Dish Network 2003 Annual Report Download - page 94

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–27
The indenture related to the 5 3/4% Convertible Subordinated Notes (the “5 3/4% Convertible Subordinated Notes
Indenture”) contains certain restrictive covenants that do not impose material limitations on us.
In the event of a change of control, as defined in the 5 3/4% Convertible Subordinated Notes Indenture, we will be
required to make an offer to repurchase all or any part of the holder’s 5 3/4% Convertible Subordinated 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.
9 1/8% Senior Notes due 2009
The EDBS $700.0 million principal amount of the 9 1/8% Senior Notes mature January 15, 2009. Interest accrues at an
annual rate of 9 1/8% and is payable semi-annually in cash, in arrears on January 15 and July 15 of each year,
commencing July 15, 2002.
Effective September 3, 2003, EDBS redeemed $245.0 million principal amount of its 9 1/8% Senior Notes due
2009, fully exercising its optional partial redemption right. The outstanding principal amount of the notes after the
redemption is $455.0 million. In accordance with the terms of the indenture governing the notes, the full $245.0
million principal amount of the notes eligible for redemption was redeemed at 109.125% of such amount, for a total
redemption payment of approximately $267.4 million. The premium paid of approximately $22.4 million and
unamortized debt issuance costs of approximately $2.9 million were recorded as charges to earnings and are
included in interest expense in our consolidated statements of operations and comprehensive income (loss). Interest
on the notes was paid through the September 3, 2003 redemption date. As a portion of the 9 1/8% Senior Notes
remains outstanding as of December 31, 2003, we continue to be subject to the terms of the related indentures until
such time as the 9 1/8% Senior Notes are fully redeemed.
The 9 1/8% Senior Notes are guaranteed by substantially all subsidiaries of EDBS on a senior basis. The 9 1/8%
Senior Notes are general unsecured senior obligations which:
• rank senior with all of EDBS’ future subordinated debt; and
• rank junior to any of EDBS’ secured debt to the extent of the value of the assets securing such debt.
Except under certain circumstances requiring prepayment premiums, and in other limited circumstances, the 9 1/8%
Senior Notes are not redeemable at EDBS’ option prior to January 15, 2006. Thereafter, the 9 1/8% Senior Notes will
be subject to redemption, at EDBS’ option, in whole or in part, at redemption prices decreasing from 104.563% during
the year commencing January 15, 2006 to 100% on or after January 15, 2008, together with accrued and unpaid interest
thereon to the redemption date.
The indenture related to the 9 1/8% Senior Notes (the “9 1/8% Senior Notes Indenture”) contains restrictive
covenants that, among other things, impose limitations on the ability of EDBS and its restricted subsidiaries to:
• incur additional indebtedness or enter into sale and leaseback transactions;
• pay dividends or make distribution on EDBS’ capital stock or repurchase EDBS’ capital stock;
• make certain investments;
• create liens;
• enter into transactions with affiliates;
• merge or consolidate with another company; and
• transfer and sell assets
In the event of a change of control, as defined in the 9 1/8% Senior Notes Indenture, EDBS will be required to make
an offer to repurchase all or any part of a holder’s 9 1/8% Senior 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.