Dish Network 2001 Annual Report Download - page 90

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ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–25
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.
5 3/4% Convertible Notes
On May 24, 2001, EchoStar sold $1 billion principal amount of the 5 3/4% Convertible Notes. Interest
accrues at an annual rate of 5 3/4% and is payable semi-annually in cash, in arrears on May 15 and November 15 of
each year, commencing November 15, 2001.
The 5 3/4% Convertible Notes are general unsecured obligations, which rank equal to EchoStar’s 4 7/8%
Convertible Notes and 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
5 3/4% Convertible Notes are not redeemable at EchoStar’s option prior to May 15, 2004. Thereafter, the 5 3/4%
Convertible Notes will be subject to redemption, at the option of the Company, in whole or in part, at redemption prices
decreasing from 103.286% during the year commencing May 15, 2004 to 100% on or after May 15, 2008, together
with accrued and unpaid interest thereon to the redemption date.
The 5 3/4% 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 EchoStar’s class A
common stock at a conversion price of $43.29 per share.
The indenture related to the 5 3/4% Convertible Notes (the “5 3/4% Convertible Notes Indenture”) contains
certain restrictive covenants that do not impose material limitations on EchoStar.
In the event of a change of control, as defined in the 5 3/4% Convertible Notes Indenture, EchoStar will be
required to make an offer to repurchase all or any part of the holder’s 5 3/4% 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.
Certain Debt Indentures
The Hughes merger agreement requires that EchoStar use commercially reasonable efforts to: 1) amend the
indentures relating to certain of its debt instruments so that the Hughes merger and related transactions would not
constitute a change of control requiring it to make an offer to repurchase those notes, 2) obtain additional committed
financing, on terms reasonably satisfactory to Hughes, sufficient to refinance the notes outstanding under the indentures