Exhibit 1.1
4,714,200 Shares
PEGASUS COMMUNICATIONS CORPORATION
Class A Common Stock
UNDERWRITING AGREEMENT
----------------------
March __, 1999
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
X.X. XXXXXXXXX, TOWBIN
ING BARING XXXXXX XXXX LLC
As representatives of the several Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Pegasus Communications Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters"), and certain stockholders of the Company
named in Schedule II hereto (the "Selling Stockholders") severally propose to
sell to the several Underwriters, an aggregate of 4,714,200 shares of the Class
A Common Stock, par value $.01 per share, of the Company (the "Firm Shares"), of
which 3,000,000 shares are to be issued and sold by the Company and 1,714,200
shares are to be sold by the Selling Stockholders, each Selling Stockholder
selling the amount set forth opposite such Selling Stockholder's name in
Schedule II hereto. The Company also proposes to issue and sell to the several
Underwriters not more than an additional 707,130 shares of its Class A Common
Stock, par value $.01 per share (the "Additional Shares"), if requested by the
Underwriters as provided in Section 2 hereof. The Firm Shares and the Additional
Shares are hereinafter referred to collectively as the "Shares." The shares of
Class A Common Stock, par value $.01 per share, of the Company to be outstanding
after giving effect to the sales contemplated hereby are hereinafter referred to
as the "Class A Common Stock." The Company and the Selling Stockholders are
hereinafter sometimes referred to collectively as the "Sellers."
Prior to the offering of the Firm Shares (the "Offering"), the Company
has entered into (i) letters of intent and/or definitive agreements referred to
in the Registration Statement and
Prospectus (each as defined below) (the "DBS Acquisition Agreements") as
described in the Registration Statement and Prospectus pursuant to which the
Company and/or its subsidiaries shall acquire (the "DBS Acquisitions") the right
to distribute video, audio and data services provided via satellite by DIRECTV
Enterprises, Inc. ("DIRECTV") and related assets from providers of DIRECTV
services and (ii) an agreement (the "Cable Purchase Agreement" and, together
with the DBS Acquisition Agreements, the "Acquisition Agreements") as described
in the Registration Statement and Prospectus pursuant to which the Company shall
acquire (the "Cable Acquisition" and, together with the DBS Acquisitions, the
"Acquisitions") a cable system serving Aguadilla, Puerto Rico and neighboring
communities.
Section 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the " Securities Act"), a registration statement on Form S-3,
including a prospectus, relating to the Shares. The registration statement, as
amended at the time it became effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act, is hereinafter referred to as
the "Registration Statement"; and the prospectus in the form first used to
confirm sales of Shares is hereinafter referred to as the "Prospectus"
(including, in the case of all references to the Registration Statement and the
Prospectus, documents incorporated by reference therein). If the Company has
filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Securities Act registering
additional shares of Class A Common Stock (a "Rule 462(b) Registration
Statement"), then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. The terms "supplement" and "amendment" or "amend" as
used in this Agreement with respect to the Registration Statement or the
Prospectus shall include all documents subsequently filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Exchange Act") that are deemed to be incorporated by reference in the
Prospectus.
Section 2. Agreements to Sell and Purchase and Lock-Up Agreements . On
the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, (i) the Company agrees to issue and sell
3,000,000 Firm Shares, (ii) each Selling Stockholder agrees, severally and not
jointly, to sell the number of Firm Shares set forth opposite such Selling
Stockholder's name in Schedule II hereto and (iii) each Underwriter agrees,
severally and not jointly, to purchase from each Seller at a price per Share of
$______ (the "Purchase Price") the number of Firm Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Firm Shares to be sold by such Seller as
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedules I hereto bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, up to an aggregate of
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707,130 Additional Shares from the Company at the Purchase Price. Additional
Shares may be purchased solely for the purpose of covering over-allotments made
in connection with the offering of the Firm Shares. The Underwriters may
exercise their right to purchase Additional Shares in whole or in part from time
to time by giving written notice thereof to the Company within 30 days after the
date of this Agreement. You shall give any such notice on behalf of the
Underwriters and such notice shall specify the aggregate number of Additional
Shares to be purchased pursuant to such exercise and the date for payment and
delivery thereof, which date shall be a business day (i) no earlier than two
business days after such notice has been given (and, in any event, no earlier
than the Closing Date (as hereinafter defined)) and (ii) no later than ten
business days after such notice has been given. If any Additional Shares are to
be purchased, each Underwriter, severally and not jointly, agrees to purchase
from the Company the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) which bears the same
proportion to the total number of Additional Shares to be purchased from the
Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I bears to the total number of Firm Shares.
Each Seller, with the exception of Xxxxxxx X. Xxxxx, hereby agrees not
to (i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Class A Common Stock or other capital stock of the
Company ("Common Stock") or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers all or a portion of the economic consequences associated with the
ownership of any Common Stock (regardless of whether any of the transactions
described in clause (i) or (ii) is to be settled by the delivery of Common
Stock, or such other securities, in cash or otherwise), except to the
Underwriters pursuant to this Agreement, for a period of 120 days (90 days, in
the case of Xxxxxxx X. Xxxxx) after the date of the Prospectus without the prior
written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation.
Concurrently, the non-selling stockholders, Xxxxxx Communications Corp.
("Xxxxxx"), Xxxxxxx Equity Partners, L.P. ("Whitney"), Fleet Venture Resources,
Inc., Fleet Equity Partners IV, L.P., Xxxxxxx Partners III, L.P. and Xxxxxxx
Plaza Partners (collectively, "Fleet"), have agreed not to participate in any of
the transactions described in clause (i) and (ii) above (regardless of whether
any of the transactions described in clauses (i) or (ii) above is to be settled
by the delivery of Common Stock, or such other securities, in cash or
otherwise), for a period of 120 days in the case of Xxxxxx and 90 days in the
case of Whitney and Fleet. Notwithstanding the foregoing, during such period (i)
the Company may grant stock options pursuant to the Company's existing stock
option plan; (ii) the Company may issue shares of Common Stock upon the exercise
of an option or warrant or the conversion of a security outstanding on the date
hereof; (iii) the Company may issue shares of Common Stock or securities,
convertible into or exercisable or exchangeable for its Common Stock, or issue
other equity securities of the Company or enter into agreements with respect to
any of the foregoing, in connection with any acquisition by the Company or any
of its Subsidiaries or any merger involving the Company or any of its
Subsidiaries, provided that the recipient of such securities pursuant to such
acquisition or merger shall agree in writing to not enter into any transaction
described in clause (i) or (ii) of the first sentence of this paragraph until
the day that is 120 days after the Closing Date without the consent of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, as representative to the
Underwriters; (iv) any person signing an agreement pursuant to this Section
shall be permitted to make gifts and other private transfers for estate planning
purposes, provided that the
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transferee agrees to be bound by the provisions of this Agreement for the
remainder of its term; and (v) the Company may issue shares in connection with
its restricted stock plan and 401(k) plan. The Company also agrees not to file
any registration statement with respect to any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock for
a period of 120 days (90 days, in the case of registration statements filed on
behalf of Whitney or Fleet) after the date of the Prospectus without the prior
written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, provided
that the Company may file a registration statement on Form S-4 or S-8 in
connection with an acquisition or merger or benefit plan as described in the
immediately preceding sentence. In addition, each of the Selling Stockholders
and Xxxxxx, with the exception of Xxxxxxx X. Xxxxx, and Xxxxxxx and Fleet agrees
that, for a period of 120 days (90 days, in the case of Whitney and Fleet) after
the date of the Prospectus without the prior written consent of Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation, it will not make any demand for, or
exercise any right with respect to, the registration of any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock. The Company shall, prior to or concurrently with the execution of
this Agreement, deliver an agreement executed by (i) each Selling Stockholder,
with the exception of Xxxxxxx X. Xxxxx, (ii) each of the directors and officers
of the Company who is not a Selling Stockholder and (iii) each stockholder
listed on Annex I hereto to the effect that such person will not, during the
period commencing on the date such person signs such agreement and ending 120
days (90 days in the case of Whitney and Fleet) after the date of the
Prospectus, without the prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Corporation, (A) engage in any of the transactions described in the first
sentence of this paragraph or (B) make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
Section 3. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
Section 4. Delivery and Payment. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
shall request no later than two business days prior to the Closing Date or the
applicable Option Closing Date (as defined below), as the case may be. The
Shares shall be delivered by or on behalf of the Sellers, with any transfer
taxes thereon duly paid by the respective Sellers, to Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation through the facilities of The Depository Trust
Company ("DTC"), for the respective accounts of the several Underwriters,
against payment to the Sellers of the Purchase Price therefor by wire transfer
of Federal or other funds immediately available in New York City. The
certificates representing the Shares shall be made available for inspection not
later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be, at the
office of DTC or its designated custodian (the "Designated Office"). The time
and date of delivery and payment for the Firm Shares shall be 9:00 A.M., New
York City time, on March __, 1999 or such other time on the same or such other
date as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and the Company
shall agree in writing. The time and date of delivery and payment for the Firm
Shares are hereinafter referred
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to as the "Closing Date." The time and date of delivery and payment for any
Additional Shares to be purchased by the Underwriters shall be 9:00 A.M.,
New York City time, on the date specified in the applicable exercise notice
given by you pursuant to Section 2 or such other time on the same or such other
date as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and the Company
shall agree in writing. The time and date of delivery and payment for any
Additional Shares are hereinafter referred to as the "Option Closing Date."
The documents to be delivered on the Closing Date or any Option Closing Date on
behalf of the parties hereto pursuant to Section 9 of this Agreement shall be
delivered at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, and the Shares shall be delivered at the Designated Office, all on
the Closing Date or such Option Closing Date, as the case may be.
Section 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, (iii) when any amendment to the
Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become effective and
(v) of the happening of any event during the period referred to in Section 5(d)
below which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish to you five signed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and to furnish to you and each Underwriter designated by
you such number of conformed copies of the Registration Statement as so filed
and of each amendment to it, without exhibits but including documents
incorporated therein by reference, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which
shall be reasonably satisfactory to you, and to file the Prospectus in such form
with the Commission within the applicable period specified in Rule 424(b) under
the Securities Act; during the period specified in Section 5(d) below, not to
file any further amendment to the Registration Statement and not to make any
amendment or supplement to the Prospectus of which you shall not previously have
been advised or to which you shall reasonably object after being so advised;
and, during such period, to prepare and file with the Commission, promptly upon
your reasonable request, any amendment to the Registration Statement or
amendment or supplement to the Prospectus which may be necessary or advisable in
connection with the distribution of the Shares by you, and to use its best
efforts to cause any such amendment to the Registration Statement to become
promptly effective.
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(d) Prior to 10:00 A.M., New York City time, on the first
business day after the date of this Agreement and from time to time thereafter
for such period as in the opinion of counsel for the Underwriters a prospectus
is required by law to be delivered in connection with sales by an Underwriter or
a dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
and any documents incorporated therein by reference as such Underwriter or
dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to prepare
and file with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with applicable
law, and to furnish to each Underwriter and to any dealer as many copies thereof
as such Underwriter or dealer may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Shares, in
any jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its stockholders as
soon as reasonably practicable an earnings statement covering the a period
ending March 31, 2000 that shall satisfy the provisions of Section 11(a) of the
Securities Act, and to advise you in writing when such statement has been so
made available.
(h) During the period of three years after the date of this
Agreement, to furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed and such other publicly available
information concerning the Company and its subsidiaries as you may reasonably
request.
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(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the Sellers' obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel, the Company's accountants and any Selling Stockholder's
counsel (in addition to the Company's counsel) in connection with the
registration and delivery of the Shares under the Securities Act and all other
fees and expenses in connection with the preparation, printing, filing and
distribution of the Registration Statement (including financial statements and
exhibits), any preliminary prospectus, the Prospectus and all amendments and
supplements to any of the foregoing, including the mailing and delivering of
copies thereof to the Underwriters and dealers in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Shares to the Underwriters, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement and any other
agreements or documents in connection with the offering, purchase, sale or
delivery of the Shares, (iv) all expenses in connection with the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for the
Underwriters in connection with such registration or qualification and memoranda
relating thereto), (v) the filing fees and disbursements of counsel for the
Underwriters in connection with the review and clearance of the offering of the
Shares by the National Association of Securities Dealers, Inc., (vi) all costs
and expenses incident to the listing of the Shares on the Nasdaq National
Market, (vii) the cost of printing certificates representing the Shares, (viii)
the costs and charges of any transfer agent, registrar and/or depository and
(ix) all other costs and expenses incident to the performance of the obligations
of the Company and the Selling Stockholders hereunder for which provision is not
otherwise made in this Section. The provisions of this Section shall not
supersede or otherwise affect any agreement that the Company and the Selling
Stockholders may otherwise have for allocation of such expenses among
themselves.
(j) To use its best efforts to list for quotation the Shares on
the Nasdaq National Market and to maintain the listing of the Shares on the
Nasdaq National Market for a period of three years after the date of this
Agreement.
(k) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date or any Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the Shares.
Section 6. Representations and Warranties of the Company and
Significant Subsidiaries. The Company and each Significant Subsidiary (as
defined below) represent and warrant to each Underwriter that:
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(a) The Registration Statement has become effective (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act; (ii)
the Registration Statement (other than any Rule 462(b) Registration Statement to
be filed by the Company after the effectiveness of this Agreement), when it
became effective, did not contain and, as amended, if applicable, will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement) and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act, (iv)
if the Company is required to file a Rule 462(b) Registration Statement after
the effectiveness of this Agreement, such Rule 462(b) Registration Statement and
any amendments thereto, when they become effective (A) will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading and
(B) will comply in all material respects with the Securities Act and (v) the
Prospectus does not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Securities Act, complied when so filed
in all material respects with the Securities Act, and did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in any preliminary prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(d) The Company is duly organized and validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, has all requisite corporate power and authority to carry on its
business as it is currently being conducted and as described in the Registration
Statement and the Prospectus and to own, lease and operate its properties, and
is duly qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified or in good standing would not, singly or in the
aggregate, have a Material Adverse Effect (as defined below).
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(e) All the outstanding shares of capital stock or other
securities evidencing equity ownership of the Company (including the shares to
be sold by the Selling Stockholders) are duly authorized and validly issued and
are fully paid, non-assessable and not subject to any preemptive or similar
rights. The Shares to be issued and sold by the Company hereunder have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor as provided in this Agreement, will have been validly issued and will
be fully paid and non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights. The Shares to be sold by such
Selling Stockholder have been duly authorized and are validly issued, fully paid
and non-assessable. The authorized, issued and outstanding stock of the Company
will be, after giving effect to the consummation of this Offering, as set forth
in the Registration Statement and the Prospectus. After giving effect to the
Offering and the application of the proceeds thereof as described in the
Registration Statement and the Prospectus under the caption "Use of Proceeds,"
the Company's consolidated capitalization as of December 31, 1998 would have
been as set forth under the "Pro Forma" column under the caption
"Capitalization." The table under the caption "Capitalization" sets forth and
identifies in reasonable detail all outstanding short-term and long-term
indebtedness of the Company and its Subsidiaries, on a consolidated basis, prior
to and after giving effect to the Offering. The authorized capital stock of the
Company, including the Shares, conforms as to legal matters to the description
thereof contained in the Registration Statement and the Prospectus. Except as
set forth in the Registration Statement and the Prospectus, there are no
outstanding subscriptions, rights, warrants, options, calls, convertible
securities, commitments of sale or liens granted or issued by the Company or any
of the Subsidiaries relating to or entitling any person to purchase or otherwise
to acquire any shares of the capital stock of the Company or any of the
Subsidiaries.
(f) The Company's direct and indirect subsidiaries
(collectively, the "Subsidiaries") and each of the Company's "significant
subsidiaries" (as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof) (the "Significant Subsidiaries"), other than Digital Television
Services, Inc., are set forth in Schedule III hereto under the captions
"Subsidiaries" and "Significant Subsidiaries," respectively. Each Subsidiary is
duly organized and validly existing as a corporation or partnership, as the case
may be, in good standing under the laws of its jurisdiction of incorporation or
organization, as the case may be, except where the failure to be in good
standing would not, singly or in the aggregate, have a Material Adverse Effect
(as defined below), and has all requisite corporate power (in the case of
corporations) or legal capacity (in the case of partnerships) and authority to
carry on its business as it is being conducted and as described in the
Registration Statement and the Prospectus and to own, lease and operate its
properties, and is duly qualified and in good standing as a foreign corporation
or partnership, as the case may be, authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not, singly or in the aggregate, have a Material Adverse Effect.
All of the
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outstanding shares of capital stock and other securities evidencing equity
ownership of each of the Subsidiaries have been duly authorized and validly
issued and are fully paid and (except in the case of general partnership
interests and in the case of limited partnership interests, except to the extent
that the provisions of the applicable limited partnership act requiring partners
to return distributions may be deemed to constitute assessability) nonassessable
and free of any preemptive or similar rights, and are owned by the Company
directly, or indirectly through one of the other Subsidiaries, except for the
shares of Series A Preferred Stock of Pegasus Satellite Television of Virginia
Inc. ("PST VI") held by Xxxxxx-Vision Inc., free and clear of any lien, adverse
claim, security interest or other encumbrance, except as are in effect under the
Credit Agreement, dated as of December 10, 1997 (the "PM&C Credit Facility"), by
and among Pegasus Media & Communications, Inc. ("PM&C"), the several lenders
from time to time party thereto and Bankers Trust Company, as agent for such
lenders, as amended from time to time, and the Second Amended and Restated
Credit Agreement, dated as of July 30, 1997 (the "DTS Credit Facility" and,
together with the PM&C Credit Facility, the "Credit Facilities"), by and among
Digital Television Services, LLC, CIBC Wood Gundy Securities Corp., as arranger,
Xxxxxx Guaranty Trust Company of New York, as syndication agent, Fleet National
Bank, as documentation agent, and Canadian Imperial Bank of Commerce, as
administrative agent, as amended from time to time, and except for the pledge of
the partnership interests of Pegasus Broadcast Associates, L.P.
(g) The Company and each of the Significant Subsidiaries has
all requisite corporate power (in the case of corporations) or legal capacity
(in the case of partnerships) and authority to execute, deliver and perform its
obligations under this Agreement and the Company and each of the Subsidiaries
will have on or prior to the Closing Date the authority to execute, deliver and
perform its obligations under the Acquisition Agreements to which it is a party,
as applicable, and to consummate the transactions contemplated hereby and
thereby, including, without limitation, in the case of the Company, all
requisite corporate power and authority to issue, sell and deliver the Shares,
as provided herein.
(h) This Agreement has been duly and validly authorized,
executed and delivered by each of the Company and the Significant Subsidiaries
and is the legally valid and binding agreement of each of them, enforceable
against each of them in accordance with its terms except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally (including
laws relating to fraudulent transfers or conveyances), by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and, as to rights and limitations of
indemnification and contribution, by federal and state securities laws and
principles of public policy.
(i) Each of the Acquisition Agreements has been duly and
validly authorized, executed and delivered by the Company or the Subsidiary that
is a party thereto and (except as otherwise provided therein) is the legally
valid and binding obligation of the Company or such Subsidiary and is
enforceable against the Company or such Subsidiary in accordance with its terms
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally (including laws relating to fraudulent transfers or
conveyances) and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
10
(j) Neither the Company nor any of the Subsidiaries is (A) in
violation of its charter, bylaws, limited partnership agreement or other
organizational documents or (B) in default in the performance of any material
bond, debenture, note, indenture (including, without limitation, (i) the
indenture governing PM&C's 12 1/2% Series B Senior Subordinated Notes due 2005
(the "PM&C Indenture"), (ii) the indenture governing the Company's 9 5/8% Senior
Notes due 2005 (the "1997 Indenture"), (iii) the indenture governing Digital
Television Services, Inc.'s and DTS Capital, Inc.'s 12 1/2% Senior Subordinated
Notes due 2007 (the "DTS Indenture"), and (iv) the indenture governing the
Company's 9 3/4% Senior Notes due 2006 (the "1998 Indenture")), mortgage, deed
of trust or other agreement or instrument (including, without limitation, the
Company's Certificate of Designation, Preferences and Relative, Participating,
Optional and Other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions Thereof governing its 12.75% Series A Cumulative
Exchangeable Preferred Stock (the "Certificate of Designation")) to which it is
a party or by which it is bound or to which any of its properties is subject, or
(C) in violation in any material respect of any law, statute, rule, regulation,
judgment or court decree applicable to it or any of its assets or properties,
except in the case of clauses (B) and (C), for any violation or default that
would not, singly or in the aggregate, (x) have a material adverse effect on the
assets, liabilities, business, results of operations, condition (financial or
otherwise), cash flows, affairs or prospects of the Company and the
Subsidiaries, taken as a whole, (y) interfere with or adversely affect the
issuance or marketability of the Shares or (z) in any manner draw into question
the validity of this Agreement or the Acquisition Agreements or any of the
transactions contemplated hereby or thereby (any of the events set forth in
clauses (x), (y) or (z), a "Material Adverse Effect"). There exists no condition
that, with notice, the passage of time or otherwise, would constitute a default
under any such document or instrument.
(k) None of (A) the execution, delivery or performance of this
Agreement by the Company or any of the Significant Subsidiaries, (B) the
issuance and sale of the Shares, (C) the execution, delivery or performance of
the Acquisition Agreements by the Company or any of the Subsidiaries, as
applicable, or (D) the transactions contemplated by the this Agreement and the
Acquisition Agreements will violate, conflict with or constitute a breach of any
of the terms or provisions of, or a default under (or an event that with notice
or the lapse of time, or both, would constitute a default), or (except as
contemplated in the second and third sentences of this paragraph) require
consent under, or result in the imposition of a lien or encumbrance on any
properties of the Company or any Subsidiary, or an acceleration of any
indebtedness of the Company or any Subsidiary pursuant to, (i) the charter,
bylaws, limited partnership agreement or other organizational documents of the
Company or any Subsidiary, (ii) any bond, debenture, note, indenture (including,
without limitation, the PM&C Indenture, the 1997 Indenture, the DTS Indenture
and the 1998 Indenture), mortgage, deed of trust or other agreement or
instrument (including, without limitation, the Certificate of Designation) to
which the Company or any Subsidiary is a party or by which any of them or their
respective property is or may be bound, (iii) any statute, rule or regulation
applicable to the Company or any Subsidiary or their respective assets or
properties or (iv) any judgment, order or decree of any court or governmental
11
agency, body or administrative agency or authority having jurisdiction over the
Company, any Subsidiary or their respective assets or properties, except for any
such violation, default, consent, imposition of a lien or acceleration that
would not, in the case of clauses (iii) and (iv), singly or in the aggregate,
have a Material Adverse Effect. No consent, approval, authorization or order of,
or filing, registration, qualification, license or permit of or with, any court
or governmental agency, body or administrative agency or authority is required
for (1) the execution, delivery and performance of this Agreement or the
Acquisition Agreements by the Company and the Subsidiaries, as applicable, (2)
the issuance and sale of the Shares, or (3) the transactions contemplated by
this Agreement or the Acquisition Agreements, except (A) as described above, (B)
such as have been obtained and made in the registration of the Shares under the
Securities Act, (C) such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act, and applicable state
securities laws in connection with the purchase and distribution of the Shares
by the Underwriters, (D) such as may be required by the National Association of
Securities Dealers (the "NASD"), (E) such as are disclosed in the Registration
Statement and the Prospectus and (F) with respect to the Acquisition Agreements,
such as would not, singly or in the aggregate, have a Material Adverse Effect.
Except as described above, no consents or waivers from any other person are
required for the execution, delivery and performance by the Company and the
Subsidiaries, as applicable, of this Agreement or the Acquisition Agreements,
the issuance and sale of the Shares, or the consummation of the transactions
contemplated by this Agreement or the Acquisition Agreements, other than (A)
such consents and waivers as have been obtained and (B) such as are disclosed in
the Registration Statement and Prospectus (including the consents of the
National Rural Telecommunications Cooperative ("NRTC") and DIRECTV with respect
to the DBS Acquisitions).
(l) There is (i) except as otherwise disclosed in the
Registration Statement and the Prospectus, no action, suit, proceeding or
investigation before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending or, to the best knowledge of the
Company and the Subsidiaries, threatened or contemplated to which the Company or
any Subsidiary is or may be a party or to which the business or property of the
Company or any Subsidiary is subject, (ii) except as otherwise disclosed in the
Registration Statement and the Prospectus, no statute, rule, regulation or order
that has been enacted, adopted or issued by any governmental agency or that has
been proposed by any governmental body, (iii) no injunction, restraining order
or order of any nature by a federal or state court or foreign court of competent
jurisdiction to which the Company or any Subsidiary is or may be subject or to
which the business, assets, or property of the Company or any Subsidiary is or
may be subject, issued that, in the case of clauses (i), (ii) and (iii) above,
might, singly or in the aggregate, result in a Material Adverse Effect.
(m) No action has been taken by the Company or any Subsidiary
(or, to the best knowledge of the Company and the Subsidiaries, by any other
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) and no
statute, rule, regulation or order has been enacted, adopted or issued by any
governmental agency that prevents the issuance of the Shares or prevents or
suspends the use of the Prospectus; no injunction, restraining order or order of
any nature by a federal, state or municipal court or any governmental authority
or agency or any other tribunal of competent
12
jurisdiction has been issued that prevents the issuance of the Shares or
prevents or suspends the sale of the Shares in any jurisdiction referred to in
Section 5(f) hereof; and every request of any securities authority or agency of
any jurisdiction for additional information has been complied with in all
material respects.
(n) There is (i) no significant unfair labor practice complaint
pending or, to the best knowledge of the Company and each of the Subsidiaries,
threatened against the Company or any Subsidiary before the National Labor
Relations Board, any state or local labor relations board or any foreign labor
relations board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending or, to the best knowledge of the Company and each of the Subsidiaries,
threatened against the Company or any Subsidiary, (ii) no significant strike,
labor dispute, slowdown or stoppage pending against the Company or any
Subsidiary nor, to the best knowledge of the Company and each of the
Subsidiaries, threatened against the Company or any Subsidiary and (iii) no
union representation question existing with respect to the employees of the
Company or any Subsidiary. To the best knowledge of the Company and each of the
Subsidiaries, no union organizing activities are taking place. Neither the
Company nor any Subsidiary has violated (A) any federal, state or local law,
statute, rule or regulation or foreign law, statute, rule or regulation relating
to discrimination in hiring, promotion or pay of employees, (B) any applicable
wage or hour laws, (C) any provision of the Employee Retirement Income Security
Act of 1974 ("ERISA"), as amended, or the rules and regulations thereunder or
(D) analogous foreign laws, statutes, rules and regulations, which in the case
of clause (A), (B), (C) or (D) above might, singly or in the aggregate, result
in a Material Adverse Effect.
(o) In the ordinary course of its business, the Company and
each Subsidiary conducts periodic reviews of the effect of Environmental Laws
(as defined below) and the disposal of hazardous or toxic substances, wastes,
pollutants and contaminants on the business, assets, operations and properties
of the Company and each Subsidiary, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation, all
material capital and operating expenditures required for clean-up, closure of
properties and compliance with Environmental Laws, all permits, licenses and
approvals, all related constraints on operating activities and all potential
liabilities to third parties). On the basis of such reviews the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a Material Adverse Effect. Neither the Company
nor any Subsidiary has violated any environmental, safety or similar law or
regulation applicable to it or its business or property relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), lacks
any permit, license or other approval required of it under applicable
Environmental Laws or is violating any term or condition of such permit, license
or approval which might, singly or in the aggregate, have a Material Adverse
Effect.
(p) The Company and each Subsidiary has (i) good and marketable
title to all of the properties and assets necessary for the operation of its
business as described in the Registration Statement and the Prospectus as owned
by it, free and clear of all liens, charges, encumbrances and restrictions,
except such as (A) are described in the Registration Statement
13
and the Prospectus, (B) are in effect under the Credit Facilities, or (C) would
not, singly or in the aggregate, have a Material Adverse Effect, (ii) peaceful
and undisturbed possession under all leases to which it is party as lessee
except such as would not, singly or in the aggregate, have a Material Adverse
Effect, (iii) all licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and will have made all declarations and
filings with, all federal, state and local authorities, all self-regulatory
authorities and all courts or governmental agencies, bodies or administrative
agencies or authorities (each an "Authorization") necessary to engage in the
business conducted by it in the manner described in the Registration Statement
and the Prospectus, except where failure to hold such Authorizations would not,
singly or in the aggregate, have a Material Adverse Effect and (iv) no reason to
believe that any governmental body or agency is considering limiting, suspending
or revoking any such Authorization. Except where the failure to be in full force
and effect would not, singly or in the aggregate, have a Material Adverse
Effect, all such Authorizations are valid and in full force and effect. The
Company and each Subsidiary is in compliance in all material respects with the
terms and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with respect
thereto. All material leases to which the Company and each Subsidiary is a party
are valid and binding and no material default by the Company or any such
Subsidiary has occurred and is continuing thereunder and no material defaults by
the landlord are existing under any such lease.
(q) The Company and each Subsidiary owns or has valid and
enforceable licenses to use all material patents, patent rights, licenses,
inventions, copyrights, know-how (including, without limitation, trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade names
(collectively, the "Intellectual Property") employed by it in connection with
the businesses operated by it as described in the Registration Statement and the
Prospectus, and neither the Company nor any Subsidiary has received any notice
of infringement of or conflict with asserted rights of others with respect to
any of the foregoing. To the best knowledge of the Company, the use of the
Intellectual Property in connection with the business and operations of the
Company and the Subsidiaries does not infringe on the rights of any person.
(r) All tax returns required to be filed by the Company and
each Subsidiary, in all jurisdictions, have been so filed, except to the extent
such failure to file would not singly, or in the aggregate, have a Material
Adverse Effect. All taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such entities
or that are due and payable have been paid, other than those being contested in
good faith and for which adequate reserves have been provided or those currently
payable without penalty or interest. There are no material proposed additional
tax assessments against the Company or any Subsidiary or the assets or property
of the Company or any Subsidiary.
(s) None of the Company or the Subsidiaries is an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "Investment Company
Act").
14
(t) There are no holders of securities of the Company or any
Subsidiary who, by reason of the execution by the Company or the Subsidiaries of
this Agreement or any Acquisition Agreement to which any of the Company or any
Subsidiary is a party or the consummation by the Company or the Subsidiaries, as
applicable, of the transactions contemplated hereby and thereby, have the right
to request or demand that the Company or any Subsidiary register under the
Securities Act or analogous foreign laws and regulations securities held by
them, other than as disclosed in the Registration Statement and the Prospectus.
(u) There are no contracts, agreements or understandings
between the Company or any Subsidiary and any other person that would give rise
to a valid claim against the Company, any Subsidiary or any of the Underwriters
for a brokerage commission, finder's fee or like payment in connection with the
issuance, purchase and sale of the Shares.
(v) The Company and each Subsidiary maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect thereto.
(w) The Company and each Subsidiary maintains insurance
covering its properties, operations, personnel and businesses, except where the
failure to do so would not, singly or in the aggregate, have a Material Adverse
Effect. Such insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company, each of the
Subsidiaries and their businesses. Neither the Company nor any Subsidiary has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other expenditures will have to be made in order to
continue such insurance. All such insurance is outstanding and duly in force on
the date hereof.
(x) Neither the Company nor any Subsidiary has taken, directly
or indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of any security of
the Company or any Subsidiary to facilitate the sale or resale of the Shares.
Except as permitted by the Securities Act, none of the Company or any of the
Subsidiaries has distributed the Registration Statement, any preliminary
prospectus, the Prospectus or other offering material in connection with the
offering and sale of the Shares.
(y) Except as (i) described in the Registration Statement and
the Prospectus, (ii) pursuant to the Company's Incentive Program (as defined in
the Registration Statement) and (iii) in connection with the completed DBS
acquisitions as described in the Registration Statement, the Company has not
sold or issued any shares of Common Stock during the six-month period preceding
the date of the Prospectus, including any sales pursuant to Rule 144A or
Regulations D or S under the Securities Act.
(z) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and, except as set
forth or contemplated in the
15
Registration Statement and the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), (A) neither the
Company nor any Subsidiary has (i) issued or granted any securities other than
in connection with the completed DBS acquisitions as described in the
Registration Statement, (ii) incurred any liability or obligation, direct or
contingent other than liabilities and obligations which were incurred in the
ordinary course of business, (iii) entered into any transaction not in the
ordinary course of business; or (iv) declared or paid any dividend on their
capital stock, and (B) there has not been, singly or in the aggregate, any
material adverse change, or any development involving a material adverse change,
in the assets, liabilities, business, results of operations, condition
(financial or otherwise), cash flows, affairs or prospects of the Company and
the Subsidiaries, taken as a whole.
(aa) The accountants who have certified or shall certify the
financial statements included or to be included as part of, or incorporated by
reference in, the Registration Statement and the Prospectus (the "Accountants"),
are independent accountants within the meaning of the Securities Act. The
historical consolidated financial statements and schedules of the Company and
the Subsidiaries and the historical financial statements and schedules of each
of the entities and businesses acquired or to be acquired by the Company and the
Subsidiaries and included in the Prospectus and the Registration Statement
comply as to form in all material respects with the requirements applicable to
registration statements on Form S-3 under the Securities Act and present fairly
the consolidated financial position and results of operations of the Company and
the Subsidiaries and the financial position and results of operations of each of
the entities and businesses acquired or to be acquired by the Company and the
Subsidiaries and included in the Prospectus and the Registration Statement at
the respective dates and for the respective periods indicated. Such financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods presented. The
pro forma financial statements included in the Registration Statement and the
Prospectus have been prepared on a basis consistent with such historical
statements, except for the pro forma adjustments specified therein, and give
effect to assumptions made on a reasonable basis and present fairly the
historical and proposed transactions contemplated by this Agreement and as set
forth in the Prospectus; and such pro forma financial statements comply as to
form in all material respects with the requirements applicable to pro forma
financial statements included in registration statements on Form S-3 under the
Securities Act. The other historical and pro forma financial and statistical
information and data included in the Prospectus and the Registration Statement
are accurately presented in all material respects and prepared on a basis
consistent with the financial statements, historical and pro forma, included in
the Registration Statement, the Prospectus and the books and records of the
Company, the Subsidiaries or the entities or businesses acquired or to be
acquired by the Company and the Subsidiaries included in the Prospectus and the
Registration Statement.
(bb) Neither the Company nor any of the Subsidiaries nor, to
the best knowledge of the Company or any Subsidiary, any employee or agent of
the Company or any of the Subsidiaries has made any payment of funds of the
Company or any of the Subsidiaries or received or retained any funds in
violation of any law, rule or regulation, which payment, receipt or retention of
funds is of a character required to be disclosed in the Registration Statement
and the Prospectus.
16
(cc) Each certificate signed by any officer of the Company or
any Subsidiary and delivered to the Underwriters or counsel for the Underwriters
shall be deemed to be a representation and warranty by the Company or such
Subsidiary, as applicable, to the Underwriters as to the matters covered
thereby.
(dd) There are no contracts or other documents which are
required to be described in the Registration Statement or the Prospectus or
filed as exhibits to the Registration Statement by the Securities Act which have
not been described in the Registration Statement or the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by reference as
permitted by the Securities Act.
(ee) No relationship, direct or indirect, exists between or
among the Company or any Subsidiary on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any Subsidiary
on the other hand, which is required to be described in the a registration
statement on Form S-3 and which is not so described.
Section 7. Representations and Warranties of the Selling Stockholders.
Each Selling Stockholder represents and warrants to each Underwriter, with
respect to himself or itself, that:
(a) Such Selling Stockholder is the lawful owner of the Shares
to be sold by such Selling Stockholder pursuant to this Agreement and has, and
on the Closing Date will have, good and clear title to such Shares, free of all
restrictions on transfer, liens, encumbrances, security interests, equities and
claims whatsoever.
(b) Such Selling Stockholder has, and on the Closing Date will
have, full legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement signed by
such Selling Stockholder and First Union National Bank, as Custodian, relating
to the deposit of the Shares to be sold by such Selling Stockholder (the
"Custody Agreement") and the Power of Attorney of such Selling Stockholder
appointing certain individuals as such Selling Stockholder's attorneys-in-fact
(the "Attorneys") to the extent set forth therein, relating to the transactions
contemplated hereby and by the Registration Statement and the Custody Agreement
(the "Power of Attorney") and to sell, assign, transfer and deliver the Shares
to be sold by such Selling Stockholder in the manner provided herein and
therein.
(c) This Agreement has been duly executed and delivered by or
on behalf of such Selling Stockholder.
(d) This Agreement has been duly authorized by or on behalf of
Columbia Capital Corporation and Columbia DBS, Inc. (individually the "Columbia
Stockholder" and collectively the "Columbia Stockholders").
(e) The Custody Agreement of such Selling Stockholder has been
duly executed and delivered by such Selling Stockholder and is a valid and
binding agreement of such Selling Stockholder, enforceable in accordance with
its terms.
17
(f) The Power of Attorney of such Selling Stockholder has been
duly executed and delivered by such Selling Stockholder and is a valid and
binding instrument of such Selling Stockholder, enforceable in accordance with
its terms, and, pursuant to such Power of Attorney, such Selling Stockholder
has, among other things, authorized the Attorneys, or any one of them, to
execute and deliver on such Selling Stockholder's behalf this Agreement and any
other document that they, or any one of them, may deem necessary or desirable in
connection with the transactions contemplated hereby and thereby and to deliver
the Shares to be sold by such Selling Stockholder pursuant to this Agreement.
(g) The Custody Agreement of such Columbia Stockholder has been
duly authorized by such Columbia Stockholder.
(h) The Power of Attorney of such Columbia Stockholder has been
duly authorized by such Columbia Stockholder.
(i) Upon delivery of and payment for the Shares to be sold by
such Selling Stockholder pursuant to this Agreement, good and clear title to
such Shares will pass to the Underwriters, free of all restrictions on transfer,
liens, encumbrances, security interests, equities and claims whatsoever.
(j) The execution, delivery and performance of this Agreement
and the Custody Agreement and Power of Attorney of such Selling Stockholder by
or on behalf of such Selling Stockholder, the compliance by such Selling
Stockholder with all the provisions hereof and thereof and the consummation of
the transactions contemplated hereby and thereby will not (i) require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the organizational documents of such Selling Stockholder, if such Selling
Stockholder is not an individual, or any indenture, loan agreement, mortgage,
lease or other agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder or any property of such Selling
Stockholder is bound or (iii) violate or conflict with any applicable law or any
rule, regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over such Selling Stockholder or any property
of such Selling Stockholder.
(k) The information in the Registration Statement under the
caption "Principal and Selling Stockholders" which specifically relates to such
Selling Stockholder does not, and will not on the Closing Date, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(l) At any time during the period described in Section 5(d), if
there is any change in the information referred to in Section 7(i), such Selling
Stockholder will immediately notify you of such change.
18
(m) Each certificate signed by or on behalf of such Selling
Stockholder and delivered to the Underwriters or counsel for the Underwriters
shall be deemed to be a representation and warranty by such Selling Stockholder
to the Underwriters as to the matters covered thereby.
Section 8. Indemnification.
(a) Each of the Company and the Significant Subsidiaries
jointly and severally, agree to indemnify and hold harmless each Underwriter,
its directors, its officers and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto) or
any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein provided, however, that the foregoing
indemnity agreement and contribution provided in Section 8(e) with respect to
any preliminary prospectus shall not inure to the benefit of any Underwriter or
controlling person of such Underwriter who failed to deliver a Prospectus (as
then amended or supplemented, provided by the Company to the several
Underwriters in the requisite quantity and on a timely basis to permit proper
delivery on or prior to the Closing Date) to the person asserting any losses,
claims, damages and liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such material misstatement or omission or alleged
material misstatement or omission was cured in such Prospectus (or the
Prospectus most recently amended) and such Prospectus was required by law to be
delivered at or prior to the written confirmation of sale to such person.
(b) Each of the Selling Stockholders, severally and not
jointly, agrees to indemnify and hold harmless each Underwriter, its directors,
its officers and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
that could give rise to any such
19
losses, claims, damages, liabilities or judgments) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only with respect to claims and actions based on information relating to such
Selling Stockholder furnished in writing by such Selling Stockholder expressly
for use in the Prospectus, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished in writing to the Company by such Underwriter through you
expressly for use therein provided, however, that the foregoing indemnity
agreement and contribution provided in Section 8(e) with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter or
controlling person of such Underwriter who failed to deliver a Prospectus (as
then amended or supplemented, provided by the Company to the several
Underwriters in the requisite quantity and on a timely basis to permit proper
delivery on or prior to the Closing Date) to the person asserting any losses,
claims, damages and liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such material misstatement or omission or alleged
material misstatement or omission was cured in such Prospectus (or the
Prospectus most recently amended) and such Prospectus was required by law to be
delivered at or prior to the written confirmation of sale to such person.
Notwithstanding the foregoing, the aggregate liability of the Selling
Stockholder pursuant to this Section 8(b) shall be limited to an amount equal to
the total proceeds (before deducting underwriting discounts and commissions and
expenses) received by such Selling Stockholder from the Underwriters for the
sale of the Shares sold by such Selling Stockholder hereunder.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, each Selling Stockholder and each person, if any, who controls such Selling
Stockholder within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from the
Sellers to such Underwriter but only with reference to information relating to
such Underwriter furnished in writing to the Company by such Underwriter through
you expressly for use in the Registration Statement (or any amendment thereto),
the Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus.
(d) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a), 8(b) or
8(c) (the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to Sections
20
8(a), 8(b) or 8(c), the Underwriter shall not be required to assume the defense
of such action pursuant to this Section 8(d), but may employ separate counsel
and participate in the defense thereof, but the fees and expenses of such
counsel, except as provided below, shall be at the expense of such Underwriter).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for (i) the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all Underwriters, their officers and directors and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, (ii) the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
the Company, its directors, its officers who sign the Registration Statement and
all persons, if any, who control the Company within the meaning of either such
Section and (iii) the fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all Selling Stockholders and
all persons, if any, who control any Selling Stockholder within the meaning of
either such Section, and all such fees and expenses shall be reimbursed as they
are incurred. In the case of any such separate firm for the Underwriters, their
officers and directors and such control persons of any Underwriters, such firm
shall be designated in writing by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation. In the case of any such separate firm for the Company and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Stockholders and such control persons of any Selling Stockholders,
such firm shall be designated in writing by the Attorneys-in-Fact. The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
21
(e) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Sellers on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 8(e)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 8(e)(i) above but also the
relative fault of the Sellers on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Sellers on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions, but before deducting expenses) received
by the Sellers, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Selling Stockholders on the one hand or the Underwriters on the other hand and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(e) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8(d) are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder and
not joint. The obligations of the Selling Stockholders under this Section 8(e)
shall be several and not joint and in no event shall the obligation of any
Selling Stockholder under this Section 8(e) exceed the limit of indemnification
provided in Section 8(b).
22
(f) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) Each Selling Stockholder hereby designates Pegasus
Communications Corporation, c/o Pegasus Communications Management Company, 5
Radnor Corporate Center, Xxxxx 000, 000 Xxxxxxxxxx Xxxx, Xxxxxx, XX 00000, as
its authorized agent, upon which process may be served in any action which may
be instituted in any state or federal court in the State of New York by any
Underwriter, any director or officer of any Underwriter or any person
controlling any Underwriter asserting a claim for indemnification or
contribution under or pursuant to this Section 8, and each Selling Stockholder
will accept the jurisdiction of such court in such action, and waives, to the
fullest extent permitted by applicable law, any defense based upon lack of
personal jurisdiction or venue. A copy of any such process shall be sent or
given to such Selling Stockholder, at the address for notices specified in
Section 12 hereof.
Section 9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and
the Significant Subsidiaries contained in this Agreement shall be true and
correct on the Closing Date with the same force and effect as if made on and as
of the Closing Date.
(b) If the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such Rule
462(b) Registration Statement shall have become effective by 10:00 P.M., New
York City time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by Xxxxxxxx X. Xxxxx and Xxxxxx X. Xxxxxxxxxx, in
their capacities as the Chief Executive Officer and Chief Financial Officer of
the Company, confirming the matters set forth in Sections 6(z), 9(a) and 9(b)
and that the Company has complied with all of the agreements and satisfied all
of the conditions herein contained and required to be complied with or satisfied
by the Company on or prior to the Closing Date.
(d) Since the respective dates as of which information is given
in the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its Subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its Subsidiaries and (iii) neither the Company nor any of its
Subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case
23
described in clause 9(d)(i), 9(d)(ii) or 9(d)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.
(e) All the representations and warranties of each Selling
Stockholder contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing Date and
you shall have received on the Closing Date a certificate dated the Closing Date
from each Selling Stockholder to such effect and to the effect that such Selling
Stockholder has complied with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied by
such Selling Stockholder on or prior to the Closing Date.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Drinker Xxxxxx & Xxxxx LLP, as counsel to the Company, to the effect that:
(i) The Company is duly incorporated and validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, and has the corporate power and authority to carry on
its business as, to such counsel's knowledge, it is being conducted and
as described in the Registration Statement and the Prospectus and to
own, lease and operate its properties known to such counsel, and is not
qualified as a foreign corporation authorized to do business in any
other jurisdiction.
(ii) Each of the Significant Subsidiaries is duly incorporated
or formed and validly existing as a corporation or partnership, as the
case may be, in good standing under the laws of its jurisdiction of
incorporation or formation, as the case may be, except where the
failure to be in good standing would not, singly or in the aggregate,
have a Material Adverse Effect and has the corporate power and
authority (in the case of corporations) or legal capacity (in the case
of partnerships) to carry on its business as, to such counsel's
knowledge, it is being conducted and as described in the Registration
Statement and the Prospectus and to own, lease and operate its
properties known to such counsel, and is duly qualified and in good
standing as a foreign corporation or partnership, as the case may be,
authorized to do business in each jurisdiction set forth on Schedule
I(a) to this Agreement. All of the outstanding shares of capital stock
and other securities evidencing equity ownership of each of the
Subsidiaries have been duly authorized and validly issued and are fully
paid and (except in the case of general partnership interests and, in
the case of limited partnership interests, except to the extent that
the provisions of the applicable limited partnership act requiring
partners to return distributions may be deemed to constitute
assessability) nonassessable and free of any statutory preemptive
rights or any similar rights known to such counsel, and are owned by
the Company directly, or indirectly through one of the other
Subsidiaries, except for the shares of Series A Preferred Stock of PST
VI held by Xxxxxx-Vision, Inc., free and clear of any lien, adverse
claim, security interest or other encumbrance known to such counsel
except as are in effect under the Credit Facilities and except for the
pledge of the partnership interests of Pegasus Broadcast Associates,
L.P.
24
(iii) All of the outstanding shares of capital stock of the
Company (including the Shares to be sold by the Selling Stockholders)
have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights
known to such counsel.
(iv) The authorized capital stock of the Company, including the
Shares, conforms as to legal matters to the description thereof
contained in the Registration Statement and the Prospectus. The Shares
to be issued and sold by the Company hereunder have been duly
authorized and, when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, will have been validly
issued and will be fully paid and non-assessable, and the issuance of
such Shares will not be subject to any statutory preemptive rights or
any similar rights.
(v) The Registration Statement has become effective under the
Securities Act, no stop order suspending its effectiveness has been
issued and no proceedings for that purpose are, to the best of such
counsel's knowledge after due inquiry, pending before or contemplated
by the Commission.
(vi) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Registration Statement and the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act which have not been
described or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Securities Act.
(vii) To the best of such counsel's knowledge, except as set
forth in the Registration Statement and the Prospectus, there are no
outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or
other equity interest in the Company.
(viii) There are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of, any
of the Shares pursuant to the Company's charter or by-laws or any
agreement or other instrument (except as set forth in the Registration
Statement and Prospectus) known to such counsel.
(ix) The Company and each of the Significant Subsidiaries have
the power and authority to execute, deliver and perform their
respective obligations under each of this Agreement and the Acquisition
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, in the
case of the Company, the corporate power and authority to issue, sell
and deliver the Firm Shares, as provided herein.
(x) This Agreement has been duly and validly authorized,
executed and delivered by the Company and the Significant Subsidiaries.
(xi) Each of the Acquisition Agreements has been duly and
validly authorized, executed and delivered by the Company or the
Subsidiary that is a party thereto and
25
(except as otherwise provided therein) is the legally valid and binding
obligation of the Company or such Subsidiary and is enforceable against
the Company or such Subsidiary in accordance with its terms except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally (including laws relating to
fraudulent transfers or conveyances) and by general equitable
principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(xii) Neither the Company nor any of the Subsidiaries is in
violation of its charter, bylaws, limited partnership agreement or
other organizational documents and, to the best of such counsel's
knowledge, neither the Company nor any of the Subsidiaries is in
default in the performance of any bond, debenture, note, indenture
(including, without limitation, (i) the PM&C Indenture, (ii) the 1997
Indenture, (iii) the DTS Indenture and (iv) the 1998 Indenture),
mortgage, deed of trust or other agreement or instrument (including,
without limitation, the Certificate of Designation) that is material to
the Company and the Subsidiaries, taken as a whole, to which it is a
party or by which it is bound or to which any of its properties is
subject.
(xiii) None of (A) the execution, delivery or performance of
this Agreement by the Company or any of the Significant Subsidiaries,
(B) the issuance and sale of the Shares, (C) the execution, delivery or
performance of the Acquisition Agreements by the Company or any of the
Subsidiaries, as applicable, or (D) the transactions contemplated by
this Agreement and the Acquisition Agreements will violate, conflict
with or constitute a breach of any of the terms or provisions of, or a
default under (or an event that with notice or the lapse of time, or
both, would constitute a default), or (except as contemplated in the
second and third sentences of this paragraph) require consent under, or
result in the imposition of a lien or encumbrance on any properties of
the Company or any Subsidiary, or an acceleration of any indebtedness
of the Company or any Subsidiary pursuant to, (i) the charter, bylaws,
limited partnership or other organizational documents of the Company or
any Subsidiary, (ii) any material bond, debenture, note, indenture
(including, without limitation, the PM&C Indenture, the 1997 Indenture,
the DTS Indenture and the 1998 Indenture), mortgage, deed of trust or
other agreement or instrument (including, without limitation, the
Certificate of Designation) known to such counsel to which the Company
or any Subsidiary is a party or by which any of them or their
respective property is bound, (iii) any statute, rule or regulation
known to such counsel applicable to the Company or any Subsidiary or
their respective assets or properties or (iv) any judgment, order or
decree known to such counsel of any court or governmental agency, body
or administrative agency or authority having jurisdiction over the
Company, any Subsidiary or their respective assets or properties. No
consent, approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, any regulatory agency or
body, administrative agency, or other governmental agency is required
for (1) the execution, delivery and performance of this Agreement or
the Acquisition Agreements by the Company and the Subsidiaries, as
applicable, (2) the issuance and sale of the Shares or (3) the
transactions contemplated by this Agreement or the Acquisition
Agreements, except (A) as described above, (B) such as have been
26
obtained and made in the registration of the Shares under the
Securities Act, (C) such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, (D) such
as may be required by the NASD, and (E) such as are disclosed in the
Registration Statement and the Prospectus. To the best of such
counsel's knowledge, except as described above, no consents or waivers
from any other person are required for the execution, delivery and
performance by the Company and the Subsidiaries, as applicable, of this
Agreement or the Acquisition Agreements, the issuance and sale of the
Shares to the Underwriters or the consummation of the transactions
contemplated by this Agreement or the Acquisition Agreements, other
than (1) such consents and waivers as have been obtained and (2) such
as are disclosed in the Registration Statement and the Prospectus
(including the consents of the NRTC and DIRECTV with respect to the DBS
Acquisitions and the consent of the required lenders under the PM&C
Credit Facility, in the case of the Cable Acquisition).
(xiv) None of the Company or the Subsidiaries is an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act.
(xv) The statements in the Prospectus under the captions
"Prospectus Summary," "Risk Factors," "Business - DBS Agreements,
Licenses, LMAs and Cable Franchises," "Certain Relationships and
Related Transactions--Split Dollar Agreement," "Certain Relationship
and Related Transactions--Voting Agreements," "Management--Incentive
Program," "Description of Certain Indebtedness," "Description of
Capital Stock" and "Future Sales of Common Stock," and Items 15 of Part
II of the Registration Statement, in so far as they are descriptions of
contracts, agreements or other legal documents or laws, regulations or
statutes are accurate, in all material respects, and present fairly the
information required to be shown.
(xvi) To the best of such counsel's knowledge, there are no
holders of securities of the Company or any Subsidiary who, by reason
of the execution by the Company or any Subsidiary of this Agreement or
any Acquisition Agreement to which the Company or any Subsidiary, as
applicable, is a party or the consummation by the Company and the
Subsidiaries of the transactions contemplated hereby and thereby, as
applicable, have the right to request or demand that the Company or any
Subsidiary register under the Securities Act or analogous foreign laws
and regulations securities held by them, other than as disclosed in the
Registration Statement and the Prospectus.
(xvii) To the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the Company or any
Subsidiary and any other person that would give rise to a valid claim
against the Company, any Subsidiary or any of the Underwriters for a
brokerage commission, finder's fee or like payment in connection with
the issuance, purchase and sale of the Shares.
27
(xviii) To the best of such counsel's knowledge and other than
as set forth in the Registration Statement and the Prospectus, there
are no legal or governmental proceedings pending to which the Company
or any of the Subsidiaries is a party or of which any property or
assets of the Company or any of the Subsidiaries is the subject which,
if determined adversely to the Company or any of the Subsidiaries,
singly or in the aggregate, are reasonably likely to, have a Material
Adverse Effect; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
In addition, such counsel shall state that it has participated in conferences
with officers and other representatives of the Company and the Subsidiaries,
representatives of the Accountants and representatives of the Underwriters at
which the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel has not undertaken to
investigate or verify independently, and does not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus, on the basis of the foregoing
(relying as to materiality to a large extent upon the opinions of officers and
other representatives of the Company) such counsel does not believe that (A) the
Registration Statement and any amendment or supplement thereto (except as to
financial statements, including the notes thereto, and supporting schedules and
other financial, statistical and accounting data included therein or omitted
therefrom, as to which no belief need be expressed) as of the date the
Registration Statement became effective contained an untrue statement of a
material fact or omitted to state any fact required to be stated therein or
necessary to make the statements therein not misleading and (B) the Prospectus
and any amendment or supplement thereto (except as to financial statements,
including the notes thereto, and supporting schedules and other financial,
statistical and accounting data included therein or omitted therefrom, as to
which no belief need be expressed) as of the date the Registration Statement
became effective or the Closing Date, contained an untrue statement of a
material fact or omitted to state any fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(g) You shall have received on the Closing Date opinions
(satisfactory to you and counsel for the Underwriters) dated the Closing Date,
of Drinker Xxxxxx & Xxxxx LLP, as counsel to Xxxxxx X. Xxxxxxxxxx and
Turtlecreek Limited Partnership, Xxxxxx & Xxxxxxxxx, as counsel to Xxxxxxx X.
Xxxxx and Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P., as counsel to the Columbia
Stockholders, Xxxxxx Trust/1995, Xxxxxx Venture Family, L.P., Xxxxxx X. Blow,
Xxxxx X. Xxxxxx III, Xxxx X. Xxxxxxx, Xxxxx X. Xxxxxx, Xx. and Xxxx X. Xxxxxx,
to the effect that:
(i) This Agreement has been duly and validly executed and
delivered (and, in the case of the Columbia Stockholder, authorized) by
or on behalf of each of the Selling Stockholders.
(ii) Each Selling Stockholder is the lawful holder of record of
the Shares to be sold by such Selling Stockholder pursuant to this
Agreement and has good and clear title to such Shares, free of all
restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever.
(iii) Each Selling Stockholder has full legal right, power and
authority, and all authorization and approval required by law, to enter
into this Agreement and the Custody Agreement and the Power of Attorney
of such Selling Stockholder and to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder in the manner
provided herein and therein.
(iv) The Custody Agreement of each Selling Stockholder has been
duly executed and delivered (and, in the case of the Columbia
Stockholder, authorized) by such Selling Stockholder and is a valid and
binding agreement of such Selling Stockholder, enforceable in
accordance with its terms.
(v) The Power of Attorney of each Selling Stockholder has been
duly executed and delivered (and, in the case of the Columbia
Stockholder, authorized) by such Selling Stockholder and is a valid and
binding instrument of such Selling Stockholder, except in the case of
the death, incapacity or mental incompetence of such Selling
Stockholder, enforceable in accordance with its terms, and, pursuant to
such Power of Attorney, such Selling Stockholder has, among other
things, authorized the Attorneys, or any one of them, to execute and
deliver on such Selling Stockholder's behalf this Agreement and any
other document they, or any one of them, may deem necessary or
desirable in connection with the transactions contemplated hereby and
thereby and to deliver the Shares to be sold by such Selling
Stockholder pursuant to this Agreement.
28
(vi) Upon delivery of and payment for the Shares to be sold by
each Selling Stockholder pursuant to this Agreement, assuming that the
Underwriters take delivery thereof without notice of any adverse claim
(within the meaning of Article 8 of the Uniform Commercial Code), the
Underwriters will acquire such Shares free of all adverse claims.
(vii) The execution, delivery and performance of this Agreement
and the Custody Agreement and Power of Attorney of each Selling
Stockholder by such Selling Stockholder, the compliance by such Selling
Stockholder with all the provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby will
not (A) to the best of such counsel's knowledge without investigation,
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except
such as may be required under the securities or Blue Sky laws of the
various states), (B) conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the organizational
documents of such Selling Stockholder, if such Selling Stockholder is
not an individual, or (except to the best of counsel's knowledge in the
case of Turtle Creek Limited Partnership) any indenture, loan
agreement, mortgage, lease or other agreement or instrument to which
such Selling Stockholder is a party or by which any property of such
Selling Stockholder is bound or (C) result in the violation by the
Selling Stockholder of any statute, rule or regulation known to such
counsel to be applicable to such Selling Stockholders.
(h) Vorys, Xxxxx, Xxxxxxx and Xxxxx shall have furnished to the
Underwriters its written opinion, as special regulatory counsel for the Company
and the Subsidiaries, addressed to the Underwriters and dated the Closing Date,
in form and substance reasonably satisfactory to the Underwriters, substantially
in the form of Annex II attached hereto.
(i) Xxxxxx Xxxxxxx Xxxxxx Leader & Xxxxxxxx L.L.P. shall have
furnished to the Underwriters its written opinion, as special regulatory counsel
for the Company and the Subsidiaries,
29
addressed to the Underwriters and dated the Closing Date, in form and substance
reasonably satisfactory to the Underwriters, substantially in the form of
Annex III attached hereto.
(j) The Underwriters shall have received from Xxxxxx & Xxxxxxx,
counsel for the Underwriters, such opinion, dated the Closing Date, with respect
to the issuance and sale of the Shares, the Registration Statement, the
Prospectus and other related matters as the Underwriters may reasonably require,
and the Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such matters.
(k) The Accountants shall have furnished to the Underwriters a
letter or letters, dated respectively as of the date hereof and the Closing
Date, addressed to the Underwriters, in form and substance satisfactory to the
Underwriters, containing statements and information, of the type ordinarily
included in accountants' "comfort letters" with respect to the financial
statements and financial information contained in or incorporated by reference
into the Registration Statement and the Prospectus.
(l) Subsequent to the date hereof and on or prior to such
Closing Date, there shall not have been any decrease in the rating of any of the
Company's or the Subsidiaries' securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)(2)
under the Securities Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.
(m) The Acquisition Agreements shall be in full force and
effect and the Underwriters shall have received copies of them.
(n) The Company shall have delivered to you the agreements
specified in Section 2 hereof which agreements shall be in full force and effect
on the Closing Date.
(o) The Custody Agreement of the Selling Stockholders has been
duly authorized, executed and delivered (and, in the case of the Columbia
Stockholders, authorized) by each of the Selling Stockholders and is a valid and
binding agreement of the Selling Stockholders, enforceable in accordance with
its terms.
(p) The Power of Attorney of each of the Selling Stockholders
has been duly authorized, executed and delivered (and, in the case of the
Columbia Stockholders, authorized) by each of the Selling Stockholder and is a
valid and binding agreement of the Selling Stockholders, enforceable in
accordance with it terms.
30
(q) The Shares shall have been duly listed for quotation on the
Nasdaq National Market.
(r) The Company and the Selling Stockholders shall not have
failed on or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with by the
Company or the Selling Stockholders, as the case may be, on or prior to the
Closing Date.
(s) You shall have received on the Closing Date, a certificate
of each Selling Stockholder who is not a U.S. Person (as defined under
applicable U.S. federal tax legislation) to the effect that such Selling
Stockholder is not a U.S. Person, which certificate may be in the form of a
properly completed and executed United States Treasury Department Form W 8 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
Section 10. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Sellers if any of the following has
occurred after the date of this Agreement: (i) any outbreak or escalation of
hostilities or other national or international calamity or crisis or change in
economic conditions or in the financial markets of the United States or
elsewhere that, in your judgment, is material and adverse and, in your judgment,
makes it impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus, (ii) the suspension or material limitation of
trading in securities or other instruments on the New York Stock Exchange, the
American Stock Exchange, the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange, the Chicago Board of Trade or the Nasdaq National Market or
limitation on prices for securities or other instruments on any such exchange or
the Nasdaq National Market, (iii) the suspension of trading of any securities of
the Company on any exchange or in the over-the-counter market, (iv) the
enactment, publication, decree or other promulgation of any federal or state
statute, regulation, rule or order of any court or other governmental authority
which in your opinion materially and adversely affects, or will materially and
adversely affect, the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate
31
number of Firm Shares or Additional Shares, as the case may be, which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the total number of Firm Shares or Additional
Shares, as the case may be, to be purchased on such date by all Underwriters,
each non-defaulting Underwriter shall be obligated severally, in the proportion
which the number of Firm Shares set forth opposite its name in Schedule I bears
to the total number of Firm Shares which all the non-defaulting Underwriters
have agreed to purchase, or in such other proportion as you may specify, to
purchase the Firm Shares or Additional Shares, as the case may be, which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the number of Firm Shares or
Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased by all Underwriters and arrangements satisfactory to you,
the Company and the Selling Stockholders for purchase of such Firm Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Stockholders. In any such case which does not result in termination
of this Agreement, either you or the Sellers shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such date, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
such Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of any such Underwriter under this Agreement.
Section 11. Agreements of the Selling Stockholders. Each Selling
Stockholder agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by such Selling
Stockholder to the Underwriters.
(b) To do and perform all things to be done and performed by
such Selling Stockholder under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares to be sold by
such Selling Stockholder pursuant to this Agreement.
Section 12. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to Pegasus
Communications Corporation, 0 Xxxxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, 100 Matsonford
Road, Radnor PA 19087, (ii) if to the
32
Selling Stockholders, to Xxxx Xxxxx c/o Columbia Capital Corporation, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000 or to Xxx X. Lodge x/x Xxxxxxx
Xxxxxxxxxxxxxx Xxxxxxxxxxx, 0 Xxxxxx Xxxxxxxxx Center, 000 Xxxxxxxxxx Xxxx,
Xxxxx 000, Xxxxxx, XX 00000, as applicable, and (iii) if to any Underwriter or
to you, to you c/x Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, or in any
case to such other address as the person to be notified may have requested in
writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the
Company, the officers or directors of the Company, any person controlling the
Company, any Selling Stockholder or any person controlling such Selling
Stockholder, (ii) acceptance of the Shares and payment for them hereunder and
(iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of any
Seller as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10), the Sellers agree, jointly and severally, to
reimburse the several Underwriters for all out-of-pocket expenses (including the
fees and disbursements of counsel) incurred by them. Notwithstanding any
termination of this Agreement, the Company shall be liable for all expenses
which it has agreed to pay pursuant to Section 5(i) hereof. The Sellers also
agree, jointly and severally, to reimburse the several Underwriters, their
directors and officers and any persons controlling any of the Underwriters for
any and all fees and expenses (including, without limitation, the fees
disbursements of counsel) incurred by them in connection with enforcing their
rights hereunder (including, without limitation, pursuant to Section 8 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Selling
Stockholders, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, the Company's directors and the
Company's officers who sign the Registration Statement and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
Telefacsimile transmission of any executed original document and/or
retransmission of any executed telefacsimile transmission shall be deemed to be
the same as the delivery of an executed original. At the request of any party
hereto, the other parties hereto shall confirm, telefacsimile transmissions by
executing duplicate original documents and delivering same to the requesting
party or parties.
[signature page follows]
33
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
Pegasus Communications Corporation
By:___________________________________________________
Name: Xxx X. Lodge
Title: Senior Vice President, Chief Administrative
Officer, General Counsel and Secretary
of Pegasus Communications Corporation
THE SELLING STOCKHOLDERS
NAMED IN SCHEDULE II
HERETO, ACTING
SEVERALLY
By:___________________________________________________
Xxxx Xxxxx, as Attorney-in-Fact
By:___________________________________________________
Xxx X. Lodge, as Xxxxxxxx-xx-Xxxx
00
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BEAR, XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
X.X. XXXXXXXXX, TOWBIN
ING BARING XXXXXX XXXX LLC
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:_______________________________
Name:
Title:
35
Schedule I
The Underwriters
----------------
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Bear, Xxxxxxx & Co. Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
X.X. Xxxxxxxxx, Towbin
ING Baring Xxxxxx Xxxx LLC
Total
Schedule I(a)
-------------
Digital Television Services of Indiana, LLC
-------------------------------------------
Indiana
DTS Management, LLC
-------------------
California, Colorado, Indiana, Kansas, Kentucky, New Hampshire, New Mexico,
New York, South Dakota, Vermont
MCT Cablevision, LTD.
---------------------
Puerto Rico
Pegasus Broadcast Television, Inc.
----------------------------------
Tennessee, Mississippi, Florida
Pegasus Cable Television, Inc.
------------------------------
New Hampshire
Pegasus Cable Television of San German, Inc.
--------------------------------------------
Pending in Puerto Rico
Pegasus Satellite Television, Inc.
----------------------------------
Texas, Alabama, Minnesota, Wisconsin
Pegasus Satellite Television of Ohio, Inc.
------------------------------------------
Ohio
Pegasus Satellite Television of Virginia
----------------------------------------
Virginia, West Virginia
PB Broadcast, Inc.
------------------
Maine
Schedule II
The Selling Stockholders
------------------------
Number of Firm
Name Shares Being Sold
---- -----------------
Columbia Capital Corporation 285,884
Columbia DBS, Inc. 18,316
Xxxx X. Xxxxxx 200,000
Xxxxxx Trust/1995 149,600
Xxxxxx Venture Family, L.P. 100,400
Xxxxxx X. Blow 250,000
Xxxxx X. Xxxxxx, Xx. 250,000
Xxxx X. Xxxxxxx 250,000
Xxxxx X. Xxxxxx III 50,000
Turtlecreek Limited Partnership 100,000
Xxxxxxx X. Xxxxx 50,000
Xxxxxx X. Xxxxxxxxxx 10,000
Total 1,714,200
Schedule III
The Subsidiaries
----------------
Bride Communications, Inc.
B.T. Satellite, Inc.
Digital Television Services, Inc.
DTS Capital, Inc.
DTS Management, LLC
HMW, Inc.
MCT Cablevision, Ltd.
PCT SG, Inc.
Pegasus Anasco Holdings, Inc.
Pegasus Broadcast Associates, L.P.
Pegasus Broadcast Television, Inc.
Pegasus Cable Television, Inc.
Pegasus Cable Television of Anasco, Inc.
Pegasus Cable Television of Connecticut, Inc.
Pegasus Cable Television of San German, Inc.
Pegasus Communications Management Company
Pegasus Development Corporation
Pegasus Cable Television of San German, Inc.
Pegasus Satellite Development Corporation
Pegasus Satellite Holdings, Inc.
Pegasus Satellite Television, Inc.
Pegasus Satellite Television of Indiana, Inc.
Pegasus Satellite Television of Michigan, Inc.
Pegasus Satellite Television of Ohio, Inc.
Pegasus Satellite Television of Virginia, Inc.
Pegasus Towers, Inc.
Pegasus Travel, Inc.
Portland Broadcasting, Inc.
PP Broadcast, Inc.
PST Holdings, Inc.
Telecast of Florida, Inc.
WDBD License Corp.
WDSI License Corp.
WILF, Inc.
WOLF License Corp.
WTLH, Inc.
WTLH License Corp.
Significant Subsidiaries
MCT Cablevision, Limited Partnership
MCT Cablevision, Ltd.
Pegasus Broadcast Television, Inc.
Pegasus Cable Television, Inc.
Pegasus Media & Communications, Inc.
Pegasus Cable Television of San German, Inc.
Pegasus Satellite Television of Texas, Inc.
PST Holdings, Inc.
Annex I
The Other Stockholders
----------------------
Whitney Equity Partners, L.P.
Fleet Venture Resources, Inc.
Fleet Equity Partners VI, X.X.
Xxxxxxxx Partners III, X.X.
Xxxxxxx Plaza Partners
Xxxxxx Communications Corp.
Annex II
Form of Opinion of Vorys, Xxxxx, Xxxxxxx and Xxxxx
Vorys, Xxxxx, Xxxxxxx and Xxxxx shall have furnished to the
Underwriters its written opinion, as special regulatory counsel for the Company
and MCT Cablevision, Ltd., Pegasus Cable Television, Inc., Pegasus Satellite
Television and the other cable subsidiaries (the "Cable Affiliates"), addressed
to the Underwriters and dated the Closing Date, to the effect that:
1. There are no FCC licenses, authorizations, consents or permits
required by the FCC as necessary in connection with the conduct of the Company
and the Cable Affiliates with respect to the operation of the systems owned and
operated by Company and the Cable Affiliates (the "Systems") as presently
conducted.
2. Such "Registrations" or "Certificates of Compliance" as are required
by the FCC are on file with the FCC. Carriage of the commercial television
broadcast signals presently offered by the Systems are, as of this date,
consistent with the FCC's regulations and are carried pursuant to retransmission
consent or pursuant to request for carriage by the applicable station.
3. All commercial and non-commercial television broadcast stations that
have requested carriage are being carried pursuant to the terms and conditions
of their request.
4. All current FCC reports and filings required to be filed for the
Systems have been filed.
5. All required FCC Forms 320 have been filed for the Systems and
reflect compliance with the FCC's cumulative leakage index ("CLI") and signal
leakage requirements.
6. The Systems are in substantial compliance with the FCC's rules and
regulations with regard to equal employment opportunity.
7. No consent, approval, or authorization of, or filing with the FCC is
necessary to issue and sell the Shares.
8. No consent, approval, or authorization of, or filing with the FCC is
necessary for the execution and delivery of the this Agreement or the
Acquisition Agreement in accordance with their terms.
9. The execution and delivery of this Agreement and the performance, on
the Closing Date, by the Company and the Cable Affiliates of the obligations
required under this Agreement, will not violate the Telecommunications Act of
1996, the Communications Act of 1934 or the rules of the FCC, provided, however
that no interest in any license issued by the FCC may be transferred or assigned
without prior FCC consent.
10. The statements set forth in the Registration Statement and
Prospectus under the caption "Business - Legislation and Regulation - Cable
Television," fairly present the information contained under such caption insofar
as such statements constitute a summary, with respect to the federal
regulation of cable television, of material (i) statements of law, (ii)
statutes, rules or regulations, or (iii) legal conclusions.
11. All relevant Statements of Account (as defined by the Copy Right
Act of 1976) required by Section 111 of the Copyright Act of 1976, as amended
(the "Copyright Act"), and royalty payments accompanying said Statements of
Account, have been submitted to the Licensing Division of the United States
Copyright Office with respect to the Systems. There have been no inquiries
received from the United States Copyright Office or any other party which would
have a material adverse impact upon the operation of the Company and the Cable
Affiliates and which questions the Statements of Account or any copyright
payments made by the Company and the Cable Affiliates with respect to the
Systems, nor are we aware of any claim, action, or demand for copyright
infringement or for non-payment of royalties pending or threatened against the
Company and the Cable Affiliates with respect to the Systems' compliance with
former Section 111(d)(1) of the Copyright Act with regard to the requirement to
file initial notices of identity and signal carriage complement in view of the
elimination of this requirement.
12. There is no FCC judgment, decree or order which has been issued
against any System or the Company, or Cable Affiliates with respect to the
Systems, other than rule makings which are applicable to the cable industry
generally, nor is there any FCC action, proceeding, or investigation pending,
or, to the best of our knowledge, threatened by the FCC against any system, the
Company, or the Cable Affiliates with respect to the Systems.
13. A review of the FCC files indicates that the basic rates for all
communities in Massachusetts and Connecticut and the cable program service tiers
of the communities listed on Attachment 1 are subject to rate regulation by the
local franchise authority or the FCC.
14. The FCC has rendered no adverse rate finding with respect to
Company, the Cable Affiliates, or the Systems.
Annex III
Form of Opinion of Xxxxxx Xxxxxxx Xxxxxx Leader & Xxxxxxxx L.L.P.
-----------------------------------------------------------------
Xxxxxx Xxxxxxx Xxxxxx Leader & Xxxxxxxx L.L.P. shall have furnished to
the Underwriters its written opinion, as special regulatory counsel for the
Company and Pegasus Broadcast Associates, L.P., Pegasus Broadcast Television,
Inc. WDBD License Corp., WDSI License Corp., WILF, Inc., WOLF License Corp. and
the other television subsidiaries (the "TV Affiliates"), addressed to the
Underwriters and dated the Closing Date, to the effect that:
1. The statements set forth in the Registration Statement and
Prospectus under the caption "Business - Legislation and Regulation - Broadcast
Television," insofar as such statements constitute a summary with respect to FCC
matters of material (i) statements of law, (ii) statutes, rules, or regulations,
or (iii) legal conclusions, fairly present the information contained under such
caption.
2. The execution, delivery, and performance in accordance with its
terms of this Agreement by the Company and the TV Affiliates that is a party
thereto does not require any authorization, consent, or approval of the FCC not
previously obtained, and does not violate the Communications Acts of 1934, as
amended, and the published rules, regulations and policies promulgated
thereunder by the FCC, except that, from time to time, the Company may be
required to obtain certain authorizations of the FCC that would be required in
the ordinary course of business of the Company.
