Dish Network 2011 Annual Report Download - page 124

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DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-30
Sprint Settlement Agreement
On November 3, 2011, we and Sprint entered into the Sprint Settlement Agreement pursuant to which all disputed issues
relating to our acquisition of DBSD North America and the TerreStar Transaction were resolved between us and Sprint,
including, but not limited to, issues relating to costs allegedly incurred by Sprint to relocate users from the spectrum now
licensed to DBSD North America and TerreStar (the “Sprint Clearing Costs”). EchoStar was a party to the Sprint
Settlement Agreement solely for the purposes of executing a mutual release between it and Sprint relating to the Sprint
Clearing Costs. As of December 31, 2011, EchoStar is currently a holder of certain TerreStar debt instruments. Pursuant
to the terms of the Sprint Settlement Agreement, we made a net payment of approximately $114 million to Sprint, which is
included on our Consolidated Balance Sheets under the caption “Other noncurrent assets, net.” As this payment relates
directly to our acquisitions of DBSD North America and TerreStar, the $114 million will be allocated evenly between
these investments as purchase consideration on the dates of the respective closings.
11. Long-Term Debt
6 3/8% Senior Notes due 2011
During September 2011, we repurchased $85 million of our 6 3/8% Senior Notes due 2011 in open market transactions.
On October 3, 2011, we redeemed the remaining $915 million principal balance of our 6 3/8% Senior Notes due 2011.
7% Senior Notes due 2013
The 7% Senior Notes mature October 1, 2013. Interest accrues at an annual rate of 7% and is payable semi-annually in
cash, in arrears on April 1 and October 1 of each year.
The 7% 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.
The 7% Senior Notes are:
x general unsecured senior obligations of DISH DBS Corporation (“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% 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 or 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.