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Echo Acceptance Corp, et al. – ‘S-4/A’ on 9/27/02

On:  Friday, 9/27/02, at 4:45pm ET   ·   Accession #:  1035704-2-497   ·   File #s:  333-92420, -01, -02, -03, -04, -05, -06, -07, -08

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 9/27/02  Echo Acceptance Corp              S-4/A                  7:3.8M                                   Bowne BDN/FA
          Dish Network Service Corp
          Echostar Indonesia Inc
          Echostar Technologies Corp
          Echostar Space Corp
          Echostar Satellite Corp
          Echostar International Corp
          Echosphere Corp
          Echostar DBS Corp

Document/Exhibit                   Description                      Pages   Size 

 1: S-4/A       Amendment to Form S-4                               HTML   3.14M 
 2: EX-4.7      EX-4.7 Indenture Relating to the Edbs Notes           99    386K 
 3: EX-5.1      EX-5.1 Opinion/Consent of Friedlob Sanderson           2     13K 
 4: EX-12       EX-12 Statement Regarding Computation of Ratios        2±    12K 
 5: EX-25.1     EX-25.1 Statement of Eligibility on Form T-1           5     20K 
 6: EX-99.1     EX-99.1 Form of Letter of Transmittal                 12     49K 
 7: EX-99.2     EX-99.2 Form of Notice of Guaranteed Delivery          3     15K 

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 27, 2002

REGISTRATION NO. 333-92420

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 1 To
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

EchoStar DBS Corporation*
(Exact name of registrant as specified in its charter)

5701 South Santa Fe Drive
Littleton, Colorado 80120
(303) 723-1000
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive office)

With copies to:

Raymond L. Friedlob, Esq.
John W. Kellogg, Esq.
RaLea Sluga, Esq.
Friedlob Sanderson Paulson & Tourtillott, LLC
1775 Sherman Street, Twenty-First Floor
Denver, Colorado 80203
(303) 571-1400

*The companies listed on the next page are also included in this Form S-4 Registration Statement as additional Registrants.

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following Box.     

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     

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The registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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Prospectus
September 27, 2002

EchoStar DBS Corporation

Offer to Exchange $1,000,000,000 of its 10 3/8% Senior Notes due 2007 which have been registered
under the Securities Act for any and all outstanding 10 3/8% Senior Notes due 2007 of EchoStar
Broadband Corporation

The Exchange Offer will expire at 5:00 p.m. Eastern Standard Time on November 4, 2002,
unless extended

The Offer

     EchoStar DBS Corporation, or EDBS, hereby offers, upon the terms and subject to the condition set forth in this prospectus and the accompanying letter of transmittal, to exchange $1,000 principal amount of its 10 3/8% senior notes due 2007, which we refer to as EDBS notes, for each $1,000 principal amount of outstanding 10 3/8% senior notes due 2007 of EchoStar Broadband Corporation, or EBC, which we refer to as EBC notes, properly tendered for exchange and accepted. Interest on the EDBS notes will accrue from April 2, 2002 at the stated rate thereon.

The EDBS Notes

     The EDBS notes are substantially identical to the EBC notes that were issued by EchoStar Broadband Corporation on September 25, 2000, except that the EDBS notes will be guaranteed by certain of our subsidiaries.

Material Terms of the Exchange Offer

Consider carefully the “Risk Factors” beginning on page 17 of this prospectus.

The date of this prospectus is September 27, 2002.

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WHERE YOU CAN FIND MORE INFORMATION

     This prospectus contains summaries and other information that we believe are accurate as of the date hereof with respect to specific terms of specific documents, but we refer to the actual documents (copies of which will be made available to prospective purchaser upon request to us) for complete information with respect to those documents. Statements contained in this prospectus as to the contents of any contract or other documents referred to in this prospectus do not purport to be complete. Where reference is made to the particular provisions of a contract or other document, the provisions are qualified in all respects by reference to all of the provisions of the contract or other document. Industry and company data is approximate and reflect rounding in certain cases

     We, our ultimate parent, EchoStar Communications Corporation, or ECC, and our direct parent, EchoStar Broadband Corporation, or EBC, are each subject to the informational requirements of the Exchange Act and accordingly file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information may be inspected and copied at the offices of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and the Woolworth Building, 233 Broadway, New York, New York 10013. The SEC also maintains a website that contains reports and other information regarding registrants such as us that file electronically with the SEC. The address of that site is http://www.sec.gov.

     The class A common stock of our ultimate parent company, ECC, is traded as “DISH” on the NASDAQ National Market. Materials filed by ECC can be inspected at the offices of the National Association of Securities Dealers, Inc., Reports Section, 1735 K Street, N.W., Washington, D.C. 20006. ECC has not guaranteed and is not otherwise responsible for the notes.

FORWARD-LOOKING STATEMENTS

     All statements contained in this prospectus, as well as statements made in press releases and oral statements that may be made by us or by officers, directors or employees acting on our behalf, that are not statements of historical fact constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known or unknown risks, uncertainties and other factors that could cause our actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. The “Risk Factors” section of this prospectus, commencing on page 17, summarizes certain of the material risks and uncertainties that could cause our actual results to differ materially. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements that include the terms “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends” or the like to be uncertain and forward-looking. All cautionary statements made herein should be read as being applicable to all forward-looking statements wherever they appear. In this connection, investors should consider the risks described herein and should not place undue reliance on any forward-looking statements.

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SUMMARY

     In this prospectus, the words “we,” “our,” “us” and “EDBS” refer to EchoStar DBS Corporation, a Colorado corporation, together with our subsidiaries, unless the context otherwise requires. “ECC” refers to our ultimate parent, EchoStar Communications Corporation, a Nevada corporation, “EBC” refers to EchoStar Broadband Corporation, a Colorado corporation, our direct parent and a wholly-owned subsidiary of ECC and “EchoStar” refers to ECC and its subsidiaries, including EBC and us. You should refer to the section entitled “The EchoStar Organization” for a simplified chart depicting EchoStar’s organizational structure. “Hughes” refers to Hughes Electronics Corporation, or a holding company that is expected to be formed to hold all of the stock of Hughes Electronics Corporation, and “PanAmSat” refers to PanAmSat Corporation, in each case including their respective subsidiaries, unless the context otherwise requires. This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary may not contain all of the information that you should consider before investing in our notes. You should carefully read the entire prospectus, including “Risk Factors” and “Disclosure Regarding Forward-Looking Statements” and the consolidated financial statements and the notes thereto appearing elsewhere in this prospectus.

ECHOSTAR BROADBAND CORPORATION

     EBC is a wholly-owned subsidiary of ECC and our direct parent. During March 1999, ECC placed ownership of all of its direct broadcast satellites and related FCC licences into subsidiaries of us. EBC was formed in September 2000 for the purpose of issuing the EBC notes, which we are exchanging through this offering. In connection with the offering of the EBC notes, ECC contributed all of the outstanding capital stock of us and EchoStar Orbital Corporation, which we refer to as EOC, to EBC. Substantially all of EBC’s operations are conducted by its subsidiaries. Accordingly, the description of our business operations is equally applicable to EBC. EOC has current contracts for the construction and launch of EchoStar IX.

ECHOSTAR DBS CORPORATION

Our Business

     We are a wholly-owned subsidiary of EBC and are a leading provider of direct broadcast satellite television services in the United States through our DISH Network business unit. We are also an international supplier of digital satellite receiver systems and a provider of other satellite services.

Our Business Strategy

     Our primary objective is to continue to expand our DISH Network subscriber base and to develop our interactive services. To achieve these objectives, we plan to:

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Our DISH Network

     We started offering subscription television services on the DISH Network in March 1996. As of June 30, 2002, the DISH Network had approximately 7.46 million subscribers. We now have seven direct broadcast satellites in operation that enable us to offer over 500 video and audio channels, together with data services and high definition and interactive TV services, to consumers across the continental United States. We believe that the DISH Network offers programming packages that have a better “price-to-value” relationship than packages currently offered by most other subscription television providers. As of June 30, 2002, there were approximately 18.9 million subscribers to direct broadcast satellite and other direct-to-home satellite services in the United States. We believe that there are more than 88 million total pay television subscribers in the United States, and that there continues to be significant unsatisfied demand for high quality, reasonably priced television programming services.

Interactive Services

     We are continuing to expand our offerings to include interactive services. During 2001, we began offering DISH Network customers an interactive digital receiver with a built-in hard disk drive that permits viewers to pause and record live programs without the need for videotape. We now offer receivers capable of storing up to 35 hours of programming, and expect to increase storage capacity on future models to over 100 hours. We are also offering set-top boxes that can provide a wide variety of innovative interactive television services and applications.

EchoStar Technologies Corporation

     In addition to supplying EchoStar satellite receiver systems for the DISH Network, our EchoStar Technologies Corporation subsidiary supplies similar digital satellite receivers to international satellite TV service operations. In addition to the DISH Network, our two major customers are Via Digital, a subsidiary of Telefonica, Spain’s national telephone company, and Bell ExpressVu, a subsidiary of Bell Canada, Canada’s national telephone company.

Our Executive Offices

     Our principal executive offices are located at 5701 South Santa Fe Drive, Littleton, Colorado 80120 and our telephone number is (303) 723-1000.

The Proposed Merger of ECC with Hughes

     On October 28, 2001, our parent company ECC, Hughes and General Motors, which is Hughes’ parent company, signed definitive agreements relating to ECC’s merger with Hughes in a stock-for-stock transaction to occur after the separation of HEC Holdings, Inc., a newly formed company that will hold all of the outstanding capital stock of Hughes, from GM by means of a split-off. Hughes is a leading provider of satellite-based entertainment, information and communications services for the home and business markets, including video, data, voice, multimedia and Internet services. Through its DIRECTV subsidiary, Hughes is the largest provider of direct broadcast satellite services in the United States. Hughes also owns an approximately 81% equity interest in PanAmSat, a leading global provider of video and data broadcasting services through 21 satellites it owns and operates.

     We will not be a direct party to the proposed merger or the acquisition of Hughes’ interest in PanAmSat. Although none of the parties is under any obligation to contribute any assets to us if ECC completes either of these transactions, we expect these transactions to have a significant impact on us.

     The surviving corporation in the merger will carry the EchoStar name and will provide direct broadcast satellite services in the United States and Latin America, primarily under the DIRECTV brand name, global fixed satellite services and other broadband communication services. The merger is subject to the prior separation of the business of Hughes from GM by way of a recapitalization of Hughes and split-off of HEC Holdings from GM and other conditions and risks. We expect the merger with Hughes and related transactions to require at least $7.025 billion of cash. We expect that ECC will provide approximately $1.5 billion of this amount from available cash at the time of signing the merger agreement. In addition, ECC and Hughes obtained $5.525 billion in bridge financing commitments for the Hughes merger and related

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transactions, which commitments have been reduced to $3.325 billion as a result of the sale of $700 million of our 9 1/8% senior notes due 2009 and a $1.5 billion investment by Vivendi Universal in ECC, which resulted in the issuance of 5,760,479 shares of ECC’s series D convertible preferred stock to a subsidiary of Vivendi. The remaining $3.325 billion of required cash will come from new cash raised by ECC, Hughes or a subsidiary of Hughes on or prior to the closing of the Hughes merger through public or private debt of equity offerings, bank debt or a combination thereof. The amount of such cash that could be raised by ECC prior to the completion of the Hughes merger is severely restricted. ECC’s agreements with GM and Hughes prohibits it from raising any additional equity capital beyond the $1.5 billion Vivendi investment, which prohibition will likely continue for two years following completion of the Hughes merger, absent possible favorable IRS rulings or termination of the Hughes merger. Any other financing we, EchoStar or Hughes complete prior to these transactions will further reduce the financing commitments on a dollar-for-dollar basis. We discuss this commitment under “The Proposed Merger and Related Transactions — Merger Financing.”

     If the Hughes merger is terminated, ECC may be required to purchase Hughes’ interest in PanAmSat, merge with PanAmSat or make a tender offer for all of PanAmSat’s shares and may also be required to pay a $600 million termination fee to Hughes. If ECC purchases the Hughes interest in PanAmSat rather than undertaking the merger or the tender offer, it must make offers for all PanAmSat shares that remain outstanding. We expect that ECC’s acquisition of Hughes’ interest in PanAmSat, which would be at a price of $22.47 per share, together with its assumed purchase of the remaining outstanding PanAmSat shares and its payment of the termination fee to GM would require at least $3.4 billion of cash and approximately $600 million of ECC’s class A common stock. We expect that ECC would meet this cash requirement by utilizing a portion of its cash on hand.

     ECC currently expects the Hughes merger to occur in the second half of 2002, subject, among other things, to receiving FCC approval and antitrust clearance. The section of this summary entitled “Effects of the Hughes Merger or the PanAmSat Acquisition on EDBS” briefly explains some of the immediate consequences we expect the transactions to have on us, and the section of this prospectus entitled “The Proposed Merger and Related Transactions” contains a more complete description of these transactions.

     Information in this prospectus relating to potential business combinations with Hughes and/or PanAmSat is relevant only if ECC completes the Hughes merger or acquires Hughes’ interest in PanAmSat. For a discussion of the uncertainties surrounding the completion of the Hughes merger or the acquisition by ECC and the potential resulting impact on us, see “Risk Factors - Risks Related to the Proposed Merger and Related Transactions.” None of GM, HEC Holdings, Hughes or PanAmSat is offering the notes or any other securities hereby, and none of GM, HEC Holdings, Hughes or PanAmSat has guaranteed or is otherwise responsible in any way for the EDBS notes, our offering of the EDBS notes or any other securities that we may issue, or for the information contained in this prospectus. The completion of these transactions is not certain. You should consider all the alternative outcomes in connection with your investment in the EDBS notes, including the possibility that ECC completes neither the Hughes merger nor the acquisition of Hughes’ interest in PanAmSat.

EchoStar’s Reasons for the Merger

     At its meeting on October 27, 2001, the EchoStar board of directors approved the Hughes merger and related transactions. In the course of making its decision to approve the Hughes merger and related transactions, the EchoStar board of directors consulted with EchoStar’s management, as well as its outside legal counsel and its financial advisors. The EchoStar board of directors considered, among other things, the following material factors at its October 27, 2001 meeting and certain prior meetings:

     Strengthened Strategic Position. The combination of EchoStar and Hughes would create one of the nation’s largest multi-channel subscription television platforms, having a scale that would permit the surviving company to compete more effectively with cable televison providers, deliver more program and service offerings to subscribers and better position the surviving company to exploit the growth opportunity represented by 100 million available United States television households.

     Cost Savings and Revenue Synergies. The integration of the two companies would create substantial potential cost savings and revenue synergies, which were estimated at up to $5 billion annually by 2005, based on various assumptions and the expected contributions of these savings and synergies to the EBITDA of the combined companies. Based on further

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analysis and discussions that have taken place between EchoStar and Hughes since October 2001, EchoStar management is currently estimating that the integration of the two companies would create substantial potential cost savings and revenue synergies of up to $5 billion annually by 2007, based on various assumptions and the expected contributions of these savings and synergies to the EBITDA of the combined companies. The principal elements of the expected costs savings and synergies include the following:

     Cost Savings:

     Revenue Synergies:

     You should understand that these estimated potential synergies are forward-looking statements subject to the risks and uncertainties described at “Forward-Looking Statements.” These estimated of synergies are based on numerous estimates, assumptions, and judgments and are subject to significant uncertainties. We cannot assure you that any particular amount of synergies will be realized by the surviving company in connection with the Hughes merger. See also “Risk Factors-Risks Related to the Proposed Merger and Related Transactions.”

     Technological Strength. The surviving company would be able to leverage the combined research and development efforts and the engineering capabilities of the combined companies to expand the features and functionality of their satellite receiver systems. These features would include a wide variety of innovative interactive television services and applications. In addition, EchoStar believes that the surviving company would be better positioned to enhance its satellite-based broadband communications platform.

Effects of the Hughes Merger or the PanAmSat Acquisition on EDBS

     The Hughes merger or the acquisition of PanAmSat could have effects on us that are important to you.

     If ECC completes the Hughes merger, we will become a subsidiary of the combined company. Although we are not directly a party to the Hughes merger, the merger will affect us significantly in ways that are difficult to predict. See “Risk Factors — Risks Related to the Proposed Merger and Related Transactions” for a discussion of some of the possible direct and indirect effects of the merger on us.

     The indenture governing our 9 1/8% senior notes due 2009 allows us to incur additional secured debt to provide additional financing for the merger. If ECC completes the Hughes merger, the amount of this additional secured debt would

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be limited to $2.7 billion plus the greater of $500 million or up to 1.25 times our 12-month trailing cash flow, depending on our credit rating. To incur this debt, we would need consents from holders of our and EBC’s outstanding senior notes.

     If ECC does not consummate the merger, ECC may purchase Hughes’ interest in PanAmSat, merge with PanAmSat or make a tender offer for all of PanAmSat’s shares. In this event, we will continue to be a subsidiary of ECC.

     Finally, if neither the Hughes merger nor the acquisition of Hughes’ interest in PanAmSat occurs, we will remain a subsidiary of ECC.

Recent Developments

Satellites

     During April 2002, EchoStar VII, which was successfully launched on February 21, 2002 from Cape Canaveral, Florida, reached its final orbital location at the 119 degree orbital location and commenced commercial operation. To date, all systems on the satellite are operating normally.

     On August 22, 2002, EchoStar VIII was successfully launched on a Russian Proton rocket from Baikonur Cosmodrome in Kazakhstan. Assuming successful completion of in-orbit testing, EchoStar VIII is expected to commence commercial operation at the 110 degree orbital location later this year.

Exchange Offer

     We were required by the terms of the indenture for our 9 1/8% senior notes due 2009 to make an exchange offer to exchange all of our outstanding restricted 9 1/8% senior notes for substantially identical 9 1/8% senior notes issued by us that are registered under the Securities Act. This exchange offer will commence on or before October 4, 2002. The exchange of our 9 1/8% senior notes will not alter the ranking of the EDBS notes being offered by this prospectus or changed the amount of our debt.

Changes to our Certifying Public Accountants

     Effective June 1, 2002, ECC determined not to renew the engagement of its independent accountants, Arthur Andersen LLP and appointed KPMG LLP as its new independent accountants, effective immediately for ECC and all of its subsidiaries including, but not limited to EBC and us. This determination followed ECC’s decision to seek proposals from independent accountants to audit its, EBC’s and our financial statements for the fiscal year ending December 31, 2002. The decision not to renew the engagement of Arthur Andersen LLP and to retain KPMG LLP was approved by ECC’s Board of Directors upon the recommendation of its Audit Committee.

     Arthur Andersen’s report on ECC’s, EBC’s and our 2001 financial statements was issued on February 27, 2002 in conjunction with the filing of ECC’s, EBC’s and our Annual Report on Form 10-K for the year ended December 31, 2001.

     During ECC’s, EBC’s and our two most recent fiscal years ended December 31, 2001, and the subsequent interim period through June 1, 2002, there were no disagreements between ECC, EBC or us and Arthur Andersen on any matter of accounting principles, or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to Arthur Andersen’s satisfaction would have caused them to make reference to the subject matter of the disagreement in connection with their reports.

     None of the reportable events described under Item 304(a)(1)(v) of Regulation S-K occurred within ECC’s and our two most recent fiscal years and the subsequent interim period through June 1, 2002. The audit reports of Arthur Andersen on the consolidated financial statements of ECC, EBC and us as of and for the fiscal years ended December 31, 2001 and 2000 do not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

     ECC provided Arthur Andersen with a copy of the foregoing disclosures.

     During ECC’s, EBC’s and our two most recent fiscal years ended December 31, 2001, and the subsequent interim period through June 1, 2002, ECC, EBC and us did not consult with KPMG LLP regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii) or Regulation S-K.

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THE EXCHANGE OFFER

     The exchange offer relates to the exchange of up to $1,000,000,000 aggregate principal amount of outstanding EBC 10 3/8% senior notes due 2007, which we refer to as EBC notes, for an equal aggregate principal amount of our 10 3/8% senior notes due 2007, which we refer to as EDBS notes. The form and terms of the EDBS notes are identical in all material respects to the form and terms of the corresponding outstanding EBC notes, except that the EDBS notes will be guaranteed by certain of our subsidiaries.

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THE NOTES

     The exchange offer applies to $1,000,000,000 aggregate principal amount of EBC’s 10 3/8% senior notes due 2007. Form and terms of the EDBS notes are substantially identical to the form and terms of the EBC notes, except that the EDBS notes will be guaranteed by certain of our subsidiaries. See “Description of the EDBS Notes.” As used in this summary of the EDBS notes, “subsidiaries” refers to our direct and indirect subsidiaries.

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OUR SUMMARY FINANCIAL DATA
(in millions, except subscriber and per subscriber data)

     We derived the following summary statements of operations, balance sheet and other data for the five years ended December 31, 2001 from our audited consolidated financial statements. The following tables also present summary unaudited financial data for the six months ended June 30, 2001 and 2002. In our opinion, this interim data reflects all adjustments, consisting of normal recurring adjustments necessary to fairly present the data for such interim periods. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full year.

     You should read the data in conjunction with, and it is qualified by reference to, the sections entitled “Management’s Narrative Analysis of Results of Operations,” our consolidated financial statements and the notes thereto, and other financial information for the year ended December 31, 2001 and for the six months ended June 30, 2002, which appear elsewhere in this prospectus.

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EBC’S SUMMARY FINANCIAL DATA
(in millions, except subscriber and per subscriber data)

     We derived the following summary statements of operations, balance sheet and other data for the four years ended December 31, 2001 from EBC’s audited consolidated financial statements and for the year ended December 31, 1997 from EDBS’ audited consolidated financial statements. EBC had no operations prior to its formation in 2000. For periods prior to EBC’s formation, results have been presented as substantially equivalent to EDBS. The following tables also present summary unaudited financial data for the six months ended June 30, 2001 and 2002 for EBC. In EBC’s opinion, this interim data reflects all adjustments, consisting of normal recurring adjustments necessary to fairly present the data for such interim periods. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full year.

     You should read the data in conjunction with, and it is qualified by reference to, the sections entitled “Management’s Narrative Analysis of Results of Operations,” EBC’s consolidated financial statements and the notes thereto, and other financial information for the year ended December 31, 2001 and for the six months ended June 30, 2002, which appear elsewhere in this prospectus.

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SUMMARY SATELLITE DATA

     The following table provides information about EchoStar’s satellites. Our subsidiary, EchoStar Satellite Corporation, owns EchoStar I through VII, and our affiliate, EchoStar Orbital Corporation, has contracted for the construction and launch of EchoStar VIII and EchoStar IX.

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THE ECHOSTAR ORGANIZATION

     The following chart illustrates the EchoStar corporate structure.

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RISK FACTORS

     Investing in the EDBS notes involves a high degree of risk. You should carefully consider the following risk factors and all other information contained in this prospectus before deciding whether to invest in the EDBS notes. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that we are unaware of, or that we currently believe to be immaterial, also may become important factors that affect us.

     If any of the following events occur, our business, financial condition or results of operations could be materially and adversely affected. In that case, the value of the EDBS notes could decline and you may lose some or all of your investment.

Risks Primarily Related to Our Business

We have substantial debt outstanding and may incur additional debt, so we may be unable to pay interest or principal on the EDBS notes.

     As of June 30, 2002, our total debt, including the debt of our subsidiaries, was approximately $3.7 billion, which includes approximately $1.0 billion of EBC’s 10 3/8% senior notes due 2007, which we are offering to exchange through this prospectus. See “Description of the EDBS Notes.”

     Our indenture governing our 9 1/8% senior notes due 2009 allows us to incur additional secured debt to provide additional financing for the Hughes merger. If ECC completes its merger with Hughes, the amount of this additional secured debt would be limited to $2.7 billion plus the greater of $500 million or up to 1.25 times our 12-month trailing cash flow, depending on our credit rating. If we incur this secured debt, it would effectively rank senior to the EDBS notes to the extent of the value of the assets securing it.

     Our substantial debt could have significant consequences to you, including:

Increased subscriber turnover could affect our financial performance.

     Historically, we have had significant levels of churn. Any development which, among other things, increases costs to our existing customers, materially adversely impacts the quality of the product of service, increases the desirability of competing products or increases uncertainty about whether the Hughes merger will be completed may increase churn. Thus, any of the risks described in this prospectus which potentially have a material adverse impact on cost or quality could also result in an increase in churn which would harm our financial performance. Churn can also increase due to factors beyond our control, including a slowing economy, significant signal compromise, a maturing subscriber base and competitive offers. We cannot assure you that we will be able to manage our churn rates to achieve a reasonable level of financial performance.

      We do not publicly disclose our churn. However, an approximation of our level of churn can be calculated using our net new subscribers numbers and our subscriber acquisition costs, both in the aggregate and on a per new subscriber basis, which can be found in the "Results of Operations" section of our Management's Narrative Analysis of Result of Operations which is included elsewhere in this prospectus.

     While our percentage of churn for the six months ended June 30, 2002 was consistent with our percentage churn compared to the same period during 2001, impacts from our litigation with the networks in Miami, new FCC rules governing the delivery of superstations and other factors could cause us to terminate delivery of distant network channels and superstations to a material portion of our subscriber base, which could cause many of those customers to cancel their subscriptions to our other

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services. Any such terminations could result in a small reduction in average monthly revenue per subscriber and could result in an increase in our percentage churn.

Increased subscriber acquisition costs could affect our financial performance.

     We generally subsidize the cost and installation of EchoStar receiver systems in order to attract new DISH Network subscribers. Our average subscriber acquisition costs were approximately $407 per new subscriber activation during the six months ended June 30, 2002. While there can be no assurance, we currently expect per subscriber acquisition costs for the year ended December 31, 2002 to be consistent with costs for the six months ended June 30, 2002. We also believe, while there can be no assurance, that heightened credit procedures we implemented during the first quarter of 2002, together with promotions tailored towards subscribers with multiple receivers, will attract better long-term subscribers than could be obtained through less costly promotions. Our subscriber acquisition costs, both in the aggregate and on a per new subscriber activation basis, may materially increase to the extent that we introduce other more aggressive promotions if we determine that they are necessary to respond to competition, or for other reasons.

     Since we retain ownership of the equipment, amounts capitalized under our Digital Home Plan, totaling approximately $166 million for the six months ended June 30, 2002, are not included in our calculation of these subscriber acquisitions costs. Cash and returned equipment received as a result of Digital Home Plan customer disconnects totaling approximately $21 million during the six months ended June 30, 2002, also is not included in our calculation of subscriber acquisition costs.

We may be unable to manage rapidly expanding operations.

     If we are unable to manage our growth effectively, our business and results of operations could be materially adversely affected. To manage our growth effectively, we must continue to:

Furthermore, our management personnel must assume even greater levels of responsibility. If we are unable to effectively manage our growth, we may experience a decrease in subscriber growth, an increase in churn, an increase in expenses or other adverse results, any one of, which could have a material adverse effect on our business.

We may need additional capital, which may not be available, in order to continue growing and to increase earnings and to make payments on the EDBS notes.

     Our ability to increase earnings, and to make interest and principal payments on the EDBS notes will depend, in part, on our ability to continue growing our business by maintaining and increasing our subscriber base. This may require significant additional capital that may not be available to us.

     Funds necessary to meet subscriber maintenance and acquisition costs will be satisfied from existing cash and investment balances to the extent available. We may, however, be required to raise additional capital in the future to meet these requirements. There can be no assurance that additional financing will be available on acceptable terms, or at all, if needed in the future.

     In addition to our direct broadcast satellite business plan, EchoStar has conditional licenses and pending FCC applications for a two satellite FSS Ku-band satellite system and a two satellite FSS Ka-band satellite system. EchoStar will need to raise additional capital to construct, launch and insure satellites and complete these systems. We may need to raise additional capital to construct, launch and insure additional satellites. There can be no assurance that additional financing will be available on acceptable terms, or at all.

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We cannot be certain that we will sustain profitability.

     Due to the substantial expenditures necessary to complete construction, launch and deployment of our direct broadcast satellite system and to obtain and service DISH Network customers, we have in the past sustained significant losses. If we do not have sufficient income or other sources of cash, our ability to service our debt and pay our other obligations could be affected. While we had net income of $32 million and $70 million for the year ended December 31, 2001 and the six months ended June 30, 2002, respectively, we can provide no assurance that we will be able to sustain this profitability. Improvements in our results of operations will depend largely upon our ability to increase our customer base while maintaining our price structure, effectively managing our costs and controlling churn. We cannot assure you that we will be effective with regard to these matters. Acquisition costs to obtain DISH Network subscribers are responsible for a substantial portion of the negative effects of churn and may otherwise have a material adverse effect on our revenues and earnings.

Our satellites are subject to risks related to launch.

     Satellite launches are subject to significant risks, including launch failure, incorrect orbital placement or improper commercial operation. About 15% of all commercial geostationary satellite launches have resulted in a total or constructive total loss. Certain launch vehicles that may be used by us have either unproven track records or have experienced launch failures in the past. The risks of launch delay and failure are usually greater when the launch vehicle does not have a track record of previous successful flights. Launch failures result in significant delays in the deployment of satellites because of the need both to construct replacement satellites, which can take up to 24 months, and obtain other launch opportunities. Such significant delays could materially adversely affect our ability to generate revenues. If we were unable to obtain launch insurance, or obtain launch insurance at rates we deem commercially reasonable, and a significant launch failure were to occur, its could have a material adverse effect on our ability to generate revenues and fund future satellite acquisitions and launch opportunities. In addition, the occurrence of future launch failures may materially adversely affect our ability to insure the launch of our satellites at commercially reasonable premiums, if at all. See “-We currently have no traditional commercial insurance coverage on our satellites and we may be unable to settle outstanding claims with insurers.”

Our satellites are subject to significant operational risks.

     Satellites are subject to significant operational risks while in orbit. These risks include malfunctions, commonly referred to as anomalies, that have occurred in our satellites and the satellites of other operators as a result of various factors, such as satellite manufacturer’s error, problems with the power systems or control systems of the satellites and general failures resulting from operating satellites in the harsh space environment.

     Although we work closely with the satellite manufacturers to determine and eliminate the cause of anomalies in new satellites and provide for redundancies of critical components in the satellites, we cannot assure you that we will not experience anomalies in the future, whether of the types described above or arising from the failure of other systems or components.

     Any single anomaly or series of anomalies could materially adversely affect the operations and revenues of us and our relationship with current customers, as well as our ability to attract new customers for our direct broadcast satellites and other satellite services. In particular, future anomalies may result in the loss of individual transponders on a satellite, a group of transponders on that satellite or the entire satellite, depending on the nature of the anomaly. Anomalies may also reduce the expected useful life of a satellite, thereby reducing the revenue that could be generated by that satellite, or create additional expenses due to the need to provide replacement or back-up satellites. Finally, the occurrence of anomalies may materially adversely affect our ability to insure our satellites at commercially reasonable premiums, if at all. While some anomalies are currently covered by existing insurance policies, others are not now covered or may not be covered in the future. The initial capitalized cost of a satellite ranges from about $175 million to about $350 million, depending upon the design. Most of the satellites used by us cost in the range of about $200 million to about $250 million. Typically, direct broadcast satellites have from 24 to 72 transponders on -board, and we expect that most of our satellites will have from 30 to 48 transponders.

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     Meteoroid events pose a potential threat to all in-orbit geosynchronous satellites. The probability that meteoroids will damage those satellites increases significantly when the Earth passes through the particulate stream left behind by various comets. Due to the current peak in the 11-year solar cycle, increased solar activity is likely for the next year. Occasionally, increased solar activity poses a potential threat to all in-orbit satellites. The probability that the effects from this activity will damage our satellites or cause service interruptions is generally very small.

     Some decommissioned spacecraft are in uncontrolled orbits which pass through the geostationary belt at various points, and present hazards to operational spacecraft, including our direct broadcast satellites. We may be required to perform maneuvers to avoid collisions and these maneuvers may prove unsuccessful or could reduce the useful life of the satellite through the expenditure of fuel to perform these maneuvers. The loss, damage or destruction of any of our satellites as a result of an electrostatic storm, collision with space debris, malfunction or other event would have a material adverse effect on our business. As is common in the industry, our in-orbit insurance, if any, will not cover damage to satellites that occurs as a result of collisions with meteoroids, decommissioned spacecraft or other space debris.

Our satellites have minimum design lives of 12 years, but could fail or suffer reduced capacity before then.

     Our ability to earn revenue depends on the usefulness of our satellites. Each satellite has a limited useful life. A number of factors affect the useful lives of the satellites, including, among other things:

Generally, the minimum design life of each of our satellites is 12 years. We can provide no assurance, however, as to the actual useful lives of the satellites.

     In the event of a failure or loss of any of our satellites, we may relocate another satellite and use it as a replacement for the failed or lost satellite. Such a relocation would require prior FCC approval and, among other things, a showing to the FCC that the replacement satellite would not cause additional interference compared to the failed or lost satellite. We cannot be certain that we could obtain such FCC approval. If we choose to use a satellite in this manner, we cannot assure you that this use would not adversely affect our ability to meet the operation deadlines associated with our authorizations. Failure to meet those deadlines could result in the loss of such authorizations, which would have an adverse effect on our ability to generate revenues.

We currently have no traditional commercial insurance coverage on our satellites and we may be unable to settle outstanding claims with insurers.

     In September 1998, we filed a $219.3 million insurance claim for a constructive total loss under the launch insurance policies covering EchoStar IV. The satellite insurance consists of separate substantially identical policies with different carriers for varying amounts which, in combination, create a total insured amount of $219.3 million. Our insurance carriers offered us a total of approximately $88 million, or 40% of the total policy amount, in settlement of the EchoStar IV insurance claim. The insurers offered to pay only part of the $219.3 million claim because they allege that we did not abide by the exact terms of the insurance policy. The insurers also assert that EchoStar IV was not a constructive total loss, as that term is defined in the policy We strongly disagree and filed an arbitration claim against the insurers for breach of contract, failure to pay a valid insurance claim and bad faith denial of a valid claim, among other things. There can be no assurance that we will receive the amount claimed or, if we do, that we will retain title to EchoStar IV with its reduced capacity. Based on the carriers’ failure to pay the amount we believe is owed under the policy and their improper attempts to force us to settle for less than the full amount of our claim, we have added causes of action in our EchoStar IV demand for arbitration for breach of the duty of good faith and fair dealing, and unfair claim practices. With respect to our arbitration claims, we are hopeful that they will be resolved, and we believe it is probable that we will receive a substantial portion of the benefits due.

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     At the time we filed our claim in 1998, we recognized an impairment loss of $106 million to write-down the carrying value of the satellite and related costs, and simultaneously recorded an insurance claim receivable for the same amount. We may have to reduce the amount of the receivable if a final settlement is reached for less than this amount.

     The indentures related to our senior notes contain restrictive covenants that require EchoStar to maintain satellite insurance with respect to at least half of the satellites it owns or leases. In addition, the indenture related to EBC’s senior notes requires EchoStar to maintain satellite insurance on the lesser of half of its satellites or three of its satellites. All of EchoStar’s direct broadcast satellites are owned by direct or indirect subsidiaries of EBC. During the three months ended June 30, 2002, EBC transferred ownership of EchoStar VII to us, which increased our total satellite ownership to seven satellites. Insurance coverage is therefore required for at least four of EchoStar’s seven satellites currently in orbit. The launch and/or in-orbit insurance policies for EchoStar I through EchoStar VII have expired. To date, EchoStar has been unable to obtain insurance on any of these satellites on terms acceptable to it. As a result EchoStar currently self-insures these satellites. To satisfy insurance covenants related to our and EBC’s outstanding senior notes, EchoStar has reclassified an amount equal to the depreciated cost of four of its satellites from cash and cash equivalents to cash reserved for satellite insurance on its balance sheet. As of June 30, 2002, cash reserved for satellite insurance totaled approximately $168 million. The reclassifications will continue until such time, if ever, as we can again insure our satellites on acceptable terms and for acceptable amounts. We believe we have in-orbit satellite capacity sufficient to expeditiously recover transmission of most programming in the event one of our in-orbit satellites fails. However, the cash reserved for satellite insurance is not adequate to fund the construction, launch and insurance for a replacement satellite in the event of a complete loss of a satellite. Programming continuity cannot be assured in the event of multiple satellite losses.

Our business depends substantially on FCC licenses that can expire or be revoked or modified and applications that may not be granted.

     We are subject to the regulatory authority of the United States government, primarily the FCC, and the national communications authorities of the countries in which we operate. If we do not obtain all requisite regulatory approvals for the construction, launch and operation of any of our satellites and for the orbital slots planned for our satellites, or the licenses obtained impose operational restrictions on us, our ability to generate revenue and profits could be materially adversely affected. In addition, under certain circumstances, existing licenses are subject to revocation or modification and renewal of licenses that have an expiration date may not be granted. If existing licenses are not renewed, or are revoked or materially modified, our ability to generate revenue could be materially adversely affected.

     Moreover, we cannot assure you that we will continue to coordinate successfully any or all of our satellites under FCC procedures domestically and under procedures of the International Telecommunication Union internationally. This coordination is required in connection with domestic and international procedures that are intended to avoid interference to or from other satellites. More specifically, the risks of government regulation include:

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     All of our FCC authorizations are subject to conditions imposed by the FCC in addition to the FCC’s authority to modify, cancel or revoke them. Use of FCC licenses and conditional authorizations are often subject to certain technical and due diligence requirements, including the requirement to construct and launch satellites. We have not filed, or not timely filed, some of the required reports. The FCC has indicated that it may revoke, terminate, condition or decline to extend or renew such authorizations if we fail to comply with applicable Communications Act requirements. Failure to comply with such requirements, or comply in a timely manner, could lead to the revocation of authorizations and could have a material adverse effect on our ability to generate revenue. Specifically, loss of a frequency authorization would reduce the amount of spectrum available to us, potentially reducing the amount of programming and other services available to our subscribers. The materiality of such a loss of authorizations would vary based upon, among other things, the orbital location at which the frequencies may be used. For example, a loss of frequencies at our core locations at the 119, 110, or 101 degree orbital locations would have a greater impact on subscribers than a loss of frequencies at other locations.

     Currently we have pending at the FCC various matters, including the following:

     In addition, many of our authorizations and pending applications are subject to petitions and oppositions filed by several companies and we cannot be certain that our authorizations will not be cancelled, revoked or modified or that our applications will not be denied.

     Our projects to construct and launch Ku-band, extended Ku-band and Ka-band satellites are in the early stages of development and are currently being challenged by several companies with interests adverse to ours. Among other things, we hold a conditional license for a Ku-band satellite system at the 83 degree and 121 degree west longitude slots. We cannot assure you that the FCC will sustain these licenses, or grant the pending applications, or that we will be able to successfully capitalize on any resulting business opportunities. In fact, by order released on July 2, 2002, the FCC's International Bureau cancelled our Ka-band authorization for the 83 degree and 121 degree west longitude slots, on the grounds that we had not commenced construction of our first Ka-band satellite by the January 2002 milestone. We disagree with that conclusion and have requested reconsideration of the Bureau's decision, but we cannot be sure that this challenge will result in any change to the decision canceling that license.

Complex technology used in our business could fail or become obsolete.

     Our operating results are dependent to a significant extent upon our ability to continue to introduce new products and services on a timely basis and to reduce costs of our existing products and services. We cannot assure you that we will successfully identify new product or service opportunities or develop and market these opportunities in a timely or cost-effective

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manner. The success of new product development depends on many factors, including proper identification of customer need, cost, timely completion and introduction, differentiation from offerings of competitors and market acceptance.

     Technology in the subscription television and satellite services industries changes rapidly as new technologies are developed, which could cause our services and products to become obsolete. We cannot assure you that we and our suppliers will be able to keep pace with technological developments. If the new technologies on which we intend to focus our research and development investments fail to achieve acceptance in the marketplace, we could suffer a material adverse effect on our future competitive position that could cause a reduction in our revenues and earnings. For example, our competitors could be the first to obtain proprietary technologies that are perceived by the market as being superior. Further, after substantial research and development costs, one or more of the technologies under our development or any of our strategic partners could become obsolete prior to its introduction. In addition, delays in the delivery of components or other unforeseen problems in our direct broadcast satellite system or other satellite services may occur that could materially adversely affect our ability to generate revenue, offer new services and remain competitive.

     Technological innovation is important to our success and depends, to a significant degree, on the work of technically skilled employees. Competition for the services of these types of employees is vigorous. We cannot assure you that we will be able to attract and retain these employees. If we are unable to attract and maintain technically skilled employees, our competitive position could be materially adversely affected.

We depend primarily on a single receiver manufacturer.

     Sanmina-SCI Corporation (formerly knows as SCI Systems, Inc.), a high-volume contract electronics manufacturer, is the primary manufacturer of our receiver systems. JVC also manufactures some of our receiver systems. In addition, during January 2002, we signed an agreement with Thomson Multimedia, S.A., a French company, to manufacture DISH Network compatible satellite TV receivers under the RCA brand name. Thomson anticipates commencing production later in 2002. If our vendors are unable for any reason to produce receivers in a quantity sufficient to meet our requirements, it would impair our ability to add additional DISH Network subscribers and grow our technology business unit, and adversely affect our results of operations.

We rely on key personnel.

     We believe that our future success will depend to a significant extent upon the performance of Charles W. Ergen, our Chairman and Chief Executive Officer. The loss of Mr. Ergen or of certain other key executives could have an adverse effect on our ability to implement our business plan. We do not maintain “key man” insurance. Although all of our executives have executed agreements limiting their ability to work for or consult with competitors if they leave us, we do not have any employment agreements with them.

Our parent is controlled by one principal stockholder.

     We are a 100% owned indirect subsidiary of ECC. Charles W. Ergen, ECC’s Chairman and Chief Executive Officer, currently beneficially owns approximately 50% of ECC’s total equity securities and possess approximately 91% of the total voting power. Thus, Mr. Ergen has the ability to elect a majority of ECC’s directors and to control all other matters requiring the approval of its stockholders. In addition, pursuant to a voting agreement among Mr. Ergen, News Corporation and MCI WorldCom, News Corporation and MCI WorldCom agreed commencing in 1999 for five years to vote their shares of ECC in accordance with the recommendation of ECC’s Board of Directors. For Mr. Ergen’s total voting power to go below 51% prior to ECC’s merger with Hughes, his percentage ownership of ECC’s equity securities of ECC would have to go below 10%. If ECC consummates the Hughes merger as contemplated, Mr. Ergen would beneficially own 100% of the class B common stock of the surviving corporation.

Foreign ownership restrictions could affect our business plan.

     The Communications Act, and the FCC’s implementing regulations, provide that when subsidiaries of a holding company hold certain types of FCC licenses, foreign nationals or their representatives may not own or vote more than 25% of the total equity of the holding company, except upon an FCC public interest determination. On June 13, 2002, however, the FCC amended certain of its rules such that providers of subscription direct broadcast satellite services, like us, are not subject to the foreign ownership limitation, We cannot be certain this decision will not be challenged at the FCC and in the courts.

     The foreign ownership limitation will apply to our licenses for fixed satellite service if we hold ourselves out as a common carrier or if the FCC decides to treat us as such a carrier. The FCC has noted that we have proposed to operate one of our authorized fixed satellite service systems on a common carrier as well as a non-common carrier basis. We have recently informed the FCC that we have no common carrier plans with respect to that system. If the FCC decides to treat us as a common carrier for any of our operations or if we operate as one, we cannot be sure that the FCC will grant any request for a public interest determination that may be needed to allow any indirect foreign investment in excess of 25%.

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We may not be aware of certain foreign government regulations.

     Because regulatory schemes vary by country, we may be subject to regulations in foreign countries of which we are not presently aware. If that were to be the case, we could be subject to sanctions by a foreign government that could materially adversely affect our ability to operate in that country. We cannot assure you that any current regulatory approvals held by us are, or will remain, sufficient in the view of foreign regulatory authorities, or that any additional necessary approvals will be granted on a timely basis or at all, in all jurisdictions in which we wish to operate new satellites, or that applicable restrictions in those jurisdictions will not be unduly burdensome. The failure to obtain the authorizations necessary to operate satellites internationally could have a material adverse effect on our ability to generate revenue and our overall competitive position.

     We, our customers and companies with which we do business may be required to have authority from each country in which we or they provide services or provides our customers use of our satellites. Because regulations in each country are different, we may not be aware if some of our customers and/or companies with which we do business do not hold the requisite licenses and approvals.

We compete with other subscription television service providers, which could affect our ability to grow and increase earnings.

     We compete in the highly competitive subscription television industry against cable television and other land-based and satellite-based system operators offering video, audio and data programming and entertainment services. Many of these competitors have substantially greater financial, marketing and other resources than we have. Our ability to increase earnings depends, in part, on our ability to compete with these other operators.

     DIRECTV’s satellite receivers are sold in a significantly greater number of consumer electronics stores than ours. Moreover, we do not have manufacturing agreements or arrangements with consumer products manufacturers other than JVC and Thomson. As a result, among other things, of these factors and since typically we do not advertise nationally, our receivers and programming services, are less well known to consumers than those of DIRECTV. Due to this relative lack of consumer awareness and other factors, we are at a competitive marketing disadvantage compared to DIRECTV.

     Cable television operators have a large, established customer base, and many cable operators have significant investments in, and access to, programming. Of the 97% of United States televison households in which cable television service is currently available, about 67% currently subscribe to cable. Cable television operators have advantages relative to us by, among other things:

As a result of these and other factors, we may not be able to continue to expand our subscriber base or compete effectively against cable television operators.

     New technologies also could have a material adverse effect on the demand for our direct broadcast satellite services. For example, new and advanced local multi-point distribution services are currently being implemented. Other terrestrial wireless video and data distribution services have been proposed at the FCC. In addition, entities such as regional telephone companies, which are likely to have greater resources than we have, are implementing and supporting digital video compression over existing telephone lines. While these entities are not currently providing digital “wireless cable,” many have the capabilities for such services. Moreover, mergers, joint ventures, and alliances among franchise, wireless or private cable television operators,

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regional Bell operating companies and others may result in providers capable of offering bundled cable television and telecommunications services in competition with us. As a result, we may not be able to compete successfully with existing competitors or new entrants in the market for subscription television services.

     DIRECTV has launched seven high powered direct broadcast satellites and has 46 direct broadcast satellite frequencies that are capable of full coverage of the continental United States. DIRECTV currently offers more than 300 channels of combined video and audio programming and, as of June 30, 2002, had approximately 10.7 million subscribers. If the merger with DIRECTV’s parent is not completed, we believe DIRECTV would continue to be in an advantageous position relative to our company with regard to programming packages, provision of local programming and, possibly, volume discounts for programming offers. In addition, the National Rural Telecommunications Cooperative, through its members and affiliates, competes with us in DIRECTV’s territories.

     Other companies in the United States have conditional permits or have leased transponders for direct broadcast satellite assignments that can be used to provide service to portions of the United States. Also, C-band satellite providers and other low and medium power satellite operators continue to compete in the market for subscription television services, particularly in rural areas.

     In addition, the FCC has proposed to allocate additional spectrum for direct broadcast satellite services, which could create significant additional competition in the market for subscription television services.

Our business relies on intellectual property, some of which is owned by third parties, and we may inadvertently infringe their patents and proprietary rights.

     Many entities, including some of our competitors, now have and may in the future obtain patents and other intellectual property rights that cover or affect products or services related to those that we offer. In general, if a court determines that one or more of our products infringes on intellectual property held by others, we may be required to cease developing or marketing those products, to obtain licenses from the holders of the intellectual property, or to redesign those products in such a way as to avoid infringing the patent claims. If a competitor holds intellectual property rights, it may not allow us to use its intellectual property at any price, which could adversely affect our competitive position.

     We cannot assure you that we are aware of all intellectual property rights that our products may potentially infringe. In addition, patent applications in the United States are confidential until the Patent and Trademark Office issues a patent and, accordingly, we cannot evaluate the extent to which our products may infringe claims contained in pending patent applications. Further, it is often not possible to determine definitively whether a claim of infringement is valid, absent protracted litigation.

     We cannot estimate the extent to which we may be required in the future to obtain intellectual property licenses or the availability and cost of any such licenses. Those costs, and their impact on net income, could be material. Damages in patent infringement cases may also include treble damages in certain circumstances. To the extent that we are required to pay royalties to third parties to whom we are not currently making payments, these increased costs of doing business could negatively affect our liquidity and operating results. We are currently being sued in five patent infringement actions by the following entities: Starsight Telecast, Inc.; Gemstar; Superguide Corp.; IPPV Enterprises, LLC; and MAAST, Inc. We cannot be certain the courts will conclude these entities do not own the rights they claim that our products do not infringe on these rights; that we would be able to obtain licenses from these entities on commercially reasonable terms or, if we were unable to obtain such licenses, that we would be able to redesign our products to avoid infringement. Certain of these actions involve claims for damages in excess of $100 million.

     On June 21, 2002, EchoStar received a favorable ruling from the Administrative Law Judge at the International Trade Commission, which we refer to as the ITC, with regard to Gemstar’s allegations of patent infringement. The parties then filed petitions for the full ITC to review Judge Luckern's Final Initial Determination. On August 29, 2002, the full ITC adopted Judge Luckern's findings regarding non-infringement and the unenforceability of the 121 patent. The ITC did not adopt, but did not overturn, Judge Luckern's findings of patent misuse. Gemstar has indicated that it plans to appeal the decision of the ITA to the United States Court of Appeals for the Federal Circuit. If the Court were to overturn Judge Luckern's decision, such an adverse decision in this case could temporarily halt the import of our receivers and could require us to materially modify certain user-friendly electronic programming guides and related features we currently offer to consumers.

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Satellite programming signals have been pirated, which could cause us to lose subscribers and revenue.

     The delivery of subscription programming requires the use of encryption technology to assure that only those who pay can receive the programming. It is illegal to create, sell or otherwise distribute mechanisms or devices to circumvent that encryption. Theft of cable and satellite programming has been widely reported and our signal encryption has been compromised and could be further compromised in the future. We continue to respond to compromises of our encryption system with measures intended to make signal theft of our programming commercially uneconomical. We utilize a variety of tools to continue to accomplish this goal. Ultimately, of other measures are not successful, it could be necessary for us to incur significant expense to replace the conditional access card that controls the security of each consumer set-top box. Even if we do replace the conditional access card, we cannot guarantee that the new card will prevent the theft of our satellite programming signals. Furthermore, we cannot assure you that other illegal methods which compromise satellite programming signals will not be developed in the future. If we cannot promptly correct a compromise in our encryption technology, our revenue and our ability to contract for video and audio services provided by programmers could be materially adversely affected.

Our local and distant programming strategy faces uncertainty.

     The Satellite Home Viewer Improvement Act generally gives satellite companies a statutory copyright license to retransmit local-into-local broadcast channel programming, subject to obtaining the retransmission consent of the local broadcast station. Retransmission consent agreements are important to us because a failure to reach such agreements with broadcasters who elect retransmission consents instead of mandatory “must carry” carriage means we cannot carry these broadcasters’ signals, and the absence of these channels could have a material adverse effect on our strategy to compete with cable and other satellite companies, which provide local signals. While we have been able to reach retransmission consent agreements with most of the local broadcast stations in areas where we provide local service, any additional roll-out of local channels in more cities will require more agreements. We cannot be certain that we will secure these agreements or new agreements upon the expiration of our current retransmission consent agreements, some of which are short term.

Our retransmission of distant stations is subject to considerable litigation risk.

     The Copyright Act, as amended by the Satellite Home Viewer Improvement Act, permits satellite retransmission of distant network stations — those that originate outside of a satellite subscriber’s local television — only to “unserved households.” (An example of a distant station retransmission is a Los Angeles network station retransmitted by satellite to a subscriber in the state of Virginia. That subscriber qualifies as an “unserved household” if he or she cannot receive, over the air, a signal of sufficient intensity from a local station affiliated with the same network). Interpretation and implementation of the Satellite Home Viewer Improvement Act by the FCC could hamper our ability to retransmit distant network and superstation signals, reduce the number of our existing or future customers than can qualify for receipt of these signals and impose testing costs on us in connection with the qualification process. In implementing the Satellite Home Viewer Improvement Act’s directive, the FCC has also required satellite carriers to delete certain programming, including sports programming, from the signals of certain distant stations. These requirements have significantly hampered our ability, and may further hamper our ability, to retransmit distant network and superstations signals, and the burdens from the rules upon us may become so onerous that we may be required to substantially alter, or stop retransmitting, many or all superstation signals. In addition, the FCC’s sports blackout requirements, which apply to all distant network signals, may require costly upgrades to our system.

“Must carry” will negatively affect our ability to offer local broadcast stations.

     The Satellite Home Viewer Improvement Act includes the imposition of “must carry” requirements on direct broadcast satellite providers. The FCC has implemented the “must carry” requirement and adopted detailed “must carry” rules covering both commercial and non-commercial broadcast stations, and the constitutionality of these requirements has been upheld by the courts. These “must carry” rules generally required that commencing January 1, 2002 satellite distributors carry all the local broadcast stations requesting carriage in a timely and appropriate manner in areas they choose to offer any local programming. Since we have limited capacity, the projected number of markets in which we can offer local programming will continue to be constrained because of the “must carry” requirement and may be reduced depending on the FCC’s interpretation of its rules in a pending proceeding. The legislation also includes provisions which could expose us to federal copyright infringement lawsuits, material monetary penalties, and permanent prohibitions on the sale of all local and distant network channels, based on inadvertent violations of the legislation, prior law, or the FCC rules. Imposition of these penalties would have a material adverse effect on our business operations generally.

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     Several “must carry” complaints by broadcasters against us have been filed at the FCC. We cannot be sure that the FCC will not rule against us in those proceedings, resulting in carriage of many additional stations in the markets where we offer local stations or cumbersome changes in our compliance plan. In addition, we cannot be sure that the FCC will not interpret or implement its rules in such a manner as to inhibit our current plan for compliance with the “must carry” requirements. In fact, the National Association of Broadcasters and Association of Local Television Stations filed an emergency petition on January 4, 2002 asking the FCC to modify or clarify its rules to prohibit or hamper our compliance plan. In response, on April 4, 2002, a bureau of the FCC issued a declaratory ruling and order finding that our compliance plan violated certain provisions of the Satellite Home Viewer Improvement Act and the FCC’s “must carry” regulations. The April 4 order required us to file compliance reports within 30 days, 90 days and 150 days of the order’s issuance. We filed our first compliance report on May 6, 2002, our second compliance report on July 3, 2002 and our third compliance report on September 3, 2002. Challenges to the April 4 order have been filed by various parties, including us, and are presently pending. On April 15, 2002, the bureau issued an order granting in part numerous complaints filed against us by individual broadcast stations that claimed violations of the must carry requirements similar to those addressed in the April 4 order. The April 15 order also required us to submit a compliance report within 30 days. Depending upon the ultimate outcome of these proceedings (including the extent to which our compliance reports are accepted), further orders by the bureau or by the FCC itself could result in a decrease in the number of local areas where we offer local network programming until new satellites are launched. This, in turn, could significantly increase the churn and reduce the average monthly revenue of subscribers in those areas where local network programming is no longer offered and impair our ability to gain new subscribers in those areas, which could materially adversely affect our financial performance. Under the “must carry” rules, we could also be exposed to court actions and may be subject to damage claims if we are found by any court to have violated the “must carry” requirements, which could materially adversely affect our financial condition.

     In addition, while the FCC has decided for now not to impose dual digital/analog carriage obligations ( i.e., additional requirements in connection with the carriage of digital televison stations that go beyond carriage of one signal, whether analog or digital, for each station), the FCC has also issued a further notice of proposed rulemaking on this matter. We cannot be sure that this rulemaking will not result in further signal carriage requirements.

We need to increase satellite capacity to avoid potential disruptions in our service caused by “must carry” requirements.

     The Hughes merger, as well as the adoption of “spot beam” technology on EchoStar VII and EchoStar VIII, are expected to increase our ability to carry local programming. EchoStar VII, which was successfully launched from Cape Canaveral, Florida on February 21, 2002, reached its final location at the 119 degree orbital location and commenced commercial operation in April 2002. To date, all systems on the satellite are operating normally. On August 22, 2002, EchoStar VIII was successfully launched on a Russian Proton rocket from Baikonur Cosmodrome in Kazakhstan. Assuming successful completion of in-orbit testing, EchoStar VIII is expected to commence commercial operation at the 110 degree orbital location later this year. The failure to increase our satellite capacity could affect our ability to comply with statutory requirements to carry substantially all over the air television stations by satellite in any geographic area where we carry any local network channels by satellite, which was effective January 1, 2002. Any reduction in the number of areas we serve in order to comply with “must carry” requirements for other markets, would adversely affect our operations and could result in a temporary increase in churn. Failure to comply with “must carry” requirements could result in substantial fines and other sanctions. While we currently believe we can meet statutory “must carry” requirements, the FCC could interpret or implement its rules in such a manner as to inhibit our current plan for compliance with the “must carry” requirement.

TV networks oppose our strategy of delivering distant network stations.

     Until July 1998, we obtained distant broadcast network stations (ABC, NBC, CBS and FOX) for distribution to our customers through PrimeTime 24. In December 1998, the United States District Court for the Southern District of Florida entered a nationwide permanent injunction requiring PrimeTime 24 to shut off distant network channels to many of its customers, and henceforth to sell those channels to consumers in accordance with certain stipulations in the injunction.

     In December 1998, the networks filed a motion for preliminary injunction directly against us. In September 2000, the District Court granted this motion and made several amendments to it. The injunction required us to terminate distant network programming to certain of our subscribers. The United States Court of Appeals for the Eleventh Circuit stayed the injunction pending our appeal. In September 2001, the United States Court of Appeals for the Eleventh Circuit vacated the District Court’s injunction, finding, among other things, that it was too broad and remanded the case back to the District Court for an evidentiary

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hearing. The United States Court of Appeals for the Eleventh Circuit also rejected our argument that the “unserved households” restriction of the law is unconstitutional, and the United States Supreme Court recently declined to review that decision. If after the trial or an evidentiary hearing, the injunction is reinstated, it could force us to terminate delivery of distant network channels to a substantial portion of our distant network subscriber base, which could also cause many of these subscribers to cancel their subscription to our other services. Our management has determined that such terminations would result in a reduction in our reported average monthly revenue per subscriber and could result in a temporary increase in churn. If we lose the case at trial, the judge could, among other remedies, prohibit all future sales of distant network programming by us, which would have a material adverse effect on our business. In order, among other things, to plan for the potential re-implementation of the injunction, we may terminate the delivery of distant network channels to certain subscribers.

We depend on the Cable Act for access to others’ programming

     We purchase a substantial percentage of our programming from programmers that are affiliated with cable system operators. Any change in the Cable Act and the FCC’s rules that would permit the cable industry or programmers that are affiliated with cable system operators to refuse to provide such programming or impose detrimental terms or conditions could materially adversely affect our ability to acquire programming on a cost-effective basis, or at all. Currently, programmers that are affiliated with cable system operators must offer programming they have developed to all multi-channel video programming distributors on non-discriminatory terms and conditions.

     The Cable Act and the FCC’s rules also prohibit some types of exclusive programming contracts involving programming from programmers that are affiliated with cable system operators. Although this provision was scheduled to expire this year, the FCC recently voted to extend the exclusivity restrictions for an additional five years. Upon expiration of that provision, many popular programs may become unavailable to us, causing a loss of customers and adversely affecting our revenues and financial performance. This decision remains potentially subject to reconsideration and further administrative or judicial challenge.

     Certain cable providers have denied access to certain sports programming provided by programmers that are affiliated with cable system operators. The cable providers are asserting that they are not required to provide such programming under the Cable Act. Challenges to this interpretation of the Cable Act have not been successful and we may continue to be precluded from obtaining this regional sports programming which could materially adversely affect our ability to compete in regions serviced by these cable providers.

We are subject to extensive regulatory requirements, and changes to the existing regulatory regime could affect us adversely.

     The FCC imposes different rules for “subscription” and “broadcast” services. We believe that because we offer a subscription programming service, we are not subject to many of the regulatory obligations imposed upon broadcast licensees. However, we cannot be certain whether the FCC will find in the future that we should comply with regulatory obligations as a broadcast licensee with respect to our current and future operations, and certain parties have requested that direct broadcast satellite service providers be treated as “broadcasters.” If the FCC determined that we are a broadcast licensee, it could require us to comply with all regulatory obligations imposed upon broadcast licensees, which are generally subject to more burdensome regulation than subscription service providers.

     Under a requirement of the Cable Act, the FCC imposed public interest requirements on direct broadcast satellite licensees, such as us, to set aside four percent of channel capacity exclusively for noncommercial programming for which we must charge programmers below-cost rates and for which we may not impose additional charges on subscribers. This could displace programming for which we could earn commercial rates and could adversely affect our financial results. The FCC has not reviewed our methodology for computing the channel capacity we must set aside or for determining the rates that we charge public interest programmers, and we cannot be sure that if the FCC were to review this methodology, it would find it in compliance with the public interest requirements.

     The FCC has also commenced an inquiry into distribution of high-speed Internet access services and a rulemaking concerning interactive television services. In these proceedings, the FCC is considering whether to impose on distributors, including possibly satellite distributors like us, various types of “open access” obligations, such as required carriage of independent content providers. We cannot be sure that the FCC will not ultimately impose such obligations, which could be onerous, and could materially adversely impact our available capacity and ability to provide other services.

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     The FCC has recently issued revised and streamlined rules for direct broadcast satellite service operators relating to requirements to provide service to Alaska and Hawaii. While the FCC declined to establish specific requirements governing dish size or programming content for direct broadcast satellite services in Alaska and Hawaii, it required that such services be “reasonably comparable” to direct broadcast satellite offerings in the contiguous 48 states. While we believe that the services we now provide satisfy that requirement, we cannot be sure that the states of Alaska and Hawaii, or the FCC, will agree with that view, and the FCC will not require us to make potentially cumbersome and costly changes to our offerings.

     The FCC has adopted rules that allow non-geostationary orbit fixed satellite services to operate on a co-primary basis in the same frequency as direct broadcast satellite and Ku-band-based FSS services, and is currently finalizing rules to govern these services. These satellite operations could provide global high-speed data services. In the same rulemaking, the FCC authorized use of the same direct broadcast satellite spectrum that we use by another terrestrial consumer service originally proposed by Northpoint Technology, Ltd.

     Over the course of this proceeding, we have submitted numerous pleadings jointly with DIRECTV to the FCC objecting to the Northpoint request, which in our view, may cause harmful and substantial interference to the service provided to direct broadcast satellite customers. Furthermore, other entities had filed applications similar to the one filed by Northpoint, and at least one other entity obtained a license from the FCC to conduct experimental operations.

     On May 23, 2002, the FCC released a Memorandum Opinion and Order and Second Report and Order in this proceeding. The FCC denied our petition for reconsideration and confirmed its earlier conclusion that the new terrestrial service could operate in the same spectrum with our system. The FCC also decided that it will issue licenses for this service by auction if there is more than one qualified applicant for a particular geographic area. In light of its decision to conduct an auction, the FCC also dismissed without prejudice the pending applications of Northpoint and certain other companies. While the FCC also announced service and technical rules for the terrestrial service with the purpose of avoiding impermissible interference to the direct broadcast satellite service, our preliminary analysis of these rules shows that they are not sufficient to prevent impermissible interference to the direct broadcast satellite service. A number of aspects of these rules remain subject to administrative reconsideration and judicial review. If Northpoint or other entities become authorized to use our spectrum, they could cause harmful and substantial interference with our service. We cannot be sure when these processes will result in the licensing of Northpoint and/or companies proposing a similar service to operate in the spectrum licensed to us or how significant the interference into our operations will be.

     On February 28, 2002, the FCC initiated a proceeding to examine and revise its licensing process for orbital locations or spectrum used for the provision of international or global satellite communications services. The extent to which any change in the satellite licensing process could affect us is unclear.

     On April 25, 2002, SES Americon, Inc. requested a declaratory ruling that it is in the public interest for SES Americon to offer satellite capacity for third party direct-to-home services to consumers in the United States and certain British Overseas Territories in the Caribbean. SES Americon proposes to employ a satellite licensed by the Government of Gibraltar to operate in the same uplink and downlink frequency bands as us, from an orbital position located in between two orbital locations where we have already positioned satellites. We believe that SES Americon’s proposal, if adopted in its current form, would cause interference with current direct broadcast satellite operations and a significant constraint on the further growth and expansion of United States direct broadcast satellite service.

We depend on others to produce programming.

     We depend on third parties to provide us with programming services. Our programming agreements have remaining terms ranging from less than one to up to ten years and contain various renewal and cancellation provisions. We may not be able to renew these agreements on favorable terms, or at all, or these agreements may be canceled prior to expiration of their original term. If we are unable to renew any of these agreements or the other parties cancel the agreements, we cannot assure you that we would be able to obtain substitute programming, or that such substitute programming would be comparable in quality or cost to our existing programming. In addition, programming costs may continue to increase. We may be unable to pass programming costs on to our customers which could have a material adverse impact on our cash flow and operating margins.

The September 11, 2001 attacks have harmed the United States’ economy and may materially adversely affect our operations and profitability.

     In addition to the tragic loss of life and suffering occasioned by the September 11, 2001 terrorist attacks, there has been a disruption of commercial and leisure activities across the nation. The terrorist attacks and subsequent uncertainty surrounding the continuing conflict have negatively affected, and are expected to continue to negatively affect, the United States’ economy generally, resulting in reduced consumer spending which could negatively affect our industry and our business. While the precise effects of this instability on our industry and our business are difficult to determine, it may materially adversely affect our revenues and, as a result, negatively impact our financial condition, profitability and cash flows.

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There may be risks relating to our prior use of Arthur Andersen as our independent public accountant.

     Our and EBC’s consolidated financial statements included in this prospectus have been audited by Arthur Andersen LLP, independent public accountants as indicated in their report with respect to such financial statements. The audit partner and manager formerly in charge of the Arthur Andersen engagement with ECC and its subsidiaries, including us, are no longer associated with that firm and, as a result, the SEC will not allow Arthur Andersen's consent to the inclusion of its report in this document. We and EBC are therefore permitted to dispense with the requirement to file an Arthur Andersen consent in reliance upon Rule 437a under the Securities Act of 1933. Since, as described above, the SEC will not allow Arthur Andersen's consent to the inclusion of its report in this document, you will not be able to recover against Arthur Andersen under Section 11 of the Securities Act in the event of any future claims that any untrue statements of a material fact were contained in our or EBC’s financial statements audited by Arthur Andersen, or that there were any omissions to state a material fact required to be stated therein.

     Effective June 1, 2002, ECC determined not to renew the engagement of Arthur Andersen as its independent accountants and appointed KPMG LLP as its new independent accountants, effective immediately for ECC and all of its subsidiaries including, but not limited to EBC and us.

     The conviction of Arthur Andersen on obstruction of justice charges may adversely affect Arthur Andersen’s ability to satisfy any claims that might arise in the future from its prior provision of auditing services to ECC and its subsidiaries. Prospective investors in ECC’s, EBC’s or our securities might consider such financial inability on the part of Arthur Andersen as a negative factor in considering an investment decision with respect to future securities offerings by ECC, EBC or us. Should ECC, EBC or us seek to access the public capital markets, or should the surviving corporation seek to access such markets after the completion of the Hughes merger, SEC rules will generally require ECC, EBC, us or the surviving corporation, as applicable, to include or incorporate by reference into any prospectus three years of audited financial statements. The SEC’s current rules would require ECC, EBC, us or the surviving corporation, as applicable, to present audited financial statements for one or more fiscal years audited by Arthur Andersen and obtain their consent or rely on Rule 437a until ECC’s, EBC’s and our audited financial statements for the fiscal year ending December 31, 2004 become available in the first quarter of 2005. If prior to that time the SEC ceases accepting financial statements audited by Arthur Andersen, then ECC’s, EBC’s and our available audited financial statements for the years ended December 31, 2001, December 31, 2000 and/or December 31, 1999 audited by Arthur Andersen would not satisfy the SEC’s requirements. In that case, it may become necessary for ECC, EBC, us or the surviving corporation, as applicable, to have KPMG, ECC’s, EBC’s and our current independent accounting firm, or another independent accounting firm, audit the financial statements originally audited by Arthur Andersen — a process that could require an estimated four to six weeks or more.

Risks Related to the Proposed Merger and Related Transactions

The financial and operating impacts on us of ECC’s agreement to merge with Hughes or acquire its interest in PanAmSat are complex and difficult to predict.

     ECC’s agreement to merge with Hughes or acquire its interest in PanAmSat will have complex consequences for us that are difficult to predict. The consummation of these transactions is subject to extensive conditions relating to regulatory and other matters beyond ECC’s direct control. These transactions also require substantial new cash financing. ECC’s agreements with Hughes and GM and our and EBC’s existing debt instruments place significant restrictions on which corporate entities can raise new financing and the types of financing they may raise. To provide some of this financing, we may incur other unsecured debt and, if ECC obtains consents from the holders of EBC’s and our outstanding senior notes, secured debt that would effectively rank senior to the EDBS notes to the extent of the collateral securing it. If ECC completes its merger with Hughes, the amount of this additional secured debt would be limited to $2.7 billion plus the greater of $500 million or up to 1.25 times ECC’s 12-month trailing cash flow, depending on our credit rating. Moreover, if ECC consummates the merger, it plans to combine some portion of Hughes’ operation with ours in ways that may have a significant impact on our business, cash flow and profitability.

ECC may be unable to consummate the Hughes merger as a result of shareholder litigation or the inability to satisfy one or more conditions to the merger and the related transactions.

     The proposed merger is subject to numerous conditions beyond ECC’s direct control. These conditions include, but are not limited to, the absence of a court order barring the recapitalization, split-off or the merger, the requisite GM stockholder approval, GM’s receipt of an antitrust clearance, FCC approval, financing, the continued effectiveness of an IRS ruling confirming the tax-free nature of the Hughes split-off and the surviving corporation’s ability to issue a minimum amount of capital stock immediately after the merger without breaching agreements designed to preserve the tax-free status of the split-off. In addition, each of the parties to the merger agreement may terminate that agreement prior to the consummation of the merger in various circumstances. As a result, whether ECC will merge with Hughes and whether we will have an opportunity to realize the benefits we expect to realize from the merger are both highly uncertain. See “The Proposed Merger and Related Transactions — The Merger.”

Regulatory approval of the transactions may require Hughes and/or ECC to agree to onerous conditions.

     Under the United States antitrust laws, the Hughes merger may not be completed until the required waiting period under the Hart-Scott-Rodino Act has terminated or expired. To complete the Hughes merger, ECC and Hughes must also obtain the approval of the FCC for the transfer of licenses and other authorizations in connection with the GM/Hughes separation transactions and the Hughes merger. The transactions may also be subject to certain regulatory requirements of other governmental agencies and authorities, including clearances for the Hughes merger from competition and

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telecommunications authorities in certain foreign jurisdictions and requirements relating to the regulation of the offer and sale of securities. Many of these governmental entities from which approvals and clearances are required may seek to condition their approval or clearance of the Hughes merger, or of the transfer to the surviving corporation of licenses and other entitlements, on the companies’ compliance with certain onerous conditions. These conditions could require Hughes and/or ECC to divest material assets or otherwise have the effect of imposing significant additional costs on the surviving company and us or of limiting revenues. Depending upon the nature and scope of such onerous conditions, rather than agreeing to such onerous conditions, the companies may determine to terminate the Hughes merger agreement instead.

     Pursuant to the Communications Act of 1934, as amended, the transfer of control over a company holding or controlling FCC licenses requires prior FCC approval. Hughes and EchoStar each, directly or indirectly, hold or control FCC licenses. GM, Hughes and EchoStar filed an application for FCC approval of the transfer of licenses and other authorizations in connection with the Hughes split-off and the Hughes merger on December 3, 2001. On December 21, 2001, the FCC placed the application on public notice and invited petitions, oppositions and other comments by third parties in respect of the application. Numerous parties have filed petitions to deny the application or comments, and Echostar and Hughes have filed a consolidated opposition. As of the date of this document, the application remains pending before the FCC. In addition, GM, Hughes and EchoStar updated the application to reflect the completion of the $1.5 billion investment by Vivendi Universal in EchoStar.

     On February 4, 2002, the FCC issued to the applicants an Initial Information and Document Request, and stated that it would appreciate receiving responses to that request no later than March 6, 2002. On March 5, 2002, the applicants requested a 15-day extension of that date. By letter released on March 7, 2002, the FCC rejected the parties’ request for an extension and “stopped” its self-imposed 180-day “clock” for merger review, until such time as the applicants submit the requested documents and information. While the FCC restarted its 180-day “clock” for merger review on July 23, 2002, suggesting an FCC decision time of November 2002, we cannot be sure that the FCC will decide our affiliation by that time or that there will not be further delays in processing and evaluating our application.

     In February 2002, EchoStar and Hughes filed an application requesting on behalf of the surviving entity authority to launch and operate a new state-of-the art, spot-beam direct broadcast satellite. Grant of this authority would allow the surviving entity to offer local broadcast channels in all 210 designated market areas. The FCC placed this satellite application on notice for public comment on April 19, 2002, and the comment period closed on June 4, 2002. This pending satellite application may delay the FCC’s consideration of the Hughes merger application. As a result of these delays, the FCC may fail to approve the Hughes merger application on a timely basis. It may also agree with the views of parties opposing the application and deny its approval of the Hughes merger or impose onerous conditions. Furthermore, the FCC may fail to grant, or may delay action on, the pending satellite application.

Any delay or failure to consummate the Hughes merger may reduce or eliminate the benefits we expect.

     In addition to the required regulatory clearances and approvals, the Hughes merger is subject to a number of conditions beyond our direct control that may prevent, delay or otherwise adversely affect its consummation. A majority of each class of GM’s stockholders — GM $1 2/3 par value common stockholders and GM class H common stockholders — voting both separately as distinct classes, and also together as a single class based on their respective per share voting power under the GM restated Certificate of Incorporation, must approve various proposed transactions that are conditions to the merger. The IRS ruling relating to the tax-free status of the split-off and related transactions must continue to remain effective. ECC intends to vigorously pursue all required approvals, but we cannot predict when or whether they can be obtained. To obtain these clearances and approvals, the surviving corporation may agree to divestitures or other onerous conditions that would make the proposed merger less attractive and could have an adverse effect on our business. We cannot predict whether and when these clearances and approvals can be obtained, and the requirement for such clearances and approvals could delay the consummation of the Hughes merger for a significant period of time or prevent it from occurring. Any delay or failure to consummate the merger could cause us not to achieve some or all of the cost savings or revenue synergies that we expect to benefit our business if ECC successfully completes the merger and integrates our business with parts of the Hughes business.

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Even if ECC completes the Hughes merger, we may not realize the expected benefits.

     As a principal operating subsidiary of ECC, we expect that portions of Hughes’ operations will be integrated with our business if the merger is completed. The success of the Hughes merger will depend, in part, upon the ability of the surviving company to develop an expanded competitive business and realize significant economies of scale and substantial cost and revenue synergies from combining the business of Hughes and ECC. The surviving company may not be able to successfully integrate these operations and realize the cost and revenue synergies it currently anticipates. The difficulties of combining the operations of two previously separate businesses include, among other things, the necessity of:

     The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of our business and the loss of key personnel. If the attention of our management is diverted and any unexpected delays or difficulties are encountered in connection with the integration of Hughes’ operations, the benefits expected from the Hughes merger may not be realized. In particular, anticipated growth in revenues and improvements in earnings and cash flow may not be realized, which could have a material adverse impact on our business, results of operations or financial condition.

We may incur significant integration-related expenses in connection with the Hughes merger.

     We expect after the consummation of the merger of ECC with Hughes to incur substantial expenses in connection with the integration of Hughes’ business and its policies, procedures, operations, technologies and systems with our business. There are a large number of systems that must be integrated, including management information, purchasing, accounting and finance, sales, billing, payroll and benefits and regulatory compliance. Among the other integration expenses to be incurred by ECC, we currently estimate that up to $2.5 billion would be required over a two- to four-year period following the completion of the Hughes merger to standardize and update the set top box equipment used by customers to receive our direct broadcast satellite signals. We are not currently in a position, however, to estimate reliably the total amount or the timing of all of the expected integration expenses because, among other reasons, constraints arising under the United States federal or state antitrust laws (for example, limitations on sharing of information) presently prevent or hinder Hughes and ECC from fully developing integration plans and many of the expenses, by their nature, are impracticable to estimate at the present time. These expenses could, particularly in the near term, exceed the savings that we expect to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost and revenue synergies related to the integration of the businesses following the completion of the Hughes merger. We do expect that some or all of these integration expenses will likely result in ECC and/or us taking substantial charges against earnings following the completion of the Hughes merger, but the amount and timing of such charges is uncertain at present.

The additional financing ECC obtains to consummate the Hughes merger may contain terms that inhibit our ability to conduct our business.

     The consummation of the Hughes merger and related transactions will require at least $7.025 billion of cash. We expect that ECC will provide approximately $1.5 billion of this amount from available cash at the time of signing the merger agreement. In addition, ECC and Hughes obtained $5.525 billion in bridge financing commitments for the Hughes merger and related transactions, which commitment has been reduced to $3.325 billion as a result of the sale of $700 million of our 9 1/8% senior notes due 2009 and $1.5 billion of ECC’s series D convertible preferred stock to a subsidiary of Vivendi Universal. The remaining $3.325 billion of required cash will come from new cash raised by ECC, Hughes or a subsidiary of Hughes on or prior to the closing of the Hughes merger through public or private debt or equity offerings, bank debt or a combination thereof. It may not be possible to obtain the remainder of the required financing on acceptable economic terms without agreeing to significant additional restrictions on our ability to obtain any further needed financing and to operate our business. These restrictions could also prevent us from taking advantage of strategic opportunities that would otherwise have been open to us.

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The merger agreement significantly restricts ECC’s and our flexibility to raise equity capital that we might need.

     ECC’s agreements with GM and Hughes place substantial restrictions on its and our ability to raise equity capital for a period ending two years after consummation of the split-off. Absent favorable IRS rulings or termination of the Hughes merger, neither ECC nor we can raise any further equity capital which we might need for a considerable period of time.

To enable ECC to complete the Hughes merger, we may have to incur significant costs to refinance outstanding notes or obtain consents to amend indentures governing them.

     ECC agreed in the merger agreement either to use commercially reasonable efforts to amend the indentures relating to certain of the debt instruments of ECC and its subsidiaries so that the merger and related transactions would not constitute a change of control requiring it to make an offer to repurchase those notes, to obtain additional committed financing, on terms reasonable satisfactory to Hughes, sufficient to refinance the notes outstanding under the indentures for which it is unable to obtain consents by October 4, 2002, or to present to Hughes a plan, taking into account the prevailing market conditions for the relevant notes, designed so that at and after the effective time of the merger, the surviving corporation and its subsidiaries would not be in breach of their obligations under these indentures. ECC’s financing costs may increase significantly as a result of obtaining these consents or refinancing these notes. To date, ECC has complied with all requirements with respect to its GM and Hughes obligations.

The Hughes merger may constitute a “Change of Control” under the indentures governing certain debt securities of ECC and us.

     Certain of the indentures governing our debt or convertible debt instruments contain change in control provisions which, as a result of our merger with Hughes, would require the combined entity to make an offer to re-purchase those obligations at 101% of the principal amount thereof, together with accrued but unpaid interest on the obligations.

     It may be possible to obtain the consent of the holders of those obligations in order to avoid implementation of the change in control offers. A successful consent solicitation could require us to make cash payments to the holders and/or to make amendments to certain terms of the relevant indentures for the benefit of the holders, potentially including terms relating to the maturity of the obligations, the interest payable on the obligations, or to provide other similar inducements to the holders. The amounts and significance of those payments or inducements would depend in large part upon the prices at which our debt and convertible debt instruments are trading at he time of the solicitations. These trading prices depend on investors’ continuing assessment of our prospects and the prospects for the combined entity, the credit rating on those instruments, and upon prevailing interest rates and other broad factors which impact the markets or the industry segments in which we operate.

     We have not yet determined whether or when to undertake those solicitations or whether to pursue a different resolution. Pursuant to the merger agreement with Hughes, as amended, we are required, by October 4, 2002 to:

     We believe that the cost to obtain all of the requisite consents would be substantial, and could, under certain circumstances, have a material adverse affect on our financial condition and on consummation of the merger.

A potential indemnity liability to GM could materially adversely affect our liquidity.

     Pursuant to the terms of the implementation agreement, ECC agreed to indemnify GM and its affiliates against any taxes resulting from the Hughes split-off if the taxes arise from actions or failures to act by ECC that disqualify the Hughes split-off from being tax-free to GM. Specifically, ECC is required to indemnify GM and its affiliates if ECC enters into any transaction or series of transactions (or fails to take any action within its control) that causes the Hughes split-off to be taxable to GM by reason of the 50% limitation. If ECC does not abide by the terms of the implementation agreement, it may be subject to substantial liabilities under the indemnification provisions of the implementation agreement. As a subsidiary of ECC, our operations and financial results could be affected by these liabilities.

The Hughes merger, if consummated, will increase the size of ECC’s operations and the risks described in this prospectus.

     The completion of the Hughes merger may intensify some of the other risks described in this prospectus. There will also be additional risks associated with managing a significantly larger company, including, among other things, the application of company-wide controls. The incurrence of additional debt may cause the rating agencies to lower ECC’s and our debt ratings and thus increase our cost of financing or even impair our ability to obtain additional financing in the future.

The Hughes merger may prevent ECC and us from pursuing other opportunities.

     The terms of the Hughes merger agreement prohibit, subject to certain exceptions, certain transactions involving ECC prior to the termination of the merger agreement. These prohibited transactions generally include any merger or consolidation of ECC, which is material to it and its subsidiaries as a whole, with an entity other than Hughes. These prohibitions may prevent ECC and us from pursuing attractive strategic alliances or combinations in the event that such opportunities arise before the termination of the transaction agreements.

The failure to consummate the Hughes merger as planned could adversely affect ECC’s and our financial condition.

     If the Hughes merger does not occur because certain financing or regulatory-related conditions have not been satisfied, ECC would be required to purchase the approximately 81% interest in PanAmSat held by certain subsidiaries of Hughes for a purchase price of $22.47 per share, or an aggregate amount of about $2.7 billion. ECC would also be required to offer to purchase the remaining publicly-traded shares of PanAmSat in an exchange offer at a price of $22.47 per share payable, at the option of each holder of such remaining shares, either in cash or shares of EchoStar class A common stock, unless ECC has previously entered into an agreement for the acquisition of PanAmSat by merger or commenced a tender offer for all of the outstanding shares of PanAmSat at an equivalent or greater price per share. The financial burden that

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such purchases would have on ECC and us could materially adversely affect its and our liquidity and ability to raise new capital. Moreover, ECC would then have business interests that would be substantially subject to the risks associated with PanAmSat’s business and those risks related to international satellite business operations.

     Under the terms of the Hughes merger agreement, if the Hughes merger is not completed for certain reasons, ECC has agreed to pay a termination fee of $600 million to Hughes. The financial burden that such payment would have on ECC and us could materially adversely affect its and our liquidity and ability to raise new capital.

     See “The Proposed Merger and Related Transactions” for further discussion. In addition to these financial burdens on ECC, which may affect its and our ability to raise new capital that we might need for our business, we and ECC will have devoted substantial management resources to the Hughes merger without realizing the anticipated benefits.

The pendency of the Hughes merger could materially adversely affect our future business and operations.

     In connection with the pending Hughes merger, some customers and strategic partners of ECC and us may delay or defer decisions, which could negatively impact revenues, earnings and cash flow of ECC and us, as well as the market prices of shares of ECC’s class A common stock, regardless of whether the Hughes merger is completed. Similarly, current and prospective employees of ECC and us may experience uncertainty about their future roles with our company, which may materially adversely affect the ability of ECC and us to attract and retain key management, sales, marketing and technical personnel.

We expect that the surviving corporation will experience net losses through at least 2003 and we cannot be certain that it or we will achieve or sustain profitability.

     Hughes and ECC have sustained significant losses and have significant amounts of debt. In addition, the surviving corporation and us will need to incur even more debt in connection with the Hughes merger financing and related transactions, and may need to incur substantial amounts of debt after the Hughes merger in order to operate our business. Further, if ECC’s and Hughes’ application for authority to launch and operate a new spot-beam satellite in connection with the delivery of local broadcast TV channels in all 210 designated market areas in the United States is approved by the FCC, the surviving corporation is expected to expend substantial resources to construct and launch this satellite. If the surviving corporation or we do not have sufficient income or other sources of cash, it could eventually affect its and our ability to service its and our debt and pay its and our other obligations. Improvements in the surviving corporation’s and our results of operations will depend largely upon its and our ability to successfully integrate the Hughes and ECC businesses while increasing our customer base, maintaining our price structure, effectively managing our costs and controlling churn. We cannot assure you that we or the surviving corporation will be effective with regard to these matters. We currently anticipate that the surviving corporation will experience net losses through 2003, and could continue to experience net losses for years subsequent to 2003 for the reasons described above and elsewhere in this document.

Risks Primarily Related to EDBS Notes

If you do not properly tender your EBC notes, we may not accept your EBC notes and the trading market for them may be limited.

     We will issue EDBS notes in exchange for your EBC notes only after we have timely received your EBC notes, along with a letter of transmittal that you have properly completed and duly executed and all other documents that we require. Therefore, if you want to tender your EBC notes in exchange for EDBS notes, you should allow sufficient time to ensure timely delivery. Neither the exchange agent nor we are under any duty to notify you of defects or irregularities with respect to the tender of your EBC notes for exchange. The exchange offer will expire at 5:00 p.m. Eastern Standard Time on November 4, 2002, or on a later extended date and time as we may decide.

     The EDBS notes will vote for purposes of determining whether holders of the requisite percentage of the EDBS notes have taken certain actions or exercise certain rights under the related indenture.

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We have substantial indebtedness and are dependent upon our subsidiaries’ earnings to make payments on our indebtedness.

     We have substantial debt service requirements that make us vulnerable to changes in general economic conditions. These debt service requirements will increase as a result of any secured debt that we might incur. Our indentures and the indenture governing EBC’s senior notes restrict our and our subsidiaries’ ability to incur additional debt if required or desired in order to implement our business strategy.

     Since we conduct substantially all of our operations through our subsidiaries, our ability to service our debt obligations is dependent upon the earnings of our subsidiaries and the payment of funds by our subsidiaries to us in the form of loans, dividends or other payments. We have few assets of significance other than the capital stock of our subsidiaries. Our subsidiaries are separate legal entities. Furthermore, our subsidiaries are not obligated to make funds available to us, and creditors of our subsidiaries will have a superior claim to our subsidiaries’ assets. In addition, our subsidiaries’ ability to make any payments to us will depend on their earnings, the terms of their indebtedness, business and tax considerations and legal restrictions. We cannot assure you that our subsidiaries will be able to pay dividends or otherwise contribute or distribute funds to us in an amount sufficient to pay the principal of or interest on the indebtedness owed by us.

We may be unable to repay or repurchase the EDBS notes upon a change of control.

     There is no sinking fund with respect to the EDBS notes, and the entire outstanding principal amount of the EDBS notes will become due and payable at maturity. If we experience a change of control, as defined, you may require us to repurchase all or a portion of your EDBS notes prior to maturity. See “Description of the EDBS Notes — Change of Control Offer.” We may not have sufficient funds or be able to arrange for additional financing to repay the EDBS notes at maturity or to repurchase EDBS notes tendered to us following a change of control.

     Upon a change of control of ECC, the terms of our and EBC’s outstanding senior notes and the outstanding convertible notes of ECC may require us or them to offer to repurchase the notes of us, EBC and/or ECC. If we, EBC or ECC is required to make such a repurchase at the same time, there will be limited funds, if any, available to us or them to repurchase the notes. If we have insufficient funds to redeem all notes that holders tender for purchase upon the occurrence of a change of control, and we are unable to raise additional capital, an event of default could occur under the indenture governing the notes. An event of default could cause any other debt that we have to become automatically due, further exacerbating our financial condition and diminishing the value and liquidity of the EDBS notes. We cannot assure you that additional capital would be available on acceptable terms, or at all.

There may be no public market for the EDBS notes, and the EDBS notes are subject to restrictions on transfer.

     The EDBS notes will constitute a new issue of securities for which there is no established trading market. If a trading market does not develop or it fails to subsist once it does develop, you may experience difficulty in reselling the EDBS notes or may be unable to sell them at all. If a market for the EDBS notes develops, any such market may fail to subsist at any time and the EDBS notes could trade at prices that may be lower than their initial price, depending on many factors, including prevailing interest rates, the markets for companies offering similar services and our financial performance. The trading market for the EDBS notes might be more limited than the trading market for the EBC notes prior to the exchange offer. If a trading market is established, various factors could have a material adverse effect on the trading of the EDBS notes, including fluctuations in the prevailing interest rates. We do not intend to apply for listing of any of the EDBS notes on any securities exchange or for quotation through the Nasdaq National Market or any other securities quotation service.

The guarantees of the EDBS notes by our subsidiaries may be subject to challenge.

     Our obligations under the EDBS notes will be guaranteed jointly and severally by certain of our subsidiaries. It is possible that the creditors of the subsidiary guarantors may challenge the subsidiary guarantees as a fraudulent conveyance under relevant federal and state statutes, and, under certain circumstances (including a finding that a subsidiary guarantor was insolvent at the time its guarantee of the EDBS notes was issued), a court could hold that the obligations of a subsidiary guarantor under a subsidiary guarantee may be voided or are subordinate to other obligations of a subsidiary guarantor. In addition, it is possible that the amount for which a subsidiary guarantor is liable under a subsidiary guarantee may be limited. The measure of insolvency for purposes of the foregoing may vary depending on the law of the jurisdiction that is being applied. Generally, however, a company would be considered insolvent if the sum of its debts is greater than all of its

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property at a fair valuation or if the present fair saleable value of its assets is less than the amount that will be required to pay its probable liability on its existing debts as they become absolute and mature. The indenture governing the EDBS notes provides that the obligations of the subsidiary guarantors under the subsidiary guarantees are limited to amounts that will not result in the subsidiary guarantees being a fraudulent conveyance under applicable law. See “Description of the EDBS Notes — Guarantees.”

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USE OF PROCEEDS

     We will receive no cash proceeds from the exchange offer. We will issue EDBS notes in exchange for EBC notes in the same principal amount, and for the same terms and form as the EBC notes, except that certain of our subsidiaries will guarantee the EDBS notes. The EBC notes that holders surrender in exchange for the EDBS notes will be retired and canceled and cannot be reissued.

THE EXCHANGE OFFER

Reason for the exchange offer

     Under the terms of the indenture concerning the EBC notes, we are required to make this exchange offer as soon as practicable following the date on which we are permitted to incur indebtedness equal to the outstanding principal amount of the EBC notes ($1,000,000,000). Under the “indebtedness to cash flow ratio” test contained in Section 4.09 of our 1999 notes indentures and such incurrence of indebtedness would not otherwise cause any breach or violation of, or result in a default under, the terms of the 1999 EDBS notes indentures. The calculation of this condition is based upon our quarterly or annual financial statements as filed with the SEC.

     We met the condition to the making of this exchange offer on March 21, 2002, the day we filed our annual report on Form 10-K for the year ended December 31, 2001.

Terms of the exchange offer

     Upon the terms and subject to the conditions set forth in ths prospectus and in the letter of transmittal attached as Exhibit 99.1 hereto and in accordance with applicable law, we hereby offer to exchange $1,000 principal amount of EDBS notes for each $1,000 principal amount of outstanding EBC notes, properly tendered for exchange and accepted. Interest on the EDBS notes will accrue from October 2, 2002 at the stated rate thereon. Interest on the EBC notes tendered for exchange will stop accruing on October 1, 2002, the last interest payment date for the EBC notes prior to the exchange offer.

     If on the date of exchange, holders of at least 90% in aggregate principal amount of the EBC notes have accepted the exchange offer, then, without any further action on the part of EBC or EDBS or any of the guarantors, all of the EBC notes shall be deemed to have been exchanged for EDBS notes and the related guarantors' guarantees. If less than 90% of the holders of EBC notes tender their EBC notes in exchange for EDBS notes, then those holders of EBC notes who do tender their EBC notes will have their EBC notes exchanged for EDBS notes and those holders of EBC notes who do not tender their notes will keep their EBC notes and remain subject to the EBC notes indenture.

     EDBS notes will be issued only in denominations of $1,000 and integral multiples thereof. If the aggregate principal amount of EDBS notes that otherwise would be issued in exchange for EBC notes tendered by a holder and accepted by us pursuant to the exchange offer is not an integral multiple of $1,000, such principal amount will be reduced to the nearest such multiple and we will pay to such holder an amount in cash equal to the reduction of such principal amount. Upon consummation of the exchange offer, EDBS notes will be delivered and other cash payments, if any, will be made on the exchange date.

     We and certain of our subsidiaries who are guarantors of the EDBS notes will issue the EDBS notes and the related guarantees, if on the exchange date for the EBC notes, the following conditions are met:

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     Under the exchange offer, we are offering EDBS notes containing substantially identical terms to the EBC notes, except as follows:

     Except for the requirements of applicable federal and state securities laws, there are no federal or state regulatory requirements to be complied with or approvals to be obtained by us in connection with the exchange offer which, if not complied with or obtained, would have a material adverse effect on us.

     We are not making the exchange offer to, nor will we accept surrenders for exchange from, holders of outstanding EBC notes in any jurisdiction in which this exchange offer or the acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction.

     We are not making the exchange offer conditional upon the holders tendering, or us accepting, any minimum aggregate principal amount of EBC notes.

Information about the expiration date of the exchange offer and changes to it

     The exchange offer expires on the expiration date, which is 5:00 p.m., Eastern Standard Time, on November 4, 2002, unless we, in our sole discretion, extend the period during which the exchange offer is open. If we extend the expiration date for the exchange offer, the term “expiration date” means the latest time and date on which the exchange offer, as so extended, expires. We reserve the right to extend the exchange offer at any time and from time to time prior to the expiration date by giving written notice to U.S. Bank National Association, which is the exchange agent, and by timely public announcement communicated by no later than 5:00 p.m. Eastern Standard Time on the next business day following the expiration date, unless applicable law or regulation requires otherwise, by making a release to the Dow Jones News Service. During any extension of the exchange offer, all EBC notes previously tendered pursuant to the exchange offer will remain subject to the exchange offer.

     The exchange date will be the first business day following the expiration date or as soon thereafter as practicable. We expressly reserve the right to terminate the exchange offer and not accept for exchange any EBC notes for any reason, including if any of the events set forth below under “We may modify or terminate the exchange offer under some circumstances” have occurred and we have not waived them. We also reserve the right to amend the terms of the exchange offer in any manner, whether before or after any tender of the EBC notes. If we terminate or amend the exchange offer, we will notify the exchange agent in writing and will either issue a press release or give written notice to you as a holder of the EBC notes as promptly as practicable. Unless we terminate the exchange offer prior to 5:00 p.m., Eastern Standard Time, on the expiration date, we will exchange the EDBS notes for EBC notes on the exchange date.

     We will mail this prospectus and the related letter of transmittal and other relevant materials to you as a record holder of EBC notes and we will furnish these items to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the lists of holders for subsequent transmittal to beneficial owners of EBC notes.

How to tender your EBC notes

     If you tender to us any of your EBC notes pursuant to one of the procedures set forth below, that tender will constitute an agreement between you and us in accordance with the terms and subject to the conditions that we describe below and in the letter of transmittal for the exchange offer.

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     You may tender EBC notes by properly completing and signing the letter of transmittal or a facsimile of it. All references in this prospectus to the “letter of transmittal” include a facsimile of the letter. You must deliver it, together with the certificate or certificates representing the EBC notes that you are tendering and any required signature guarantees, or a timely confirmation of a book-entry transfer pursuant to the procedure that we describe below, to the exchange agent at its address set forth on the back cover of this prospectus on or prior to the expiration date. You may also tender EBC notes by complying with the guaranteed delivery procedures that we describe below.

     Your signature does not need to be guaranteed if you registered your EBC notes in your name, you will register the EDBS notes in your name and you sign the letter of transmittal. In any other case, the registered holder of your EBC notes must endorse them or send them with duly executed written instruments of transfer in the form satisfactory to us. Also, an “eligible institution,” such as a bank, broker, dealer, credit union, savings association, clearing agency or other institution that is a member of a recognized signature guarantee medallion program within the meaning of Rule 17Ad-15 under the Exchange Act must guarantee the signature on the endorsement or instrument of transfer. If you want us to deliver the EDBS notes or non-exchanged EBC notes to an address other than that of the registered holder appearing on the note register for the EBC notes, an “eligible institution” must guarantee the signature on the letter of transmittal.

     If your EBC notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender EBC notes, you should contact the registered holder promptly and instruct the holder to tender EBC notes on your behalf. If you wish to tender your EBC notes yourself, you must, prior to completing and executing the letter of transmittal and delivering your EBC notes, either make appropriate arrangements to register ownership of the EBC notes in your name or follow the procedures described in the immediately preceding paragraph. Transferring record ownership from someone else’s name to your name may take considerable time.

How to tender if you hold your EBC notes through a broker or other institution and you do not have the actual EBC notes

     Any financial institution that is a participant in DTC’s systems may make book-entry delivery of your EBC notes by causing DTC to transfer your EBC notes into the exchange agent’s account at DTC in accordance with DTC’s procedures for transfer. Although you may deliver your EBC notes through book-entry transfer at DTC, you still must send the letter of transmittal, with any required signature guarantees and any other required documents, to the exchange agent at the address specified on the back cover of this prospectus on or prior to the expiration date and the exchange agent must receive these documents on time. If you will not be able to send all the documents on time, you can still tender your EBC notes by using the guaranteed delivery procedures described below.

     You assume the risk of choosing the method of delivery of EBC notes and all other documents. If you send your EBC notes and your document by mail, we recommend that you use registered mail, return receipt requested, you obtain proper insurance, and you mail these items sufficiently in advance of the expiration date to permit delivery to the exchange agent on or before the expiration date.

     If you do not provide your taxpayer identification number, which is your social security number or employer identification number, as applicable, and certify that such number is correct, the exchange agent will withhold 31% of the gross proceeds otherwise payable to you pursuant to the exchange offer, unless an exemption applies under the applicable law and regulations concerning “backup withholding” of federal income tax. You should complete and sign the main signature form and the Substitute Form W-9 included as part of the letter of transmittal, so as to provide the information and certification necessary to avoid backup withholding, unless an applicable exemption exists and you prove it in a manner satisfactory to us and the exchange agent.

How to use the guaranteed delivery procedures if you will not have enough time to send all documents to us

     If you desire to accept the exchange offer, and time will not permit a letter of transmittal or EBC notes to reach the exchange agent before the expiration date, you may tender your EBC notes if the exchange agent has received at its office listed on the letter of transmittal on or prior to the expiration date a letter, telegram or facsimile transmission from an eligible institution setting forth: your name and address, the principal amount of the EBC notes that you are tendering, the names in which you registered the EBC notes and, if possible, the certificate numbers of the EBC notes that you are tendering.

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     The eligible institution’s correspondence to the exchange agent must state that the correspondence constitutes the tender and guarantee that within three New York Stock Exchange trading days after the date that the eligible institution executes such correspondence, the eligible institution will deliver the EBC notes, in proper form for transfer, together with a properly completed and duly executed letter of transmittal and any other required documents. We may, at our option, reject the tender if you do not tender your EBC notes and accompanying documents by either the above-described method or by a timely book-entry confirmation, and if you do not deposit your EBC notes and tender documents with the exchange agent within the time period set forth above. Copies of a notice of guaranteed delivery that eligible institutions may use for the purposes described in this paragraph are available from the exchange agent.

     Valid receipt of your tender will occur as of the date when the exchange agent receives your properly completed letter of transmittal, accompanied by either the EBC notes or a timely book-entry confirmation. We will issue EDBS notes in exchange for EBC notes that you tendered pursuant to a notice of guaranteed delivery or correspondence to similar effect as described above by an eligible institution only against deposit of the letter of transmittal, any other required documents and either the tendered EBC notes or a timely book-entry confirmation.

We reserve the right to determine validity of all tenders

     We will be the sole judge of all questions as to the validity, form, eligibility, including time of receipt, and acceptance for exchange of your tender of EBC notes and our judgment will be final and binding. We reserve the absolute right to reject any or all of your tenders that are not in proper form or the acceptances for exchange of which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any of the conditions of the exchange offer or any defect or irregularities in your case. Neither we, the exchange agent nor any other person will be under any duty to give you notification of any defects or irregularities in tenders nor shall any of us incur any liability for failure to give you any such notification. Our interpretation of the terms and conditions of the exchange offer, including the letter of transmittal and its instructions, will be final and binding.

To participate, you must complete the letter of transmittal certifying certain information

     By tendering each holder of EBC notes will represent to and agree with us that, among other things, the EDBS notes tendered are held by such holder free and clear of all security interests, liens, restrictions, changes, encumbrances, conditional sale agreements or other obligations relating to their sale or transfer, and not subject to any adverse claim when the same are accepted by us.

     By tendering EBC notes for exchange, you will exchange, assign and transfer the EBC notes to us and irrevocably appoint the exchange agent as your agent and attorney-in-fact to assign, transfer and exchange the EBC notes. You will also represent and warrant that you have full power and authority to tender, exchange, assign and transfer the EBC notes and to acquire EDBS notes issuable upon the exchange of such tendered EBC notes. The letter of transmittal requires you to agree that, when we accept your EBC notes for exchange, we will acquire good and unencumbered title to them, free and clear of all liens, restrictions, charges and encumbrances and that they are not subject to any adverse claim.

     You will also warrant that you will, upon our request, execute and deliver any additional documents that we believe are necessary or desirable to complete the exchange, assignment and transfer of your tendered EBC notes. You must further agree that our acceptance of any tendered EBC notes and the issuance of EDBS notes in exchange for them will constitute performance in full by us of our obligations under the registration rights agreement and that we will have no further obligations or liabilities under that agreement, except in certain limited circumstances. All authority conferred by you will survive your death or incapacity and every obligation of you shall be binding upon your heirs, legal representatives, successors, assigns, executors and administrators.

If you tender EBC notes pursuant to the exchange offer, you may withdraw them at any time prior to the expiration date

     For your withdrawal to be effective, the exchange agent must timely receive your written or fax notice of withdrawal prior to the expiration date at the exchange agent’s address set forth on page 42 of this prospectus. Your notice of withdrawal must specify the following information:

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The person or persons who signed your letter of transmittal, including any eligible institutions that guaranteed signatures on your letter of transmittal, must sign the notice of withdrawal in the same manner as their original signatures on the letter of transmittal including any required signature guarantees. If such persons and eligible institutions cannot sign your notice of withdrawal, you must send it with evidence satisfactory to us that you now hold beneficial ownership of the EBC notes that you are withdrawing. The exchange agent will return the properly withdrawn EBC notes promptly following receipt of notice of withdrawal. We will determine all questions as to the validity of notices of withdrawals, including time of receipt, and our determination will be final and binding on all parties.

How we will either exchange your EBC notes for EDBS notes or return them to you

     On the exchange date, we will determine which EBC notes the holders validly tendered and we will issue EDBS notes in exchange for the validly tendered EBC notes. The exchange agent will act as your agent for the purpose of receiving EDBS notes from us and sending the EBC notes to you in exchange for EDBS notes promptly after acceptance of the tendered EBC notes. If we do not accept your EBC notes for exchange, we will return them without expense to you. If you tender your EBC notes by book-entry transfer into the exchange agent’s account at DTC pursuant to the procedures described above, we do not accept your EBC notes for exchange, DTC will credit your non-exchanged EBC notes to an account maintained with DTC. In either case, we will return your non-exchanged EBC notes to you promptly following the expiration of the exchange offer.

     We shall be deemed to have accepted validly tendered EBC notes which have not been withdrawn or revoked as proved in the prospectus when, and if, we have given oral or written notice thereof to DTC, as your agent. Subject to the terms and conditions of this exchange offer, delivery of the EDBS note and other cash payments, if any, for EBC notes so accepted will be made by DTC on the exchange date upon receipt of such notice.

We may modify or terminate the exchange offer under some circumstances

     We are not required to issue EDBS notes in respect of any properly tendered EBC notes that we have not previously accepted and we may terminate the exchange offer or, at our option, we may modify or otherwise amend the exchange offer. If we terminate the exchange offer, it will be by oral or written notice to the exchange agent and by timely public announcement communicated no later than 5:00 p.m. on the next business day following the expiration date, unless applicable law or regulation requires terminate the exchange offer in the following circumstances:

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     The foregoing conditions are for our sole benefit and we may assert them with respect to all or any portion of the exchange offer regardless of the circumstances giving rise to such condition. We also reserve the right to waive these conditions in whole or in part at any time or from time to time in our discretion. Our failure at any time to exercise any of the foregoing rights will not be a waiver of any such right, and each right will be an ongoing right that we may assert at any time or from time to time. In addition, we have reserved the right, notwithstanding the satisfaction of each of the foregoing conditions, to terminate or amend the exchange offer.

     Any determination by us concerning the fulfillment or nonfulfillment of any conditions will be final and binding upon all parties.

     In addition, we will not accept for exchange any tendered EBC notes, and we will not issue EDBS notes in exchange for any such EBC notes, if at that time there is, or the SEC has threatened, any stop order with respect to the registration statement that this prospectus is a part of, or if qualification of the indentures is required under the Trust Indenture Act of 1939.

Where to send your documents for the exchange offer

     We have appointed U.S. Bank National Association as the exchange agent for the exchange offer. You must send your letter of transmittal to the exchange agent at:

     U.S. Bank National Association
     180 East Fifth Street
     St. Paul, Minnesota 55101
     Telephone: (800) 934-6802
     Facsimile: (651) 244-1537
     Attention: Specialized Finance Group

     If you send your documents to any other address or fax number, you will have not validly delivered them and you will not receive EDBS notes in exchange for your EBC notes. We will return your EBC notes to you.

We are paying the costs for the exchange offer

     We have not retained any dealer-manager or similar agent in connection with the exchange offer and will not make any payments to brokers, dealers or others for soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for reasonable out-of-pocket expenses. We will also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses that they incur in forwarding tenders for their customers. We will pay the expenses incurred in connection with the exchange offer, including the fees and expenses of the exchange agent and printing, accounting, investment banking and legal fees. We estimate that these fees are approximately $250,000.

     Tendering holders of EBC notes are not required to pay any fee or commission to us. However, if a tendering holder handles the transaction through its broker, dealer, commercial bank, trust company or other institution, such holder may be required to pay brokerage fees or commissions.

     We will pay all transfer taxes, if any, applicable to the exchange of EBC notes pursuant to the exchange offer. If however, EDBS notes and/or substitute EBC notes for amounts not tendered or not exchanged are to be delivered to, or are to be registered in the name of, any person other then the holder of EBC notes tendered, or if tendered EBC notes are registered in the name of any person other than the person signing the letter of transmittal, or if a transfer tax is imposed for any reason other than the exchange of the EBC notes pursuant to the exchange offer, then the amount of any such transfer taxes (whether imposed on the holder or any other person) will be payable by the tenderor thereof. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the appropriate letter of transmittal, the amount of such transfer taxes will be billed directly to such tendering holder and/or withheld from any payments due with respect to the EBC notes tendered by such holder.

     No person has been authorized to give you any information or to make any representations to you in connection with the exchange offer other than those that this prospectus contains.

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     If anyone else gives you information or representations about the exchange offer, you should not rely upon that information or representation or assume that we have authorized it. Neither the delivery of this prospectus nor any exchange made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs since the respective dates as of which this prospectus gives information. We are not making the exchange offer to, nor will we accept tenders from or on behalf of, holders of EBC notes in any jurisdiction in which it is unlawful to make the exchange offer or to accept it. However, we may, at our discretion, take such action as we may deem necessary to make the exchange offer in any such jurisdiction and extend the exchange offer to holders of EBC notes in such jurisdiction. In any jurisdiction where the securities laws or blue sky laws require a licensed broker or dealer to make the exchange offer one or more registered brokers or dealers that are licensed under the laws of that jurisdiction is making the exchange offer on our behalf. We intend to conduct the exchange offer in accordance with the applicable requirements of the Securities Act and the Exchange Act, and the rules and regulations of the Commission thereunder.

There are no dissenter or appraisal rights

     Holders of EBC notes will not have dissenters’ rights or appraisal rights in connection with the exchange offer under the Colorado Business Corporation Act on the EBC notes indenture.

Federal income tax consequences to you

     Your exchange of EBC notes for EDBS notes will be a taxable exchange for federal income tax purposes. See “Summary of Certain United States Federal Income Tax Considerations” below.

This is the only exchange offer for EBC notes that we are required to make

     Your participation in the exchange offer is voluntary and you should carefully consider whether to accept the terms and conditions of it. You are urged to consult your financial and tax advisors in making your own decisions on what action to take with respect to the exchange offer. If you do not tender your EBC notes in the exchange offer, you will continue to hold such EBC notes and you will be entitled to all the rights and limitations applicable to the EBC notes under the indenture. All non-exchanged EBC notes will continue to be subject to the restriction on transfer set forth in the indenture for the EBC notes. If we exchange EBC notes in the exchange offer, the trading market, if any, for any remaining EBC notes could be much less liquid.

     We may in the future seek to acquire non-exchanged EBC notes in the open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plan to acquire any EBC notes that are not exchanged in the exchange offer.

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OUR SELECTED FINANCIAL DATA

     We have derived the following selected financial data as of, and for each of the five years in the period ended December 31, 2001 and for the six months ended June 30, 2001 and 2002, from, and the data is qualified by reference to, our audited and unaudited consolidated financial statements incorporated by reference in this prospectus. You should read this data in conjunction with our consolidated financial statements and the related notes thereto, and “Management’s Narrative Analysis of Results of Operations,” which appear elsewhere in this prospectus.