<PAGE>
CONSENT AND LETTER OF TRANSMITTAL
PEGASUS COMMUNICATIONS CORPORATION
(to be renamed Pegasus Satellite Communications, Inc.)
Offer to Exchange
its 12 3/4% Series A Cumulative Exchangeable Preferred Stock
for any and all
(but not less than a majority) of the
12 3/4% Series A Cumulative Exchangeable Preferred Stock,
when issued, of our new holding company
(to be renamed Pegasus Communications Corporation)
and Solicitation of Consents
CUSIP No. 705904209
Pursuant to the Offering Memorandum dated as of December 19, 2000
--------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JANUARY
18, 2001, UNLESS FURTHER EXTENDED (THE "EXCHANGE OFFER EXPIRATION DATE").
HOLDERS OF PEGASUS COMMUNICATIONS PREFERRED STOCK (AS DEFINED HEREIN) MUST
TENDER THEIR PEGASUS COMMUNICATIONS PREFERRED STOCK AND PROVIDE THEIR CONSENTS
(AS DEFINED HEREIN) TO THE PROPOSED AMENDMENTS TO THE PEGASUS COMMUNICATIONS
CORPORATION PREFERRED STOCK CERTIFICATE OF DESIGNATION (AS DEFINED HEREIN)
PRIOR TO THE EXCHANGE OFFER EXPIRATION DATE IN ORDER TO RECEIVE PEGASUS
SATELLITE PREFERRED STOCK (AS DEFINED HEREIN). THE CONSENT EXPIRATION DATE IS
JANUARY 18, 2001, IF ON SUCH DATE THE EXCHANGE AGENT HAS RECEIVED DULY
EXECUTED AND UNREVOKED CONSENTS TO THE PROPOSED AMENDMENTS FROM HOLDERS
REPRESENTING A MAJORITY OF THE OUTSTANDING SHARES OF SUCH PREFERRED STOCK (THE
"REQUISITE CONSENTS"), OR SUCH LATER DATE THAT THE EXCHANGE AGENT SHALL HAVE
FIRST RECEIVED THE REQUISITE CONSENTS. CONSENTS MAY BE REVOKED AND TENDERS MAY
BE WITHDRAWN AT ANY TIME PRIOR TO THE CONSENT EXPIRATION DATE, BUT NOT
THEREAFTER (EXCEPT UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED MORE FULLY
HEREIN). THE CONSUMMATION OF THE EXCHANGE OFFER AND THE CONSENT SOLICITATION
IS CONDITIONED UPON SATISFACTION OF, AMONG OTHER THINGS, THE MINIMUM TENDER
CONDITION AND THE REQUISITE CONSENT CONDITION. THESE CONDITIONS ARE DESCRIBED
IN THE OFFERING MEMORANDUM.
--------------------------------------------------------------------------------
The Exchange Agent is:
First Union National Bank
<TABLE>
<S> <C> <C>
By Mail: By Hand/Overnight Express: By Facsimile:
First Union National Bank First Union National Bank (704) 590-7628
1525 West W.T. Harris Blvd., 3C3 1525 West W.T. Harris Blvd., 3C3
Charlotte, NC 28288 Charlotte, NC 28262 To confirm receipt:
Attention: Michael Klotz Attention: Michael Klotz (704) 590-7408
Telephone: (704) 590-7408 Telephone: (704) 590-7408
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS SET FORTH IN THIS
CONSENT AND LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS CONSENT
AND LETTER OF TRANSMITTAL IS COMPLETED.
1
<PAGE>
The undersigned hereby acknowledges that it has received and reviewed the
offering memorandum (the "Offering Memorandum") dated as of December 19, 2000,
of Pegasus Communications Corporation (to be renamed Pegasus Satellite
Communications, Inc.), a Delaware corporation (the "Company"), and this Consent
and Letter of Transmittal (the "Letter of Transmittal"), which together with
the Offering Memorandum shall constitute the Company's (i) offer to exchange
(the "Exchange Offer") its 12 3/4% Series A Cumulative Exchangeable Preferred
Stock (the "Pegasus Satellite Preferred Stock") for any and all (but not less
than a majority) of shares of the 12 3/4% Series A Cumulative Exchangeable
Preferred Stock (the "Pegasus Communications Preferred Stock"), when issued, of
its new holding company (to be renamed Pegasus Communications Corporation), and
(ii) solicitation (the "Solicitation") of consents to certain amendments (the
"Proposed Amendments"), as further described in the Offering Memorandum, to the
Pegasus Communications Preferred Stock Certificate of Designation. Recipients
of the Offering Memorandum should read the requirements described therein with
respect to their eligibility to participate in the Exchange Offer.
The undersigned hereby tenders to the Company the Pegasus Communications
Preferred Stock described in the box entitled "Description of Pegasus
Communications Preferred Stock" below and/or consents to the Proposed
Amendments so described pursuant to the terms and conditions described in the
Offering Memorandum and this Letter of Transmittal. The undersigned hereby
represents that it is the registered owner of all of the Pegasus Communications
Preferred Stock so described and that it has received from each beneficial
owner of Pegasus Communications Preferred Stock (collectively, the "Beneficial
Owners") a duly completed and executed form of "Instruction to Registered
Holder from Beneficial Owner" accompanying this Letter of Transmittal
instructing the undersigned to take the actions and authorizing the undersigned
to make certain representations, on behalf of the Beneficial Owner, with
respect to such Beneficial Owner described in this Letter of Transmittal.
This Letter of Transmittal is to be used by a holder of Pegasus
Communications Preferred Stock (i) (a) if certificates representing Pegasus
Communications Preferred Stock are to be forwarded herewith, (b) if delivery of
Pegasus Communications Preferred Stock is to be made by book-entry transfer to
the Exchange Agent's account at The Depository Trust Company ("DTC") pursuant
to the procedures set forth in the Offering Memorandum under the caption The
Exchange Offer and Consent Solicitation--Procedures for Tendering and
Consenting, or (c) if a tender is made pursuant to the guaranteed delivery
procedures set forth in the Offering Memorandum under the caption The Exchange
Offer and Consent Solicitation--Guaranteed Delivery Procedures, and (ii) such
holder desires to consent to the Proposed Amendments and, in each case,
instructions are not being transmitted through the DTC Automated Tender Offer
Program ("ATOP").
The undersigned hereby represents and warrants that the information
received from the beneficial owners is accurately reflected in the boxes
entitled "Beneficial Owner(s)--Status" and "Beneficial Owner(s)--Residence."
Any beneficial owner whose Pegasus Communications Preferred Stock is
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender and consent should contact such
registered holder of Pegasus Communications Preferred Stock promptly and
instruct such registered holder of Pegasus Communications Preferred Stock to
tender and consent on behalf of the beneficial owner. If such beneficial owner
wishes to tender and consent on its own behalf, such beneficial owner must,
prior to completing and executing this Letter of Transmittal and delivering its
Pegasus Communications Preferred Stock, either make appropriate arrangements to
register ownership of the Pegasus Communications Preferred Stock in such
beneficial owner's name or obtain a properly completed bond power from the
registered holder of Pegasus Communications Preferred Stock. The transfer of
record ownership may take considerable time.
In order to properly complete this Letter of Transmittal, a holder of
Pegasus Communications Preferred Stock must (i) complete the box entitled
"Description of Pegasus Communications Preferred Stock," (ii) complete the
boxes entitled "Beneficial Owner(s)--Status" and "Beneficial
Owner(s)--Residence," (iii) if appropriate, check and complete the boxes
relating to book-entry transfer, guaranteed delivery, Special Issuance
Instructions, Special Delivery Instructions, and Special Payment Instructions,
(iv) sign the Letter of Transmittal by completing the box entitled "Sign Here,"
and (v) complete the Substitute Form W-9. No holder of Pegasus Communications
Preferred Stock may withdraw a tender of Pegasus Communications Preferred Stock
or revoke a Consent after the Consent Expiration Date, unless the Exchange
Offer is terminated without any Pegasus Communications Preferred Stock being
exchanged thereunder. Holders of Pegasus Communications Preferred Stock who do
not tender their Pegasus Communications Preferred Stock and deliver their
consent prior to the Exchange Offer Expiration Date will not receive Pegasus
Satellite Preferred Stock.
Holders of Pegasus Communications Preferred Stock who desire to tender
their Pegasus Communications Preferred Stock for exchange and (i) whose Pegasus
Communications Preferred Stock is not immediately available or (ii) who
2
<PAGE>
cannot deliver their Pegasus Communications Preferred Stock, this Letter of
Transmittal and all other documents required to be delivered hereby to the
Exchange Agent on or prior to the Exchange Offer Expiration Date must tender
their Pegasus Communications Preferred Stock pursuant to the guaranteed
delivery procedures set forth in the Offering Memorandum under the caption The
Exchange Offer and Consent Solicitation--Guaranteed Delivery Procedures. See
Instruction 2.
Holders of Pegasus Communications Preferred Stock who desire to tender
their Pegasus Communications Preferred Stock for exchange must complete columns
(1) through (3) in the box below entitled "Description of Pegasus
Communications Preferred Stock" and sign this Letter of Transmittal by
completing the box below entitled "Sign Here." If only those columns are
completed, such holder of Pegasus Communications Preferred Stock will have
tendered for exchange and furnished consent with respect to all Pegasus
Communications Preferred Stock listed in column (3) below. If a holder of
Pegasus Communications Preferred Stock desires to tender for exchange and,
consequently, furnish consent with respect to, less than all of such holder's
Pegasus Communications Preferred Stock, column (4) must be completed in full.
In such case, such holder of Pegasus Communications Preferred Stock should
refer to Instruction 5.
Holders who desire to tender their Pegasus Communications Preferred Stock
pursuant to the Exchange Offer and receive Pegasus Satellite Preferred Stock,
are required to consent to the Proposed Amendments with respect to the Pegasus
Communications Preferred Stock Certificate of Designation. The completion,
execution and delivery of this Letter of Transmittal constitutes a Consent to
the Proposed Amendments with respect to the Pegasus Communications Preferred
Stock Certificate of Designation. Holders of Pegasus Communications Preferred
Stock may not tender Pegasus Communications Preferred Stock without consenting
to the Proposed Amendments with respect to the Pegasus Communications Preferred
Stock Certificate of Designation.
The Exchange Offer is made only to, and may be accepted only as to Pegasus
Communications Preferred Stock beneficially owned by: (a) "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act); (b)
"accredited investors" (as defined in Rule 501(a)(1), (2), (3), (5), (6), (7)
or (8) under the Securities Act; (c) non "U.S. Persons" (as defined in
Regulation S under the Securities Act); and (d) a limited number of
unaccredited investors. Other beneficial owners may, however, consent to the
Proposed Amendments by checking the appropriate box on page 5 below.
3
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION OF PEGASUS COMMUNICATIONS PREFERRED STOCK
----------------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
Number of Shares
Name(s) and Address(es) of Registered Holder(s) Aggregate of Preferred Stock
of Pegasus Communications Preferred Stock, Liquidation Tendered For
exactly as name(s) appear(s) on Pegasus Preference Exchange and as to
Communications Preferred Stock Certificate(s) Certificate Represented by which Consents
(Please fill in, if blank) Number(s) Certificate(s)(1) are Furnished(1)
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Total Number of Shares of
Pegasus Communications Preferred Stock Tendered:
----------------------------------------------------------------------------------------------------------------------------------
1. Unless otherwise indicated in the column "Number of Shares of Preferred
Stock Tendered For Exchange and as to which Consents are Furnished," any
tendering holder of Pegasus Comunications Preferred Stock will be deemed to
have tendered the entire aggregate liquidation preference of Preferred Stock
represented by the column labeled "Aggregate Liquidation Preference
Represented by Certificate(s) together with all in-kind distributions paid
on such preferred stock as of the exchange offer expiration date."
----------------------------------------------------------------------------------------------------------------------------------
/ / CHECK HERE IF TENDERED PEGASUS COMMUNICATIONS PREFERRED STOCK IS ENCLOSED
HEREWITH.
/ / CHECK HERE IF TENDERED PEGASUS COMMUNICATIONS PREFERRED STOCK IS BEING
DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE
INSTITUTIONS (AS HEREINAFTER DEFINED) ONLY):
Name of Tendering Institution:
----------------------------------------------------------------------
Account Number:
-------------------------------------------------------------------------------------
Transaction Code Number:
----------------------------------------------------------------------------
/ / CHECK HERE IF CONSENTS ARE BEING FURNISHED AND TENDERED PEGASUS
COMMUNICATIONS PREFERRED STOCK IS BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE FOLLOWING (FOR USE BY
ELIGIBLE INSTITUTIONS ONLY):
Name of Registered Holder of Pegasus Communications Preferred Stock:
--------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-------------------------------------------------
Window Ticket Number (if available):
----------------------------------------------------------------
Name of Eligible Institution that Guaranteed Delivery and Consent:
-----------------------------------
Account Number (if delivered by book-entry transfer):
-----------------------------------------------
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE ADDITIONAL COPIES
OF THE OFFERING MEMORANDUM AND COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
----------------------------------------------------------------------------------------------
Address:
--------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
/ / CHECK HERE IF YOU ARE CONSENTING TO THE PROPOSED AMENDMENTS BUT NOT
TENDERING PEGASUS COMMUNICATIONS PREFERRED STOCK PURSUANT TO THE EXCHANGE
OFFER.
</TABLE>
4
<PAGE>
--------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 1, 8, 9 and 10)
To be completed ONLY (i) if Pegasus Satellite Preferred Stock issued in
exchange for Pegasus Communications Preferred Stock certificates for Pegasus
Communications Preferred Stock in a number of shares not exchanged for Pegasus
Satellite Preferred Stock, or Pegasus Communications Preferred Stock (if any)
not tendered for exchange, is to be issued in the name of someone other than the
undersigned or (ii) if Pegasus Communications Preferred Stock tendered by
book-entry transfer which is not exchanged is to be returned by credit to an
account maintained at DTC.
Issue to:
Name
----------------------------------------------------------------------------
(Please Type or Print)
Address
-------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Include Zip Code)
--------------------------------------------------------------------------------
(Taxpayer Identification or Social Security Number)
Credit Pegasus Communications Preferred Stock not exchanged and delivered
by book-entry transfer to DTC account set forth below:
--------------------------------------------------------------------------------
(Account Number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 8, 9 and 10)
To be completed ONLY if the Pegasus Satellite Preferred Stock issued in
exchange for Pegasus Communications Preferred Stock, certificates for Pegasus
Communications Preferred Stock in a number of shares not exchanged for Pegasus
Satellite Preferred Stock, or Pegasus Communications Preferred Stock (if any)
not tendered for exchange, is to be mailed or delivered (i) to someone other
than the undersigned or (ii) to the undersigned at an address other than the
address shown below the undersigned's signature.
Mail or deliver to:
Name
----------------------------------------------------------------------------
(Please Type or Print)
Address
-------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Include Zip Code)
--------------------------------------------------------------------------------
(Taxpayer Identification or Social Security Number)
--------------------------------------------------------------------------------
5
<PAGE>
--------------------------------------------------------------------------------
BENEFICIAL OWNER(S) -- RESIDENCE
--------------------------------------------------------------------------------
State of Domicile/Principal
Place of Business of Number of Shares of Pegasus
Each Beneficial Owner of Communications Preferred
Pegasus Communications Stock Held for
Preferred Stock Account of Beneficial Owner(s)
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BENEFICIAL OWNER(S) -- STATUS
--------------------------------------------------------------------------------
The beneficial owner of the Pegasus Communications Preferred Stock
described herein is (check the box that applies):
/ / A "Qualified Institutional Buyer" (as defined in Rule 144A under the
Securities Act)
/ / An "Accredited Investor" (as defined in Rule 501(a)(1), (2), (3), (5),
(6), (7) or (8) under the Securities Act)
/ / A non "U.S. person" (as defined in Regulation S under the Securities
Act)
/ / An unaccredited investor
--------------------------------------------------------------------------------
CERTIFICATE OF EXCHANGE
Re: Pegasus Communications Corporation's 12 3/4% Series A Cumulative
Exchangeable Preferred Stock (the "Pegasus Communications Preferred
Stock")
The undersigned is the registered holder of the Pegasus Communications
Preferred Stock and (i) tenders (the "Tender") the Pegasus Communications
Preferred Stock or interest in such Pegasus Communications Preferred Stock
specified in "Description of Pegasus Communications Preferred Stock" in
exchange (the "Exchange") for Pegasus Satellite Preferred Stock and (ii) gives
consents (the "Consent") to the Proposed Amendments with respect to the Pegasus
Communications Preferred Stock Certificate of Designation. In connection with
the Tender, the undersigned hereby certifies that:
/ / Check if the undersigned will take delivery of the Pegasus Satellite
Preferred Stock or interest in the Pegasus Satellite Preferred Stock
pursuant to Rule 144A. The Exchange is being effected pursuant to and in
accordance with Rule 144A under the Securities Act. The undersigned is a
"qualified institutional buyer" within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A.
/ / Check if the undersigned will take delivery of the Pegasus Satellite
Preferred Stock or interest in the Pegasus Satellite Preferred Stock
pursuant to Regulation S. The Exchange is being effected pursuant to and in
accordance with Rule 903 or Rule 904 under the Securities Act. The
undersigned hereby certifies that (i) the undersigned is not a person in the
United States and (x) the undersigned is outside the United States or (y)
the Exchange will be executed
6
<PAGE>
in, on or through the facilities of a designated offshore securities market
and the Exchange was not prearranged with a buyer in the United States, (ii)
no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the
Securities Act, and (iii) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
/ / Check if the undersigned will take delivery of the Pegasus Satellite
Preferred Stock pursuant to Rule 506 as an "accredited investor". The
undersigned is an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3), (5), (6), (7) or (8) of the Securities Act. The
undersigned hereby certifies that the Exchange is effected pursuant to and
in accordance with Rule 506 under the Securities Act, and the undersigned
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act, and the
Exchange complies with the transfer restrictions applicable to the Pegasus
Satellite Preferred Stock and the requirements of the exemption claimed,
which certification is supported by (1) a duly executed and completed form
of "Certificate from Accredited Investor" accompanying the Letter of
Transmittal and (2) if such Exchange is in respect of a number of shares of
Pegasus Communications Preferred Stock at the time of exchange with a
liquidation preference of less than $100,000 in the aggregate, an opinion of
counsel provided by the undersigned (a copy of which the undersigned has
attached to the Letter of Transmittal), to the effect that the undersigned
is in compliance with the Securities Act.
/ / Check if the undersigned will take delivery of the Pegasus Satellite
Preferred Stock pursuant to Rule 506 as an "unaccredited investor". The
undersigned is an unaccredited investor. The undersigned hereby certifies
that the Exchange is effected pursuant to and in accordance with Rule 506
under the Securities Act, and the undersigned hereby further certifies that
it has not engaged in any general solicitation within the meaning of
Regulation D under the Securities Act, and the Exchange complies with the
transfer restrictions applicable to the Pegasus Satellite Preferred Stock
and the requirements of the exemption claimed, which certification is
supported by a duly executed and completed form of Certificate of Accredited
or Unaccredited Investor accompanying the Letter of Transmittal.
Capitalized terms used but not defined herein shall have the meanings given by
the Letter of Transmittal.
---------------------------------------------
(Please Print Name)
By:
---------------------------------------------
Name:
Title:
7
<PAGE>
CERTIFICATE FROM ACCREDITED OR UNACCREDITED INVESTOR
Re: Pegasus Communications Corporation's 12 3/4% Series A Cumulative
Exchangeable Preferred Stock (the "Pegasus Communications Preferred
Stock")
The undersigned is the registered holder of the Pegasus Communications
Preferred Stock and tenders (the "Tender") the Pegasus Communications Preferred
Stock or interest in such Pegasus Communications Preferred Stock specified in
"Description of Pegasus Communications Preferred Stock" in exchange for Pegasus
Satellite Preferred Stock and furnishes consent to the Proposed Amendments to
the Pegasus Communications Preferred Stock Certificate of Designation. In
connection with the Tender, the undersigned hereby certifies on its behalf, or,
if the undersigned holds the Pegasus Communications Preferred Stock for the
account of a beneficial owner of the Pegasus Communications Preferred Stock, on
behalf of such beneficial owner who signs the form "Letter of Transmittal --
Instructions to Registered Holder from Beneficial Owner" and is an "accredited
investor" (as defined) or an unaccredited investor (the "Beneficial Owner"),
that:
1. The undersigned or the Beneficial Owner, as applicable (the applicable
party being referred to herein as the "Owner"), understands that any subsequent
transfer of the Pegasus Satellite Preferred Stock or any interest therein is
subject to certain restrictions and conditions set forth in the Pegasus
Satellite Certificate of Designation under which the Pegasus Satellite
Preferred Stock will be issued, and the Owner agrees to be bound by, and not to
resell, pledge or otherwise transfer the Pegasus Satellite Preferred Stock or
any interest therein except in compliance with, such restrictions and
conditions and the Securities Act.
2. The Owner understands that the Exchange Offer and the Pegasus Satellite
Preferred Stock have not been registered under the Securities Act, and that the
Pegasus Satellite Preferred Stock and any interest therein may not be offered
or sold except as permitted in the following sentence. The Owner agrees, on its
own behalf and on behalf of any accounts for which it is acting as hereinafter
stated, that if it should sell the Pegasus Satellite Preferred Stock or any
interest therein, the Owner will do so only (a) to Pegasus Satellite
Communications, Inc. (the "Company") or any subsidiary thereof, (b) in
accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined therein), (c) to an "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to the Company's transfer agent and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of a liquidation preference of Pegasus Satellite
Preferred Stock, at the time of transfer of less than $100,000, an opinion of
counsel in a form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (d) outside the United
States in accordance with Rule 904 of Regulation S under the Securities Act,
(e) pursuant to the provisions of Rule 144(k) under the Securities Act or (f)
pursuant to an effective registration statement under the Securities Act, and
the Owner further agrees to provide to any person purchasing the Pegasus
Satellite Preferred Stock from the Owner in a transaction meeting the
requirements of clauses (a) through (e) of this paragraph a notice advising
such purchaser that resales thereof are restricted as stated herein.
3. The Owner understands that, on any proposed resale of Pegasus Satellite
Preferred Stock or beneficial interest therein, the Owner will be required to
furnish to the Company's transfer agent and the Company such certifications,
legal opinions and other information as the transfer agent and the Company may
reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. The Owner further understands that the Pegasus
Satellite Preferred Stock will bear a legend to the foregoing effect. The Owner
further understands that any subsequent transfer by the Owner of the Pegasus
Satellite Preferred Stock or a beneficial interest therein acquired by the
Owner must be effected through The Depository Trust Company.
4. The Owner is:
/ / an "accredited investor" (as defined in Rule 501(a)(1), (2), (3), (5),
(6), (7) or (8) of Regulation D under the Securities Act); or
/ / The Owner is an unaccredited investor;
and has such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of the Exchange Offer and an
investment in the Pegasus Satellite Preferred Stock, and the Owner and any
accounts for which the Owner is acting are each able to bear the economic risk
of the Owner's or its investment.
8
<PAGE>
5. The Owner is acquiring the Pegasus Satellite Preferred Stock or a
beneficial interest therein exchanged in the Exchange Offer for the Owner's own
account or for one or more accounts (each of which is an "accredited investor")
as to each of which the Owner exercises sole investment discretion.
The Company's transfer agent and the Company are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
-------------------------------------------------------
(Please Print the Name of the Registered Holder)
By:
----------------------------------------------------
Name:
Title:
-------------------------------------------------------
(Please Print the Name of the Beneficial Owner, if Any)
9
<PAGE>
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Pursuant to the Exchange Offer and Consent Solicitation, upon the terms
and subject to the conditions set forth in the Offering Memorandum and this
Consent and Letter of Transmittal, the undersigned hereby tenders to the
Company for exchange (unless otherwise indicated above) and consents to the
Proposed Amendments to the Pegasus Communications Preferred Stock Certificate
of Designation indicated above.
If the undersigned has checked the box above indicating that the
undersigned is consenting to the Proposed Amendments but not tendering Pegasus
Communications Preferred Stock, all references to tendered stock will be deemed
to refer to the Pegasus Communications Preferred Stock described herein, and
all statements to the effect that any such stock is being tendered shall be
inoperative.
By executing this Letter of Transmittal and subject to and effective upon
acceptance for exchange of the Pegasus Communications Preferred Stock tendered
for exchange herewith, the undersigned (i) will have irrevocably sold,
assigned, transferred and exchanged to the Company all right, title and
interest in, to and under all of the Pegasus Communications Preferred Stock
tendered for exchange hereby, (ii) hereby will have consented to each of the
Proposed Amendments to the Pegasus Communications Preferred Stock Certificate
of Designation, and (iii) hereby will have appointed the Exchange Agent as the
true and lawful agent and attorney-in-fact (with full knowledge that the
Exchange Agent also acts as agent of the Company) of such holder of Pegasus
Communications Preferred Stock with respect to such Pegasus Communications
Preferred Stock, with full power of substitution to (a) deliver certificates
representing such Pegasus Communications Preferred Stock, or transfer ownership
of such Pegasus Communications Preferred Stock on the account books maintained
by DTC (together, in any such case, with all accompanying evidences of transfer
and authenticity), to the Company, (b) present and deliver such Pegasus
Communications Preferred Stock for transfer on the books of the Company, (c)
consent to the Proposed Amendments to the Pegasus Communications Preferred
Stock Certificate of Designation, and (d) receive all benefits and otherwise
exercise all rights and incidents of beneficial ownership with respect to such
Pegasus Communications Preferred Stock, all in accordance with the terms of the
Exchange Offer and Solicitation. The power of attorney granted in this
paragraph shall be deemed to be irrevocable and coupled with an interest.
By executing this Letter of Transmittal, and subject to and effective upon
acceptance for exchange of the Pegasus Communications Preferred Stock tendered
for exchange herewith, the undersigned will be deemed to have signed the
Registration Rights Agreement, as described in the Offering Memorandum.
The undersigned hereby represents and warrants that (i) the undersigned is
the owner of the Pegasus Communications Preferred Stock tendered for exchange
hereby, (ii) the undersigned has full power and authority to tender, exchange,
assign and transfer the Pegasus Communications Preferred Stock, and (iii) that
when such Pegasus Communications Preferred Stock is accepted for exchange by
the Company, the Company will acquire good and marketable title thereto, free
and clear of all liens, restrictions, charges and encumbrances and not subject
to any adverse claims. The undersigned will, upon receipt, execute and deliver
any additional documents deemed by the Exchange Agent or the Company to be
necessary or desirable to complete the exchange, assignment and transfer of,
and deliver consents to the Proposed Amendments to the Pegasus Communications
Preferred Stock Certificate of Designation.
For purposes of the Exchange Offer and Solicitation, the Company will be
deemed to have accepted for exchange, and to have exchanged, validly tendered
Pegasus Communications Preferred Stock and accepted validly delivered consents
to the Proposed Amendments to the Pegasus Communications Preferred Stock
Certificate of Designation, if, as and when the Company gives oral or written
notice thereof to the Exchange Agent. Tenders of Pegasus Communications
Preferred Stock pursuant to the Exchange Offer may be withdrawn and consent to
the Proposed Amendments ("Consents") may be revoked at any time prior to, but
not after, the Consent Expiration Date, unless the Exchange Offer is terminated
without any Pegasus Communications Preferred Stock being exchanged thereunder.
See The Exchange Offer and Consent Solicitation -- Withdrawal of Tenders and
Revocation of Consents in the Offering Memorandum. The undersigned further
understands that tendered Pegasus Communications Preferred Stock may be
withdrawn by written notice of withdrawal received by the Exchange Agent at any
time on or prior to the Consent Expiration Date. The withdrawal of tendered
Pegasus Communications Preferred Stock prior to the Consent Expiration Date in
accordance with the procedures set forth hereunder will effect a revocation of
the related Consent. In order for a holder to revoke a
10
<PAGE>
Consent, such holder must withdraw the related tendered Pegasus Communications
Preferred Stock. The undersigned understands that Pegasus Communications
Corporation intends to execute an amended certificate of designation (the
"Amended Certificate of Designation") promptly following the Consent Expiration
Date, if the requisite consents have been received and that such Amended
Certificate of Designation will be binding upon each holder whether or not such
holder delivers a Consent.
The undersigned acknowledges that the Company's acceptance of Pegasus
Communications Preferred Stock validly tendered for exchange and consents
validly delivered with respect to such Pegasus Communications Preferred Stock
pursuant to any one of the procedures described in the section of the Offering
Memorandum entitled The Exchange Offer and Consent Solicitation and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Company upon the terms and subject to the conditions of the Exchange
Offer and Solicitation.
The Exchange Offer and Solicitation are subject to a number of conditions,
each of which may be waived or modified by the Company, in whole or in part, at
any time and from time to time, as described in the Offering Memorandum under
the caption The Exchange Offer and Consent Solicitation--Conditions of the
Exchange Offer and Consent Solicitation. The undersigned recognizes that as a
result of such conditions, the Company may not be required to accept the
Pegasus Communications Preferred Stock properly tendered hereby. In such an
event, tendered Pegasus Communications Preferred Stock not accepted for
purchase will be returned to the undersigned without cost to the undersigned as
soon as practicable following the earlier to occur of the applicable Exchange
Offer Expiration Date or the date on which the Exchange Offer is terminated
without any Pegasus Communications Preferred Stock being purchased thereunder.
Unless otherwise indicated in the box entitled "Special Issuance
Instructions," please return any Pegasus Communications Preferred Stock not
accepted for exchange in the name(s) of the undersigned. Similarly, unless
otherwise indicated in the applicable box entitled "Special Delivery
Instructions," please mail any certificates for Pegasus Communications
Preferred Stock not exchanged (and accompanying documents, as appropriate) to
the undersigned at the address shown below the undersigned's signature(s). In
the event that both "Special Issuance Instructions" and "Special Delivery
Instructions" are completed, please issue the certificates representing the
Pegasus Satellite Preferred Stock issued in exchange for the Pegasus
Communications Preferred Stock accepted for exchange in the name(s) of, and
return any Pegasus Communications Preferred Stock not tendered for exchange or
not exchanged to, the person(s) so indicated. The undersigned recognizes that
the Company has no obligation pursuant to the "Special Issuance Instructions"
and "Special Delivery Instructions" to transfer any Pegasus Communications
Preferred Stock from the name of the holder of Pegasus Communications Preferred
Stock thereof if the Company does not accept for exchange any of the Pegasus
Communications Preferred Stock so tendered for exchange or if such transfer
would not be in compliance with any transfer restrictions applicable to the
Pegasus Satellite Preferred Stock.
IN ORDER TO VALIDLY TENDER PEGASUS COMMUNICATIONS PREFERRED STOCK FOR
EXCHANGE AND VALIDLY DELIVER A CONSENT TO THE PROPOSED AMENDMENTS TO THE
PEGASUS COMMUNICATIONS PREFERRED STOCK CERTIFICATE OF DESIGNATION, HOLDERS OF
PEGASUS COMMUNICATIONS PREFERRED STOCK MUST COMPLETE, EXECUTE, AND DELIVER THIS
LETTER OF TRANSMITTAL, UNLESS, IN THE CASE OF BOOK-ENTRY TRANSFER, INSTRUCTIONS
ARE BEING TRANSMITTED THROUGH THE DTC AUTOMATED TENDER OFFER PROGRAM ("ATOP").
Except as stated in the Offering Memorandum, all authority herein
conferred or agreed to be conferred shall survive the death, incapacity, or
dissolution of the undersigned, and any obligation of the undersigned hereunder
shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned. Except as otherwise stated in the Offering
Memorandum, this tender for exchange of, and delivery of consents to the
Proposed Amendments to the Pegasus Communications Preferred Stock Certificate
of Designation are irrevocable.
11
<PAGE>
--------------------------------------------------------------------------------
SIGN HERE
-------------------------------------------------------------------------------
Signature(s) of Owner(s)
Dated: , 2000
-----------------
Must be signed by the registered holder(s) of Pegasus Communications
Preferred Stock exactly as name(s) appear(s) on certificate(s) representing
the Pegasus Communications Preferred Stock or on a security position listing
or by person(s) authorized to become registered Pegasus Communications
Preferred Stock holder(s) by certificates and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, please provide the following information.
(See Instruction 8).
Name(s):
------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print)
Capacity (full title):
----------------------------------------------------------
--------------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
--------------------------------------------------------------------------------
(Include Zip Code)
Principal place of business (if different from address listed above):
--------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.: ( )
------ -----------------------------------------
Tax Identification or Social Security Numbers:
-------------------------------------------------------------------------------
Please complete Substitute Form W-9
GUARANTEE OF SIGNATURE(S)
(Signature(s) must be guaranteed if required by Instruction 1)
Authorized Signature:
----------------------------------------------------------
Dated:
-------------------------------------------------------------------------
Name and Title:
----------------------------------------------------------------
(Please Print)
Name and Title:
----------------------------------------------------------------
12
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER AND SOLICITATION
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by an institution
which is (1) a member firm of a registered national securities exchange or of
the National Association of Securities Dealers, Inc., (2) a commercial bank or
trust company having an office or correspondent in the United States, or (3) an
"eligible guarantor institution" within the meaning of Rule l7Ad-l5 under the
Securities Exchange Act of 1934 which is a member of one of the following
recognized Signature Guarantee Programs (an "Eligible Institution"):
a. The Securities Transfer Agents Medallion Program (STAMP)
b. The New York Stock Exchange Medallion Signature Program (MSP)
c. The Stock Exchange Medallion Program (SEMP)
Signatures on this Letter of Transmittal need not be guaranteed (i) if this
Letter of Transmittal is signed by the registered holder(s) of the Pegasus
Communications Preferred Stock tendered herewith and such registered holder(s)
have not completed any of the boxes entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on this Letter of Transmittal, or (ii) if such
Pegasus Communications Preferred Stock is tendered for the account of an
Eligible Institution. IN ALL OTHER CASES, ALL SIGNATURES MUST BE GUARANTEED BY
AN ELIGIBLE INSTITUTION.
2. Delivery of this Letter of Transmittal, Consents to the Proposed
Amendments and Pegasus Communications Preferred Stock; Guaranteed Delivery
Procedures. This Letter of Transmittal is to be completed by holders of Pegasus
Communications Preferred Stock (i) (a) if certificates are to be forwarded
herewith or (b) if tenders are to be made pursuant to the procedures for tender
by book-entry transfer or guaranteed delivery set forth in the section of the
Offering Memorandum entitled The Exchange Offer and Consent Solicitation, and
(ii) if instructions are not being transmitted through ATOP. Certificates for
all physically tendered Pegasus Communications Preferred Stock or any timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation"), as well as
a properly completed and duly executed copy of this Letter of Transmittal or
facsimile hereof or an agent's message (as defined in the Offering Memorandum)
in the case of a book-entry transfer, and any other documents required by this
Letter of Transmittal, must be received by the Exchange Agent at its address
set forth on the cover of this Letter of Transmittal prior to 5:00 p.m., New
York City time, on the Exchange Offer Expiration Date. Holders of Pegasus
Communications Preferred Stock who elect to tender Pegasus Communications
Preferred Stock and (i) whose Pegasus Communications Preferred Stock is not
immediately available, or (ii) who cannot deliver the Pegasus Communications
Preferred Stock and the consents to the Proposed Amendments to the Pegasus
Communications Preferred Stock Certificate of Designation, this Letter of
Transmittal or other required documents to the Exchange Agent prior to 5:00
p.m., New York City time, on the Exchange Offer Expiration Date, must tender
their Pegasus Communications Preferred Stock according to the guaranteed
delivery procedures set forth in the Offering Memorandum. Holders may have such
tender and delivery of such consents effected if: (a) such tender and consents
are made through an Eligible Institution; (b) prior to 5:00 p.m., New York City
time, on the Exchange Offer Expiration Date, the Exchange Agent has received
from such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery, setting forth the name and address of the holder of such
Pegasus Communications Preferred Stock, the certificate number(s) of such
Pegasus Communications Preferred Stock and the principal amount of Pegasus
Communications Preferred Stock tendered for exchange and with respect to which
Consents to the Proposed Amendments are given, stating that tender is being
made and Consents are being delivered thereby and guaranteeing that, within
three New York Stock Exchange trading days after the Exchange Offer Expiration
Date, this Letter of Transmittal (or a facsimile thereof), together with the
certificate(s) representing such Pegasus Communications Preferred Stock (or a
Book-Entry Confirmation), in proper form for transfer, and any other documents
required by this Letter of Transmittal, will be deposited by such Eligible
Institution with the Exchange Agent; and (e) a properly executed Letter of
Transmittal (or a facsimile hereof), as well as the certificate(s) for all
tendered Pegasus Communications Preferred Stock with respect to which Consents
to the Proposed Amendments have been furnished, in proper form for transfer or
a Book-Entry Confirmation, together with any other documents required by this
Letter of Transmittal, are received by the Exchange Agent within three New York
Stock Exchange trading days after the Exchange Offer Expiration Date.
THE METHOD OF DELIVERY OF PEGASUS COMMUNICATIONS PREFERRED STOCK, THIS
LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY
THROUGH DTC AND
13
<PAGE>
ANY ACCEPTANCE OR AGENT'S MESSAGE DELIVERED THROUGH ATOP, IS AT THE ELECTION
AND RISK OF THE HOLDER. EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY SHALL
BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT.
INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR
HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXCHANGE OFFER
EXPIRATION DATE. NEITHER THIS LETTER OF TRANSMITTAL, THE AGENT'S MESSAGE, THE
NOTICE OF GUARANTEED DELIVERY, BOOK-ENTRY CONFIRMATION NOR ANY PEGASUS
COMMUNICATIONS PREFERRED STOCK SHOULD BE SENT TO THE COMPANY. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
No alternative, conditional or contingent tenders or consents will be
accepted. All tendering holders of Pegasus Communications Preferred Stock, by
execution of this Letter of Transmittal (or facsimile hereof, if applicable) or
the agent's message, waive any right to receive notice of the acceptance of
their Pegasus Communications Preferred Stock for exchange.
3. Consents to Proposed Amendments. A valid Consent to the Proposed
Amendments may be given only by the holder or by its attorney-in-fact. A
beneficial owner who is not a holder must arrange with the holder to execute
and deliver a Consent on its behalf, obtain a properly completed irrevocable
proxy that authorizes such beneficial owner to consent to the Proposed
Amendments on behalf of such holder or become a holder. Any financial
institution that is a participant in the Book-Entry Transfer Facility's system
and whose name appears on a security position listing as the record owner of
the Pegasus Communications Preferred Stock who wishes to make book-entry
delivery of such Pegasus Communications Preferred Stock as described above and
who wishes to consent to the Proposed Amendments must complete and execute a
participant's letter (which will be distributed to participants by the
Book-Entry Transfer Facility) instructing the Book-Entry Transfer Facility's
nominee to complete and sign the proxy attached thereto.
4. Inadequate Space. If the space provided in the box entitled
"Description of Pegasus Communications Preferred Stock" above is inadequate,
the certificate numbers and principal amounts of the Pegasus Communications
Preferred Stock being tendered should be listed on a separate signed schedule
affixed hereto.
5. Withdrawals and Revocations. A tender of Pegasus Communications
Preferred Stock may be withdrawn and Consents to the Proposed Amendments
("Consents") may be revoked at any time until 5:00 p.m., New York City time, on
the Consent Expiration Date. Tendered Pegasus Communications Preferred Stock
may not be withdrawn at any time after the Consent Expiration Date unless the
Exchange Offer is terminated without any Pegasus Communications Preferred Stock
being purchased thereunder. In the event of such a termination, all tendered
Pegasus Communications Preferred Stock will be returned to the tendering holder
as promptly as practicable. The withdrawal of Pegasus Communications Preferred
Stock prior to the Consent Expiration Date in accordance with the procedures
set forth hereunder will effect a revocation of the Consent. In order for a
holder to revoke a Consent, such holder must withdraw the tendered Pegasus
Communications Preferred Stock.
To be effective, a written or facsimile transmission (or delivered by hand
or by mail) notice of withdrawal of a tender or revocation of a Consent must:
(i) be timely received by the Exchange Agent at one of its addresses set forth
on the front cover page hereof; (ii) specify the name of the person having
tendered the Pegasus Communications Preferred Stock to be withdrawn or as to
which Consents are revoked, the principal amount of such Pegasus Communications
Preferred Stock to be withdrawn and, if certificates for the Pegasus
Communications Preferred Stock have been tendered, the name of the registered
holder(s) of such Pegasus Communications Preferred Stock as set forth in such
certificates, if different from that of the person who tendered such Pegasus
Communications Preferred Stock; (iii) identify the Pegasus Communications
Preferred Stock to be withdrawn or to which the notice of revocation relates;
and (iv) (a) be signed by the holder in the same manner as the original
signature on this Letter of Transmittal or Notice of Guaranteed Delivery (as
the case may be) by which such Pegasus Communications Preferred Stock was
tendered (including any required signature guarantees), or (b) be accompanied
by evidence satisfactory to the Company and the Exchange Agent that the holder
withdrawing such tender or revoking such Consents has succeeded to beneficial
ownership of such Pegasus Communications Preferred Stock. If certificates
representing Pegasus Communications Preferred Stock are to be withdrawn or
Consents to be revoked have been delivered or otherwise identified to the
Exchange Agent, then the name of the registered holder and the serial numbers
of the particular certificate evidencing the Pegasus Communications Preferred
Stock to be withdrawn or Consents to be revoked and a signed notice of
withdrawal with signatures guaranteed
14
<PAGE>
by an Eligible Institution, except in the case of Pegasus Communications
Preferred Stock tendered by an Eligible Institution (in which case no signature
guarantee shall be required), must also be so furnished to the Exchange Agent
as aforesaid prior to the physical release of the certificates for the
withdrawn Pegasus Communications Preferred Stock. If Pegasus Communications
Preferred Stock has been tendered or if Consents have been delivered pursuant
to the procedures for book-entry transfer as set forth herein, any notice of
withdrawal or revocation of Consent must also specify the name and number of
the account at DTC to be credited with the withdrawn Pegasus Communications
Preferred Stock. Any Pegasus Communications Preferred Stock so withdrawn will
thereafter be deemed not validly tendered and any Consents with respect to such
Pegasus Communications Preferred Stock will thereafter be deemed not validly
delivered for purposes of the Exchange Offer and Solicitation and no Pegasus
Satellite Preferred Stock will be issued unless the Pegasus Communications
Preferred Stock so withdrawn is validly retendered and the Consents with
respect to such Pegasus Communications Preferred Stock are validly redelivered.
Properly withdrawn Pegasus Communications Preferred Stock may be retendered and
properly revoked Consents with respect to such Pegasus Communications Preferred
Stock may be redelivered by following one of the procedures described in the
section of the Offering Memorandum entitled The Exchange Offer and Consent
Solicitation--Procedures for Tendering and Consenting at any time prior to 5:00
p.m., New York City time, on the Exchange Offer Expiration Date.
6. Partial Tenders. If a tender for exchange is to be made and Consents
are to be delivered with respect to less than all of the shares of any Pegasus
Communications Preferred Stock, fill in the number of shares of Pegasus
Communications Preferred Stock which are tendered for exchange and with respect
to which Consents are delivered in column (4) of the box entitled "Description
of Pegasus Communications Preferred Stock," as more fully described in the
footnotes thereto. In case of a partial tender for exchange and, consequently,
a partial Consent, a new certificate, in fully registered form, for the
remainder of the shares of Pegasus Communications Preferred Stock, will be sent
to the holders of the Pegasus Communications Preferred Stock unless otherwise
indicated in the appropriate box on this Letter of Transmittal as promptly as
practicable after the expiration or termination of the Exchange Offer.
7. Qualification to Participate in the Exchange Offer. The Exchange Offer
and Solicitation are being made only to (a) "qualified institutional buyers"
(as defined in Rule 144A under the Securities Act), (b) "accredited investors"
(as defined in Rule 501(a)(1), (2), (3), (5), (6), (7) or (8) under the
Securities Act), (c) non "U.S. persons" (as defined in Regulation S of the
Securities Act) in offshore transactions complying with Rule 903 or 904 of
Regulation S, and (d) a limited number of unaccredited investors. The Pegasus
Satellite Preferred Stock will be offered for exchange in a transaction not
involving any public offering in the United States within the meaning of the
Securities Act. The Pegasus Satellite Preferred Stock will not be registered
under the Securities Act or any U.S. securities laws and it will be offered for
exchange in transactions exempt from the registration requirements of the
Securities Act. To validly tender the Pegasus Communications Preferred Stock
and to receive in exchange in the Exchange Offer and Solicitation the Pegasus
Satellite Preferred Stock, each of the registered holders and, if applicable,
the beneficial owner of such Pegasus Communications Preferred Stock tendered
must (i) be either (a) a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act), (b) an "accredited investor" (as defined in
Rule 501(a)(1), (2), (3), (5), (6), (7) or (8) under the Securities Act), (c) a
non "U.S. Person" (as defined in Regulation S of the Securities Act) who
receives the Pegasus Satellite Preferred Stock in offshore transactions
complying with Rule 903 or 904 of Regulation S, or (d) an unaccredited investor
(each of the persons described in clauses (a),(b), (c) and (d), a "Qualified
Person") and (ii) duly execute and complete the form of the "Certificate of
Exchange" and, if applicable, the "Certificate from Accredited or Unaccredited
Investor," "Beneficial Owner(s)-Status" and the "Instruction to Registered
Holder from Beneficial Owner" each accompanying this Letter of Transmittal
(each of the foregoing, a "Qualification Certificate"). No tender of Pegasus
Communications Preferred Stock by a registered holder or, if applicable,
beneficial owner thereof who is not each a Qualified Person and who has not
completed the applicable Qualification Certificate will be accepted in the
Exchange Offer and Solicitation.
8. Signatures on this Letter of Transmittal, Assignment and Endorsements.
(a) The signature(s) of the holder of Pegasus Communications Preferred
Stock on this Letter of Transmittal must correspond with the name(s) as written
on the face of the Pegasus Communications Preferred Stock without alteration,
enlargement or any change whatsoever.
(b) If tendered Pegasus Communications Preferred Stock is owned of record
by two or more joint owners, all such owners must sign this Letter of
Transmittal.
15
<PAGE>
(c) If any tendered Pegasus Communications Preferred Stock is registered
in different names on several certificates, it will be necessary to complete,
sign and submit as many separate copies of this Letter of Transmittal and any
necessary or required documents as there are different registrations or
certificates.
(d) When this Letter of Transmittal is signed by the holder of the Pegasus
Communications Preferred Stock listed and transmitted hereby, no endorsements
of Pegasus Communications Preferred Stock or bond powers are required. If,
however, Pegasus Communications Preferred Stock not tendered or not accepted,
is to be issued or returned in the name of a person other than the holder of
the Pegasus Communications Preferred Stock, then the Pegasus Communications
Preferred Stock transmitted hereby must be endorsed or accompanied by a
properly completed bond power, in a form satisfactory to the Company, in either
case signed exactly as the name(s) of the holder of the Pegasus Communications
Preferred Stock appear(s) on the Pegasus Communications Preferred Stock.
Signatures on such Pegasus Communications Preferred Stock or bond powers must
be guaranteed by an Eligible Institution (unless signed by an Eligible
Institution).
(e) If this Letter of Transmittal or Pegasus Communications Preferred
Stock or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and unless waived by the Company, evidence satisfactory to the Company
of their authority to so act must be submitted with this Letter of Transmittal.
(f) If this Letter of Transmittal is signed by a person other than the
registered holder of Pegasus Communications Preferred Stock listed, the Pegasus
Communications Preferred Stock must be endorsed or accompanied by a properly
completed bond power, in either case signed by such registered holder exactly
as the name(s) of the registered holder of Pegasus Communications Preferred
Stock appear(s) on the certificates. Signatures on such Pegasus Communications
Preferred Stock or bond powers must be guaranteed by an Eligible Institution
(unless signed by an Eligible Institution).
9. Transfer Taxes. Except as set forth in this Instruction 9, the Company
will pay all transfer taxes, if any, applicable to the exchange of Pegasus
Communications Preferred Stock pursuant to the Exchange Offer. If, however, a
transfer tax is imposed for any reason other than the exchange of the Pegasus
Communications Preferred Stock pursuant to the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemptions therefrom is not submitted with
this Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering holder.
10. Special Issuance, Delivery, and Payment Instructions. If the Pegasus
Satellite Preferred Stock is to be issued, or if any Pegasus Communications
Preferred Stock not tendered for exchange is to be issued or sent to someone
other than the holder of Pegasus Communications Preferred Stock or to an
address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Holders of Pegasus Communications Preferred
Stock tendering Pegasus Communications Preferred Stock by book-entry transfer
may request that Pegasus Communications Preferred Stock not accepted be
credited to such account maintained at DTC as such holder of Pegasus
Communications Preferred Stock may designate.
11. Irregularities. All questions as to the validity, form, eligibility
(including time of receipt), compliance with conditions, acceptance, revocation
and withdrawal of tendered Pegasus Communications Preferred Stock and delivered
Consents will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute
right to reject any and all Pegasus Communications Preferred Stock not properly
tendered, any and all Consents not properly delivered or any Pegasus
Communications Preferred Stock the Company's acceptance of which and the
subsequent issuance of Pegasus Satellite Preferred Stock would, in the opinion
of counsel for the Company, be unlawful. The Company also reserves the right to
waive any defects, irregularities or conditions of tender or Consents as to
particular Pegasus Communications Preferred Stock. The Company's interpretation
of the terms and conditions of the Exchange Offer and Solicitation (including
the instructions in the Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with
tenders of and delivery of Consents to the amendments to the Pegasus
Communications Preferred Stock Certificate of Designation must be cured within
such time as the Company shall determine. Although the Company intends to
notify holders of defects or irregularities with respect to tenders of and/or
delivery of Consents to the Proposed Amendments, none of the Company, the
dealer manager, the Exchange Agent or any other person shall incur any
liability for failure to give such notification. Tenders of and delivery of
Consents to the Proposed Amendments will not be deemed to have been made until
such defects or irregularities have been cured or waived. Any Pegasus
Communications Preferred Stock received by the Exchange Agent
16
<PAGE>
that is not properly tendered or with respect to Consents not properly
delivered and as to which the defects or irregularities have not been cured or
waived will be returned by the Exchange Agent to the tendering and consenting
holders, unless otherwise provided in this Letter of Transmittal, as soon as
practicable following the Exchange Offer Expiration Date.
12. Waiver of Conditions. The Company reserves the absolute right to
waive, amend or modify certain of the specified conditions as described under
The Exchange Offer and Consent Solicitation--Conditions of the Exchange Offer
and Consent Solicitation in the Offering Memorandum in the case of any Pegasus
Communications Preferred Stock tendered and with respect to delivered Consents
(except as otherwise provided in the Offering Memorandum).
13. Mutilated, Lost, Stolen or Destroyed Pegasus Communications Preferred
Stock. Any tendering and consenting Holder whose Pegasus Communications
Preferred Stock has been mutilated, lost, stolen or destroyed should contact
the exchange agent listed below for further instructions:
First Union National Bank
1525 West W.T. Harris Blvd., 3C3
Charlotte, NC 28288
Attention: Michael Klotz
14. Requests for Information or Additional Copies. Requests for
information or for additional copies of the Offering Memorandum and this Letter
of Transmittal may be directed to the exchange agent or the dealer manager at
their respective addresses or telephone numbers set forth on the back cover of
the Offering Memorandum.
Important: This Letter of Transmittal (or a facsimile thereof, if
applicable) or an agent's message, in the case of book-entry transfer, together
with certificates, or confirmation of book-entry or the notice of guaranteed
delivery, and all other required documents must be received by the Exchange
Agent prior to 5:00 p.m., New York City time, on the Exchange Offer Expiration
Date with respect to holders wishing to receive the Pegasus Satellite Preferred
Stock.
IMPORTANT TAX INFORMATION
Under current federal income tax law, a holder of Pegasus Communications
Preferred Stock whose tendered Pegasus Communications Preferred Stock is
accepted for exchange may be subject to backup withholding unless the holder
provides the Company (as payor), through the Exchange Agent, with either: (i)
such holder's correct taxpayer identification number ("TIN") on Substitute Form
W-9 attached hereto, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such holder of Pegasus Communications Preferred Stock is
awaiting a TIN) and that (A) the holder of Pegasus Communications Preferred
Stock has not been notified by the Internal Revenue Service that he or she is
subject to backup withholding as a result of a failure to report all interest
or dividends or (B) the Internal Revenue Service has notified the holder of
Pegasus Communications Preferred Stock that he or she is no longer subject to
backup withholding; or (ii) an adequate basis for exemption from backup
withholding. If such holder of Pegasus Communications Preferred Stock is an
individual, the TIN is such holder's social security number. If the exchange
agent is not provided with the correct taxpayer identification number, the
holder of Pegasus Communications Preferred Stock may be subject to certain
penalties imposed by the Internal Revenue Service.
Certain holders of Pegasus Communications Preferred Stock (including,
among others, all corporations and certain foreign individuals) are not subject
to these backup withholding and reporting requirements. Exempt holders of
Pegasus Communications Preferred Stock should indicate their exempt status on
Substitute Form W-9. A foreign individual may qualify as an exempt recipient by
submitting to the Exchange Agent a properly completed Internal Revenue Service
Form W-8 (which the Exchange Agent will provide upon request) signed under
penalty of perjury, attesting to the holder's exempt status.
If backup withholding applies, the Company is required to withhold 31% of
any payment made to the holder of Pegasus Communications Preferred Stock or
other payee. Backup withholding is not an additional federal income tax.
Rather, the federal income tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service. The holder of Pegasus Communications Preferred Stock is
required to give the Exchange Agent the TIN (e.g., social security number or
employer identification number) of the record owner of the Pegasus
Communications Preferred Stock.
17
<PAGE>
INSTRUCTION TO REGISTERED HOLDER
FROM BENEFICIAL OWNER
OF 12 3/4% SERIES A CUMULATIVE EXCHANGEABLE PREFERRED STOCK OF
PEGASUS COMMUNICATIONS CORPORATION
The undersigned hereby acknowledges receipt of the Offering Memorandum and
Consent Solicitation Statement (the "Offering Memorandum"), of Pegasus
Communications Corporation (to be renamed Pegasus Satellite Communications,
Inc.), a Delaware corporation (the "Company" or "Pegasus"), and this Consent
and Letter of Transmittal (the "Letter of Transmittal"), which together with
the Offering Memorandum shall constitute the Company's (i) offer to exchange
(the "Exchange Offer") its 12 3/4% Series A Cumulative Exchangeable Preferred
Stock (the "Pegasus Satellite Preferred Stock") for any and all (but not less
than a majority) of the outstanding 12 3/4% Series A Cumulative Exchangeable
Preferred Stock (the "Pegasus Communications Preferred Stock"), when issued, of
its new holding company (to be renamed Pegasus Communications Corporation) and
(ii) solicitation (the "Solicitation") of consents ("Consents") to certain
amendments (the "Proposed Amendments"), as further described in the Offering
Memorandum, to the Pegasus Communications Preferred Stock Certificate of
Designation (the "Pegasus Communications Preferred Stock Certificate of
Designation"). Recipients of the Offering Memorandum should read the
requirements described in such Offering Memorandum with respect to eligibility
to participate in the Exchange Offer.
This will instruct you, the registered holder, as to the action to be
taken by you relating to the Exchange Offer and Solicitation with respect to
the Pegasus Communications Preferred Stock held by you for the account of the
undersigned.
The aggregate amount of shares of Pegasus Communications Preferred Stock
held by you for the account of the undersigned is (fill in amount):
____ shares of the Pegasus Communications Preferred Stock.
With respect to the Exchange Offer and Solicitation, the undersigned
hereby instructs you (check appropriate box):
/ / To TENDER Pegasus Communications Preferred Stock held by you for the
account of the undersigned (insert number of shares of Pegasus
Communications Preferred Stock to be tendered, if any) and to deliver
Consents to the Proposed Amendments to the Pegasus Communications
Preferred Stock Certificate of Designation:
____ shares of the Pegasus Communications Preferred Stock.
/ / NOT to TENDER any Pegasus Communications Preferred Stock held by you
for the account of the undersigned or to deliver Consents to the Proposed
Amendments.
If the undersigned instructs you to tender the Pegasus Communications
Preferred Stock held by you for the account of the undersigned, it is
understood that you are authorized: (a) to make, on behalf of the undersigned
(and the undersigned, by its signature below, hereby makes to you), the
representations and warranties contained in the Letter of Transmittal that are
to be made with respect to the undersigned as a beneficial owner of the Pegasus
Communications Preferred Stock, including but not limited to the
representations that (i) the undersigned's principal residence is in the state
of (fill in state) ____________ and (ii) the undersigned (as certified by the
undersigned below) is either (A) a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act), or (B) an "accredited investor" (as
defined in Rule 501(a)(1), (2), (3), (5), (6), (7) or (8) under the Securities
Act), or (C) a non "U.S. person" (as defined in Regulation S of the Securities
Act) who is acquiring Pegasus Satellite Preferred Stock in offshore
transactions complying with Rule 903 or 904 of Regulation S, or (D) an
unaccredited investor; (b) if the beneficial owner is an "accredited investor"
(as defined in Rule 501(a)(1), (2), (3), (5), (6), (7) or (8) under the
Securities Act), to duly execute and complete the form of the "Certificate from
Accredited or Unaccredited Investor" accompanying the Letter of Transmittal on
behalf of the undersigned and to make the representations and warranties
contained in such "Certificate from Accredited Investor" on behalf of the
undersigned; (c) to agree, on behalf of the undersigned, as set forth in the
Letter of Transmittal; and (d) to take such other action as necessary under the
Offering Memorandum or the Letter of Transmittal to effect the valid tender of
and delivery of Consents to the Proposed Amendments to the Pegasus
Communications Preferred Stock Certificate of Designation.
The undersigned is the beneficial owner of Pegasus Communications
Preferred Stock and has instructed you to (i) tender (the "Tender") the Pegasus
Communications Preferred Stock or interest in such Pegasus Communications
Preferred Stock specified in "Description of Pegasus Communications Preferred
Stock" for exchange (the "Exchange") for Pegasus Satellite Preferred Stock, and
(ii) give consents (the "Consent") to the Proposed Amendments to the Pegasus
Communications Preferred Stock Certificate of Designation.
18
<PAGE>
/ / Check if the undersigned is a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act). The undersigned is a
"qualified institutional buyer" within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A.
/ / Check if the undersigned is an "accredited investor" (as defined in
Rule 501 (a) (1), (2), (3), (5), (6), (7) or (8) under the Securities
Act). The undersigned is an accredited investor within the meaning of
Rule 501(a)(1), (2), (3), (5), (6), (7) or (8) of the Securities Act. The
undersigned hereby certifies that the Exchange is effected pursuant to
and in accordance with Rule 506 under the Securities Act, and the
undersigned hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the
Securities Act and the Exchange complies with the transfer restrictions
applicable to the Pegasus Satellite Preferred Stock and the requirements
of the exemption claimed, which certification is supported by (1) a duly
executed and completed form of "Certificate from Accredited or
Unaccredited Investor" accompanying the Letter of Transmittal and (2) if
such Exchange is in respect of a number of shares of Pegasus
Communications Preferred Stock at the time of exchange with a liquidation
preference of less than $100,000 in the aggregate, an opinion of counsel
provided by the undersigned (a copy of which the undersigned has attached
to the Letter of Transmittal), to the effect that the undersigned is in
compliance with the Securities Act.
/ / Check if the undersigned is a non "U.S. person" (as defined in
Regulation S of the Securities Act) and the Pegasus Satellite Preferred
Stock and/or any interest in the Pegasus Satellite Preferred Stock will
be exchanged outside the United States in accordance with Rule 904 of the
Securities Act. The Exchange is being effected pursuant to and in
accordance with Rule 903 or Rule 904 under the Securities Act. The
undersigned hereby certifies that (i) the undersigned is not a person in
the United States and (x) the undersigned is outside the United States or
(y) the Exchange will be executed in, on or through the facilities of a
designated offshore securities market and the Exchange was not
prearranged with a buyer in the United States, (ii) no directed selling
efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act and (iii)
the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act.
/ / Check if the undersigned is an unaccredited investor. The undersigned
is not an accredited investor within the meaning of Rule 501(a)(1), (2),
(3), (5), (6), (7) or (8) of the Securities Act. The undersigned hereby
certifies that the Exchange is effected pursuant to and in accordance
with Rule 506 under the Securities Act. The undersigned hereby certifies
that it has not engaged in any general solicitation within the meaning of
Regulation D under the Securities Act and the Exchange complies with the
transfer restrictions applicable to the Pegasus Satellite Preferred Stock
and the requirements of the exemption claimed, which certification is
supported by a duly executed and completed form of "Certificate of
Accredited or Unaccredited Investor" accompanying the Letter of
Transmittal.
19
<PAGE>
SIGN HERE
Name of Beneficial Owner(s):
----------------------------------------------------
--------------------------------------------------------------------------------
Signature(s):
-------------------------------------------------------------------
--------------------------------------------------------------------------------
Name(s) (please print):
---------------------------------------------------------
--------------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
--------------------------------------------------------------------------------
Principal place of business (if different from address listed above):-----------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Telephone Number(s):
------------------------------------------------------------
--------------------------------------------------------------------------------
Taxpayer Identification or Social Security Number(s):
---------------------------
--------------------------------------------------------------------------------
Date:
---------------------------------------------------------------------------
20
<PAGE>
<TABLE>
<S> <C> <C>
------------------------------------------------------------------------------------------------
PAYER'S NAME:
------------------------------------------------------------------------------------------------
SUBSTITUTE Part I -- PLEASE PROVIDE Social Security Number
YOUR TIN IN THE BOX AT
Form W-9 RIGHT AND CERTIFY BY -------------------------------
SIGNING AND DATING OR
Department of the Treasury BELOW. Employer Identification Number
Internal Revenue Service
-------------------------------
Payer's Request for Taxpayer
Identification Number (TIN)
------------------------------------------------------------------------------------------------
Part II -- Certifications -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my current taxpayer identification number (or I am waiting
for a number to be issued to me) and
(2) I am not subject to backup withholding because I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or the IRS has notified me that I am no longer
subject to backup withholding.
Certification Instruction -- You must cross out item (2) in Part 2 above if you have been
notified by the IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return. However, if after being notified by the IRS that you
are subject to backup withholding you receive another notification from the IRS stating that
you are no longer subject to backup withholding, do not cross out item (2).
Part III -- Awaiting TIN / /
------------------------------------------------------------------------------------------------
Name
--------------------------------------------------------------------------------------------
(Please Print)
Address
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
(Including Zip Code)
Signature Date
--------------------------------------------------------- -----------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY
PAYMENT MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED
"GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9"
FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECK THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
------------------------------------------------------------------------------------------------
PAYOR'S NAME: FIRST UNION NATIONAL BANK
------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number has not been issued
to me, and either (a) I have mailed or delivered an application to receive a Taxpayer
Identification Number to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver such an application in the near future.
I understand that if I do not provide a Taxpayer Identification Number within sixty (60) days,
31% of all reportable payments made to me thereafter will be withheld until I provide such
a number.
SIGNATURE DATE
------------------------------------------------------- --------------------------
</TABLE>
21
