Dish Network 2001 Annual Report Download - page 89

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–24
9 1/8% Seven Year Notes
On December 28, 2001, EDBS sold $700 million principal amount of the 9 1/8% Seven Year Notes. 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. The proceeds of the 9 1/8% Seven Year Notes are intended to be used for one or
more of the following: 1) to provide a portion of the financing for the proposed merger of EchoStar with Hughes
Electronics Corporation, 2) if EchoStar does not consummate the merger, to provide a portion of the financing for the
acquisition by EchoStar of Hughes’ approximately 81% interest in PanAmSat Corporation, and 3) the construction,
launch and insurance of additional satellites, strategic acquisitions and other general corporate purposes.
The 9 1/8% Seven Year Notes are guaranteed by substantially all subsidiaries of EDBS on a senior basis. The
9 1/8% Seven Year 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% Seven Year Notes are not redeemable at EDBS’ option prior to January 15, 2006. Thereafter, the 9 1/8% Seven
Year 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% Seven Year Notes (the “9 1/8% Seven Year 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% Seven Year Notes Indenture, EDBS will be
required to make an offer to repurchase all or any part of a holder’s 9 1/8% Seven 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 the 4 7/8% Convertible Notes. Interest
accrues at an annual rate of 4 7/8% 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.