Item 1.01 Entry into a Material Definitive Agreement.
On November 26, 2021, DISH DBS Corporation (the "Company"), an indirect
wholly-owned subsidiary of DISH Network Corporation ("DISH Network"), entered
into a secured indenture (the "Indenture"), among the Company, the guarantors
named on the signature page thereto (the "Guarantors") and U.S. Bank National
Association, as trustee (in such capacity, the "Trustee") and collateral agent
(in such capacity, the "Collateral Agent"), relating to the Company's issuance
of $2.75 billion aggregate principal amount of its 5.25% Senior Secured Notes
due 2026 (the "2026 Notes") and $2.5 billion aggregate principal amount of its
5.75% Senior Secured Noted due 2028 (the "2028 Notes" and, together with the
2026 Notes, the "Notes") at an issue price of 100% of the principal amount of
the Notes. A copy of the Indenture is attached hereto as Exhibit 4.1, and
incorporated herein by reference. For a description of the material terms of the
Indenture and the Notes, see the information set forth below under Item 2.03,
which is incorporated by reference into this Item 1.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On November 26, 2021, the Company issued $2.75 billion aggregate principal
amount of the 2026 Notes pursuant to the Indenture at an issue price of 100% of
the principal amount of the 2026 Notes and $2.5 billion aggregate principal
amount of the 2028 Notes pursuant to the Indenture at an issue price of 100% of
the principal amount of the 2028 Notes. The Notes were sold in a private
placement to (1) persons reasonably believed to be "qualified institutional
buyers" in reliance on Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act") and (2) outside the United States to persons who are not
"U.S. persons" (as defined in Rule 902 of Regulation S under the Securities Act)
in compliance with Regulation S under the Securities Act.
The net proceeds from the offering were used to make an intercompany loan to
DISH Network pursuant to a Loan and Security Agreement dated November 26, 2021
(the "Intercompany Loan") between the Company and DISH Network in order to
finance the potential purchase of wireless spectrum licenses and for general
corporate purposes, including the buildout of wireless infrastructure. The
Company may make additional advances to DISH Network under the Intercompany
Loan. The Intercompany Loan is secured by (i) the cash proceeds of the loan and
(ii) an interest in any wireless spectrum licenses acquired using such proceeds.
In certain cases, DISH Network wireless spectrum licenses (valued based upon a
third-party valuation) may be substituted for the collateral. The Intercompany
Loan is not included as collateral for the Notes, and the Notes are subordinated
to the Company's existing and certain future unsecured notes with respect to
certain realizations under the Intercompany Loan and any collateral pledged as
security for the Intercompany Loan.
The 2026 Notes bear interest at a rate of 5.25% per annum and mature on
December 1, 2026, and the 2028 Notes bear interest at a rate of 5.75% per annum
and mature on December 1, 2028. Interest on the Notes will be payable
semi-annually on June 1 and December 1 of each year, commencing June 1, 2022, to
the holders of record of such Notes at the close of business on May 15 and
November 15, respectively, preceding such interest payment date. The Notes are
the Company's secured senior obligations and, pursuant to the Security
Agreement, dated as of November 26, 2021 (the "Security Agreement") among the
Company, the Guarantors and the Collateral Agent, are secured by security
interests in substantially all existing and future tangible and intangible
assets of the Company and the Guarantors on a first priority basis, subject to
certain exceptions. The guarantees in respect of the Notes rank equally with all
of the Guarantors' existing and future unsubordinated indebtedness and are
effectively senior to such Guarantors' existing and future obligations to the
extent of the value of the assets securing the Notes.
The Indenture contains covenants that will limit the Company's ability and, in
certain instances, the ability of certain of the Company's subsidiaries, to,
among other things: (i) incur additional debt; (ii) pay dividends or make
distributions on the Company's capital stock or repurchase the Company's capital
stock; (iii) make certain investments; (iv) create liens or enter into sale and
leaseback transactions; (v) enter into transactions with affiliates; (vi) merge
or consolidate with another company; and (vii) transfer and sell assets. These
covenants include certain exceptions.
The Company may, at its option, redeem all or any portion of either series of
Notes prior to, in the case of the 2026 Notes, June 1, 2026 (the date that is
six months prior to the maturity of the 2026 Notes (the "2026 Par Call Date")),
and in the case of the 2028 Notes, December 1, 2027 (the date that is twelve
months prior to the maturity of the 2028 Notes (the "2028 Par Call Date")) on
not less than 10 and not more than 60 days' prior notice mailed to the holders
of the Notes to be redeemed. The Notes will be redeemable at a price equal to
the principal amount of the Notes being redeemed, together with accrued and
unpaid interest, if any, to the date of redemption and a "make-whole" premium
calculated under the Indenture. At any time on or after the 2026 Par Call Date
or the 2028 Par Call Date, as applicable, the Company may redeem the applicable
series of Notes, in whole at any time or in part from time to time, at a price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of redemption. At any time and from time to time during the
36-month period following the issue date of the Notes, the Company may redeem up
to 10% of each series of Notes during each twelve-month period commencing with
the issue date of the Notes (including any additional notes issued under the
Indenture which are fungible with the applicable series of Notes) at a
redemption price equal to 103% of the principal amount thereof plus accrued and
unpaid interest and additional interest, if any, to, but not including, the
applicable redemption date. Further, at any time prior to December 1, 2024, the
Company may also redeem up to 35% of each series of Notes at a purchase price
equal to, in the case of the 2026 Notes, 105.250% of the principal amount of the
2026 Notes redeemed, and in the case of the 2028 Notes, 105.750% of the
principal amount of the 2028 Notes redeemed, in each case together with accrued
and unpaid interest, if any, to the date of redemption with the net cash
proceeds from certain equity offerings or capital contributions.
The Indenture provides for customary events of default, including: nonpayment,
breach of the covenants in the Indenture, payment defaults or acceleration of
other indebtedness, a failure to pay certain judgments and certain events of
bankruptcy, insolvency and reorganization. If any event of default occurs and is
continuing under the Indenture, the trustee or the holders of at least 25% in
principal amount of the then outstanding Notes issued pursuant to the Indenture
may declare all the Notes issued pursuant to the Indenture to be due and payable
immediately, together with interest, if any, accrued thereon.
The description set forth above is qualified in its entirety by the Indenture
filed herewith as Exhibit 4.1.
Copies of the Security Agreement and the Intercompany Loan are attached hereto
as Exhibits 4.2 and 4.3, respectively, and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
Exhibit 4.1 Indenture, relating to the Notes, dated as of November 26, 2021, among
the Company, the Guarantors and U.S. Bank National Association, as
trustee and collateral agent.
Exhibit 4.2 Security Agreement, dated as of November 26, 2021, among the Company,
the Guarantors and U.S. Bank National Association, as collateral
agent.
Exhibit 4.3 Loan and Security Agreement, dated as of November 26, 2021, between
the Company and DISH Network Corporation.
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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DISH NETWORK CORPORATION 
