Document:

<PAGE>

Exhibit 10.5

LOAN AGREEMENT (BUSINESS OVERDRAFT FACILITY) BETWEEN COMTREX SYSTEMS CORPORATION
LTD AND NATIONAL WESTMINSTER BANK PLC DATED FEBRUARY 8, 2001

                            Advice of Borrowing Terms

Relationship Office: Crawley Corporate Business Centre     Date: 8 February 2001

Borrower(s): Comtrex Systems Corporation Limited     Registered Number: 01367328

We intend that the facilities listed in Part 1 of the attached Facility Schedule
(the "on-demand facilities") should remain available to the borrower(s) until 19
December 2001 and all facilities should be reviewed on of before that date. The
facilities are, however, subject to the following:

   o  The terms and conditions below,

   o  The specific conditions applicable to an individual facility as detailed
      in the Facility shedule,

   o  The Security detailed in the attached Security Schedule: and

   o  The attached General Terms.

All amounts outstanding are repayable on demand which may be made by us at our
discretion at any time and the facilities may be withdrawn, reduced, made
subject to further conditions or otherwise varied by us giving notice in
writing.

Conditions:
The following conditions must be satisfied at all times while the faciltites are
outstanding, but this will not affect our right to demand repayment at any time:
   o Quarterly management accounts to be provided to us within 28 days of the
     end of the month to which they relate for UK and within 6 weeks for the US
     parent(the latter to monitor the overall Group position).
   o Audited accounts to be provided to us within 9 months of the financial year
     end to which they relate.
   o The Bank is pleased to provide its agreement in principal to a higher
     overdraft line to be secured by the debtor book if required.
   o All Barclays charges are to be released prior to the account being
     transferred or contemporaneously with the transfer.
   o NatWest is to have priority to the charge over the company in favour of
     Shirley Jean Roberts and Norman David Roberts, but understands and accepts
     the latter wish to rank behind NatWest.

   RA Rowbotham
   Corporate Manager
   For and on behalf of
   National Westminster Bank Plc

                                       17
<PAGE>

Acceptance:
To signify your agreement to the terms and conditions outlined above please sign
and return the enclosed copy of this Advice of Borrowing Terms within 28 days.

                               Form of Acceptance
                               ------------------

I accept the facility/facilities on the above terms and conditions and confirm
that I have been authorized by the Board(s) of Directors of the Borrower(s)(copy
Resolution enclosed) to sign this Form of Acceptance on behalf of the
Borrower(s).

By(name and title):  N. D. Roberts, Financial Director            Date 09-02-01
                     ---------------------------------                 --------

For and on behalf of: Comtrex Systems Corporation Limited

                                       18
<PAGE>

                                Facility Schedule

Part 1 - Facilities Repayable on Demand:
<TABLE>
<CAPTION>
                                 ----------------------------------
                                    Overdraft Base Rate
   ----------------------------- ---------------------------------------------------------------------------------------
   <S>                           <C>
   Account Number                12486264
   ----------------------------- ---------------------------------------------------------------------------------------
   Name of Borrower              Comtrex Systems Corporation Limited
   ----------------------------- ---------------------------------------------------------------------------------------
   Limit                         150,000

   ----------------------------- ---------------------------------------------------------------------------------------
   Purpose                       To finance working capital

   ----------------------------- ---------------------------------------------------------------------------------------
   Repayment                     Fully fluctuating
   ----------------------------- ---------------------------------------------------------------------------------------
   1st Debit Interest Rate       2% above the Bank's Base rate
   ----------------------------- ---------------------------------------------------------------------------------------
   2nd Debit Interest Rate       5% above the Bank's Base rate on Borrowing over 150,000 or in excess of agreed
                                 facilities
   ----------------------------- ---------------------------------------------------------------------------------------
   Interest Payable              Quarterly
   ----------------------------- ---------------------------------------------------------------------------------------
   Arrangement                   750 will be debited upon setting up of the facility
   ----------------------------- ---------------------------------------------------------------------------------------
   Excess Fees                   We will be entitled to charge an excess fee at the Bank's published rate for each day
                                 anyagreed limit is exceeded(see our "Services & Charges for Business Customers"
                                 brochure for details).
   ----------------------------- ---------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                 ------------------------------------
                                      Loan Base Rate
   ----------------------------- ---------------------------------------------------------------------------------------
   <S>                           <C>
   Account Number                Not Yet Opened

   ----------------------------- ---------------------------------------------------------------------------------------
   Name of Borrower              Comtrex Systems Corporation Limited

   ----------------------------- ---------------------------------------------------------------------------------------
   Limit                         170,000(New) - or whatever the current outstanding balance with Barclays

   ----------------------------- ---------------------------------------------------------------------------------------
   Purpose                       Freehold Purchase

   ----------------------------- ---------------------------------------------------------------------------------------

   Current Repayment             1565.43 per month to achieve full repayment by February  2017
   ----------------------------- ---------------------------------------------------------------------------------------
   Interest                      2% above the Bank's Base rate
   ----------------------------- ---------------------------------------------------------------------------------------
   Account to be debited         Comtrex Systems Corporation Limited Current Account 12486264 at 601141

   ----------------------------- ---------------------------------------------------------------------------------------
   Interest Payable              Quarterly
   ----------------------------- ---------------------------------------------------------------------------------------
   Security costs                440 will be debited upon drawdown of the loan
   ----------------------------- ---------------------------------------------------------------------------------------
</TABLE>

                                       19
<PAGE>

Part 2 - Facilities Subject to Separate Documentation:

The following facilities are made available on the terms of the separate
documentation between us.
<TABLE>
<CAPTION>
   ----------------------------- ----------------------- -------------------------------- ------------------------------
   Name of Borrower              Facility and Purpose    Amount                           Date Agreement Signed

   ----------------------------- ----------------------- -------------------------------- ------------------------------
   <S>                           <C>                                                      <C>
   Comtrex Systems Corporation   Company Card            43,000                           4th January 2001
   Limited
   ----------------------------- ----------------------- -------------------------------- ------------------------------
</TABLE>

                                Security Schedule

We rely on the security below (and require additional security where specified)
to repay, on demand, all your current and future liabilities(both actual and
contingent)to us. These liabilities include, without limitation, those incurred
by you under the facility(ies) specified in the Facility Schedule.
<TABLE>
<CAPTION>

   ------------------------- ------------------------------------------------------ -------------------------------------------

   Date Executed/New         Security                                               Given/to be given by
   ------------------------- ------------------------------------------------------ -------------------------------------------
   <S>                       <C>                                                    <C>
   New                       1st Legal Mortgage over Unit 2 Gatwick                 Comtrex Systems Corporation Limited
                             Metro Centre, Balcombe Road, Horley

   ------------------------- ------------------------------------------------------ -------------------------------------------

   New                       1st Legal Mortgage Debentrue                           Comtrex Systems Corporation Limited

   ------------------------- ------------------------------------------------------ -------------------------------------------

   New                       Postponement by Shirley Jean Roberts and Norman        Shirley Jean Roberts and Norman David
                             David Roberts of their charge dated 27th October       Roberts
                             1997 so that National Westminster Bank plc has full
                             first legal priority and Shirley Jean Roberts and
                             Norman David Roberts rank second

   ------------------------- ------------------------------------------------------ -------------------------------------------
</TABLE>

                                       20
<PAGE>

                                  General Terms

--------------------------------------------------------------------------------
This section sets out in more detail the basis on which we make facilities
available to you. It covers issues such as haw limits and interest are
calculated, how we can vary agreed terms and what we mean by "on demand".
--------------------------------------------------------------------------------

These General Terms apply to all on demand facilities listed in the Advice of
Borrowing Terms(the "AOBT"), but do not apply to those facilities which are
subject to separate documentation, unless such documentation expressly
incorporates these General Terms. In cases where the expression "you" includes
more than one person (for example joint account holders) it shall be taken to
refer to all or any one or more of you, and your obligations shall be joint and
several.

      o  Independent Advice. Unless we expressly agree in writing to do so we do
         not hold ourselves out as providing advice on or considering the
         general suitability of facilities for your particular circumstances
         (including tax) and neither we nor our employees shall be liable for
         any indications given as to such suitability. We make no warranties or
         representations about the advisability of any underlying transaction
         entered into by you. You should obtain independent professional advice
         on such matters, and upon any security or guarantee required by us.
      o  Acceptance. Any offer of a facility must be accepted within the time
         period specified in the AOBT. We may, at our option, treat any usage of
         any of these facilities as acceptance(without amendment) of the terms
         and conditions of the AOBT.
      o  Availability. Our normal practice is to review all credit facilities
         periodically. Any references in the AOBT to a review at, or
         availability until, a future date are merely indicative of our current
         intention, and we may, at our discretion, review on demand facilities
         at an earlier date. Facilities which are not loans or overdrafts are
         offered on the basis that there is no commitment on our part to enter
         into any such facility with you. We may, at our absolute discretion,
         decide whether a utilisation may be made and any conditions subject to
         which utilisations may be made.
      o  Repayment. Notwithstanding any reference to review or availability or
         repayment term in the AOBT, all facilities are repayable on demand
         which we may make at our sole discretion at any time and may by notice
         be withdrawn reduced or made subject to (further) conditions or
         otherwise varied. You must ensure that we receive by way of repayment,
         the full amount of any indebtedness irrespective of any taxes, duties
         or charges, in immediately available funds in the currency in which the
         facility is outstanding at the branch or office where the facilities
         are provided.
      o  Variation and waiver. We may vary these General Terms by giving one
         month's written notice to you. If a change in currency of the United
         Kingdom occurs(including Introduction of the euro), the AOBT and these
         General Terms will be amended to the extent we specify to reflect the
         change in currency and put us i9n the same position, so far as
         possible, that we would have been in if no change in currency had
         occurred. If we refrain from exercising any of our rights this shall
         not preclude us from exercising any rights at a later date.
      o  Limits. The limits specified in the AOBT or the Facility Schedule for
         each facility and/or each account(including any Group of Composite
         Facility limits) must not at any time be exceeded. In addition, the
         aggregate utilization of any individual of sob limits allocated. If we
         have agreed that there will be a gross limit for one of mare
         facilities, this means that the aggregate utilization of those
         facilities must not at any time exceed the gross limit. If we have
         agreed that there will be a net limit for one or more facilities, this
         means that the aggregate utilization of those facilities, less the
         aggregate amount of the cleared credit balances on the accounts
         specified by us in the AOBT, will not exceed the net limit(If no
         accounts are specified we may determine which accounts are utilised for
         this purpose). We are not obliged to allow or continue to allow any
         borrowing in excess of agreed facilities. Any references to a
         particular account will include any successor account.
      o  Interest.  All interest rates are variable.  Interest is payable
         monthly or quarterly(as detailed in the AOBT).on our usual charging
         days and on final repayment of the indebtedness. Interest accrues on
         the daily cleared debit balance on the account(s) concerned at the
         annual rate or rates shown in the AOBT(both before and after demand
         and/or judgement). It is calculated on the basis of a 365 day year for
         sterling(and either a 365 or 360 day year for currencies other than
         sterling or on such other basis as we may from time to time specify)
         and the actual member of days elapsed and is compounded monthly or
         quarterly. Our variable unarranged borrowing rate for the relevant
         currency will apply to any indebtedness from time to time (i) in excess
         of agreed facilities or (ii) outstanding after the expiry date of
         agreed facilities or, in respect of(i) only, such other interest rate
         as we may specify.

                                       21
<PAGE>

      o  Changes to Interest. We may alter the basis on which interest is
         calculated including the size of the interest margin charged over our
         Base Rate or other published rate and/or the amount of any regular
         repayments of facilities which are repayable on demand by providing you
         with one month's written notice. As a change in our Base Rate or other
         variable rate is not an alteration of the basis upon which interest is
         calculated, no written notice need be given of such a change. Changes
         in our Base Rate of other published rates take effect when made.
         Details of current rates are available from any branch of office, and
         are published in selected national newspapers. Omission to publish
         details of any change in a newspaper shall not stop the change from
         taking effect. For a currency account, written notice of changes to the
         relevant Currency Base Rate will normally be given, although failure to
         do so will not stop the change taking effect when made.
      o  Fees. Fees quoted exclude charges for money transmission or similar
         services which are either advised (i) separately, or (ii) at the time a
         facility is used. All costs, charges and expenses incurred of suffered
         y us, including legal costs and our internal management costs, arising
         at any time in connection with any facility or with any related
         security or guarantee are payable by you on demand.
      o  Uncovered Payments. An "uncovered payment" is a payment where the
         cleared credit balance or agreed credit facility is insufficient to
         meet that payment and all other payments requested, disregarding
         uncleared credits to that account. We do not accept any obligation to
         make uncovered payments to third parties unless we have agreed to do so
         in writing. We need not make any uncovered payment which is in excess
         of any settlement risk limit.
      o  Set Off. We may, without notice, set-off against any credit balances on
         any of your account(s)(in any currency), your liability in respect of
         any facilities(including any uncovered payment)and may combine
         accounts. We are authorized to use all or any such credit balances to
         buy such other currencies as may be necessary in order to exercise any
         fights of set-off to which we may be entitled.
      o  Appropriation and Lien. Where more than one debt is owing to us we may
         use the whole or any part of any repayment to reduce or discharge the
         principal amount of your indebtedess as we may select, to meet any
         accrued interest or to discharge any other liabilities to us. We shall
         have a lien over securities of any kind and other items deposited b or
         on your behalf with us(including, without limitation, cheques given to
         us for collection).
      o  Security. Unless the AOBT expressly provides otherwise, any mortgage,
         charge or debenture must be a first legal mortgage, charge or debenture
         over the unemcumbered title of the property in question. You may not
         grant(or allow to be created) without our prior written consent any
         other security interest in the property in question or part with
         possession of it. We may, at our sole discretion, require from time to
         time additional valuations(at your expense) by such valuer as we may
         approve, of any or all of the assets held by us a security.
      o  Environment. You represent and warrant(both now and in the future) that
         you have and will comply in all material respects with any applicable
         environmental law, regulation or code of practice ("environmental law")
         and with the terms and conditions of any applicable environmental
         licences or other consents or approvals required by environmental
         law("environmental licenses").
      o  Information. You must provide us with any information which we may at
         any time reasonably require, and must inform us of any material change
         of facts or circumstances. You authorize us to disclose to your
         auditors any such information concerning your accounts with us as they
         may from time to time require.
      o  Currency Accounts.  If in our opinion deposits in a currency are
         unavailable to us at any time to fund a currency drawing then we will
         not make a drawing available in that currency. All payments (including
         interest) required to be made by you under a facility in a currency
         other than sterling must be made in the currency of the drawing(The
         "Agreed Currency") and by credit to our account with such banking
         office as we may require. Any amount payable by you which is received
         by us in a currency other than the Agreed Currency, will be calculated
         by converting(at the prevailing spot rate of exchange on such date and
         in such market as we shall determine as being most appropriate) the
         Currency so received into the Agreed Currency. If the amount received
         is less than the relevant amount of the Agreed Currency then you will
         indemnify us for the deficiency and for any losses we may sustain as a
         result. You will in addition pay the costs of such conversion. All
         payments shall be deemed to have been made on such date as we shall
         determine in accordance with our normal practice from time to time.
      o  Currency Equivalents. The Sterling/Currency Equivalent of any amount
         denominated in another currency shall be calculated by reference to the
         Bank's then current spot rate of exchange for the purchase of the
         relevant currency with the currency in which the facility is
         denominated. We may calculate the aggregate Sterling/Currency
         Equivalents of all drawings outstanding/proposed at any time to
         determine compliance or otherwise with the relevant facility limit.
      o  Contingent Liabilities. You will, on demand, pay to us an amount equal
         to the full face value of any contingent of future liabilities incurred
         by us at your request(such as letters of credit, bonds or guarantees).
         We may hold any such payment in our own name and may use it to meet
         such liabilities. You must in any event indemnify us against such
         liabilities and we will require you to execute a formal
         counter-indemnity in our standard form.
      o  Negotiaitons. You agree that all foreign cheques submitted to us for
         negotiation and/or collection will be dealt with on the basis that you
         have food title to all cheques and that you agree to indemnify us
         against all liabilities claims losses costs and expenses including
         exchange fluctuations and agents' charges which may be imposed upom,

                                       22
<PAGE>

         asserted against or incurred by us in any way relating to or arising
         out of the negotiation and/or collection of cheques on your behalf. If
         the cheque is subsequently returned unpaid you authorize us to debit
         your account with the amount credited to your account plus any losses,
         costs, expenses or charges which we may have incurred.
      o  Forward Exchange. Where we make a forward exchange facility available
         to you, you confirm and understand that no forward purchase or sale of
         foreign currency shall be made for investment purposes(see paragraph 8
         of Schedule 1 of the Financial Services Act 1986) without our prior
         written consent.
      o  General.
         a)   Whenever facilities are subject to Part V of the Consumer Credit
              Act 1974 additional documents and procedures may be necessary
              before facilities can be drawn.
         b)   If we consider that any proposed payment or use of a facility
              might be made for an unlawful purpose, then we may refuse to make
              such a payment of allow such use.
         c)   We may give written notice of make demand by post or by hand or by
              facsimile machine or by other form of electronic communication. A
              notice or demand may be addressed to you at your Registered Office
              or address or the place of business last known to us and shall be
              deemed to have been received when transmitted of(if posted) on the
              business day after posting. We may use the facsimile number of
              electronic address last known to us.
         d)   The relationship between us, these General Terms and the AOBT are
              governed by English law and the English courts shall have
              jurisdiction in respect thereof. However when we consider it
              appropriate we may take proceedings against you in any other court
              of competent jurisdiction(whether concurrently or not with any
              other proceedings). These terms are in addition to the usual terms
              which apply to the relationship between a bank and its customer
              and to the operation of bank accounts(whether in credit of debit)
              and to the terms of your mandate with us and to all other
              consistent terms which may be implied by law.
         e)   You must maintain a current account with us throughout the life of
              any facilities and we may charge to your current account all
              amounts, including interest, due in respect of any facility.

                                       23<PAGE>

                                                                    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:

<PAGE>

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-
<PAGE>

         (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-
<PAGE>

                  (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-
<PAGE>

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-
<PAGE>

         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-
<PAGE>

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-
<PAGE>

         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]
<PAGE>

                                   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]

<PAGE>

                                         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]
<PAGE>

                                   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]
<PAGE>

                                   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]
<PAGE>

                                                 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]
<PAGE>

                                   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]
<PAGE>

                                       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]
<PAGE>

                                       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]
<PAGE>

                                       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]
<PAGE>

                                               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]

<PAGE>

                                              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]
<PAGE>

                                      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/(704) 387-9951
                                      Telecopy:  (704) 388-0648
                                      Attention: Annabet Morris/Diana Mushill

             [Signature Page to First Amendment to Credit Agreement]
<PAGE>

                                   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]
<PAGE>

                                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]
<PAGE>

                                    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/(704) 387-9951
                                    Telecopy :  (704) 388-0648
                                    Attention:  Annabet Morris/Diana Mushill

             [Signature Page to First Amendment to Credit Agreement]
<PAGE>

                                        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/(704) 387-9951
                                        Telecopy:  (704) 388-0648
                                        Attention: Annabet Morris/Diana Mushill

             [Signature Page to First Amendment to Credit Agreement]
<PAGE>

                                    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]
<PAGE>

                                       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]
<PAGE>

                                    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]
<PAGE>

                                    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]
<PAGE>

                                       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]
<PAGE>

                                       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]

<PAGE>

                                       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]
<PAGE>

                                       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]
<PAGE>

                                       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]
<PAGE>

                                          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]

<PAGE>

                                     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/(704) 387-9951
                                     Telecopy:  (704) 388-0648
                                     Attention: Annabet Morris/Diana Mushill

             [Signature Page to First Amendment to Credit Agreement]
<PAGE>

                                     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]
<PAGE>

                                     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]
<PAGE>

                                     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]
<PAGE>

                                     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]
<PAGE>

                                     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]
<PAGE>

                                     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]
<PAGE>

                                     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]

<PAGE>

                                     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]
<PAGE>

                                     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]

<PAGE>

                                     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]

<PAGE>

                                     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]
<PAGE>

                                    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]
<PAGE>

                                     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]
<PAGE>

                                    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]
<PAGE>

                                     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]
<PAGE>

                                     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]
<PAGE>

                                     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]
<PAGE>

                                     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]

<PAGE>

                                     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]

<PAGE>

                                 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]
<PAGE>

                                     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]
<PAGE>

                                     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]
<PAGE>

                                     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]
<PAGE>

                                    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]
<PAGE>

                                    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]
<PAGE>

                                   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]
<PAGE>

                                    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]
<PAGE>

                                    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]
<PAGE>

                                    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]
<PAGE>

                                    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]
<PAGE>

                                     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]

<PAGE>

                                     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]
<PAGE>

                                     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]

<PAGE>

                                     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]

<PAGE>

                                     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  21204-5001
                                     Telephone: (410) 938-8770
                                     Telecopy:  (410) 938-8779
                                     Attention: Mike Doran

             [Signature Page to First Amendment to Credit Agreement]
<PAGE>

                                     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]

<PAGE>

                                     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]

<PAGE>

                                     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]
<PAGE>

                                     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]

<PAGE>

                                     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]

<PAGE>

                                     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]

<PAGE>

                              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

<PAGE>

                                                            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.

<PAGE>

         (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-
<PAGE>

         (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-
<PAGE>

                                            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]

<PAGE>

                                                                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.

<PAGE>

         (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.

<PAGE>

         (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]

<PAGE>

                                                      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-
<PAGE>

   2.     ANNUALIZED EBITDA FOR THE FISCAL QUARTER ENDING ______________________

   (a)  LOCATION CASH FLOW DERIVED FROM THE DBS SUBSIDIARIES FOR SUCH
        FISCAL QUARTER
<TABLE>
   <S>         <C>                                                                        <C>
   (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                                                                    $_______
</TABLE>

                                       -2-
<PAGE>

   (b)  LOCATION CASH FLOW DERIVED FROM THE SUBSIDIARIES (OTHER THAN DBS
   SUBSIDIARIES) FOR SUCH FISCAL QUARTER AND THE IMMEDIATELY PRECEDING THREE (3)
   FISCAL QUARTERS
<TABLE>
    <S>             <C>                                                                        <C>
   (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                                              $_______
</TABLE>

                                       -3-
<PAGE>

   (c) ANNUALIZED EBITDA FOR SUCH FISCAL QUARTER
<TABLE>
   <S>              <C>                                                                        <C>
   (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

</TABLE>

                                       -4-
<PAGE>

   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
<TABLE>
    <S>             <C>                                                                        <C>
   (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                                                               $_______
</TABLE>

                                       -5-

<PAGE>
<TABLE>
   <S>              <C>                                                                        <C>
   (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                                                  $_______
</TABLE>

                                      -6-
<PAGE>
<TABLE>
<CAPTION>

<S>                  <C>                                                                       <C>
   (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                                                          $_______

</TABLE>

                                      -7-
<PAGE>
<TABLE>
<CAPTION>

<S>                  <C>                                                                       <C>
   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                                                                $_______
</TABLE>

                                      -8-
<PAGE>
<TABLE>
<CAPTION>

<S>                   <C>                                                                       <C>

   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                                                                    $_______

</TABLE>

                                      -9-
<PAGE>
<TABLE>
<CAPTION>

<S>                  <C>                                                                        <C>

   (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                              $______
</TABLE>

                                      -10-
<PAGE>

<TABLE>
<CAPTION>

<S>                  <C>                                                                        <C>
   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                                          $______

</TABLE>

                                      -11-
<PAGE>

<TABLE>
<CAPTION>

<S>                <C>                                                                           <C>

   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.
</TABLE>

WITNESS my hand this ____ day of __________, 200___.

                                     PEGASUS MEDIA & COMMUNICATIONS, INC.

                                     By:
                                        ----------------------------------------
                                        Name:
                                             ---------------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}]]