Dish Network 2008 Annual Report Download - page 114

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-32
The indenture related to the 7% Senior Notes contains restrictive covenants that, among other things,
impose limitations on the ability of DDBS and its restricted subsidiaries to:
x incur additional debt;
x pay dividends or make distribution on DDBS’ capital stock or repurchase DDBS’ capital stock;
x make certain investments;
x create liens or enter into sale and leaseback transactions;
x enter into transactions with affiliates;
x merge or consolidate with another company; and
x transfer and sell assets.
In the event of a change of control, as defined in the related indenture, we would be required to make an
offer to repurchase all or any part of a holder’s 7% 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.
7 ¾% Senior Notes due 2015
On May 27, 2008, we sold $750 million aggregate principal amount of our seven-year, 7 ¾% Senior Notes
due May 31, 2015. Interest accrues at an annual rate of 7 ¾% and is payable semi-annually in cash, in
arrears on May 31 and November 30 of each year, commencing on November 30, 2008. The net proceeds
that we received from the sale of the notes were used for general corporate purposes.
The 7 ¾% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100%
of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with
accrued and unpaid interest. Prior to May 31, 2011, we may also redeem up to 35% of each of the 7 ¾%
Senior Notes at specified premiums with the net cash proceeds from certain equity offerings or capital
contributions.
The 7 ¾% Senior Notes are:
x general unsecured senior obligations of DDBS;
x ranked equally in right of payment with all of DDBS’ and the guarantors’ existing and future
unsecured senior debt; and
x ranked effectively junior to our and the guarantors’ current and future secured senior
indebtedness up to the value of the collateral securing such indebtedness.
The indenture related to the 7 ¾% Senior Notes contains restrictive covenants that, among other things,
impose limitations on the ability of DDBS and its restricted subsidiaries to:
x incur additional debt;
x pay dividends or make distribution on DDBS’ capital stock or repurchase DDBS’ capital stock;
x make certain investments;
x create liens or enter into sale and leaseback transactions;
x enter into transactions with affiliates;
x merge or consolidate with another company; and
x transfer and sell assets.
In the event of a change of control, as defined in the related indenture, we would be required to make an
offer to repurchase all or any part of a holder’s 7 ¾% 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.