue
statement is contained in, or such fact is omitted from, information furnished
in writing to the Company by or on behalf of such Holder or the Holders' Agent
specifically for inclusion in such Registration Statement (or in any preliminary
or final prospectus included therein). Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of any Company
Indemnitee. The foregoing indemnity is in addition to any liability which a
Holder or the Holders' Agent may otherwise have to any Company Indemnitee.
-13-
<PAGE>
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 11, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in subsection (a) or (b) shall be available to any
person who shall fail to give notice as provided in this subsection (c) if the
indemnifying party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was materially prejudiced by the
failure to give such notice, but the failure to give such notice shall not
relieve the indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of the provisions of subsection (a) or (b). In case any such proceeding shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred the fees and expenses of the counsel retained by the
indemnified party in the event (1) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (2) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel, in the written opinion of such counsel, would be
inappropriate due to actual or potential differing interests between them. The
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties (in
addition to local counsel). Such firm shall be designated in writing by the
Holders' Agent in the case of Holder Indemnitees and by the Company in the case
of Company Indemnitees. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 11 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) in respect of any losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) referred to therein, or if the
indemnified party failed to give the notice required under subsection (c), then
each indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) in such proportion as is appropriate
to reflect not only both the relative benefits received by such party (as
compared to the benefits received by all other parties) from the offering in
respect of which indemnity is sought, but also the relative fault of all parties
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by a party shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by it bear
to the total amounts received by each other party. Relative fault shall be
-14-
<PAGE>
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties agree that it would not be just
and equitable if contributions pursuant to this subsection (d) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subsection
(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The indemnity provided for hereunder shall not inure to
the benefit of any indemnified party to the extent that the claim is based on
such indemnified party's failure to comply with the applicable prospectus
delivery requirements of the Securities Act as then applicable to the person
asserting the loss, claim, damage or liability for which indemnity is sought.
Section 12. Expenses. In connection with any registration
under this Agreement the Company shall pay all Registration Expenses (to the
extent not borne by underwriters or others), except as provided in Section 2(f)
or 3(e), and each Holder participating in such registration shall pay its pro
rata share of the items described in clause (i) of the definition of
"Registration Expenses" in Section 1.
Section 13. Appointment of Holders' Agent; Reliance. The
Holders appoint William P. Collatos as their agent and representative (the
"Holders' Agent") to take such actions under this Agreement on their behalf as
the Holders' Agent shall consider advisable. Notwithstanding anything herein or
in the Merger Agreement to the contrary, the Holders' Agent shall not be
required to request registration of any Registrable Securities of any Holders
other than Spectrum or Alta (to the extent requested by Spectrum or Alta) in any
Registration Statement pursuant to this Agreement, and the decision of whether
to include or exclude any such Registrable Securities in or from any such
Registration Statement shall be in the sole discretion of the Holders' Agent.
The Holders' Agent shall deliver copies of all materials and notices required
hereunder to the Holders in a timely fashion, and shall comply with written
direction from any Holder concerning the Registrable Securities beneficially
owned by such Holder. The Holders' Agent may be removed by Spectrum and Alta,
acting together, by their written notice to the Holders' Agent and Pegasus. Upon
any vacancy in the position of Holders' Agent caused by resignation or removal,
Spectrum and Alta, acting together, shall appoint a new Holders' Agent by
written notice to Pegasus and the Holders. The Holders will indemnify the
Holders' Agent for any liability it may incur by reason of acting as such,
except liability caused by its gross negligence or willful misconduct. Pegasus
shall be entitled to rely on the statements and directions of the Holders'
Agent, notwithstanding any statement or direction to the contrary by one or more
of the Holders.
-15-
<PAGE>
Section 14. Notices. Except as otherwise provided below,
whenever it is provided in this Agreement that any notice, demand, request,
consent, approval, declaration or other communication shall or may be given to
or served upon any of the parties hereto, or whenever any of the parties hereto
wishes to provide to or serve upon the other party any other communication with
respect to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be delivered in
person, delivered by the U.S. mail, delivered by overnight courier service, or
sent by telecopy, as follows: (a) if to the Holders' Agent or any Holder, to
William P. Collatos at the address set forth in the Merger Agreement, with a
copy to Karen A. Dewis, at the address set forth in the Merger Agreement; and
(b) if to the Company, at the Company's address set forth in the Merger
Agreement. Any party may change the address at which it wishes to receive notice
by giving notice of the same in accordance with the provisions of this Section
14. The furnishing of any notice required hereunder may be waived in writing by
the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly furnished or served on the party to which it is addressed, in
the case of delivery in person or by telecopy, on the date when sent (with
receipt personally acknowledged in the case of telecopied notice), in the case
of delivery by overnight courier service, on the dated delivered as evidenced by
delivery receipt, and in all other cases, five business days after it is sent.
Section 15. Entire Agreement. This Agreement represents the
entire agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersedes any and all prior oral and written
agreements, arrangements and understandings among the parties hereto with
respect to such subject matter; and this Agreement can be amended, supplemented
or changed, and any provision hereof can be waived or a departure from any
provision hereof can be consented to, only by a written instrument making
specific reference to this Agreement signed by the Company and the Holders of a
majority of the Registrable Securities then outstanding.
Section 16. Headings. The section headings contained in this
Agreement are for general reference purposes only and shall not affect in any
manner the meaning, interpretation or construction of the terms or other
provisions of this Agreement.
Section 17. Applicable Law. This Agreement shall be governed
by, construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts to be made, executed, delivered and performed wholly
within such state and, in any case, without regard to the conflicts of law
principles of such state.
Section 18. Severability. If any provision of this Agreement
shall be held by any court of competent jurisdiction to be illegal, void or
unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon and
shall not impair the enforceability of any other provision of this Agreement.
-16-
<PAGE>
Section 19. No Waiver. The failure of any party at any time or
times to require performance of any provision hereof shall not affect the right
at a later time to enforce the same. No waiver by any party of any condition,
and no breach of any provision, term, covenant, representation or warranty
contained in this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be construed as a further or continuing waiver of
any such condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
Section 20. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one and the same original instrument. Not
all parties need sign the same counterpart. Delivery by facsimile of a signature
page to this Agreement shall have the same effect or delivery of an original
executed counterpart.
Section 21. Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors, assigns and transferees of
each of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; but nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of applicable law. If any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such Holder
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement, including the restrictions on resale
set forth in this Agreement, and such Holder shall be entitled to receive the
benefits hereof.
-17-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and
delivered as of the date first above written.
PEGASUS COMMUNICATIONS CORPORATION
By /s/ Kasin Smith
---------------------------------------------------------
Name: Kasin Smith
Title: Chief Financial Officer
HOLDERS' AGENT
By /s/ William P. Collatos
---------------------------------------------------------
HOLDERS:
ALTA SUBORDINATED DEBT PARTNERS III, L.P.
By: Alta Subordinated Debt Management III, L.P.
By: /s/ Eileen McCarthy
---------------------------------------
Name: Eileen McCarthy
Title: General Partner
ALTA COMMUNICATIONS VI, L.P.
By: Alta Communications VI Management Partners,
L.P.
By: /s/ Eileen McCarthy
---------------------------------------
Name: Eileen McCarthy
Title: General Partner
ALTA-COMM BY S, LLC
By: /s/ Eileen McCarthy
---------------------------------------
Name: Eileen McCarthy
Title: Member
-18-
<PAGE>
HARBOURVEST PARTNERS V-DIRECT FUND L.P.
By: HVP V-Direct Associates, LLC
Its General Partner
By: HarbourVest Partners, LLC
Its Managing Member
By: /s/ William A. Johnston
-----------------------------
Name: William A. Johnston
Title: Managing Director
SPECTRUM EQUITY INVESTORS, L.P.
By: Spectrum Equity Associates L.P., General
Partner
By: /s/ William P. Collatos
-----------------------------------------
Name: William P. Collatos
Title: General Partner
SPECTRUM EQUITY INVESTORS II, L.P.
By: Spectrum Equity Associates L.P., General
Partner
By: /s/ William P. Collatos
-----------------------------------------
Name: William P. Collatos
Title: General Partner
BANCBOSTON VENTURES, INC.
By: /s/ William P. Collatos
-----------------------------------------
Name: William O. Charman
Title: Director
-19-
