Dish Network 1998 Annual Report Download - page 67

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–20
Stock. Following expiration of the Tender Offers, an aggregate of approximately $2.4 million of 1994 Notes,
1996 Notes, 1997 Notes and Senior Exchange Notes remain outstanding.
The Notes are general senior unsecured obligations, which (i) rank pari passu in right of payment to each
other and to all existing and future senior unsecured obligations, (ii) rank senior to all existing and future junior
obligations, and (iii) are effectively junior to secured obligations to the extent of the collateral securing such
obligations, including any borrowings under future secured credit facilities. With the exception of certain de minimis
domestic and foreign subsidiaries, the Notes are fully, unconditionally and jointly and severally guaranteed by all
subsidiaries of DBS Corp, (collectively, the “Notes Guarantors”).
Except under certain circumstances requiring prepayment premiums, and in other limited circumstances, the
Seven and Ten Year Notes are not redeemable at DBS Corp’s option prior to February 1, 2003 and February 1, 2004,
respectively. Thereafter, the Seven Year Notes will be subject to redemption, at the option of DBS Corp, in whole or in
part, at redemption prices decreasing from 104.625% during the year commencing February 1, 2003 to 100% on or
after February 1, 2005, together with accrued and unpaid interest thereon to the redemption date. The Ten Year Notes
will be subject to redemption, at the option of DBS Corp, in whole or in part, at redemption prices decreasing from
104.688% during the year commencing February 1, 2004 to 100% on or after February 1, 2008, together with accrued
and unpaid interest thereon to the redemption date.
The indentures related to the Notes (the “Indentures”) contain restrictive covenants that, among other
things, impose limitations on the ability of DBS Corp to: (i) incur additional indebtedness; (ii) apply the proceeds of
certain asset sales; (iii) create, incur or assume liens; (iv) create dividend and other payment restrictions with respect
to DBS Corp’s subsidiaries; (v) merge, consolidate or sell assets; and (vi) enter into transactions with affiliates. In
addition, DBS Corp may pay dividends on its equity securities only if: (1) no default shall have occurred or is
continuing under the Indentures; and (2) after giving effect to such dividend and the incurrence of any indebtedness
(the proceeds of which are used to finance the dividend), DBS Corps’s ratio of total indebtedness to cash flow
(calculated in accordance with the Indentures) would not exceed 8.0 to 1.0. Moreover, the aggregate amount of such
dividends generally may not exceed the sum of the difference of cumulative consolidated cash flow (calculated in
accordance with the Indentures) minus 120% of consolidated interest expense of DBS Corp (calculated in
accordance with the Indentures), in each case from April 1, 1999 plus an amount equal to 100% of the aggregate net
cash proceeds received by DBS Corp and its subsidiaries from the issuance or sale of certain equity interests of DBS
Corp or EchoStar.
In the event of a change of control, as defined in the Indentures, DBS Corp will be required to make an offer to repurchase all of the
Seven and Ten Year Notes at a purchase price equal to 101% of the aggregate principal amount thereof, together with accrued and
unpaid interest thereon, to the date of repurchase.