Dish Network 2000 Annual Report Download - page 69

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–18
The indentures related to the 9 1/4% Seven and 9 3/8% Ten Year Notes (the “Seven and Ten Year Notes
Indentures”) contain restrictive covenants that, among other things, impose limitations on the ability of EDBS to:
• incur additional indebtedness;
• apply the proceeds of certain asset sales;
• create, incur or assume liens;
• create dividend and other payment restrictions with respect to EDBS’s subsidiaries;
• merge, consolidate or sell assets; and
• enter into transactions with affiliates.
In addition, EDBS may pay dividends on its equity securities only if no default shall have occurred or is
continuing under the Seven and Ten Year Notes Indentures; and after giving effect to such dividend and the
incurrence of any indebtedness (the proceeds of which are used to finance the dividend), EDBSs’ 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 EDBS
(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 EDBS and its subsidiaries from the issuance or sale of certain equity
interests of EDBS or EchoStar.
In the event of a change of control, as defined in the Seven and Ten Year Notes Indentures, EDBS will be
required to make an offer to repurchase all of the 9 1/4% Seven and 9 3/8% 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.
4 7/8% Convertible Notes
On December 2, 1999, EchoStar sold $1 billion principal amount of 4 7/8% Convertible Subordinated
Notes due 2007 (the “4 7/8% Convertible Notes”). Interest accrues at an annual rate of 4 7/8% on the 4 7/8%
Convertible Notes and is payable semi-annually in cash, in arrears on January 1 and July 1 of each year,
commencing July 1, 2000.
The 4 7/8% Convertible Notes are general unsecured obligations, which rank junior in right of payment to:
• all existing and future senior obligations;
• all of EchoStar’s secured debts to the extent of the value of the assets securing those debts; and
• all existing and future debts and other liabilities or EchoStar’s subsidiaries.
Except under certain circumstances requiring prepayment premiums, and in other limited circumstances,
the 4 7/8% Convertible Notes are not redeemable at EchoStar’s option prior to January 1, 2003. Thereafter, the
4 7/8% Convertible Notes will be subject to redemption, at the option of the Company, in whole or in part, at
redemption prices decreasing from 102.786% during the year commencing January 1, 2003 to 100% on or after
January 1, 2007, together with accrued and unpaid interest thereon to the redemption date.
The 4 7/8% Convertible Notes, unless previously redeemed, are convertible at the option of the holder any
time after 90 days following the date of their original issuance and prior to maturity into shares of our class A
common stock at a conversion price of $45.44 per share.
The indenture related to the 4 7/8% Convertible Notes (the “4 7/8% Convertible Notes Indenture”) contain
certain restrictive covenants that do not impose material limitations on EchoStar.
In the event of a change of control, as defined in the 4 7/8% Convertible Notes Indenture, EchoStar will be
required to make an offer to repurchase all or any part of the holder’s 4 7/8% Convertible 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.