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LETTER TO DTC PARTICIPANTS
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
Pursuant to the Offering Memorandum dated as of December 19, 2000
Cusip No. 705904209
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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 CONSENTS MAY BE REVOKED AND TENDERS MAY BE WITHDRAWN AT ANY TIME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.
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December 19, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Pegasus Communications Corporation (to be
renamed Pegasus Satellite Communications, Inc.), a Delaware corporation (the
"Company" or "Pegasus"), to act as dealer manager and consent solicitation
agent in connection with its offer to exchange all of the outstanding preferred
stock listed above (the "Pegasus Communications Preferred Stock"), when issued,
for its 12 3/4% Series A Cumulative Exchangeable Preferred Stock (the "Pegasus
Satellite Preferred Stock") upon the terms and subject to the conditions set
forth in the Offering Memorandum dated December 19, 2000 and in the
accompanying Consent and Letter of Transmittal (the "Letter of Transmittal"
and, together with the Offering Memorandum, the "Offering Materials") (such
offer is referred to as the "Exchange Offer"). In conjunction with the Exchange
Offer, the Company is soliciting consents (the "Consents") to the proposed
amendments (as discussed in the Offering Memorandum) to the Pegasus
Communications Preferred Stock Certificate of Designation (the "Consent
Solicitation"). The Offering Materials more fully describe the Exchange Offer.
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Enclosed herewith are copies of the following documents:
1. The Offering Memorandum;
2. The Consent and Letter of Transmittal for your use and for the
information of your clients; and
3. A form of letter which may be sent to your clients for whose account
you hold stock in your name or in the name of a nominee, with space provided
for obtaining such clients' instructions with regard to the Exchange Offer and
the Consent Solicitation.
DTC participants will be able to execute tenders and deliver consents
through the DTC Automated Tender Offer Program.
Please note that the Consent Solicitation will expire at 5:00 p.m., New
York City time, on January 18, 2001, if on such date the exchange agent has
received the Requisite Consents, or such later date that the exchange agent
shall have first received the Requisite Consents, unless extended. The Exchange
Offer will expire at 5:00 p.m., New York City time, on January 18, 2001, unless
extended. We urge you to contact your clients as promptly as possible.
IMPORTANT: The Letter of Transmittal (or a facsimile thereof), together
with the Pegasus Communications Preferred Stock and all other required
documents, or an agent's message, together with a confirmation of book-entry
transfer of Pegasus Communications Preferred Stock, must be received by the
exchange agent prior to the Exchange Offer Expiration Date with respect to
holders wishing to receive the Pegasus Satellite Preferred Stock.
Holders of Pegasus Communications Preferred Stock who desire to accept the
Exchange Offer must consent to the proposed amendments to the Pegasus
Communications Preferred Stock Certificate of Designation and to the execution
of an amended Certificate of Designation. The proposed amendments and the
amended Certificate of Designation are described in the Offering Memorandum
under the caption Proposed Amendments to the Pegasus Communications Preferred
Stock Certificate of Designation and Exchange Notes Indenture.
An acceptance of the Exchange Offer, either by execution of the Letter of
Transmittal or by tender of Pegasus Communications Preferred Stock and delivery
of Consents through the Automated Tender Offer Program, will constitute a
signature to the Registration Rights Agreement, as defined in the Offering
Memorandum, by the person accepting the Exchange Offer.
Consummation of the Exchange Offer with respect to the Pegasus
Communications Preferred Stock is conditioned upon, among other things, receipt
of the requisite Consents (as discussed in the Offering Memorandum) to give
effect to the proposed amendments to the Pegasus Communications Preferred Stock
Certificate of Designation and the minimum tender condition.
In order to take advantage of the Exchange Offer, a duly executed and
properly completed Letter of Transmittal and any required signature guarantees
should be sent to the exchange agent, and certificates representing the
tendered Pegasus Communications Preferred Stock (or confirmation of book-entry
transfer) should be delivered to the exchange agent, all in accordance with the
instructions set forth in the Letter of Transmittal and the Offering
Memorandum.
The Company will not pay any fees or commissions to any broker or dealer
or other person for soliciting tenders of Pegasus Communications Preferred
Stock or Consents pursuant to the Exchange Offer and the Consent Solicitation.
You will be reimbursed for customary mailing and handling expenses incurred by
you in forwarding the enclosed materials to your clients.
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Any questions or requests for assistance may be directed to us as dealer
manager and solicitation agent at the addresses and telephone numbers set forth
on the back cover of the Offering Memorandum. Requests for additional copies of
the Offering Memorandum, the Letter of Transmittal and the other tender offer
materials may be directed to the exchange agent or to brokers, dealers,
commercial banks or trust companies.
Very truly yours,
CIBC WORLD MARKETS CORP.
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Nothing contained herein or in the enclosed documents shall constitute you
or any other person as the agent of the dealer manager and the solicitation
agent or the exchange agent or authorize you or any other person to give any
information or make any representation on behalf of any of them with respect to
the Exchange Offer and the Consent Solicitation not contained in the Offering
Memorandum or the Letter of Transmittal.
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