Item 1.01 Entry into a Material Definitive Agreement
On November 21, 2019, DISH Network Corporation ("DISH Network") entered into a
Standby Purchase Agreement (the "Standby Purchase Agreement") with Charles W.
Ergen (the "Standby Purchaser"), pursuant to which the Standby Purchaser has
agreed to purchase, at the subscription price of $33.52 per share of Class A
common stock, any and all shares of DISH Network Class A common stock, par value
$0.01 per share (the "Class A Common Stock"), not subscribed for by the holders
of DISH Network's Eligible Securities (as defined in Item 8.01 below) pursuant
to the exercise of their subscription rights in connection with the rights
offering (the "Rights Offering") described in Item 8.01 below. The Standby
Purchaser is the Chairman and controlling stockholder of DISH Network.
No fees or other consideration will be paid by DISH Network to the Standby
Purchaser in consideration of his commitment to purchase any and all
unsubscribed shares of Class A Common Stock following the Rights Offering. Any
shares of Class A Common Stock issued to the Standby Purchaser in connection
with the Standby Purchase Agreement described above will be "restricted
securities" as that term is defined in Rule 144 under the Securities Act of
1933, as amended. The Standby Purchaser is a current stockholder of DISH Network
and has informed DISH Network that he intends to fully exercise all subscription
rights allocated in respect of Eligible Securities of DISH Network that he
beneficially owns. In light of the Standby Purchase Agreement, DISH Network
anticipates that it will receive gross proceeds of approximately $1 billion if
the Rights Offering is completed.
The Standby Purchase Agreement contains other provisions, including conditions
to closing, termination rights, and representations, warranties and covenants of
DISH Network and the Standby Purchaser, that are customary for agreements of
this type.
DISH Network is filing the Standby Purchase Agreement as Exhibit 10.1 to this
Current Report on Form 8-K. The Standby Purchase Agreement is incorporated by
reference herein and the summary set forth above is qualified by reference to
the full text of the Standby Purchase Agreement.
Item 3.02 Unregistered Sales of Equity Securities.
The information described under Item 1.01 above with regard to the Standby
Purchase Agreement is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On November 22, 2019, DISH Network issued a press release announcing the
commencement of its previously announced Rights Offering. A copy of the press
release is attached hereto as Exhibit 99.8 and incorporated into this Item 7.01
by reference.
The information contained in this Item 7.01 and Exhibit 99.8 shall not be deemed
to be "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities
of such section, nor will such information be deemed incorporated by reference
in any filing under the Securities Act of 1933, as amended, or the Exchange Act,
except as may be expressly set forth by specific reference in such filing.
Item 8.01 Other Events.
On November 22, 2019, DISH Network announced the commencement of its previously
announced Rights Offering to raise proceeds of approximately $1 billion. All
holders of DISH Network's Class A Common Stock, Class B common stock and
outstanding convertible notes (the "Eligible Securities") are being granted the
right to participate in the Rights Offering and subscribe for newly-issued
shares of DISH Network's Class A Common Stock on a pro rata basis. The Rights
Offering is being made pursuant to DISH Network's Registration Statement on Form
S-3 (File No. 333-234552) (the "Registration Statement") that was previously
filed with the Securities and Exchange Commission (the "SEC") and became
effective on November 7, 2019, and the prospectus supplement relating the Rights
Offering filed with the SEC on November 22, 2019 (together with the accompanying
prospectus, the "Prospectus").
In connection with this Rights Offering, DISH Network is filing certain
ancillary agreements as Exhibits 4.1, 99.1, 99.2, 99.3, 99.4, 99.5, 99.6 and
99.7 to this Current Report on Form 8-K for the purpose of incorporating such
items by reference as exhibits to the Registration Statement, to which the
Prospectus is a part. Also in connection with the Rights Offering, DISH Network
is filing as Exhibit 5.1, the opinion of Timothy A. Messner, in connection with
the issuance of the subscription rights and the underlying Class A Common Stock
issuable upon exercise of the subscription rights.
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This Current Report on Form 8-K shall not constitute an offer to sell or a
solicitation of an offer to buy the securities, nor shall there be any offer,
solicitation or sale of the securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful under the securities laws of
such state or jurisdiction. The Rights Offering will be made only by means of
the Prospectus, copies of which will be mailed to all record holders of Eligible
Securities and can be accessed through the SEC's website at www.sec.gov. A copy
of the Prospectus may also be obtained from the information agent, Georgeson
LLC, toll free at (877) 278-4751. Additional information regarding the Rights
Offering is set forth in the Prospectus filed with the SEC.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained herein may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements include statements about the benefits of the rights
offering, including future DISH Network's plans, objectives, expectations and
intentions, and other statements that are not historical facts. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
DISH Network to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. More
information about such risks, uncertainties and other factors is set forth in
DISH Network Corporation's Disclosure Regarding Forward-Looking Statements
included in its recent filings with the SEC, including its annual report on Form
10-K for the year ended December 31, 2018 and any subsequent quarterly reports
on Form 10-Q. Risks and uncertainties relating to the proposed transaction
include, but are not limited to, the possibility that the rights offering will
not be completed, adverse effects on the market price of DISH Network
Corporation's Class A Common Stock and adverse effects on DISH Network's
operating results for any reason. The forward-looking statements speak only as
of the date made, and DISH Network expressly disclaims any obligation to update
these forward-looking statements. Nothing herein shall be deemed to be a
forecast, projection or estimate of the future financial performance of DISH
Network following the completion of the Rights Offering.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
No.
Exhibit Form of Subscription Rights Certificate.
4.1
Exhibit Opinion of Timothy A. Messner.
5.1
Exhibit Standby Purchase Agreement.
10.1
Exhibit Consent of Timothy A. Messner (included in Exhibit 5.1 hereto).
23.2
Exhibit Form of Instructions for Use of Subscription Rights Certificates.
99.1
Exhibit Form of Letter to Holders who are Registered Holders.
99.2
Exhibit Form of Letter to Custodian Banks, Brokers, Dealers and Other Nominee
99.3 Holders.
Exhibit Form of Letter to Clients for Use by Custodian Banks, Brokers,
99.4 Dealers and Other Nominee Holders.
Exhibit Form of Notice of Guaranteed Delivery for Subscription Rights
99.5 Certificates.
Exhibit Form of Beneficial Holder Election Form.
99.6
Exhibit Form of Nominee Holder Certification.
99.7
Exhibit Press Release "DISH Network Commences Rights Offering," dated
99.8 November 22, 2019.
Exhibit Cover Page Interactive Data File (embedded within the Inline XBRL
104 document).
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