Exhibit 4.20
ECHOSTAR COMMUNICATIONS CORPORATION
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of ___________, 1997, by and between
EchoStar Communications Corporation, a Nevada corporation (the "COMPANY"), and
American Securities Transfer & Trust, Inc. (the "DEPOSIT AGENT"), for the
benefit of the holders (the "HOLDERS") of the __% Series C Cumulative
Convertible Preferred Stock (the "PREFERRED STOCK").
This Agreement is made to induce all present and future Holders to
purchase the Preferred Stock by providing a deposit account (the "DEPOSIT
ACCOUNT") to provide for a quarterly cash payment to the Holders in an amount
equal to $__ per share of Preferred Stock (the "QUARTERLY RETURN AMOUNT") in the
manner hereinafter provided.
NOW, THEREFORE, the parties hereto agree as follows:
1. ESTABLISHMENT OF DEPOSIT ACCOUNT.
(a) The Company hereby agrees that the Deposit Account shall be
established in connection with the offering of ______ shares of Preferred Stock
(the "OFFERING") and shall be held subject to the terms and conditions of this
Agreement.
(b) Simultaneously with the closing of the Offering, the initial
Holders shall deliver $___ in cash (the "DEPOSIT FUND") to the Deposit Agent
against the Deposit Agent's written acknowledgment and receipt of the Deposit
Fund, in the form attached hereto as EXHIBIT A, which amount the Deposit Agent
will deposit into the Deposit Account and hold pursuant to the terms of this
Agreement. The Deposit Fund shall be invested as provided on EXHIBIT B to be
attached at the closing of the Offering and which will provide sufficient funds
without any further investment by the Company to cover the aggregate Quarterly
Return Amount due on the outstanding Preferred Stock, as such Quarterly Return
Amount becomes due, for each Deposit Payment Date (as defined below). The
Deposit Agent shall have no responsibility for determining whether funds held in
the Deposit Account shall have been invested in a such a manner so as to comply
with the requirements of this SECTION 1(B).
2. DISTRIBUTION, REDUCTION AND TERMINATION OF DEPOSIT ACCOUNT.
(a) Unless on or prior to the Notice Date (as defined below) the
Company shall have delivered to the Deposit Agent a Direction Notice (as defined
below), the Deposit Agent shall deliver to each Holder the Quarterly Return
Amount on _________, _________, __________ and __________ of each year (each
such date being a "DEPOSIT PAYMENT DATE"), commencing _________, 1998 and
continuing until _____, 1999 (the "DEPOSIT EXPIRATION DATE"). If the Company
shall have delivered a Direction Notice, substantially in the form attached
hereto as EXHIBIT C, to the Deposit Agent on or prior to the Notice Date, the
Deposit Agent shall, as instructed by the Company in such Direction Notice, (i)
defer payment of all or a portion of any Quarterly Return Amount until the next
Deposit Payment Date or any subsequent Deposit Payment Date or (ii) purchase
from the Company, for transfer to each Holder in lieu of all or a portion of the
Quarterly Return Amount on the next Deposit Payment Date, that number of whole
shares of Class A Common Stock of the Company (the "COMMON STOCK") determined by
dividing the Quarterly Return Amount and any deferred Quarterly Return Amount by
95% of the Market Value (as defined below) of the Common Stock as of the Notice
Date. At the written request of the Deposit Agent, the Company shall deliver,
for and on behalf of the Deposit Agent, the Common Stock acquired by the Deposit
Agent directly to the Holders. The Deposit Agent's obligation hereunder to
purchase the Common Stock from the Company shall be secured by the funds in the
Deposit Account.
(b) (i) In the event of any conversion of the Preferred Stock on or
prior to the Deposit Expiration Date, the cumulative amount of any deferred
Quarterly Return Amounts allocable to the Preferred Stock being converted, at
the time of such conversion, shall be paid by the Deposit Agent to the
Holders who are converting their Preferred Stock at the time of such
conversion. The Deposit Agent shall make any such payment in cash unless,
prior thereto, the Company delivers a Direction Notice to the Deposit Agent
requiring the Deposit Agent to purchase from the Company for transfer to
Holders who are converting their Preferred Stock that number of whole shares
of the Common Stock determined by dividing all or a portion of the deferred
Quarterly Return Amount allocable to the Preferred Stock being converted by
95% of the Market Value of the Common Stock as of the date of the Direction
Notice. (ii) Immediately after such conversion and payment of any deferred
Quarterly Return Amount allocable to the Preferred Stock being converted, the
Company shall be paid by the Deposit Agent any funds remaining in the
Deposit Account allocable to the shares of Preferred Stock so converted.
Such allocation shall be made pro rata based upon the number of shares of
Preferred Stock so converted.
(c) On the Deposit Expiration Date, the Deposit Agent shall deliver
to the Holders any cash remaining in the Deposit Account on such date unless,
prior thereto, the Company delivers a Direction Notice to the Deposit Agent
requiring the Deposit Agent to purchase from the Company for transfer to
Holders that number of whole shares of the Common Stock determined by
dividing all or a portion of the Quarterly Return Amount and all or a portion
of the cash remaining in the Deposit Account by 95% of the Market Value of
the Common Stock as of the Notice Date.
(d) For purposes of this Agreement: (i) the term "NOTICE DATE"
means the day on or before the tenth day prior to the applicable Deposit
Payment Date or Deposit Expiration Date, as the case may be, on which the
Company sends the Direction Notice, (ii) the term "MARKET VALUE" means, as of
any date, the average of the daily closing price for the five consecutive
trading days ending on such date; the closing price for each day shall be the
last sales price or, in case no such reported sales take place on such day,
the average of the last reported bid and asked price, in either case on the
principal national securities exchange on which the shares of the Common
Stock are admitted to trading or listed, or if not listed or admitted to
trading on such exchange, the representative closing bid price as reported by
the Nasdaq National Market, or other similar organization if the Nasdaq
National Market is no longer reporting such information, or if not so
available, the fair market price as determined, in good faith, by the Board
of Directors of the Company and (iii) the term "DIRECTION NOTICE" means a
notice from the Company delivered to the Deposit Agent directing the Deposit
Agent to purchase Common Stock from the Company to distribute to holders of
Preferred Stock or defer payment of any Quarterly Return Amount until the
next Deposit Payment Date or any subsequent Deposit Payment Date.
(e) This Agreement shall remain in full force and effect until all
amounts held hereunder by the Deposit Agent have been finally distributed in
accordance herewith.
3. RECORD DATE. The Quarterly Return Amount or, if a Direction
Notice has been delivered by the Company, Common Stock, shall be paid or
delivered to the Holders of record of the Preferred Stock, as they appear on
the Company's stock register 10 business days prior to each Deposit Payment
Date.
4. EXPENSES. The Deposit Agent shall be entitled to customary
fees and expenses for performing its duties hereunder, as may be agreed from
time to time by the Company and the Deposit Agent. The Deposit Agent shall
be entitled to prompt reimbursement of all reasonable expenses incurred by
the Deposit Agent in carrying out its duties hereunder, including, without
limitation, travel and other out-of-pocket expenses provided they are
pre-approved in writing by the Company and fees and expenses of its legal
counsel arising in connection with the interpretation or enforcement of any
provision hereof or any arbitration or other proceeding hereunder provided
they are pre-approved in writing by the Company, which approval shall not be
unreasonably withheld. The fees and expenses of the Deposit Agent in
carrying out its duties hereunder, including reasonable legal fees provided
they are pre-approved in writing by the Company which approval shall not be
unreasonably withheld, shall be paid or reimbursed by the Company.
5. NOTICES. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid:
(a) if to the Holders, to their address as set forth in the stock
transfer records of the Company;
(b) if to the Company, to EchoStar Communications Corporation, 00
Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxxxx,
Esq., or to such other person or address as the Company shall designate in
writing, with a copy to Friedlob Xxxxxxxxx Xxxxxx Xxxxxxx & Xxxxxxxxxxx, LLC,
0000 Xxxxxxx Xxxxx, #000, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X.
Xxxxxxxx, Esq. and Xxxxxxx X. Xxxxxxxx, Xx., Esq.; and
(c) if to Deposit Agent, to American Securities Transfer & Trust,
Inc., 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000.
Any party may change the address (or the person to whose attention such notice
is directed) by notice given to the other parties hereto as aforesaid.
6. CONCERNING THE DEPOSIT AGENT. In order to induce the Deposit
Agent to act as deposit agent hereunder, the Company hereby covenants and agrees
with the Deposit Agent as follows:
(a) The Deposit Agent shall not in any way be bound or affected by
any amendment, modification or cancellation of this Deposit Agreement, unless
the same shall have been agreed to in writing by the Deposit Agent.
(b) The Deposit Agent shall be entitled to rely, and shall be
protected in acting in reliance upon, any Direction Notice or other instructions
or directions furnished to the Deposit Agent in writing by the proper party
under this Deposit Agreement and shall be entitled to treat as genuine, and as
the document it purports to be, any letter, instruction or other document or
instrument delivered to the Deposit Agent hereunder and believed by the Deposit
Agent to be genuine and to have been presented by the proper party or parties,
without being required to determine the authenticity or correctness of any fact
stated therein, the propriety or validity thereof, or the authority or
authorization of the party or parties making and/or delivering the same to do
so.
(c) This Agreement sets forth exclusively the duties and obligations
of the Deposit Agent with respect to any and all matters pertinent to its acting
as deposit agent hereunder.
(d) The Deposit Agent undertakes to perform only such duties as are
expressly set forth in this Deposit Agreement, and neither the Deposit Agent nor
any of its directors, officers, employees or agents shall be in any manner
liable or responsible to the Company or any Holder or any other person or entity
for or in respect of any loss, claim, damage or liability (collectively, "LOSS")
resulting from, or arising out of, any action or failure or omission to act
hereunder or for any mistake of fact or error of judgment, including, but not
limited to, any Loss that may occur by reason of the exercise of the Deposit
Agent's discretion in any particular matter or for any other reason,
except for any Loss which is the result of negligence or willful misconduct on
the part of the Deposit Agent or such director, officer, employee or agent.
(e) The Company covenants and agrees to indemnify and hold the
Deposit Agent and each of its directors, officers, employees and agents (the
Deposit Agent and any such person or entity seeking indemnification hereunder
being hereinafter referred to as an "INDEMNIFIED PARTY") harmless from and
against, and upon demand reimburse each Indemnified Party for, any and all
losses, claims, damages, liabilities, costs and expenses (including expenses of
its legal counsel) (collectively, "INDEMNIFIED LOSSES") which may be paid,
incurred or suffered by such Indemnified Party or to which such Indemnified
Party may become subject by reason of or in connection with the administration
of the Deposit Agent's duties as deposit agent hereunder (including, but not
limited to, any action taken or omitted by the Deposit Agent in connection with
this Agreement or any action allegedly so taken or omitted) or by reason of, or
as a result of, the Deposit Agent's compliance with the instructions set forth
herein or with any instructions delivered to the Deposit Agent pursuant hereto,
except with respect to Indemnified Losses which shall be the result of
negligence or willful misconduct on the part of such Indemnified Party.
(f) In the event of any controversy or dispute hereunder, or with
respect to any question as to the construction of this Agreement or any action
to be taken by it hereunder, the Deposit Agent may, in its discretion, obtain
the advice of counsel reasonably satisfactory to it provided such consultation
is approved in writing in advance by the Company, which approval shall not be
unreasonably withheld and shall incur no liability for any action taken,
suffered or omitted by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(g) If any part of the Deposit Fund is at any time attached,
garnished or levied upon or under any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any of the Deposit Fund shall be
stayed or enjoined by any court order, or in case any order, writ, judgment or
decree shall be made or entered by any court affecting the Deposit Fund or any
part thereof, then and in any of such events, the Deposit Agent is authorized,
in its sole discretion, to rely upon and comply with any such order, writ,
judgment or decree. The Deposit Agent shall not be liable to any of the parties
hereto, to any Holder or to any other person, firm or corporation by reason of
such compliance even though such order, writ, judgment or decree may be
subsequently reversed, modified, annulled, set aside, vacated, found to have
been entered without jurisdiction, or found to be in violation of or beyond the
scope of a constitution or a law.
(h) Notwithstanding anything to the contrary contained herein, if the
Deposit Agent shall be uncertain as to its duties or rights hereunder, shall
receive any notice, advice, direction, or other document from the Company with
respect to the Deposit Fund which, in its opinion, is in conflict with any of
the provisions of this Agreement, or should be advised that a dispute has arisen
with respect to the payment, ownership, or right of possession of the Deposit
Fund or any part thereof (or as to the delivery, non-delivery, or content of any
notice, advice, direction, or other document), the Deposit Agent shall be
entitled (but not obligated), without liability to
anyone, to refrain from taking any action other than to use its best efforts to
keep safely the Deposit Fund until the Deposit Agent shall be directed otherwise
in writing by Company and a majority of the Holders or by an order, decree or
judgment of a court of competent jurisdiction which has been finally affirmed on
appeal or which by lapse of time or otherwise is no longer subject to appeal,
but the Deposit Agent shall be under no duty to institute or to defend any
proceeding, although it may institute or defend such proceedings.
(j) The Company shall have the right to cause the Deposit Agent to be
relieved of its duties hereunder and to select a substitute deposit agent, upon
the expiration of thirty (30) days following delivery of written notice of
substitution to the Deposit Agent. Upon selection of such substitute deposit
agent, such substitute deposit agent and the Company shall enter into an
agreement substantially identical to this Agreement and, thereafter, the
replaced deposit agent shall be relieved of its duties and obligations to
perform hereunder, except that the replaced deposit agent shall transfer to the
substitute deposit agent upon request therefor the Deposit Funds and copies of
all books, records, plans and other documents in the replaced deposit agent's
possession relating to such funds or this Agreement.
(k) Upon not less than ten days' written notice to the Company and
the Holders of its intention to resign under this Agreement, the Deposit Agent
may resign as deposit agent hereunder by selecting, as a successor deposit
agent, any other Deposit Agent as directed or approved by the Company (which
approval shall not be unreasonably withheld). Such resignation shall take
effect upon delivery by the resigning Deposit Agent of the Deposit Fund to such
successor deposit agent; the resigning Deposit Agent shall thereupon be
discharged of all its duties and obligations hereunder. In addition, the
Deposit Agent shall be discharged of all of its duties and obligations hereunder
upon its deposit of the Deposit Fund with a court of competent jurisdiction.
The Company and the Holders each hereby irrevocably consents and submits to the
jurisdiction of such court in any such action and waives all rights to contest
the jurisdiction of such court.
(l) The Company hereby authorizes the Deposit Agent, if the Deposit
Agent is threatened with litigation or is sued, to interplead all interested
parties in any court of competent jurisdiction and to deposit the Deposit
Account with the clerk of that court.
(m) The Deposit Agent's duties, obligations and liabilities
hereunder, except as a result of the Deposit Agent's negligence or willful
misconduct, will terminate upon its delivery of all of the Deposit Fund under
any provision of this Agreement. The provisions of Paragraphs 6(e) and of this
Paragraph 6(m) shall survive any such termination.
7. SPECIFIC PERFORMANCE. In the event of the failure by a party
hereto to give any notice required under the terms of this Agreement, the other
parties hereto shall be entitled to specific performance by such non-performing
party.
8. MISCELLANEOUS.
(a) CONTINUANCE OF AGREEMENT. This Agreement shall be binding upon
the parties hereto and their respective heirs, personal representatives,
successors and assigns.
(b) COUNTERPARTS. This Agreement may be executed in any number of
counterparts all of which, taken together shall constitute the same agreement.
(c) NO AMENDMENTS. This Agreement may not be modified or amended,
nor may any provision hereof be waived, except by a writing duly executed by the
Deposit Agent, the Company and by a majority of the Holders.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and the year first above written.
ECHOSTAR COMMUNICATIONS CORPORATION
By: _______________________________________
Name:
Title:
AMERICAN SECURITIES TRANSFER & TRUST, INC.
By: _______________________________________
Name:
Title:
EXHIBIT A
DEPOSIT AGENT'S CROSS-RECEIPT
THE UNDERSIGNED hereby acknowledges receipt from EchoStar
Communications Corporation (the "COMPANY") of [__] Dollars ($[__]) representing
a portion of the proceeds from that certain public offering of [__]% Series C
Cumulative Convertible Preferred Stock, par value $0.01 per share (the
"PREFERRED STOCK"), of the Company.
The undersigned, as deposit agent for the Company (the "DEPOSIT
AGENT") has, in accordance with that certain Deposit Agreement, dated
October [__], 1997 among the Company and the Deposit Agent, as deposit agent and
trustee (the "DEPOSIT AGREEMENT"), deposited the Initial Deposit Amount in the
Deposit Account (as such term is defined in the Deposit Agreement).
AMERICAN SECURITIES TRANSFER & TRUST, INC.
By: _____________________________
Name:
Title:
Date: October [ ], 1997
EXHIBIT B
INVESTMENTS
EXHIBIT C
FORM OF DIRECTION NOTICE
[LETTERHEAD OF THE COMPANY]
[DATE]
[DEPOSIT AGENT]
Re: Direction Notice No. [___]
Ladies and Gentlemen:
We refer to the Deposit Agreement (the "DEPOSIT AGREEMENT") dated as
of the [ ] day of October, 1997 between you, as Deposit Agent, and EchoStar
Communications Corporation, a Nevada corporation (the "COMPANY"). Unless
otherwise specified, capitalized terms used herein shall have the meaning given
in the Deposit Agreement. This letter constitutes a Direction Notice under the
Deposit Agreement.
[The undersigned hereby notifies you that you are directed, pursuant
to SECTION 2(A)(I) of the Deposit Agreement, to defer payment of $____ of the
Quarterly Return Amount and/or deferred Quarterly Return Amount until [IDENTIFY
SUBSEQUENT DEPOSIT PAYMENT DATE.]]
[The undersigned hereby notifies you that you are directed, pursuant
to SECTION 2(A)(II) of the Deposit Agreement, to purchase from the Company, for
delivery to each holder of Preferred Stock in lieu of the Quarterly Return
Amount and/or any deferred Quarterly Return Amount on the next Deposit Payment
Date, ___ shares of Common Stock for $____ of Quarterly Return Amount and/or
deferred Quarterly Return Amount.]
[The undersigned hereby notifies you that you are directed, pursuant
to SECTION 2(B)(I) of the Deposit Agreement, to purchase from the Company for
transfer to holders who are converting their Preferred Stock, ___ shares of
Common Stock for $____ of Quarterly Return Amount and/or deferred Quarterly
Return Amount.]
[The undersigned hereby notifies you that you are directed, pursuant
to SECTION 2(C) of the Deposit Agreement, to purchase from the Company for
delivery to holders who are entitled to the proceeds from the Deposit Account,
___ shares of Common Stock for $____ of Quarterly Return Amount and/or deferred
Quarterly Return Amount.]
In connection with the requested disbursement, the undersigned hereby
notifies you that: (i) you may elect to have the Company deliver, for and on
your behalf, the shares of Common Stock acquired by you directly to the holders
of the Preferred Stock and (ii) your obligation to purchase shares of Common
Stock is secured by the funds in the Deposit Account. The Deposit Agent is
entitled to rely on the foregoing in disbursing funds relating to this Deposit
Notice.
ECHOSTAR COMMUNICATIONS CORPORATION
By:____________________________________
Name:
Title:
