STOCKHOLDERS' AGREEMENT
by and among
PEGASUS COMMUNICATIONS CORPORATION,
XXXXXX X. XXXXX
and
XXXXXXX X. XXXXXXX
--------------------------
Dated as of November 7, 1997
--------------------------
495523.1
STOCKHOLDERS' AGREEMENT
This STOCKHOLDERS' AGREEMENT ("Agreement") is made as of the 7th day of
November, 1997, by and among PEGASUS COMMUNICATIONS CORPORATION, a Delaware
corporation ("Pegasus"), XXXXXX X. XXXXX ("Xxxxx") and XXXXXXX X. XXXXXXX
("Xxxxxxx"). Xxxxx and Xxxxxxx are collectively referred to herein as the
"Stockholders," and Pegasus and the Stockholders are collectively referred to
herein as the "Parties."
RECITALS:
WHEREAS, the Stockholders are receiving shares of Class A Common Stock (as
defined herein) as part of the merger consideration in connection with the
merger of Viewstar Entertainment Services, Inc., a Georgia corporation majority
owned by Xxxxx ("Viewstar"), with and into Peach State Satellite Television,
Inc., a Delaware corporation wholly owned by Pegasus ("Merger Sub"), pursuant to
the terms and conditions of that certain Agreement and Plan of Merger, dated as
of November 7, 1997 (the "Merger Agreement"), among Pegasus, Xxxxx, Viewstar and
Merger Sub;
WHEREAS, it is a condition precedent to the obligations of the Parties
under the Merger Agreement that the Parties shall have entered into this
Agreement;
NOW, THEREFORE, in consideration of the premises, mutual promises,
representations, warranties, covenants and agreements contained herein and in
the Merger Agreement, and intending to be legally bound hereby, the Parties
agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. The following terms shall, when used in this
Agreement, have the following meanings:
"Affiliate" means, with respect to any Person: (i) any Person directly or
indirectly owning, controlling, or holding with power to vote 25% or more of the
outstanding voting securities of such other Person; (ii) any Person 25% or more
of whose outstanding voting securities are directly or indirectly owned,
controlled, or held with power to vote, by such other Person; (iii) any Person
directly or indirectly controlling, controlled by, or under common control with
such other Person; and (iv) any officer, director or partner of such other
Person. "Control" for the foregoing purposes shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities or
voting interests, by contract or otherwise.
495523.1
"Business Day" means any day other than Saturday, Sunday or a day on which
banking institutions in New York, New York, are required or authorized to be
closed.
"Class A Common Stock" means the Class A Common Stock, par value $.01 per
share, of Pegasus.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"Holders" means the Stockholders or any subsequent holder of Registrable
Securities who acquires them in a transaction permitted by this Agreement.
"Majority in Interest" means Holders holding in the aggregate a majority of
the total number of Registrable Securities held by the Holders at the relevant
time.
"Market Price" means, with reference to the Class A Common Stock on any
day, the average of the Quoted Prices of the Class A Common Stock for 30
consecutive trading days commencing 45 trading days before the day in question.
The "Quoted Price" of the Class A Common Stock means the last reported sales
price of the Class A Common Stock as reported by the Nasdaq National Market or,
if the Class A Common Stock is listed on a securities exchange, the last
reported sales price of the Class A Common Stock on such exchange, which shall
be for consolidated trading if applicable to such exchange, or, if not so
reported or listed, the last reported bid price of the Class A Common Stock. In
the absence of one or more such quotations, the Board of Directors of Pegasus
shall determine the current market price on such basis as it in good faith
considers appropriate.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Prospectus" means the Prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.
"Registrable Securities" means any shares of Class A Common Stock, but with
respect to any such share, only until such time as such share (i) has been
effectively registered under the Securities Act and disposed of in accordance
with the Registration Statement covering it or (ii) may be sold to the public
pursuant to Rule 144 and the legend referred to in Section 4.2 has been removed
or the Company has authorized the removal thereof from the certificate
representing such Share.
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"Registration Statement" means any registration statement of Pegasus filed
pursuant to the Securities Act and which covers any of the Registrable
Securities pursuant to the provisions of this Agreement, including the
Prospectus amendments and supplements to such Registration Statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such Registration Statement.
"Rule 144" means Rule 144 under the Securities Act or any similar provision
in effect at the relevant time.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Subject Securities" mean Class A Common Stock or securities convertible
into or exchangeable for, or options or warrants to purchase, Class A Common
Stock.
1.2 Other Definitions. The following terms shall, when used in this
Agreement, have the meanings assigned such terms in the Sections indicated:
Term Section
"Agreement".............................................................Preamble
"Application"..........................................................2.9(a)(i)
"Merger Agreement"......................................................Recitals
"Merger Sub"............................................................Recitals
"Pegasus"...............................................................Preamble
"Registration"........................... ...................................2.1
"Registration Expenses"......................................................2.8
"Stockholders"..........................................................Preamble
"Viewstar"..............................................................Recitals
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ARTICLE II
REGISTRATION RIGHTS
2.1 Right to Piggyback. Whenever Pegasus proposes to register any Subject
Securities under the Securities Act and the registration form to be used may be
used for the registration of the Registrable Securities (other than a
registration statement on form S-4 or S-8 or any similar successor forms)
("Registration"), Pegasus shall give written notice to all Holders at least 20
days prior to the anticipated filing date, of its intention to effect such a
Registration, which notice will specify (to the extent known to Pegasus) the
proposed offering price, the kind and number of securities proposed to be
registered, the distribution arrangements and such other information that at the
time would be appropriate to include in such notice, and shall, subject to
Section 2.2, include in such Registration, all Registrable Securities with
respect to which Pegasus has received written requests for inclusion therein
within 5 days after the effectiveness of the Pegasus' notice; provided, however,
that if, at any time after giving written notice of its intention to register
any securities and prior to the effective date of the Registration Statement
filed in connection with such securities, Pegasus shall determine for any reason
not to register or to delay registration of such securities, Pegasus may, at its
election, give written notice of such determination to each Holder and,
thereupon, (i) in the case of a determination not to register, Pegasus shall be
relieved of its obligation to register any Registrable Securities under this
Section 2.1 in connection with such Registration and (ii) in the case of a
determination to delay Registration, Pegasus shall be permitted to delay
registering any Registrable Securities under this Section 2.1 during the period
that the Registration of such other securities is delayed. Pegasus further
agrees to supplement or amend a Registration Statement if required by applicable
laws, rules or regulations or by the instructions applicable to the registration
form used by Pegasus for such Registration Statement. Except as may otherwise be
provided in this Agreement, Registrable Securities with respect to which such
request for registration has been received shall be registered by Pegasus and
offered to the public in a Registration pursuant to this Article II on the terms
and conditions at least as favorable as those applicable to the registration of
Subject Securities to be sold by Pegasus or other selling stockholders.
2.2 Priority of Registrations. If the managing underwriter or underwriters,
if any, advise the Holders in writing that in its or their reasonable opinion
or, in the case of a Registration not being underwritten, Pegasus shall
reasonably determine (and notify the Holders requesting registration of such
determination) that the number or kind of securities proposed to be sold in such
Registration (including Registrable Securities to be included pursuant to
Section 2.1 above) will adversely affect the success of such offering or will
affect the price at which the securities of Pegasus will be sold therein,
Pegasus shall include in such Registration only the number of securities, if
any, which, in the opinion of such underwriter or underwriters, or Pegasus, as
the case may be, can be sold, in the following order of priority: (i) first, the
shares of Subject Securities Pegasus proposes to sell and (ii) second, the
Registrable Securities requested to be included in such registration by the
Holders or any other Person or entity granted similar registration rights before
or after the date hereof. To the extent that the privilege of including
495523.1
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Registratrable Securities in any Registration must be allocated pursuant to this
Section 2.2, the allocation shall be made pro rata based on the number of
securities that each such participant shall be made pro rata based on the number
of securities that each such participant shall have requested to be included
therein.
2.3 Demand Registration.
(a) At any time after nine months from the date of this Agreement, a
Majority in Interest may request in writing that Pegasus cause a Registration
Statement to be filed under the Securities Act with respect to such of their
Registrable Securities as they shall specify in such request. Pegasus shall
promptly give written notice of such request to the other Holders and afford
them the opportunity of including in the requested Registration Statement such
of their Registrable Securities as they shall specify in a written notice given
to Pegasus within thirty (30) days after their receipt of Pegasus' notice of the
request for the filing of a Registration Statement. Following receipt of such
notices, Pegasus shall promptly use its best efforts to cause all Registrable
Securities with respect to which Holders shall have so requested registration to
be registered under the Securities Act, all to the extent required to permit the
sale or other disposition by the Holders of the Registrable Securities so
registered in the manner contemplated by such Holders. Pegasus shall use its
reasonable best efforts to keep such demand Registration Statement effective for
a period of 180 days.
(b) Pegasus shall not be required to file and cause to become effective
more than one (1) Registration Statement at the demand of the Holders made under
this Section 2.3.
(c) Provided Pegasus has honored its obligations under Section 2.1, no
demand registration right granted in this Section 2.3 may be exercised during
any period of time beginning on the date Pegasus delivers notice to the Holders
of its intention to file a Registration Statement with the Commission within 60
days of the date of the notice registering any of its Subject Securities for
sale to the public pursuant to Section 2.1 and ending on the earlier to occur of
(i) 180 days after the date on which the Registration Statement is declared
effective by the Securities and Exchange Commission or otherwise becomes
effective or (ii) the 90th day after the date Pegasus delivers its notice of
filing to the Holders pursuant to Section 2.1 if no filing is made or (iii) the
abandonment by Pegasus of the offering; provided, however, that this Section
2.3(c) shall not apply with respect to any Registration Statement that the
Holders decline to participate in pursuant to Section 2.1 which Registration
Statement becomes effective before December 31, 1998.
2.4 Form S-3 Registration. In addition to the rights provided to the
Holders in Sections 2.1 and 2.3, if Xxxxx is no longer a director or Affiliate
of Pegasus then, provided the registration of Registrable Securities under the
Securities Act can be effected on Form S-3 (or any similar form promulgated by
the Commission), Xxxxx may request in writing that Pegasus cause a Registration
Statement on Form S-3 to be filed under the Securities Act with respect to such
of his Registrable Securities as he shall specify in such request. Pegasus shall
promptly give written notice of such request to the other Holders and afford
them the opportunity of including
495523.1
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in the requested registration statement on Form S-3 such of their Registrable
Securities as they shall specify in a written notice given to Pegasus within
thirty (30) days after their receipt of Pegasus' notice of the request for the
filing of a Registration Statement on Form S-3. Following receipt of such
notices, Pegasus shall promptly use its best efforts to cause all Registrable
Securities with respect to which Holders shall have so requested registration to
be registered on Form S-3 under the 1933 Act, all to the extent required to
permit the sale or other disposition by Holders of the Registrable Securities so
registered in the manner contemplated by such Holders. Pegasus shall not be
required to file and cause to become effective more than one (1) Registration
Statement on Form S-3 pursuant to this Section 2.4. Pegasus shall use its
reasonable best efforts to keep such Form S-3 Registration Statement effective
for a period of 180 days.
2.5 Registration Procedures. With respect to any Registration, Pegasus
shall, subject to Section 2.2 above, as expeditiously as practicable:
(a) prepare and file with the Commission a Registration Statement or
Registration Statements relating to the applicable Registration on any
appropriate form under the Securities Act, which form shall be available for the
sale of the Registrable Securities in accordance with the intended method or
methods of distribution thereof;
(b) prepare and file with the Commission such amendments and post-effective
amendments to the Registration Statement as may be necessary to keep each
Registration Statement effective for the applicable period of distribution
contemplated in the Registration Statement, or such shorter period which will
terminate when all Registrable Securities covered by such Registration Statement
have been sold; cause each Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act; and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(c) notify the Holders of Registrable Securities included in the
Registration promptly, and (if requested by any such person or entity) confirm
such advice in writing, (i) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information, (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by Pegasus of any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threat of any proceeding for such purpose; and
(v) of the happening of any event which makes any statement made in the
Registration Statement, the Prospectus or any document
495523.1
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incorporated therein by reference untrue or which requires the making of any
changes in the Registration Statement, the Prospectus or any document
incorporated therein by reference in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(d) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement;
(e) furnish to each selling Holder of Registrable Securities, without
charge, at least one copy of the Registration Statement and any amendment
thereto, including financial statements and schedules, and all documents
incorporated therein by reference;
(f) deliver to each selling Holder of Registrable Securities as many copies
of the Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such selling Holder of Registrable Securities may
reasonably request;
(g) prior to any public offering of Registrable Securities, register or
qualify such Registrable Securities for offer and sale under the securities or
"blue sky" laws of such jurisdictions as the selling Holders of Registrable
Securities reasonably request in writing, considering the amount of Registrable
Securities proposed to be sold in each such jurisdiction, and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statement; provided, however, that Pegasus shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject;
(h) use its best efforts to cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof, if any, to consummate the disposition of such
Registrable Securities;
(i) upon the occurrence of any event contemplated by Section 2.5(c)(v),
prepare a supplement or post-effective amendment, which addresses the event
referenced above, to the Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required document;
provided that Pegasus may elect to suspend or abandon the Registration in such
event;
(j) cause all Registrable Securities covered by any Registration Statement
to be listed on each securities exchange or quotation system on which similar
securities issued by Pegasus are then listed; and
(k) provide a CUSIP number for all Registrable Securities, not later than
the effective date of the applicable Registration Statement.
495523.1
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Pegasus may require that each selling Holder of Registrable Securities
furnish to Pegasus such information regarding the proposed distribution of such
securities as Pegasus may from time to time reasonably request in writing.
Each selling Holder of Registrable Securities agrees that upon receipt
of any notice from Pegasus of the happening of any event of the kind described
in Section 2.5(c)(v), such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement until such
Holder's receipt of copies of the supplemented or amended Prospectus, as
contemplated by Section 2.5(i), or until it is advised in writing by Pegasus
that the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus, and, if so directed by Pegasus, such Holder will deliver to Pegasus
all copies, other than permanent file copies, then in such Holder's possession
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice.
2.6 Selection of Underwriters. If any Registration is an underwritten
offering, Pegasus shall have the right to select the underwriters and managing
underwriters(s) of the offering.
2.7 Restrictions on Public Sale. To the extent not inconsistent with
applicable law and unless otherwise advised by Pegasus or the underwriter(s) for
the Registrable Securities, each Holder whose Registrable Securities are
included in a Registration Statement hereunder agrees not to effect any public
sale or distribution of Registrable Securities, including a sale pursuant to
Rule 144, during the 15 business days prior to, and during the 180-day period
(or such shorter period as shall be approved by the underwriter(s)) beginning on
the effective date of a Registration Statement other than pursuant to the
Registration.
2.8 Registration Expenses. The term "Registration Expenses" as used herein
means all expenses incident and specifically attributable to Pegasus's
performance of or compliance with Article II of this Agreement, including,
without limitation, all registration and filing fees, the fees and expenses of
the counsel and accountants for Pegasus (including the expenses of any "comfort"
letters and special audits), as well as the fees and expenses of the counsel and
accountants to the selling Holders of Registrable Securities, all other costs
and expenses of Pegasus incident to the preparation, printing and filing under
the Securities Act of the Registration Statement (and all amendments and
supplements thereto) and furnishing copies thereof and of the Prospectus
included therein, the costs and expenses incurred by Pegasus in connection with
the qualification of the Registrable Securities under the state securities or
"blue sky" laws of various jurisdictions, the costs and expenses associated with
filings required to be made with the NASD (including, if applicable, the fees
and expenses of any "qualified independent underwriter" and its counsel as may
be required by the rules and regulations of the NASD), the costs and expenses of
listing the Registrable Securities for trading on a national securities exchange
or authorizing them for trading on the Nasdaq National Market, underwriters'
commissions, brokerage fees, transfer taxes and all other costs and expenses
incurred by Pegasus in connection with the inclusion of Registrable Securities
in any Registration hereunder. All Registration Expenses attributable to
Pegasus' performance of or compliance with Sections 2.3 and 2.4 of this
Agreement shall be borne by the
495523.1
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Selling Holders of Registrable Securities on a pro rata basis, whereas, in
connection with a Registration pursuant to Section 2.1, each selling Holder
participating in such Registration shall only bear his pro rata portion of the
Registration Expenses attributable to his Registrable Securities.
2.9 Indemnification.
(a) Pegasus agrees to indemnify and hold harmless each selling Holder, each
of its directors and officers and each person who controls such Holder within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, against any losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act or the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
i. any untrue statement or alleged untrue statement of any material
fact contained in (A) any Registration Statement or Prospectus or any amendment
or supplement thereto or (B) any application or other document, or any amendment
or supplement thereto, executed by Pegasus or based upon written information
furnished by or on behalf of Pegasus filed in any jurisdiction in order to
qualify Registrable Securities under the securities or blue sky laws thereof or
filed with the Commission or any securities association or securities exchange
(each an "Application"); or
ii. the omission or alleged omission to state in any Registration
Statement or Prospectus or any amendment or supplement thereto or any
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading,
and shall reimburse each indemnified person for any legal or
other expenses reasonably incurred by each indemnified person in connection with
investigating and defending against any such loss, claim, damage, liability or
action; provided, however, that Pegasus shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement or Prospectus or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with information relating to such Holder that was furnished to
Pegasus by such Holder specifically for use therein. Pegasus shall not, without
the prior written consent of any such Person, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder, unless
such settlement, compromise or consent includes a release of such Person and
such directors, officers or controlling persons from all liability arising out
of such claim, action, suit or proceeding.
(b) Each Holder whose Registrable Securities are included in a Registration
agrees to indemnify and hold harmless Pegasus, each of its directors and
officers and each person who controls Pegasus within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities to which Pegasus or any such
495523.1
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director or officer or controlling person may become subject under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement or Prospectus or any amendment or
supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in any
Registration Statement or Prospectus or any amendment or supplement thereto, or
any Application necessary to make the statements therein not misleading, in each
case to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
information relating to such Holder that was furnished to Pegasus by such Holder
in writing specifically for use in such Registration Statement; and will
reimburse any legal or other expenses reasonably incurred by Pegasus or any such
director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or any action in respect
thereof.
(c) Promptly after receipt by an indemnified party under this Section 2.9
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 2.9, notify the indemnifying party of the commencement thereof. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
based on the advice of counsel that there may be one or more legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action the
indemnifying party will not be liable to such indemnified party under this
Section 2.9 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding
sentence or (ii) the indemnifying party does not promptly retain counsel
reasonably satisfactory to the indemnified party or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. After such notice from the indemnifying party
to such indemnified party, the indemnifying party shall not be liable for the
costs and expenses of any settlement of such action effected by such indemnified
party without the consent of the indemnifying party.
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ARTICLE III
RULE 144
Pegasus agrees that it shall file in a timely manner all reports
required to be filed by it pursuant to the Securities Act and the Exchange Act
and shall take such further action as any Holder may reasonably request in order
that such Holder may effect sales of Registrable Securities pursuant to Rule 144
under the Securities Act. At any reasonable time and upon request of a Holder,
Pegasus shall furnish such Holder and others with such information as may be
necessary to enable the Holder to effect sales of Registrable Securities
pursuant to Rule 144 and shall deliver to such Holder a written statement as to
whether Pegasus has complied with such requirements. Notwithstanding the
foregoing, Pegasus may deregister any class of its equity securities under
Section 12 of the Exchange Act or suspend its duty to file reports with respect
to any class of its securities under Section 12 of the Exchange Act or suspend
its duty to file reports with respect to any class of its securities pursuant to
Section 15(d) of the Exchange Act if it is then permitted to do so pursuant to
the Exchange Act.
ARTICLE IV
TRANSFER RESTRICTIONS
4.1 Restrictions. The Stockholders will not sell, assign or otherwise
transfer any shares of Class A Common Stock or any interest (including a
security interest) therein except as permitted by Section 3.23 of the Merger
Agreement (which is incorporated herein by reference) or as otherwise permitted
herein. Notwithstanding anything to the contrary contained herein, Xxxxx shall
not sell, assign or otherwise transfer any shares of Class A Common Stock for a
period of nine months from the date of this Agreement without Pegasus' consent,
except pursuant to the exercise of his piggyback rights under Section 2.1.
4.2 Legends. The Parties agree that each certificate representing the
shares of Class A Common Stock shall bear the following legend until such time
as the same is no longer applicable:
"THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAW AND MAY NOT BE OFFERED, SOLD, PLEDGED,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OR AN APPLICABLE EXEMPTION FROM
REGISTRATION.
THE SECURITY EVIDENCED HEREBY IS ENTITLED TO THE BENEFITS AND
SUBJECT TO THE RESTRICTIONS OF A STOCKHOLDERS' AGREEMENT DATED
AS OF NOVEMBER 7, 1997,
495523.1
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AMONG PEGASUS COMMUNICATIONS CORPORATION AND CERTAIN OF ITS
CORPORATION AND CERTAIN OF ITS SECURITY HOLDERS, A COPY OF
WHICH WILL BE FURNISHED TO THE REGISTERED HOLDER HEREOF
WITHOUT CHARGE BY PEGASUS UPON WRITTEN REQUEST."
ARTICLE V
MISCELLANEOUS
5.1 Notices. Any notices and other communications required or permitted
hereunder shall be in writing and shall be effective upon delivery by hand or
upon receipt if sent by certified or registered mail (postage prepaid and return
receipt requested) or by a nationally recognized overnight courier service
(appropriately marked for overnight delivery) or upon transmission if sent by
telex or facsimile (with request for immediate confirmation of receipt in a
manner customary for communications of such respective type and with physical
delivery of the communication being made by one or the other means specified in
this Section 6.1 as promptly as practicable thereafter). Notices shall be
addressed as follows:
(a) If to Pegasus:
c/o Pegasus Communications Management Company
5 Radnor Corporate Center
000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Xx. Xxxxxxxx X. Xxxxx
(with a copy to Xxx X. Lodge at the same address)
(b) If to Xxxxx, to:
Xxxxxx X. Xxxxx
000 Xxx Xxxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
with a copy to:
Xxxxxx, Golden & Xxxxxxx, LLP
2800 One Atlantic Center
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Xx., Esq.
Telecopier: 000-000-0000
(c) If to Xxxxxxx, to:
495523.1
00
Xxxxxxx X. Xxxxxxx
0000-X Xxxxx Xxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
(d) If to Holders of Registrable Securities, if any,
(other than the Stockholders), to their respective
addresses appearing on the stock transfer agent's
register.
Any Party may change the address to which notices are required to be sent by
giving notice of such change in the manner provided in this Section.
5.2 FCC Compliance. Notwithstanding anything to the contrary contained
herein, the Parties recognize that a holder of Registrable Securities may be
restricted from the exercise of certain rights contained herein, including, but
not limited to, the right to transfer the Registrable Securities, if such
exercise would constitute a violation of, or cause Pegasus to not be in
compliance with, the Communications Act of 1934, as amended, or applicable
Federal Communications Commission rules, regulations or policies, including, but
not limited to, those restricting alien ownership (the "FCC Rules"), and
accordingly, the Parties shall act hereunder in compliance with FCC Rules.
5.3 Amendments and Waivers. The provisions of this Agreement may only be
amended, modified or supplemented, and waivers of or consents to departures from
the provisions hereof may only be given if approved by the Parties in writing.
No action taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any Party, shall be deemed to constitute a
waiver by the Party taking such action. The waiver by any Party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any preceding or succeeding breach and no failure by any Party to
exercise any right or privilege hereunder shall be deemed a waiver of such
Party's rights or privileges hereunder or shall be deemed a waiver of such
Party's rights to exercise the same at any subsequent time or times hereunder.
5.4 Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Parties and their respective successors and assigns,
including, without limitation, subsequent holders of Registrable Securities,
except that no subsequent holder to whom Registrable Securities shall have been
transferred in violation of this Agreement shall be entitled to any benefit
hereunder.
5.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same instrument.
5.6 Headings. The headings in this Agreement are for convenience of
reference only and shall not affect the meaning of any provision of this
Agreement.
495523.1
13
5.7 Governing Law. The validity, performance, construction and effect of
this Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania applicable to agreements made and to be
performed therein. The parties hereto agree to submit to the jurisdiction of the
courts of the Commonwealth of Pennsylvania in any action or proceeding arising
out of or relating to this Agreement.
5.8 Severability. If any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
5.9 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings other than those set forth or referred to herein with
respect to the governance and registration rights granted by Pegasus to Holders
or with respect to restrictions on transferability of Registrable Securities.
This Agreement supersedes all prior agreements and understandings between the
Parties with respect to such subject matter.
IN WITNESS WHEREOF, the Parties hereto have duly executed this
Agreement as of the day and year first above written.
PEGASUS COMMUNICATIONS CORPORATION
By: /s/ Xxx X. Lodge, Senior Vice President
---------------------------------------
Xxx X. Lodge, Senior Vice President
/s/ Xxxxxx X. Xxxxx
---------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxx
495523.1
14
