UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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Form
8-K
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CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of
1934
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Date
of Report (Date of earliest event reported) : February 5,
2008
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ECHOSTAR
CORPORATION
(Exact
name of registrant as specified in its charter)
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NEVADA
(State
or other jurisdiction of incorporation)
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001-33807
(Commission
File Number)
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26-1232727
(IRS
Employer
Identification
No.)
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90
INVERNESS CIRCLE E.
ENGLEWOOD,
COLORADO
(Address
of principal executive offices)
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80112
(Zip
Code)
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(303)
723-1100
(Registrant's
telephone number, including area code)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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1
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Item
1.01
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Entry
into a Material Definitive
Agreement
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On
February 7, 2008, the Registrant completed several transactions under a
Master Investment Agreement, dated as of February 5, 2008 (the “Master Investment
Agreement”) between the Registrant on the one hand, and TerreStar
Corporation (“TerreStar Parent”)
and TerreStar Networks Inc. (“TerreStar”) on the
other hand. Under the Master Investment Agreement, the Registrant
acquired (i) $50 million in aggregate principal amount of TerreStar’s
6½% Senior Exchangeable Paid-in-Kind Notes due June 15, 2014 (the “Exchangeable Notes”);
(ii) $50 million aggregate principal amount of TerreStar’s 15% Senior
Secured Paid-in-Kind Notes due February 15, 2014 (the “Secured Notes”) and
(iii) one share of TerreStar Parent’s Series C Preferred Stock (the
“Series C
Preferred”). The
Senior Secured Notes acquired by the Registrant were issued under TerreStar’s
existing Indenture, dated as of February 14, 2007 with U.S. Bank National
Association, as trustee.
The
Exchangeable Notes were issued pursuant to an Indenture dated as of February
7,
2008 among TerreStar, TerreStar Parent, certain guarantor subsidiaries of
TerreStar and U.S. Bank National Association, as trustee. The
Exchangeable Notes are guaranteed by TerreStar License Inc. and TerreStar
National Services, Inc. and will mature on June 15, 2014. The
Exchangeable Notes are exchangeable for shares of TerreStar Parent Common Stock
based on a price of $5.57 per share following effectiveness of TerreStar Parent
stockholder approval. TerreStar may be obligated to repurchase all or
a part of the Exchangeable Notes under certain circumstances, including upon
a
change of control of TerreStar or if stockholder approval of the issuance of
TerreStar Parent common stock is not effective by July 23, 2008. The
Exchange Notes will bear interest at 6.5% per annum, with such interest being
payable in additional Exchangeable Notes through March
2011. Additional cash interest may be payable in the event that
certain milestones leading to the effectiveness of the stockholder approval
are
not met.
The
Registrant also entered into a Purchase Money Credit Agreement with TerreStar
and Harbinger Capital Partners Master Fund I, Ltd. and Harbinger
Capital Partners Special Situations Fund LP (collectively, “Harbinger”), in which
the Registrant and Harbinger have each committed to provide up to
$50 million in secured financing, the proceeds of which may be advanced to
TerreStar from time to time as required for TerreStar to make required payments
in connection with a communications satellite (the “TerreStar-2
Satellite”) to be constructed and launched for
TerreStar. Pursuant to a Security Agreement, dated as of February 5,
2008 (the “Security
Agreement”), from TerreStar in favor of US Bank National Association, as
Collateral Agent (the “Collateral Agent”)
TerreStar granted a security interest to the Collateral Agent in certain of
TerreStar's assets to be financed by the proceeds of the loan, including, among
other things, the TerreStar-2 Satellite and related raw materials,
work-in-progress, and finished goods.
The
Registrant also entered into a Spectrum Agreement with TerreStar Parent and
TerreStar. Under the Spectrum Agreement, a subsidiary of the
Registrant will enter into a lease, with TerreStar Parent as lessee, of certain
1.4 GHz spectrum currently held by that subsidiary. TerreStar Parent
will also have the option exercisable on or before July 23, 2008, to acquire
the
intermediate holding company through which the Registrant holds the spectrum,
in
exchange for the issuance by TerreStar Parent of 30 million shares of its
Common Stock. The issuance of these common shares and exercise by
TerreStar Parent of its option will be subject to shareholder approval of the
issuance of these shares.
Pursuant
to the Master Investment Agreement and the TerreStar Parent Series C
Preferred, the Registrant will have the right to nominate two members to the
Boards of Directors of TerreStar Parent and TerreStar, each of which will be
composed of eight members. The Series C Preferred also provides the
Registrant with consent rights with respect to certain significant corporate
matters. Only the Registrant or its affiliates may own the Series C
Preferred.
TerreStar
Parent has also agreed to register with the Securities and Exchange Commission
the Common Stock that the Registrant may receive in these
transactions.
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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ECHOSTAR
CORPORATION
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Date:
February 8, 2008
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By:
/s/
Bernard
L. Han
Bernard
L. Han
Executive
Vice President and Chief Financial
Officer
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3