Dish Network 2004 Annual Report Download - page 106

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
2004, 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 our option prior to January 15, 2006. Thereafter, the 9 1/8% Senior Notes will be
subject to redemption, at our 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, we 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.
3% Convertible Subordinated Note due 2010
On July 21, 2003, we sold $500.0 million principal amount of the 3% Convertible Subordinated Note due 2010 which
mature July 21, 2010 to SBC Communications, Inc. (“SBC”) in a privately negotiated transaction. Interest accrues at
an annual rate of 3% and is payable semi-annually in cash, in arrears on June 30 and December 31 of each year.
The 3% Convertible Subordinated Note due 2010 is convertible into approximately 6.87 million shares of our Class
A common stock at the option of SBC at $72.82 per share, subject to adjustment in certain circumstances.
The 3% Convertible Subordinated Note due 2010 is:
• general unsecured obligations;
• ranked junior in right of payment with all of our existing and future senior debt;
• ranked equal in right of payment to our existing convertible subordinated debt; and
• ranked equal in right of payment to all other existing and future indebtedness whenever the instrument
expressly provides that such indebtedness ranks equal with the 3% Convertible Subordinated Note due
2010.
The indenture related to the 3% Convertible Subordinated Note due 2010 contains certain restrictive covenants that
do not impose material limitations on us.
In the event of a change of control, as defined in the related indenture, we will be required to make an offer to
repurchase all or any part of the holder’s 3% Convertible Subordinated Note due 2010 at a purchase price equal to
100% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon, to the date of
repurchase. Commencing July 21, 2008, we may redeem, and SBC may require us to purchase, all or a portion of
the note without premium.
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