First Amendment to Credit Agreement among Pegasus Media & Communications, Inc. and Lenders

Summary

This amendment, dated July 23, 2001, modifies the existing Credit Agreement between Pegasus Media & Communications, Inc. (the Borrower), its parent Pegasus Satellite Communications, Inc., and a group of financial institutions (the Lenders), along with several agents and arrangers. The amendment updates terms to reflect the acquisition of Golden Sky Holdings, extends the deadline for incremental loans, adjusts financial covenants, increases certain credit limits, and allows specific distributions to the parent company. These changes are effective upon satisfaction of stated conditions by the parties involved.

EX-10.1 3 ex10-1.txt EX-10.1 Exhibit 10.1 FIRST AMENDMENT TO CREDIT AGREEMENT ----------------------------------- THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") dated as of July 23, 2001 by and among the financial institutions which are now, or in accordance with Section 1.04 or Article XII of the Credit Agreement (hereinafter described) hereafter become, parties to the Credit Agreement (collectively, the "Lenders" and each individually, a "Lender"); CIBC WORLD MARKETS CORP. and DEUTSCHE BANK SECURITIES, INC. (together, the "Co-Arrangers"); BANKERS TRUST COMPANY, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the "Agent"); CANADIAN IMPERIAL BANK OF COMMERCE, as syndication agent for such Lenders (in such capacity, together with its successors and assigns in such capacity, the "Syndication Agent"); FLEET NATIONAL BANK, as documentation agent for such Lenders (in such capacity, together with its successors and assigns in such capacity, the "Documentation Agent"); and PEGASUS MEDIA & COMMUNICATIONS, INC., a Delaware corporation (the "Borrower") and a wholly owned subsidiary of Pegasus Satellite Communications, Inc. (formerly known as Pegasus Communications Corporation), a Delaware corporation (the "Parent"). RECITALS -------- A. The Borrower is a party to a First Amended and Restated Credit Agreement dated as of January 14, 2000 with the Co-Arrangers, the Agent, the Syndication Agent and the Documentation Agent and the Lenders named therein (the "Credit Agreement"). Capitalized terms used herein without definition have the meanings assigned to them in the Credit Agreement, unless otherwise provided. B. The Borrower has requested that the Credit Agreement be amended (1) to reflect the contribution on June 29, 2001 to the Borrower of all of the issued and outstanding capital stock of Golden Sky Holdings, Inc., a Delaware corporation wholly owned by the Parent ("Golden Sky"); (2) to extend the date by which any Incremental Term Loans must be made; (3) to permit certain distributions to the Parent to finance interest payable on notes previously exchanged by the Parent for debt obligations of Golden Sky; (4) to increase the sub-limit under the Commitments with respect to Letters of Credit; (5) to make certain amendments to the financial covenants; and (6) to make certain other related modifications. C. The Lenders are willing to agree to such amendments subject to the conditions set forth herein. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: I. AMENDMENTS TO CREDIT AGREEMENT. Subject to the satisfaction of each of the conditions set forth in Section V, the Lenders hereby agree with the Borrower that the Credit Agreement shall be amended as follows: A. Letters of Credit. Section 1.02 is hereby amended by deleting paragraph (a)(i) thereof and substituting the following: (i) The Issuing Bank shall not issue any Letter of Credit if, after giving effect to the issuance thereof, (A) the Aggregate Exposure would exceed the aggregate Commitments then in effect, (B) the aggregate NRTC Letter of Credit Exposure would exceed $90,000,000, (C) the aggregate General Purpose Letter of Credit Exposure would exceed $10,000,000 or (D) the aggregate Seller Letter of Credit Exposure would exceed $60,000,000. B. Incremental Term Loans. Section 1.04 of the Credit Agreement is hereby amended by deleting the date "June 30, 2001" where it appears in paragraphs (b) and (d) thereof and substituting therefor "December 31, 2001". C. Financial Covenants. Article V of the Credit Agreement is hereby amended as follows: 1. Churn Adjusted Borrower Leverage Ratio. Section 5.01(c) of the Credit Agreement is hereby amended (a) by calculating the Churn Adjusted Borrower Leverage Ratio to reflect the Golden Sky Acquisition (as hereinafter defined) as if it had occurred on July 1, 2000 and (b) by deleting the Table set forth therein and substituting therefor the following: Period Maximum Ratio ------ ------------- The Closing Date through September 29, 2001 5.25:1.00 September 30, 2001 through December 30, 2001 4.75:1.00 December 31, 2001 through June 29, 2002 4.50:1.00 June 30, 2002 through December 30, 2002 4.00:1.00 December 31, 2002 through June 29, 2003 3.50:1.00 June 30, 2003 through December 30, 2003 3.00:1.00 December 31, 2003 and thereafter 2.50:1.00 2. Fixed Charge Coverage. Section 5.03 of the Credit Agreement is hereby amended by deleting the Table set forth therein and substituting therefor the following: Quarterly Date Minimum Ratio -------------- ------------- December 31, 2000 through September 30, 2002 1.00:1.00 December 31, 2002 through September 30, 2003 1.15:1.00 December 31, 2003 through June 30, 2004 1.35:1.00 September 30, 2004 and each Quarterly Date thereafter 1.05:1.00 3. Restricted Payments Section 5.04 of the Credit Agreement is hereby amended by deleting paragraph (b)(vi) thereof and substituting the following: -2- (vi) The Borrower may pay annual or semi-annual dividends or distributions to the Parent solely for the purpose of financing interest due and payable under the PCC 1997 Senior Notes, the PCC 1998 Senior Note, the PCC Exchange Notes and the Golden Sky Exchange Notes, provided that no Default shall exist as of the date of the proposed payment or after giving effect thereto (calculated both as of such date and on a pro forma basis as of the end of and for the fiscal period(s) most recently ended prior thereto for which financial statements are required to be provided under Section 6.05). D. Definitions. Article XIV of the Credit Agreement is hereby amended as follows: 1. By amending the definitions of "PCC Preferred Stock" and "PCC Preferred Stock Designation" by deleting the references therein to "January 24, 1997" and substituting therefor "February 22, 2001". 2. By deleting the definitions of "Parent", "Subscriber Acquisition Costs" and substituting therefor the following: Parent (or PCC). Pegasus Satellite Communications, Inc., a Delaware corporation of which the Borrower is a wholly owned subsidiary and which was formerly known as Pegasus Communications Corporation. Subscriber Acquisition Costs. For any period, those expenses (excluding capitalized costs) incurred in the generation of Gross Subscriber Additions, such as sales commissions, advertising expenses and promotional expenses, including the amount (other than the amount capitalized), if any, by which the cost of equipment sold to subscribers to the DBS services offered by the DBS Subsidiaries (including rebates, subsidies and the like) exceeds the revenue generated from such sale(s). 3. By adding, in alphabetical order, the following new definitions: (a) Golden Sky Acquisition. The Parent's contribution to the Borrower, on June 29, 2001, of all issued and outstanding shares of capital stock of Golden Sky Holdings, Inc., a Delaware corporation, which were in turn contributed by the Borrower to PST Holdings, Inc. and by PST Holdings, Inc. to Pegasus Satellite Television, Inc., all in compliance with the terms and conditions of Sections 2.01 and 7.05 of the Credit Agreement. (b) Golden Sky Notes. Collectively, (a) the 12 3/8% Series A and B Senior Subordinated Notes due 2006 in the principal amount of $195,000,000 issued by Golden Sky Systems, Inc. on July 31, 1998 and (b) the 13 1/2% Series B Senior Discount Notes due 2007 in the principal amount of $193,100,000 issued by Golden Sky DBS, Inc. on February 19, 1999. -3- (c) Golden Sky Exchange. The exchange by the Parent of the Golden Sky Exchange Notes for the Golden Sky Notes pursuant to the Golden Sky Exchange Indentures, as contemplated by the Golden Sky Prospectus. (d) Golden Sky Exchange Indentures. The Indentures, each dated May 31, 2001, between the Parent and First Union National Bank, as Trustee, pursuant to which the Golden Sky Exchange Notes were issued, as contemplated by the Golden Sky Exchange Prospectus. (e) Golden Sky Exchange Notes. Collectively, (a) the Parent's 12 3/8% Senior Notes Due 2006 in the aggregate principal amount of $195,000,000 and (b) the Parent's 13 1/2% Senior Subordinated Discount Notes Due 2007 in the aggregate principal amount of $193,100,000; issued on May 31, 2001 in exchange for the applicable Golden Sky Notes. (f) Golden Sky Exchange Prospectus. The Prospectus, Offer to Exchange and Consent Solicitation dated as of April 27, 2001 pursuant to which the Parent offered to exchange the Golden Sky Notes for the Golden Sky Notes. E. References to Golden Sky Notes and Golden Sky Indentures. The following provisions of the Credit Agreement are hereby amended to include therein references to the Golden Sky Notes and the Golden Sky Indentures, as appropriate: 1. Section 4.06, by adding (a) ", the Golden Sky Indenture, the Golden Sky Indentures "after the two references therein to "PCC 1998 Senior Notes" and (b) ", Golden Sky Indenture" after the last reference therein to "the PCC 1997 Indenture". 2. Each of paragraph (q) of Article VIII and Section 13.11, by adding ", the Golden Sky Indentures" after the reference to "the PCC 1997 Indenture" therein. F. Schedules. Schedules 1.02(a)(iv, 1.06(a) and 6.05(a) are deleted and the attached Schedules 1.02(a)(iv), 1.06(a) and 6.05(a) substituted therefor. G. No Further Amendments. Except as specifically amended hereby, the text of the Credit Agreement and all other Loan Documents shall remain unchanged and in full force and effect. II. REFERENCES IN SECURITY DOCUMENTS; CONFIRMATION OF SECURITY. All references to the "Credit Agreement" in all Security Documents, and in any other Loan Documents shall, from and after the date hereof, refer to the Credit Agreement, as amended by this Amendment, and all obligations of the Borrower under the Credit Agreement, as amended, shall be secured by and be entitled to the benefits of said Security Documents and such other Loan Documents. All Security Documents heretofore executed by the Borrower and its Subsidiaries shall remain in full force and effect and such Security Documents, as amended hereby, are hereby ratified and affirmed. -4- III. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER. The Borrower hereby represents and warrants to, and covenants and agrees with, the Agent, the Syndication Agent, the Documentation Agent, the Co-Arrangers and the Lenders that: A. The execution and delivery of this Amendment and the other Loan Documents contemplated hereby (collectively, the "Documents") have been duly authorized by all requisite corporate action on the part of the Borrower, the Subsidiaries and the Parent, as applicable. B. The representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of this Amendment as though made at and as of such date. Since the Closing Date (and, without limitation thereof, since December 31, 2000), no event or circumstance has occurred or existed which could reasonably be expected to have Material Adverse Effect. As of the date hereof and after giving effect to this Amendment, no Default has occurred and is continuing. C. The Borrower has heretofore furnished to the Lenders (1) the March 31, 2001 Consolidated balance sheet of the Borrower and the Subsidiaries showing their pro forma financial condition after the consummation of the Golden Sky Acquisition, as if it had occurred on March 31, 2001 (the "Opening Balance Sheet"), and (2) updated projections for the Companies through December 31, 2005, giving effect to the Golden Sky Acquisition. The Opening Balance Sheet fairly represents the pro forma financial condition of the Companies as of its date. All such financial projections are believed by the Borrower to be reasonable in light of all information presently known by the Borrower. D. Neither the Borrower nor any Affiliate of the Borrower is required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority (including any Specified Authority), or any other Person in connection with or as a condition to the execution, delivery or performance of this Amendment or any of the other Documents. E. This Amendment and the other Documents constitute the legal, valid and binding obligations of the Borrower and its Affiliates enforceable against them, jointly and severally, in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the rights and remedies of creditors generally or the application of principles of equity, whether in any action at law or proceeding in equity, and subject to the availability of the remedy of specific performance or of any other equitable remedy or relief to enforce any right thereunder. F. The Borrower will satisfy all of the conditions set forth in Section IV. IV. CONDITIONS. This Amendment shall take effect upon the satisfaction of the following conditions precedent: A. The Required Lenders shall have executed this Amendment. -5- B. The Borrower shall have executed and delivered to the Agent (or shall have caused to be executed and delivered to the Agent by the appropriate persons) the following: 1. On or before the date hereof: (a) This Amendment. (b) The attached Joinders, duly authorized, executed and delivered by the Borrower's Subsidiaries and the Parent, respectively. (c) True and complete copies of any stockholders' consents and/or resolutions of the board of directors or other governing body of each company, authorizing the execution and delivery of this Amendment, certified by the Manager or Secretary of the appropriate Company, as appropriate. 2. Such other supporting documents and certificates as the Agent or its counsel may reasonably request, within the time period(s) reasonably designated by the Agent or its counsel. C. The Agent and the Lenders shall have received the favorable opinion of general counsel to the Borrower, its Subsidiaries and the Parent as to the due authorization, execution and delivery of this Amendment and the other Documents, the enforceability thereof, the absence of conflict thereof with material contracts and such other matters as may be reasonably requested by the Agent. D. In consideration for the amendments and consents provided herein, the Borrower shall have paid to the Agent, for the account of each Lender executing this Amendment, a non-refundable facility fee in an amount equal to .25% of the sum of (1) such Lender's Commitment and (2) the outstanding principal amount of the Initial Term Note(s) held by such Lender. E. All legal matters incident to the transactions hereby contemplated shall be reasonably satisfactory to the Agent's counsel. V. MISCELLANEOUS. ------------- A. As provided in the Credit Agreement, the Borrower agrees to reimburse the Agent upon demand for all reasonable fees and disbursements of counsel to the Agent incurred in connection with the preparation of this Amendment and the other Documents. B. This Amendment and the Joinders shall be governed by and construed in accordance with the internal laws of the State of New York (excluding the laws applicable to conflicts or choice of laws). C. This Amendment and the Joinders may be executed by the parties hereto in several counterparts hereof and by the different parties hereto on separate counterparts hereof, all of which counterparts shall together -6- constitute one and the same agreement. Delivery of an executed signature page of this Amendment or either Joinder by facsimile transmission shall be effective as an in-hand delivery of an original executed counterpart hereof. * The next pages are the signature pages * -7- IN WITNESS WHEREOF, the Agent, the Syndication Agent, the Documentation Agent, the Co-Arrangers, the undersigned Lenders and the Borrower have caused this Amendment to be duly executed by their duly authorized representatives, as a sealed instrument, all as of the day and year first above written. BORROWER: --------- PEGASUS MEDIA & COMMUNICATIONS, INC. By: /s/ Scott A. Blank ------------------------------------- Scott A. Blank, Senior Vice President CO-ARRANGERS: ------------- CIBC WORLD MARKETS CORP. By: /s/ Matthew B. Jones ------------------------------------ Matthew B. Jones, Managing Director DEUTSCHE BANK SECURITIES, INC. By: _____________________________________ Name:________________________________ Title: ______________________________ AGENT (in an Administrative capacity): ------------------------------------- BANKERS TRUST COMPANY By: /s/ Gregory P. Shefrin ------------------------------------ Gregory P. Shefrin, Director [Signature Page to First Amendment to Credit Agreement] SYNDICATION AGENT: ----------------- CANADIAN IMPERIAL BANK OF COMMERCE By: /s/ Matthew B. Jones ----------------------------------------- Matthew B. Jones, Managing Director, CIBC World Markets Corp., as Agent DOCUMENTATION AGENT: ------------------- FLEET NATIONAL BANK By: /s/ Manuel Burgueno ---------------------------------------- Manuel Burgueno, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ BANKERS TRUST COMPANY By: /s/ Gregory P. Shefrin, Director ------------------------------------ Gregory P. Shefrin, Director Address for Notices: Bankers Trust Company 130 Liberty Street New York NY 10006 Telephone: (212) 250-1724 Telecopy: (212) 250-7218 Attention: Gregory P. Shefrin, Director [Signature Page to First Amendment to Credit Agreement] LENDER: ------ Centurion CDO II, Ltd By: American Express Asset Management Group Inc. as Collateral Manager By: /s/ Steven B. Staver ----------------------------------------- Steven B. Staver, Managing Director Address for Notices: American Express Asset Management Group, Inc. 100 N. Sepulveda Blvd. Suite 1010 El Segundo, California 90245 Telephone: (310) 744-2402 Telecopy: (310) 615-1048 Attention: Angela Jarasunas, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ Centurion CDO III, Ltd By: American Express Asset Management Group Inc. as Collateral Manager By: /s/ Steven B. Staver ----------------------------------------- Steven B. Staver, Managing Director Address for Notices: American Express Asset Management Group, Inc. 100 N. Sepulveda Blvd. Suite 1010 El Segundo, California 90245 Telephone: (310) 744-2402 Telecopy: (310) 615-1048 Attention: Angela Jarasunas, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ KZH STERLING LLC By: /s/ Susan Lee ---------------------------- Susan Lee, Authorized Agent Address for Notices: KZH Sterling LLC 140 E 45th Street, 11th Floor New York, New York 10017 Telephone: (212) 622-9357 Telecopy: (212) 622-0123 Attention: Virginia R. Conway [Signature Page to First Amendment to Credit Agreement] LENDER: ------ Sequils-Centurion V, Ltd. By: American Express Asset Management Group Inc. as Collateral Manager By: /s/ Steven B. Staver ------------------------------------------ Steven B. Staver, Managing Director Address for Notices: American Express Asset Management Group, Inc. 100 N. Sepulveda Blvd. Suite 1010 El Segundo, California 90245 Telephone: (310) 744-2402 Telecopy: (310) 615-1048 Attention: Angela Jarasunas, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ AMMC CDO II, LIMITED By: American Money Management Corp., as Collateral Manager By: /s/ David P. Meyer -------------------------------------- David P. Meyer, Vice President Address for Principal & Interest Notices: AMMC CDO II, LIMITED % The Chase Manhattan Bank 600 Travis Street, 50th Floor Houston, Texas 77002 Telephone: (713) 216-1557 Telecopy: (713) 577-5260 Fax Server Attention: Douglas Neaves A/C 23617-00 Address for Credit Information: American Money Management Corp. One East Fourth Street, 3rd Floor Cincinnati, Ohio 45202 Telephone: (513) 579-2904 Telecopy: (513) 579-2910 Attention: David P. Meyer Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ AMMC CDO I, LIMITED By: American Money Management Corp., as Collateral Manager By: /s/ David P. Meyer -------------------------------------- David P. Meyer, Vice President Address for Principal & Interest Notices: AMMC CDO I, LIMITED % The Chase Manhattan Bank 600 Travis Street, 50th Floor Houston, Texas 77002 Telephone: (713) 216-1557 Telecopy: (713) 216-8299 Attention: Douglas Neaves A/C 23340-00 Address for Credit Information: American Money Management Corp. One East Fourth Street, 3rd Floor Cincinnati, Ohio 45202 Telephone: (513) 579-2904 Telecopy: (513) 579-2910 Attention: David P. Meyer Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ BANK OF AMERICA, N.A. By: /s/ Robert Y Bennet -------------------------------------- Robert Y. Bennett, Managing Director Address for Notices: Bank of America, N.A. 1850 Gateway Boulevard CA4-706-05-11 Concord, California 94520 Telephone: (925) 675-7478 Telecopy: (888) 969-9281 Attention: Nina Lemmer, Customer Services Representative [Signature Page to First Amendment to Credit Agreement] LENDER: ------ BAVARIA TRR CORPORATION By: /s/ Lori Rezza ------------------------------ Lori Rezza, Vice President Address for Notices: Bavaria TRR Corporation 150 E. 42nd Street New York, New York 10017 Telephone: (212) 672-6011 Telecopy: (212) 672-5522 Attention: Kara Alnasrawi [Signature Page to First Amendment to Credit Agreement] LENDER: ------ CARAVELLE INVESTMENT FUND, L.L.C. By: /s/ Dean Criares ------------------------------- Dean Criares, Managing Director Address for Notices: Trimaran Advisors, L.L.C. 425 Lexington Avenue New York, New York 10017 [Signature Page to First Amendment to Credit Agreement] LENDER: ------ SAWGRASS TRADING LLC By: /s/ Ann E. Morris --------------------------------------- Ann E. Morris, Assistant Vice President Address for Notices: Banc of America Securities LLC 100 North Tryon Street NC1-007-06-07 Charlotte, North Carolina 28255 Telephone: (704) 387-1939 ###-###-#### Telecopy: (704) 388-0648 Attention: Annabet Morris/Diana Mushill [Signature Page to First Amendment to Credit Agreement] LENDER: ------ CIBC INC. By: /s/ Matthew B. Jones ----------------------------------------- Matthew B. Jones, Managing Director, CIBC World Markets Corp., as Agent Address for Notices: CIBC Inc. 425 Lexington Avenue New York, New York 10017 Telecopier: (212) 856-3558 Telephone: (212) 856-3774 Attention: Coleen Rsorto, Executive Director [Signature Page to First Amendment to Credit Agreement] LENDER: ------ CITIZENS BANK OF MASSACHUSETTS By: /s/ Hamilton H. Wood, Jr. ------------------------------------------ Hamilton H. Wood, Jr., Senior Vice President Address for Notices: Citizen Bank of Massachusetts Communications & Publishing Division 53 State Street, 8th Floor Boston, Massachusetts 02109 Telephone: (617) 994-7042 Telecopy: (617) 227-8854 Attention: Hamilton H. Wood, Jr., Senior Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ MUIRFIELD TRADING LLC By: /s/ Ann E. Morris --------------------------------------- Ann E. Morris, Assistant Vice President Address for Notices: Banc of America Securities LLC 100 North Tryon Street NC1-007-06-07 Charlotte, North Carolina 28255 Telephone: (704) 387-1939 ###-###-#### Telecopy : (704) 388-0648 Attention: Annabet Morris/Diana Mushill [Signature Page to First Amendment to Credit Agreement] LENDER: ------ OLYMPIC FUNDING TRUST, SERIES 1999-1 By: /s/ Ann E. Morris ------------------------------------- Ann E. Morris, Authorized Agent Address for Notices: Banc of America Securities LLC 100 North Tryon Street NC1-007-06-07 Charlotte, North Carolina 28255 Telephone: (704) 387-1939 ###-###-#### Telecopy: (704) 388-0648 Attention: Annabet Morris/Diana Mushill [Signature Page to First Amendment to Credit Agreement] LENDER: ------ SEQUILS-CUMBERLAND I, LTD. By: Deerfield Capital Management LLC as its Collateral Manager By: /s/ Mark E. Wittnebel ---------------------------------------- Mark E. Wittnebel, Senior Vice President Address for Notices: Deerfield Capital Management LLC 8700 West Bryn Mawr, 12th Floor Chicago, Illinois 60631 Telephone: (773) 380-1684 Telecopy: (773) 380-1629 Attention: Phyllis Zavala, Administrative Assistant [Signature Page to First Amendment to Credit Agreement] LENDER: ------ FIDELITY ADVISOR SERIES II: FIDELITY ADVISOR FLOATING RATE HIGH INCOME FUND By: /s/ John H. Costello ------------------------------------- John H. Costello, Assistant Treasurer VARIABLE INSURANCE PRODUCTS FUND II: ASSETS MANAGER PORTFOLIO By: /s/ John H. Costello ------------------------------------- John H. Costello, Assistant Treasurer VARIABLE INSURANCE PRODUCTS FUND II: ASSET MANAGER: GROWTH PORTFOLIO By: : / s/ John H. Costello ------------------------------------- John H. Costello, Assistant Treasurer Address for Notices: Fidelity Investments 82 Devonshire Street, E20E Boston, Massachusetts 02109 Telephone: (617) 392-8134 Telecopy: (617) 476-7774 Attention: Lisa Rymut, Director [Signature Page to First Amendment to Credit Agreement] LENDER: ------ FIRSTAR BANK, N.A. By: /s/ Gregory D. Knudsen ----------------------------------------- Gregory D. Knudsen, Senior Vice President Address for Notices: Firstar Bank, N.A. One Firstar Plaza St. Louis, Missouri 63101-1643 Telephone: (314) 418-2024 Telecopy: (314) 418-8292 Attention: Gail F. Scannell, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ FLEET NATIONAL BANK By: /s/ Manuel Burgueno ----------------------------------------- Manuel Burgueno, Vice President Address for Notices: Fleet National Bank 100 Federal Bank Boston, Massachusetts 02110 Telephone: (617) 434-2147 Telecopy: (617) 434-8426 Attention: Manuel Burgueno, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ FRANKLIN CLO II, LIMITED By: /s/ Chauncey Lufkin -------------------------------------- Chauncey Lufkin, Vice President Address for Notices: Franklin CLO II Limited One Franklin Parkway San Mateo, California 94403 Telephone: (650) 312-3732 Telecopy: (650) 312-3346 Attention: Richard Hsu, Portfolio Manager [Signature Page to First Amendment to Credit Agreement] LENDER: ------ FRANKLIN FLOATING RATE MASTER SERIES By: /s/ Chauncey Lufkin -------------------------------------- Chauncey Lufkin, Vice President Address for Notices: Franklin Floating Rate Master Series One Franklin Parkway San Mateo, California 94403 Telephone: (650) 312-3732 Telecopy: (650) 312-3346 Attention: Richard Hsu, Portfolio Manager [Signature Page to First Amendment to Credit Agreement] LENDER: ------ FRANKLIN FLOATING RATE TRUST By: /s/ Chauncey Lufkin -------------------------------------- Chauncey Lufkin, Vice President Address for Notices: Franklin Floating Rate Trust One Franklin Parkway San Mateo, California 94403 Telephone: (650) 312-3732 Telecopy: (650) 312-3346 Attention: Richard Hsu, Portfolio Manager [Signature Page to First Amendment to Credit Agreement] LENDER: ------- FREMONT INVESTMENT & LOAN By: /s/ Maria Chachere -------------------------------------- Maria Chachere, Vice President Address for Notices: Fremont Investment & Loan 2020 Santa Monica Boulevard Santa Monica, California 90404 Telephone: (310) 315-7063 Telecopy: (310) 264-7401 Attention: Maria Chachere, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ FIRST UNION NATIONAL BANK By: _____________________________________ [Name, Title] Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------- GOLDMAN SACHS CREDIT PARTNERS L.P. By: /s/ Daniel Allen ---------------------------------- Daniel Allen, Authorized Signatory Address for Notices: Goldman Sachs Credit Partners L.P. 85 Broad Street New York, New York 10004 Telephone: (212) 357-9145 Telecopy: (212) 346-2608 Attention: Jennifer Canu [Signature Page to First Amendment to Credit Agreement] LENDER: ------ GLENEAGLES TRADING LLC By: /s/ Ann E. Morris --------------------------------------- Ann E. Morris, Assistant Vice President Address for Notices: Banc of America Securities LLC 100 North Tryon Street NC1-007-06-07 Charlotte, North Carolina 28255 Telephone: (704) 387-1939 ###-###-#### Telecopy: (704) 388-0648 Attention: Annabet Morris/Diana Mushill [Signature Page to First Amendment to Credit Agreement] LENDER: ------ EMERALD ORCHARD LIMITED By: /s/ Gwen Zirkle ---------------------------------------- Gwen Zirkle, Attorney in fact Address for Notices: Emerald Orchard Limited 909 Fannin, Ste. 1700 Houston, Texas 77010 Telephone: (713) 653-8214 Telecopy: (713) 652-0914 Attention: Gwen Zirkle [Signature Page to First Amendment to Credit Agreement] LENDER: ------ PAMCO CAYMAN LTD. By: Highland Capital Management, L.P. As Collateral Manager By: /s/ Mark K. Okada ---------------------------------------- Mark K. Okada, Executive Vice President Address for Notices: Highland Capital Management 1300 Two Galleria Tower 13455 Noel Rd. LB #45 Dallas, Texas 75240 Telephone: (972) 628-4123 Telecopy: (972) 628-4143 Attention: Mandy Gauntt, Portfolio Administration [Signature Page to First Amendment to Credit Agreement] LENDER: ------ HIGHLAND LEGACY LIMITED By: Highland Capital Management, L.P. as Collateral Manager By: /s/ Mark K. Okada ---------------------------------------- Mark K. Okada, Executive Vice President Address for Notices: Highland Capital Management 1300 Two Galleria Tower 13455 Noel Rd. LB #45 Dallas, Texas 75240 Telephone: (972) 628-4123 Telecopy: (972) 628-4143 Attention: Mandy Gauntt, Portfolio Administration [Signature Page to First Amendment to Credit Agreement] LENDER: ------ HIGHLAND OFFSHORE PARTNERS, L.P. By: Highland Capital Management, L.P. as General Manager By: /s/ Mark K. Okada ---------------------------------------- Mark K. Okada, Executive Vice President Address for Notices: Highland Capital Management 1300 Two Galleria Tower 13455 Noel Rd. LB #45 Dallas, Texas 75240 Telephone: (972) 628-4123 Telecopy: (972) 628-4143 Attention: Mandy Gauntt, Portfolio Administration [Signature Page to First Amendment to Credit Agreement] LENDER: ------ IBJ WHITEHALL BANK & TRUST COMPANY By: /s/ Alexander B. Wright ---------------------------------------- Alexander B. Wright, Director Address for Notices: IBJ Whitehall Bank & Trust Company One State Street Plaza New York, New York 10004 Telephone: (212) 858-2191 Telecopy: (212) 858-2768 Attention: Alexander B. Wright, Director [Signature Page to First Amendment to Credit Agreement] LENDER: ------ ARCHIMEDES FUNDING III, LTD. By: ING Capital Advisors LLC, as Collateral Manager By: /s/ Jonathan David ---------------------------------------- Jonathan David, Vice President Address for Notices: ING Capital Advisors 333 S. Grand Ave., #4100 Los Angeles, California 90071 Telephone: (213) 621-3762 Telecopy: (213) 621-3795 Attention: Jonathan David, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ KZH ING-1 LLC By: /s/ Susan Lee ---------------------------------------- Susan Lee, Authorized Agent Address for Notices: KZH ING-1 LLC 140 E 45th Street, 11th Floor New York, New York 10017 Telephone: (212) 622-9357 Telecopy: (212) 622-0123 Attention: Virginia R. Conway [Signature Page to First Amendment to Credit Agreement] LENDER: ------ KZH ING-2 LLC By: /s/ Susan Lee ---------------------------------------- Susan Lee, Authorized Agent Address for Notices: KZH ING-2 LLC 140 E 45th Street, 11th Floor New York, New York 10017 Telephone: (212) 622-9357 Telecopy: (212) 622-0123 Attention: Virginia R. Conway [Signature Page to First Amendment to Credit Agreement] LENDER: ------ SEQUILS-ING I (HBDGM), LTD. By: ING Capital Advisors LLC, as Collateral Manager By: /s/ Jonathan David ---------------------------------------- Jonathan David, Vice President Address for Notices: ING Capital Advisors 333 S. Grand Ave. #4100 Los Angeles, California 90071 Telephone: (213) 621-3762 Telecopy: (213) 621-3795 Attention: Jonathan David, VP [Signature Page to First Amendment to Credit Agreement] LENDER: ------ INNER HARBOR CBO 2001-1 LTD., T. Rowe Price Associates, Inc., as Collateral Manager By: /s/ Kim Z. Golden ---------------------------------------- Kim Z. Golden, Vice President Address for Notices: T. Rowe Price Associates, Inc. 100 E. Pratt Street Baltimore, Maryland 21202 Telephone: (410) 345-2013 Telecopy: (410) 345-6575 Attention: Darrell Braman Associate Legal Counsel [Signature Page to First Amendment to Credit Agreement] LENDER: ------ KZH CYPRESSTREE-1 LLC By: /s/ Susan Lee --------------------------------------- Susan Lee, Authorized Agent Address for Notices: KZH Cypresstree-1 LLC 140 E 45th Street, 11th Floor New York, New York 10017 Telephone: (212) 622-9357 Telecopy: (212) 622-0123 Attention: Virgina R. Conway [Signature Page to First Amendment to Credit Agreement] LENDER: ------ MERRILL LYNCH GLOBAL INVESTMENT SERIES: BANK LOAN INCOME PORTFOLIO By: Merrill Lynch Investment Managers, L.P. As Investment Advisor By: /s/ Andrew C. Liggio ---------------------------------------- Andrew C. Liggio, Authorized Signatory Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ DEBT STRATEGIES FUND, INC. By: /s/ Andrew C. Liggio ---------------------------------------- Andrew C. Liggio, Authorized Signatory Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ MERRILL LYNCH GLOBAL INVESTMENT SERIES: INCOME STRATEGIES PORTFOLIO By: Merrill Lynch Investment Managers, L.P. As Investment Advisor By: /s/ Andrew C. Liggio ----------------------------------------- Andrew C. Liggio, Authorized Signatory Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ Longhorn CDO (Cayman) LTD By: Merrill Lynch Investment Managers, L.P. As Investment Advisor By: /s/ Andrew C. Liggio ---------------------------------------- Andrew C. Liggio, Authorized Signatory Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ MASTER SENIOR FLOATING RATE TRUST By: /s/ Andrew C. Liggio ---------------------------------------- Andrew C. Liggio, Authorized Signatory Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ MERRILL LYNCH PRIME RATE PORTFOLIO By: Merrill Lynch Investment Managers, L.P. As Investment Advisor By: /s/ Andrew C. Liggio ---------------------------------------- Andrew C. Liggio, Authorized Signatory Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ MERRILL LYNCH SENIOR FLOATING RATE FUND, INC. By: /s/ Andrew C. Liggio ---------------------------------------- Andrew C. Liggio, Authorized Signatory Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ SENIOR HIGH INCOME PORTFOLIO, INC. By: /s/ Andrew C. Liggio ---------------------------------------- Andrew C. Liggio, Authorized Signatory Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------- NATIONAL WESTMINSTER BANK PLC By: NatWest Capital Markets Limited, its Agent By: Greenwich Capital Markets, Inc., its Agent By: /s/ Kelly A Myers -------------------------------------------- Kelly A. Myers, Vice President Address for Principal & Interest Notices: National Westminster Bank PLC ("NatWest") % Greenwich Capital Markets, Inc. 600 Steamboat Road Greenwich, Connecticut 06830 Telephone: (203) 618-2553 Telecopy: (203) 618-2112 Attention: Harry Paschalidis Address for Credit Information: American Money Management Corp. One East Fourth Street, 3rd Floor Cincinnati, Ohio 45202 Telephone: (513) 579-2904 Telecopy: (513) 579-2910 Attention: David P. Meyer, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ KZH SHOSHONE LLC By: /s/ Susan Lee ---------------------------------------- Susan Lee, Authorized Agent Address for Notices: KZH SHOSHONE LLC 140 E. 45th Street, 11th Floor New York, New York 10017 Telephone: (212) 622-9357 Telecopy: (212) 622-0123 Attention: Virginia R. Conway [Signature Page to First Amendment to Credit Agreement] LENDER: ------ HARBOURVIEW CDO II, LTD. By: /s/ David Foxhoven ---------------------------------------- David Foxhoven, AVP Address for Notices: HarbourView CDO II, Ltd. 6803 South Tucson Way Englewood, Colorado 80112-3924 Telephone: (303) 768-3434 Telecopy: (303) 645-0942 Attention: Joseph Welsh, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ OPPENHEIMER SENIOR FLOATING RATE FUND By: /s/ David Foxhoven ---------------------------------------- David Foxhoven, AVP Address for Notices: Oppenheimer Senior Floating Rate Fund 6803 South Tucson Way Englewood, Colorado 80112-3924 Telephone: (303) 768-3434 Telecopy: (303) 645-0942 Attention: Joseph Welsh, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ PILGRIM CLO 1999 - 1 LTD. By: ING Pilgrim Investments, Inc. _____________as its investment manager By: /s/ Jeffrey A. Bakalar ---------------------------------------- Jeffrey A. Bakalar, Senior Vice President Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ PILGRIM AMERICA HIGH INCOME INVESTMENTS INC. LTD. By: ING Pilgrim Investments, Inc. ______________as its investment manager By: /s/ Jeffrey A. Bakalar ----------------------------------------- Jeffrey A. Bakalar, Senior Vice President Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ ML CLO XV PILGRIM AMERICA (CAYMAN) LTD. By: ING Pilgrim Investments, Inc. _______________as its investment manager By: /s/ Jeffrey A. Bakalar ------------------------------------------ Jeffrey A. Bakalar, Senior Vice President Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ ML CLO XX PILGRIM AMERICA (CAYMAN) LTD. By: ING Pilgrim Investments, Inc. ______________as its investment manager By: /s/ Jeffrey A. Bakalar ----------------------------------------- Jeffrey A. Bakalar, Senior Vice President Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ PILGRIM PRIME RATE TRUST By: ING Pilgrim Investments, Inc. ______________as its investment manager By: /s/ Jeffrey A. Bakalar ----------------------------------------- Jeffrey A. Bakalar, Senior Vice President Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ SEQUILS PILGRIM - 1 LTD. By: ING Pilgrim Investments, Inc. ______________as its investment manager By: /s/ Jeffrey A. Bakalar ----------------------------------------- Jeffrey A. Bakalar, Senior Vice President Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ PILGRIM SENIOR INCOME FUND By: ING Pilgrim Investments, Inc. _____as its investment manager By: /s/ Jeffrey A. Bakalar ----------------------------------------- Jeffrey A. Bakalar, Senior Vice President Address for Notices: [Name of Institution] [Street Address of Institution] Telephone: (xxx) xxx-xxxx Telecopy: (yyy) yyy-yyyy Attention: [Name, Title] [Signature Page to First Amendment to Credit Agreement] LENDER: ------ SANKATY ADVISORS, INC. as Collateral Manager for Great Point CLO 1999-1 LTD., as Term Lender By: /s/ Diane J. Exter ---------------------------------------- Diane J. Exter, Managing Director, Portfolio Manager Address for Notices: Sankaty Advisors, LLC Two Copley Place Boston, Massachusetts 02116 Telephone: (617) 572-3216 Telecopy: (617) 572-2134 [Signature Page to First Amendment to Credit Agreement] LENDER: ------ SANKATY ADVISORS, LLC, as Collateral Manager for BRANT POINT II CBO 2000-1, LTD., as Term Lender By: /s/ Diane J. Exter ---------------------------------------- Diane J. Exter, Managing Director, Portfolio Manager Address for Notices: Sankaty Advisors, LLC Two Copley Place Boston, Massachusetts 02116 Telephone: (617) 572-3216 Telecopy: (617) 572-2134 [Signature Page to First Amendment to Credit Agreement] LENDER: ------ SANKATY HIGH YIELD ASSET PARTNERS, L.P. By: /s/ Diane J. Exter ---------------------------------------- Diane J. Exter, Managing Director, Portfolio Manager Address for Notices: Sankaty Advisors, LLC Two Copley Place Boston, Massachusetts 02116 Telephone: (617) 572-3216 Telecopy: (617) 572-2134 [Signature Page to First Amendment to Credit Agreement] LENDER: ------ SANKATY HIGH YIELD PARTNERS II, L.P. By: /s/ Diane J. Exter ---------------------------------------- Diane J. Exter, Managing Director, Portfolio Manager Address for Notices: Sankaty Advisors, LLC Two Copley Place Boston, Massachusetts 02116 Telephone: (617) 572-3216 Telecopy: (617) 572-2134 [Signature Page to First Amendment to Credit Agreement] LENDER: ------ SEABOARD CLO 2000 LTD. By: /s/ Sheppard H.C. Davis, Jr. ---------------------------------------- Sheppard H.C. Davis, Jr. CEO of Seaboard & Co. Its Collateral Manager Address for Notices: Seaboard & Co. 32 West Pennsylvania Avenue Towson, Maryland ###-###-#### Telephone: (410) 938-8770 Telecopy: (410) 938-8779 Attention: Mike Doran [Signature Page to First Amendment to Credit Agreement] LENDER: ------ STANFIELD ARBITRAGE CDO, LTD. By: Stanfield Capital Partners LLC as its Collateral Manager By: /s/ Stephen M. Alfieri ---------------------------------------- Stephen M. Alfieri, Managing Partner Address for Notices: Stanfield Arbitrage CDO, Ltd. c/o State Street Bank & Trust Co. Corporate Trust Department Two Avenue de Lafayette Boston, Massachusetts 02110 Telephone: (617) 662-1221 Telecopy: (617) 988-9668 Attention: Jennifer Vlasuk and Stanfield Arbitrage CDO, Ltd. c/o Stanfield Capital Partners LLC 330 Madison Avenue, 27th Floor New York, New York 10017 Telephone: (212) 284-4306 Telecopy: (212) 284-4341 Attention: Susan McKofke [Signature Page to First Amendment to Credit Agreement] LENDER: ------ STANFIELD CLO, LTD. By: Stanfield Capital Partners LLC as its Collateral Manager By: /s/ Stephen M. Alfieri ---------------------------------------- Stephen M. Alfieri, Managing Partner Address for Notices: Stanfield CLO Ltd. c/o State Street Bank & Trust Co. Corporate Trust Department Two Avenue de Lafayette Boston, Massachusetts 02110 Telephone: (617) 662-1221 Telecopy: (617) 988-9668 Attention: Jennifer Vlasuk and Stanfield CLO Ltd. c/o Stanfield Capital Partners LLC 330 Madison Avenue, 27th Floor New York, New York 10017 Telephone: (212) 284-4341 Telecopy: (212) 284-4341 Attention: Susan McKofke [Signature Page to First Amendment to Credit Agreement] LENDER: ------ STANFIELD/RMF TRANSATLANTIC CDO, LTD. By: Stanfield Capital Partners LLC as its Collateral Manager By: /s/ Stephen M. Alfieri ---------------------------------------- Stephen M. Alfieri, Managing Partner Address for Notices: Stanfield/RMF Transatlantic CDO, Ltd. c/o State Street Bank & Trust Co. Corporate Trust Department Two Avenue de Lafayette Boston, Massachusetts 02110 Telephone: (617) 662-1403 Telecopy: (617) 988-9668 Attention: Salomao Couri and Stanfield /RMF Transatlantic CDO, Ltd. c/o Stanfield Capital Partners LLC 330 Madison Avenue, 27th Floor New York, New York 10017 Telephone: (212) 284-4306 Telecopy: (212) 284-4341 Attention: Susan McKofke [Signature Page to First Amendment to Credit Agreement] LENDER: ------ WINDSOR LOAN FUNDING, LIMITED By: Stanfield Capital Partners LLC as its Investment Manager By: /s/ Stephen M. Alfieri --------------------------------------- Stephen M. Alfieri, Managing Partner Address for Notices: Windsor Loan Funding, Limited c/o Chase The Chase Manhattan Bank - Texas 600 Travis, 50th Floor Houston, Texas 77002 Telephone: (713) 216-8684 Telecopy: (713) 577-5265 Attention: Monica Lopez and Windsor Loan Funding, Limited c/o Stanfield Capital Partners LLC 330 Madison Avenue, 27th Floor New York, New York 10017 Telephone: (212) 284-4306 Telecopy: (212) 284-4341 Attention: Susan McKofke [Signature Page to First Amendment to Credit Agreement] LENDER: ------ TORONTO DOMINION (NEW YORK), INC. By: /s/ Stacey L. Malek ---------------------------------------- Stacey L. Malek, Vice President Address for Notices: Toronto Dominion (New York), Inc. 909 Fannin, Ste. 1700 Houston, Texas 77010 Telephone: (713) 653-8215 Telecopy: (713) 652-0914 Attention: Stacey Malek, Vice President [Signature Page to First Amendment to Credit Agreement] LENDER: ------ UNION BANK OF CALIFORNIA, N.A. By: /s/ Pete Connoy ---------------------------------------- Pete Connoy Address for Notices: Union Bank of California, N.A. 445 South Figueroa Street, 16th Floor Los Angeles, California 90071 Telephone: (213) 236-6903 Telecopy: (213) 236-5747 [Signature Page to First Amendment to Credit Agreement] JOINDER BY GUARANTORS --------------------- Each of the undersigned Subsidiaries of Pegasus Media & Communications, Inc. (the "Subsidiaries") hereby (a) jointly and severally joins in the execution of the foregoing First Amendment to Credit Agreement dated as of July 23, 2001 (the "Amendment") to which this Joinder is attached, to confirm its respective consent to all of the transactions contemplated by the Amendment and all agreements and instruments executed and delivered in connection therewith, and (b) jointly and severally reaffirms and ratifies all agreements set forth in such Security Documents securing such guaranty, all of which shall in all respects remain in full force and effect and shall continue to guaranty and secure any and all indebtedness, obligations and liabilities of the Borrower to the Agent and the Lenders, whether now existing or hereafter arising, on the same terms and conditions as are now set forth in such Security Documents. PEGASUS BROADCAST TELEVISION, INC., WOLF LICENSE CORP., WDSI LICENSE, CORP., WDBD LICENSE CORP., WILF, INC., BRIDE COMMUNICATIONS, INC., HMW, INC., PORTLAND BROADCASTING, INC., B.T. SATELLITE, INC., TELECAST OF FLORIDA, INC., WTLH LICENSE CORP., PST HOLDINGS, INC., PEGASUS SATELLITE TELEVISION, INC., HENRY COUNTY MRTV, INC., PEGASUS SATELLITE FINANCE CORPORATION, PEGASUS SATELLITE FINANCE CORP. 1999-1, PEGASUS SATELLITE FINANCE CORP. 1999-2, PEGASUS SATELLITE FINANCE CORP. 1999-3, PEGASUS SATELLITE FINANCE CORP. 1999-4, CARR RURAL TV, INC., DTS MANAGEMENT, LLC, DIGITAL TELEVISION SERVICES OF INDIANA, LLC, GOLDEN SKY HOLDINGS, INC., GOLDEN SKY DBS, INC., GOLDEN SKY SYSTEMS, INC., ARGOS SUPPORT SERVICES COMPANY, DBS TELE-VENTURE, INC., PRIMEWATCH, INC. By: /s/ Scott A. Blank ---------------------------------------- Duly authorized signatory as to all Schedule 1.02(a)(iv) -------------------- Letter of Credit Request ------------------------ Dated: ____(1)____ Bankers Trust Company, as Issuing Bank under the Credit Agreement referred to below One Bankers Trust Plaza New York, New York 10006 Attention: Commercial Loan Division Standby LC Unit - MS 2143 Re: Letter of Credit Request under the First Amended and Restated Credit Agreement dated as of January 14, 2000 among Pegasus Media & Communications, Inc. (the "Borrower"), the Lenders from time to time party thereto, CIBC World Markets Corp. and Deutsche Bank Securities, Inc., as Co-Arrangers, Bankers Trust Company, as Agent for the Lenders, Canadian Imperial Bank of Commerce, as Syndication Agent, and Fleet National Bank, as Documentation Agent (as amended, restated, renewed, replaced, supplemented or otherwise modified from time, the "Credit Agreement") Ladies and Gentlemen: The Borrower hereby requests that Bankers Trust Company, as Issuing Bank under the Credit Agreement, issue an irrevocable standby Letter of Credit for the account of the undersigned on _____(2)_____ (the "Issuance Date") in an aggregate stated amount of US$_____(3)_____. Capitalized terms used herein without definition shall have the meanings assigned to them in the Credit Agreement. The beneficiary of the Letter of Credit will be _____(4)_____, and such Letter of Credit will be a _____(5)_____ and will have a stated expiration date of _____(6)_____. (1) Insert date of Letter of Credit Request. (2) Insert date of issuance, which shall be at least three (3) Business Days from the date of the Letter of Credit Request (or such shorter period as is acceptable to the Issuing Bank). (3) Insert initial face amount of the requested Letter of Credit. (4) Insert full name and address of the Beneficiary. (5) Insert [NRTC Letter of Credit] [General Purpose Letter of Credit] [Seller Letter of Credit] (6) Insert expiry date, which cannot be later then the date which is one year from the Issuance Date or the 10th Business Day prior to the Expiration Date. The Borrower further certifies that: (a) All warranties and representations set forth in the Credit Agreement and the other Loan Documents will be true and correct in all material respects on the Issuance Date of the Letter of Credit requested hereby (except to the extent they expressly relate to an earlier specified date or are affected by transactions or events occurring after the Closing Date and permitted or not prohibited under the Credit Agreement). (b) The Borrower has performed and complied in all material respects with all terms and conditions of the Credit Agreement and the applicable Letter of Credit Documents required to be performed or complied with by it prior to the Issuance Date of the Letter of Credit requested hereby. (c) After giving effect to the issuance of such Letter of Credit (both as of the proposed date thereof and, on a pro forma basis, the last day of _______, 200___ [ Insert the most recent month for which financial statements have been delivered to the Lenders under Section 6.05], no Default has occurred and is continuing. (d) As of the Issuance Date, after giving effect to the issuance of the Letter of Credit requested hereby, the Letter of Credit Exposure will not exceed the limits specified in Section 1.02(a)(i) of the Credit Agreement. (e) With reference to Section 1.01(b) of the Credit Agreement, after giving effect to the issuance of the Letter of Credit requested hereby on the Issuance Date, (i) the aggregate amount of all outstanding Revolving Loans will be $_________, (ii) the Letter of Credit Exposure will be $___________, (iii) that portion of the Permitted Seller Debt Outstandings not secured by Letters of Credit will be $_________, and the total amount referred to in the foregoing clauses (i), (ii) and (iii) will be $___________, which amount does not exceed the aggregate Commitments in effect on the date hereof and will not exceed the aggregate Commitments on the Issuance Date. (f) Without limiting the generality of paragraph (a) above, after giving effect to the issuance of such Letter of Credit, all of the Obligations (i) are permitted under, and do not and will not violate, the PCC Preferred Stock Designation , the PCC Exchange Indenture, the PCC Exchange Notes, the PCC 1997 Indenture, the PCC 1997 Senior Notes, the PCC 1998 Indenture, the PCC 1998 Senior Notes, the Golden Sky Indentures, the Golden Sky Notes and the Subordinated Debt Documents, (ii) constitute "Senior Debt" and, with the exception of Rate Hedging Obligations, "Designated Senior Debt" under the Subordinated Indenture and (iii) constitute ["Permitted Refinancing Debt"] and "Eligible Indebtedness" under the PCC Exchange Indenture, the PCC 1997 Indenture, the PCC 1998 Indenture and each of the Golden Sky Indentures. -2- (g) [The Calculation of Leverage Ratio attached hereto as Exhibit A correctly applies the provisions of the Subordinated Indenture to the appropriate financial statements and books and records of the Borrower and its Subsidiaries and accurately calculates the "Indebtedness to Adjusted Operating Cash Flow Ratio" (as defined in the Subordinated Indenture) as of the Issuance Date.]* After giving effect to the issuance of the Letter of Credit requested hereby, the "Indebtedness to Adjusted Operating Cash Flow Ratio" will not exceed [6.50 to 1.00], and the Borrower will be in full compliance with Section 4.09 of the Subordinated Indenture. (h) [The Calculation of Leverage Ratio attached hereto as Exhibit B correctly applies the provisions of the PCC 1997 Indenture to the appropriate financial statements and books and records of the Parent and its Subsidiaries and accurately calculates the "Indebtedness to Adjusted Operating Cash Flow Ratio" (as defined in the PCC 1997 Indenture) as of the Issuance Date.]* After giving effect to the issuance of the Letter of Credit requested hereby, the "Indebtedness to Adjusted Operating Cash Flow Ratio" will not exceed [7.00 to 1.00], and the Borrower will be in full compliance with Section 4.09 of the PCC 1997 Indenture. (i) [The Calculation of Leverage Ratio attached hereto as Exhibit C correctly applies the provisions of the PCC 1998 Indenture to the appropriate financial statements and books and records of the Parent and its Subsidiaries and accurately calculates the "Indebtedness to Adjusted Operating Cash Flow Ratio" (as defined in the PCC 1998 Indenture) as of the Issuance Date.]* After giving effect to the issuance of the Letter of Credit requested hereby, the "Indebtedness to Adjusted Operating Cash Flow Ratio" will not exceed [7.00 to 1.00], and the Borrower will be in full compliance with Section 4.09 of the PCC 1998 Indenture. (j) [The Calculation of Leverage Ratio attached hereto as Exhibit D correctly applies the provisions of each of the Golden Sky Indentures to the appropriate financial statements and books and records of the Parent and its Subsidiaries and accurately calculates the "Indebtedness to Adjusted Operating Cash Flow Ratio" (as defined in each of the Golden Sky Indentures) as of the Issuance Date.]* After giving effect to the issuance of the Letter of Credit requested hereby, the "Indebtedness to Adjusted Operating Cash Flow Ratio" will not exceed [7.00 to 1.00], and the Borrower will be in full compliance with Section 4.09 of the PCC 1998 Indenture. Copies of all documentation with respect to the supported transaction are attached hereto. -3- PEGASUS MEDIA & COMMUNICATIONS, INC. By:_________________________________ Name:____________________________ Title:___________________________ [Attach Exhibits A, B, C and D on Closing Date and thereafter, if Leverage Ratio Calculation is requested by Agent] Schedule 1.06(a) ---------------- LOAN REQUEST ------------ _______________, 200___ Bankers Trust Company, as Agent under the Credit Agreement referred to below One Bankers Trust Plaza New York, New York 10006 Attention: [Mr. George Pottanat] Re: Loan Request under the First Amended and Restated Credit Agreement dated as of January 14, 2000 among Pegasus Media & Communications, Inc. (the "Borrower"), the Lenders from time to time party thereto, CIBC World Markets Corp. and Deutsche Bank Securities, Inc., as Co-Arrangers, Bankers Trust Company, as Agent for the Lenders, Canadian Imperial Bank of Commerce, as Syndication Agent, and Fleet National Bank, as Documentation Agent (as amended, restated, renewed, replaced, supplemented or otherwise modified from time, the "Credit Agreement") ---------------- Ladies and Gentlemen: Pursuant to Section 1.06 of the Credit Agreement, this letter shall serve as a request for Loans to be made by the Lenders to the Borrower in the aggregate principal amount of $ , which Loans shall be [LIBOR/Base Rate] Loans [with an Interest Period commencing and ending ]. The Borrowing Date of such Loans should be , 200___. Capitalized terms used herein without definition shall have the meanings assigned to them in the Credit Agreement. The undersigned hereby certifies that such Loans, to the extent not applied for working capital purposes of the Companies, will be used for the following purposes: ______________________________________________________________ ______________________________________________________________ The undersigned hereby further certifies as follows: (a) All warranties and representations set forth in the Credit Agreement and the other Loan Documents will be true and correct in all material respects on the Credit Extension Date of the Loans requested hereby, except to the extent they expressly relate to an earlier specified date or are affected by transactions or events occurring after the Closing Date and permitted or not prohibited under the Credit Agreement. (b) The Borrower has performed and complied in all material respects with all terms and conditions of the Credit Agreement required to be performed or complied with by it prior to the Credit Extension Date of the Loans requested hereby. (c) With reference to Section 1.01(b) of the Credit Agreement, after giving effect to the Loans requested hereby and the use of proceeds thereof on the Credit Extension Date thereof, the, (i) the aggregate amount of all outstanding Loans will be $_________, (ii) the Letter of Credit Exposure will be $___________, (iii) that portion of the Permitted Seller Debt Outstandings not secured by Letters of Credit will be $_________, and the total amount referred to in the foregoing clauses (i), (ii) and (iii) will be $___________, which amount does not exceed the aggregate Commitments in effect on the date hereof and will not exceed the aggregate Commitments on the Credit Extension Date. (d) Without limiting the generality of paragraph (a) above, after giving effect to such Loans and the use of proceeds thereof on the Borrowing Date thereof, all of the Obligations (i) are permitted under, and do not and will not violate, the PCC Preferred Stock Designation, the PCC Exchange Indenture, the PCC Exchange Notes, the PCC 1997 Indenture, the PCC 1997 Senior Notes, the PCC 1998 Indenture, the PCC 1998 Senior Notes and the Subordinated Debt Documents, (ii) constitute "Senior Debt" and, with the exception of Rate Hedging Obligations, "Designated Senior Debt" under the Subordinated Indenture and (iii) constitute ["Permitted Refinancing Debt"] and "Eligible Indebtedness" under the PCC Exchange Indenture, the PCC 1997 Indenture, the PCC 1998 Indenture and each of the Golden Sky Indentures. (e) [The Calculation of Leverage Ratio attached hereto as Exhibit A correctly applies the provisions of the Subordinated Indenture to the appropriate financial statements and books and records of the Borrower and its Subsidiaries and accurately calculates the "Indebtedness to Adjusted Operating Cash Flow Ratio" (as defined in the Subordinated Indenture) as of the Credit Extension Date of the Loans requested hereby.]* After giving effect to the Loans requested hereby and the use of proceeds thereof, the "Indebtedness to Adjusted Operating Cash Flow Ratio" will not exceed [6.50 to 1.00], and the Borrower will be in full compliance with Section 4.09 of the Subordinated Indenture. (f) [The Calculation of Leverage Ratio attached hereto as Exhibit B correctly applies the provisions of the PCC 1997 Indenture to the appropriate financial statements and books and records of the Parent and its Subsidiaries and accurately calculates the "Indebtedness to Adjusted Operating Cash Flow Ratio" (as defined in the PCC 1997 Indenture) as of the Credit Extension Date of the Loans requested hereby.]* After giving effect to the Loans requested hereby and the use of proceeds thereof, the "Indebtedness to Adjusted Operating Cash Flow Ratio" will not exceed [7.00 to 1.00], and the Borrower will be in full compliance with Section 4.09 of the PCC 1997 Indenture. (g) [The Calculation of Leverage Ratio attached hereto as Exhibit C correctly applies the provisions of the PCC 1998 Indenture to the appropriate financial statements and books and records of the Parent and its Subsidiaries and accurately calculates the "Indebtedness to Adjusted Operating Cash Flow Ratio" (as defined in the PCC 1998 Indenture) as of the Credit Extension Date of the Loans requested hereby.]* After giving effect to the Loans requested hereby and the use of proceeds thereof, the "Indebtedness to Adjusted Operating Cash Flow Ratio" will not exceed [7.00 to 1.00], and the Borrower will be in full compliance with Section 4.09 of the PCC 1998 Indenture.] (h) [[The Calculation of Leverage Ratio attached hereto as Exhibit D correctly applies the provisions of each of the Golden Sky Indentures to the appropriate financial statements and books and records of the Parent and its Subsidiaries and accurately calculates the "Indebtedness to Adjusted Operating Cash Flow Ratio" (as defined in the Golden Sky Indentures) as of the Credit Extension Date of the Loans requested hereby.]* After giving effect to the Loans requested hereby and the use of proceeds thereof, the "Indebtedness to Adjusted Operating Cash Flow Ratio" will not exceed [7.00 to 1.00], and the Borrower will be in full compliance with Section 4.09 of each of the Golden Sky Indentures. [(i) After giving effect to the Acquisition Loans requested hereby (both as of the proposed Credit Extension Date and, on a pro forma basis, the last day of __________, 200___ [Insert the most recent fiscal quarter for which financial statements are required to be provided (and have been so provided) to the Lenders under Section 6.05], and the application of the proceeds thereof to effect the related Acquisition and otherwise, no Default has occurred and is continuing, as demonstrated in the detailed calculations attached as Exhibit E to this Loan Request.] PEGASUS MEDIA & COMMUNICATIONS, INC. By:_________________________________ Name:____________________________ Title:___________________________ [Attach Exhibits A, B, C and D on the Closing Date and thereafter, if requested by the Agent, and/or Exhibit E, if Acquisition Loans are proposed] Exhibit A to Schedule 6.05 -------------------------- FINANCIAL COVENANTS ------------------- A. PCC LEVERAGE (Section 5.01(a)) ------------ 1. MAXIMUM PERMITTED PCC LEVERAGE RATIO DURING THE PERIOD ___________ THROUGH ___________. 7:00:1.00 Note: The term "PCC Leverage Ratio" has the meaning given to the term "Indebtedness to Adjusted Operating Cash Flow Ratio" (as applied to indebtedness having been incurred on the basis of such ratio) in the PCC 1998 Indenture, as in effect on January 14, 2000, without giving effect to any amendment thereto after such date (unless the Required Lenders agree in writing, in their sole discretion, that any such amendment shall be given effect for purposes of this Agreement). Attached as an Addendum to this Schedule is a detail of the computation of such ratio, in accordance with the applicable provisions of the PCC 1998 Indenture. Actual PCC Leverage Ratio during such period _____:1.00 B. BORROWER LEVERAGE RATIO (Section 5.01(b)) ----------------------- 1. MAXIMUM PERMITTED RATIO OF TOTAL FUNDED DEBT AS OF ________________ TO ANNUALIZED EBITDA FOR THE MOST RECENTLY ENDED FISCAL QUARTER (Please circle the applicable ratio): Period Maximum Ratio ------ ------------- The Closing Date through June 29, 2001 4.00:1.00 June 30, 2001 through December 30, 2001 3.75:1.00 December 31, 2001 through June 29, 2002 3.50:1.00 June 30, 2002 through December 30, 2002 3.00:1.00 December 31, 2002 through June 29, 2003 2.50:1.00 June 30, 2003 through December 30, 2003 2.00:1.00 December 31, 2003 and thereafter 1.50:1.00 -2- 2. ANNUALIZED EBITDA FOR THE FISCAL QUARTER ENDING ______________________ (a) LOCATION CASH FLOW DERIVED FROM THE DBS SUBSIDIARIES FOR SUCH FISCAL QUARTER (i) Net Income $_______ (ii) Plus: Subscriber Acquisition Costs $_______ (iii) Plus: Total Interest Expense $_______ (iv) Plus: Depreciation/amortization $_______ (v) Plus: Taxes in respect of income and profits, to the extent expensed (including without duplication payments paid under the Tax Sharing Agreement) $_______ (vi) Plus: Transaction Costs $_______ (vii) Plus: Other non-cash expenses (including the amortization of television program license and rental fees) $_______ (viii) Minus: Television program license and rental fees actually paid in cash $_______ (ix) Total EBITDA $_______ (x) Adjustments for Acquisitions (please circle plus or minus) $_______ (xi) Adjustments for Dispositions (please circle plus or minus) $_______ (xii) Total EBITDA, adjusted as permitted by the Agent for $_______ Acquisitions/Dispositions (xiii) Plus: Amounts deducted for corporate overhead charges $_______ (xiv) Location Cash Flow derived from the DBS Subsidiaries for such fiscal quarter $_______

-2- (b) LOCATION CASH FLOW DERIVED FROM THE SUBSIDIARIES (OTHER THAN DBS SUBSIDIARIES) FOR SUCH FISCAL QUARTER AND THE IMMEDIATELY PRECEDING THREE (3) FISCAL QUARTERS (i) Net Income $_______ (ii) Plus: Subscriber Acquisition Costs $_______ (iii) Plus: Total Interest Expense $_______ (iv) Plus: Depreciation/amortization $_______ (v) Plus: Taxes in respect of income and profits, to the extent expensed (including without duplication payments paid under the Tax Sharing Agreement) $_______ (vi) Plus: Transaction Costs $_______ (vii) Plus: Other non-cash expenses (including the amortization of television program license and rental fees) $_______ (viii) Minus: Television program license and rental fees actually paid in cash $_______ (ix) Total EBITDA $_______ (x) Adjustments for Acquisitions (please circle plus or minus) $_______ (xi) Adjustments for Dispositions (please circle plus or minus) $_______ (xii) Total EBITDA, adjusted as permitted by the Agent for $_______ Acquisitions/Dispositions (xiii) Plus: Amounts deducted for corporate overhead charges $_______ (xiv) Location Cash Flow derived from Subsidiaries (other than the DBS Subsidiaries) for such period $_______

-3- (c) ANNUALIZED EBITDA FOR SUCH FISCAL QUARTER (i) Location Cash Flow derived from the DBS Subsidiaries for such fiscal quarter (See B(2)(a)(xiv)) $______ (ii) Multiply: (i) by four (4) $______ (iii) Plus: Location Cash Flow derived from the Subsidiaries (other than DBS Subsidiaries) for such fiscal quarter and the immediately preceding three (3) fiscal quarters (See B(2)(b)(xiv)) $______ (iv) Minus: Corporate overhead charges (including Management Fees) for all of the Borrower's Subsidiaries for such fiscal quarter and the immediately preceding three (3) fiscal quarters $______ (v) Annualized EBITDA for such fiscal quarter $______ 3. TOTAL FUNDED DEBT (a) Indebtedness underP. (a) throughP. (f) of the definition thereof as of $_______ (b) Plus: Aggregate amount payable as of such date (whether or not due) in respect of any and all LMA Purchase Options $_______ (c) Total Funded Debt $_______ 4. ACTUAL RATIO (a) Total Funded Debt as of ________ (See B(3)(c)) $_______ (b) Annualized EBITDA (See B(2)(c)(v) for the fiscal quarter ended _________ $______ (c) Actual Ratio of (a) to (b): ____:1:00

-4- C. CHURN ADJUSTED BORROWER LEVERAGE RATIO (Section 5.01(c)) -------------------------------------- 1. MAXIMUM PERMITTED RATIO OF TOTAL FUNDED DEBT AS OF _______ TO (A) ANNUALIZED EBITDA MINUS (B) COST OF CHURN FOR THE MOST RECENTLY ENDED FISCAL QUARTER (Please circle the applicable ratio). Period Maximum Ratio ------ ------------- The Closing Date through September 29, 2001 5.25:1.00 September 30, 2001 through December 30, 2001 4.75:1.00 December 31, 2001 through June 29, 2002 4.50:1.00 June 30, 2002 through December 30, 2002 4.00:1.00 December 31, 2002 through June 29, 2003 3.50:1.00 June 30, 2003 through December 30, 2003 3.00:1.00 December 31, 2003 and thereafter 2.50:1.00 2. ANNUALIZED EBITDA FOR THE FISCAL QUARTER ENDING _______________ (a) LOCATION CASH FLOW DERIVED FROM THE DBS SUBSIDIARIES FOR SUCH FISCAL QUARTER (i) Net Income $_______ (ii) Plus: Subscriber Acquisition Costs $_______ (iii) Plus: Total Interest Expense $_______ (iv) Plus: Depreciation/amortization $_______ (v) Plus: Taxes in respect of income and profits, to the extent expensed (including without duplication payments paid under the Tax Sharing Agreement) $_______ (vi) Plus: Transaction Costs $_______ (vii) Plus: Other non-cash expenses (including the amortization of television program license and rental fees) $_______ (viii) Minus: Television program license and rental fees actually paid in cash $_______ (ix) Total EBITDA $_______

-5- (x) Adjustments for Acquisitions (please circle plus or minus) $_______ (xi) Adjustments for Dispositions (please circle plus or minus) $_______ (xii) Total EBITDA, adjusted as permitted by the Agent for $_______ Acquisitions/Dispositions (xiii) Plus: Amounts deducted for corporate overhead charges $_______ (xiv) Location Cash Flow derived from the DBS Subsidiaries for such fiscal quarter $_______ (b) LOCATION CASH FLOW DERIVED FROM THE SUBSIDIARIES (OTHER THAN DBS SUBSIDIARIES) FOR SUCH FISCAL QUARTER AND THE IMMEDIATELY PRECEDING THREE (3) FISCAL QUARTERS (i) Net Income $_______ (ii) Plus: Subscriber Acquisition Costs $_______ (iii) Plus: Total Interest Expense $_______ (iv) Plus: Depreciation/amortization $_______ (v) Plus: Taxes in respect of income and profits, to the extent expensed (including without duplication payments paid under the Tax Sharing Agreement) $_______ (vi) Plus: Transaction Costs $_______ (vii) Plus: Other non-cash expenses (including the amortization of television program license and rental fees) $_______ (viii) Minus: Television program license and rental fees actually paid in cash $_______ (ix) Total EBITDA $_______ (x) Adjustments for Acquisitions (please circle plus or minus) $_______ (xi) Adjustments for Dispositions (please circle plus or minus) $_______ (xii) Total EBITDA, adjusted as permitted by the Agent for Acquisitions/Dispositions $_______

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(xiii) Plus: Amounts deducted for corporate overhead charges $_______ (xiv) Location Cash Flow derived from Subsidiaries (other than the DBS Subsidiaries) for such period $_______ (c) ANNUALIZED EBITDA FOR SUCH FISCAL QUARTER (i) Location Cash Flow derived from the DBS Subsidiaries for such fiscal quarter (See B(2)(a)(xiv)) $______ (ii) Multiply: (i) by four (4) $______ (iii) Plus: Location Cash Flow derived from the Subsidiaries (other than DBS Subsidiaries) for such fiscal quarter and the immediately preceding three (3) fiscal quarters (See B(2)(b)(xiv)) $______ (iv) Minus: Corporate overhead charges (including Management Fees) for all of the Borrower's Subsidiaries for such fiscal quarter and the immediately preceding three (3) fiscal quarters $______ (v) Annualized EBITDA for such fiscal quarter $______ 3. TOTAL FUNDED DEBT (a) Indebtedness under P. (a) through P. (f) of the definition thereof as of _______________ $_______ (b) Plus: Aggregate amount payable as of such date (whether or not due) in respect of any and all LMA Purchase Options $_______ (c) Total Funded Debt $_______
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4. ACTUAL RATIO (a) Total Funded Debt as of ________ (See B(3)(c)) $_______ (b) Annualized EBITDA (See B(2)(c)(v) for the fiscal quarter ended _________ $_______ (c) Actual Ratio of (a) to (b): ____:1:00 D. INTEREST COVERAGE (Section 5.02) 1. MINIMUM REQUIRED RATIO OF EBITDA TO TOTAL INTEREST EXPENSE FOR THE FISCAL QUARTER ENDED _________________ (Please circle applicable ratio): Quarterly Date Minimum Ratio -------------- ------------- March 31, 2000 through September 30, 2000 2.50:1.00 December 31, 2000 through September 30, 2001 3.25:1.00 December 31, 2001 through September 30, 2002 4.00:1.00 December 31, 2002 through September 30, 2003 4.75:1.00 December 31, 2003 and each Quarterly Date thereafter 5.50:1.00 2. EBITDA FOR THE FISCAL QUARTER ENDING _______________ (a) Net Income $_______ (b) Plus: Subscriber Acquisition Costs $_______ (c) Plus: Total Interest Expense $_______ (d) Plus: Depreciation/amortization $_______ (e) Plus: Taxes in respect of income and profits, to the extent expensed (including without duplication payments owed under the Tax Sharing Agreement) $_______ (f) Plus: Transaction Costs $_______ (g) Plus: Other non-cash expenses (including the amortization of television program license and rental fees) $_______ (h) Minus: Television program license and rental fees actually paid in cash $_______ (i) Total EBITDA $_______
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3. ACTUAL RATIO (a) EBITDA for the fiscal quarter ended ______________(See D(2)(i)) $_______ (b) Total Interest Expense for such fiscal quarter $_______ (c) Actual Ratio of (a) to (b): ____:1:00 E. FIXED CHARGE COVERAGE (Section 5.03) 1. MINIMUM REQUIRED RATIO OF ANNUALIZED EBITDA TO FIXED CHARGES FOR THE PERIOD OF FOUR (4) FISCAL QUARTERS ENDED _________(Please circle applicable ratio): Quarterly Date Minimum Ratio -------------- ------------- December 31, 2000 through September 30, 2002 1.00:1.00 December 31, 2002 through September 30, 2003 1.15:1.00 December 31, 2003 through June 30, 2004 1.35:1.00 September 30, 2004 and each Quarterly Date thereafter 1.05:1.00 2. ANNUALIZED EBITDA FOR THE PERIOD OF FOUR (4) FISCAL QUARTERS ENDED _________ (a) LOCATION CASH FLOW DERIVED FROM THE DBS SUBSIDIARIES FOR THE LAST FISCAL QUARTER IN SUCH PERIOD (i) Net Income $_______ (ii) Plus: Subscriber Acquisition Costs $_______ (iii) Plus: Total Interest Expense $_______ (iv) Plus: Depreciation/amortization $_______ (v) Plus: Taxes in respect of income and profits, to the extent expensed (including without duplication payments owed under the Tax Sharing Agreement) $_______ (vi) Plus: Transaction Costs $_______ (vii) Plus: Other non-cash expenses (including the amortization of television $_______ program license and rental fees) (viii) Minus: Television program license and rental fees actually paid in cash $_______ (ix) Total EBITDA derived from DBS Subsidiaries $_______ (x) Plus: Amounts deducted for corporate overhead charges by DBS $_______ Subsidiaries (xi) Location Cash Flow derived from the DBS Subsidiaries for such fiscal quarter $_______
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(b) LOCATION CASH FLOW DERIVED FROM THE SUBSIDIARIES (OTHER THAN DBS SUBSIDIARIES) FOR SUCH FOUR(4) QUARTER PERIOD: (i) Net Income $_______ (ii) Plus: Subscriber Agreement Costs $_______ (iii) Plus: Total Interest Expense $_______ (iv) Plus: Depreciation/amortization $_______ (v) Plus: Taxes in respect of income and profits, to the extent expensed (including without duplication payments owed under the Tax Sharing Agreement) $_______ (vi) Plus: Transaction Costs $_______ (vii) Plus: Other non-cash expenses (including the amortization of television program license and rental fees) $_______ (viii) Minus: Television program license and rental fees actually paid in cash $_______ (ix) Total EBITDA $_______ (x) Plus: Amounts deducted for corporate overhead charges $_______ (xi) Location Cash Flow derived from Subsidiaries (other than the DBS Subsidiaries) for such period $_______ (c) ANNUALIZED EBITDA FOR SUCH PERIOD (i) Location Cash Flow derived from the DBS Subsidiaries for the last fiscal quarter in such four quarter period ended _________(See C(2)(a)(iv)) $______ (ii) Multiply: (i) by four (4) $______ (iii) Plus: Location Cash Flow derived from the Subsidiaries (other than DBS Subsidiaries) for such four quarter period (See C(2)(b)(iv)) $______ (iv) Minus: Corporate overhead charges (including Management Fees) for all of the Borrower's Subsidiaries for such four quarter period $______ (v) Annualized EBITDA for such four quarter period $______
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3. FIXED CHARGES FOR THE PERIOD OF FOUR (4) FISCAL QUARTERS ENDED ______________ (a) Cost of Churn for such period: (i) Churned Subscribers (ii) Multiplied by: Subscriber Acquisition Costs over Gross Subscriber Additions ($____) (iii) Total Cost of Churn $______ (b) Plus: Total Debt Service for such period $______ (c) Minus: Payments of principal on Permitted Seller Debt and Permitted $______ Seller Subordinated Debt (d) Plus: Capital Expenditures made by the Companies during such period $______ (e) Plus: Taxes in respect of income and profits, including Tax Sharing Payments $______ (f) Plus: Restricted Payments made to PCC under Section 5.04(b)(vi) $______ (g) Total Fixed Charges for such period $______
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4. ACTUAL RATIO (a) Annualized EBITDA for the period of four (4) fiscal quarters ended ___________(See E(2)(c)(v)) $______ (b) Fixed Charges for the period of four (4) fiscal quarters ended $______ ___________(See E(3)(g)) (c) Actual Ratio of (a) to (b) ____:1.00 F. RESTRICTED PAYMENTS (Section 5.04) 1. MANAGEMENT FEES PAID (A) DURING THE FISCAL QUARTER ENDED _________ AND (B) THE TWELVE (A) $_______ (12) MONTH PERIOD ON SUCH DATE (B) $_______ Note: Such fee payments are subject to the Manager's Affiliate Subordination Agreement and cannot exceed, during any period of twelve (12) consecutive months, the actual cost of providing management and administrative support services to the Companies for such period. 2. DIVIDENDS AND DISTRIBUTIONS PAID UNDER SECTION 5.04(b)(iv), (v), (vi) and (vii) DURING THE FISCAL [YEAR/QUARTER] ENDED ___________ TO FINANCE PCC PREFERRED STOCK DIVIDENDS and INTEREST PAYABLE BY THE PARENT $__________ Please attached detailed calculations and breakdowns supporting the foregoing Restricted Payments.
WITNESS my hand this ____ day of __________, 200___. PEGASUS MEDIA & COMMUNICATIONS, INC. By: ---------------------------------------- Name: ---------------------------------