1
Exhibit 4.5.2
▇▇▇▇▇ CORNING,
THE BANK OF NEW YORK
AND
THE CHASE MANHATTAN BANK
FORM OF PLEDGE AGREEMENT
Dated as of _______ __, 1997
2
TABLE OF CONTENTS
-----------------
Page
----
Section 1. Definitions........................................................ 2
Section 2. Pledge; Control and Perfection..................................... 7
Section 2.1. The Pledge......................................................... 7
Section 2.2. Control and Perfection............................................. 9
Section 3. Distributions on Pledged Collateral................................ 10
Section 4. Substitution, Release, Repledge and
Settlement of Preferred Securities................................. 12
Section 4.1. Substitution of Preferred Securities
and the Establishment of Growth
PRIDES............................................................. 12
Section 4.2. Pledge of Preferred Securities and
Re-establishment of Income PRIDES.................................. 12
Section 4.3. Termination Event.................................................. 13
Section 4.4. Cash Settlement.................................................... 14
Section 4.5. Early Settlement................................................... 15
Section 4.6. Application of Proceeds Settlement ................................ 15
Section 5. Voting Rights -- Preferred
Securities......................................................... 16
Section 6. Rights and Remedies; Investment
Company Event...................................................... 17
Section 6.1. Rights and Remedies of the Collateral
Agent.............................................................. 17
Section 6.2. Investment Company Event, etc...................................... 18
Section 7. Representation and Warranties;
Covenants.......................................................... 19
i
3
Page
----
Section 7.1. Representations and Warranties..................................... 19
Section 7.2. Covenants.......................................................... 20
Section 8. The Collateral Agent............................................... 20
Section 8.1. Appointment, Powers and Immunities................................. 21
Section 8.2. Instructions of the Company........................................ 22
Section 8.3. Reliance by Collateral Agent....................................... 22
Section 8.4. Rights in Other Capacities......................................... 22
Section 8.5. Non-Reliance on Collateral Agent................................... 23
Section 8.6. Compensation and Indemnity......................................... 23
Section 8.7. Failure to Act..................................................... 24
Section 8.8. Resignation of Collateral Agent.................................... 24
Section 8.9. Right to Appoint Agent or Advisor.................................. 25
Section 8.10. Survival........................................................... 25
Section 8.11. Indemnity.......................................................... 26
Section 9. Amendment.......................................................... 26
Section 9.1. Amendment Without Consent of Holders............................... 26
Section 9.2. Amendment with Consent of Holders.................................. 27
Section 9.3. Execution of Amendments............................................ 27
Section 9.4. Effect of Amendments............................................... 28
Section 9.5. Reference to Amendments............................................ 28
Section 10. Miscellaneous...................................................... 28
Section 10.1. No Waiver.......................................................... 28
Section 10.2. Governing Law...................................................... 29
ii
4
Page
----
Section 10.3. Notices............................................................ 29
Section 10.4. Successors and Assigns............................................. 29
Section 10.5. Counterparts....................................................... 30
Section 10.6. Severability....................................................... 30
Section 10.7. Expenses, etc...................................................... 30
Section 10.8. Security Interest Absolute......................................... 31
EXHIBIT A INSTRUCTION TO COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
iii
5
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of __________ __, 1997 (this "Agreement"),
among ▇▇▇▇▇ Corning, a Delaware corporation (the "Company"), The Chase Manhattan
Bank, a New York banking corporation, not individually but solely as collateral
agent (in such capacity, together with its successors in such capacity, the
"Collateral Agent") and in its capacity as a "securities intermediary" as
defined in Section 8-102(a)(14) of Revised Article 8 (as defined herein) (in
such capacity, together with its successors in such capacity, the "Securities
Intermediary"), and The Bank of New York, not individually but solely as
purchase contract agent and as attorney-in-fact of the Holders (as defined in
the Purchase Contract Agreement) from time to time of the Securities (as
hereinafter defined) (in such capacity, together with its successors in such
capacity, the "Purchase Contract Agent") under the Purchase Contract Agreement
(as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to 6,900,000 FELINE PRIDES (the "Securities").
Each Security, at issuance, consists of a unit (the "Income PRIDES")
comprised of (a) one stock purchase contract (the "Purchase Contract") under
which (i) the Holder will purchase from the Company on November 16, 2000, for an
amount equal to the Stated Amount, a number of shares of Common Stock equal to
the Settlement Rate, and (ii) the Company will pay the Holder Contract
Adjustment Payments, if any, and (b) beneficial ownership of a ____% Trust
Originated Preferred Security (a "Preferred Security") issued by ▇▇▇▇▇ Corning
Capital II (the "Trust"), having a liquidation amount equal to $50 (the "Stated
Amount") and maturing on _______ __, 2002, unless settled earlier.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of
6
such Holders, among other things, to execute and deliver this Agreement on
behalf of such Holders and to grant the pledge provided hereby of the Preferred
Securities and any Treasury Securities (as defined below) delivered in exchange
therefor to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof. Upon such pledge
the Preferred Securities will be beneficially owned by the Holders but will be
owned of record by the Purchase Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
Section 1. DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in
the Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board
Resolution, (iv) Cash Settlement, (v) Certificate, (vi) Collateral
Settlement, (vii) Common Stock, (viii) Contract Adjustment Payments,
(ix) Early Settlement, (x) Early Settlement Amount, (xi) Early
Settlement Date, (xii) Debentures, (xiii) Opinion of Counsel, (xiv)
Outstanding Securities, (xv) Purchase Contract, (xvi) Purchase Contract
Settlement Date, (xvii) Purchase Price, (xviii) Repayment Price, (xix)
Settlement Rate, (xx) Termination Event, and (xxi) Underwriting
Agreement;
(d) the following terms have the meanings assigned to them
in the Declaration: (i) Investment Company Event, (ii) Liquidation
Distribution, (iii) Institutional Trustee, and (iv) Tax Event.
2
7
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State of
New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the trust account (number _____) maintained
at The Chase Manhattan Bank in the name "The Bank of New York, as Purchase
Contract Agent on behalf of the holders of certain securities of ▇▇▇▇▇ Corning
Capital II, Collateral Account subject to the security interest of The Chase
Manhattan Bank, as Collateral Agent, for the benefit of ▇▇▇▇▇ Corning, as
pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Declaration" means the Amended and Restated Declaration of Trust of
the Trust, dated as of _____ __, 1997, among the Company as sponsor, the
trustees named therein
3
8
and the holders from time to time of undivided beneficial interests in the
assets of the Trust.
"Growth PRIDES" means a Purchase Contract with respect to which
Treasury Securities have been substituted for Preferred Securities as collateral
to secure the Holder's obligations under such Purchase Contract.
"Holder" when used with respect to a Security, or a Purchase Contract
constituting a part thereof, means The Depository Trust Company (or its nominee)
as the registered holder of an Income PRIDES or a Growth PRIDES, as the case may
be.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall
mature on the next succeeding Business Day (i) any evidence of indebtedness with
an original maturity of 365 days or less issued, or directly and fully
guaranteed or insured, by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof or such indebtedness constitutes
a general obligation of it); (ii) deposits, certificates of deposit or
acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US$ 200.0 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally guaranteed
by the United States Government or issued by any agency thereof and backed by
the full faith and credit of the United States Government; (v) investments in
commercial paper, other than commercial paper issued by the Company or its
affiliates, of any corporation incorporated under the laws of the United States
or any State thereof, which commercial paper has a rating at the time of
purchase at least equal to "A-1" by Standard & Poor's Ratings Services or at
least equal to "P-1" by ▇▇▇▇▇'▇ Investors Service, Inc.; and (vi) investments in
4
9
money market funds registered under the Investment Company Act of 1940, as
amended, which have net assets of at least $200.0 million and at least 85.0% of
whose assets consist of securities and other obligations of the types described
in clauses (i) through (v) above.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Securities" has the meaning specified in Section 2.1
hereof.
"Pledged Treasury Securities" has the meaning specified in Section
2.1 hereof.
"Preferred Securities" has the meaning specified in the Recitals.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in ss. 8-102(a)(9) of Revised Article
8) and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Collateral.
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this instrument.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Revised Article 8" means the 1994 Official Text of Revised Article 8
of the Uniform Commercial Code, together with conforming and miscellaneous
amendments to Articles 1, 3, 4, 5, 9 and 10, 1994 Official Text, as adopted by
the American Law Institute and the National Conference of Commissioners on
Uniform State Laws and approved by the American Bar Association on February 14,
1995.
5
10
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the preamble to
this Agreement.
"Security Entitlement" has the meaning set forth in Section 8.102(a)(7)
of Revised Article 8.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree
are to be delivered in physical form, delivery in appro-
priate physical form to the recipient accompanied by any
duly executed instruments of transfer, assignments in blank,
transfer tax stamps and any other documents necessary to
constitute a legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities
maintained in book-entry form (other than Treasury Securities)
by (A) causing such securities to be credited to a book-entry
securities account of the recipient or an Intermediary and
(B) causing such Intermediary, if any, (i) to send to the
recipient confirmation of the transfer of the relevant
interest in such Collateral to the recipient and
6
11
(ii) to identify by book-entry or otherwise such Collateral
as subject to the relevant interest in favor of the
recipient or such other method as may be effective under
applicable law; and
(iii) in the case of Treasury Securities in book-entry form, by
causing a "securities intermediary" (as defined in Section
8-102(a)(14) of Revised Article 8) to (i) credit a "securi-
ties entitlement" (as defined in Section 8-102(a)(17) of
Revised Article 8) with respect to such securities to a
securities account maintained by or on behalf of the re-
cipient; (ii) to issue a confirmation to the recipient with
respect to such credit and (iii) to make appropriate notations
in its books to reflect the security interest of the recipient
in such Treasury Securities.
"Treasury Security" means a zero-coupon U.S. Treasury Security maturing
on November 15, 2000 (Cusip Number 912820 AY3) which are the principal strips of
the 8.50% U.S. Treasury Securities which mature on November 15,
2000.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as to
(i) a Preferred Security, the Stated Amount, (ii) Cash, the face amount thereof
and (iii) Treasury Securities, the aggregate principal amount thereof at
maturity.
Section 2. PLEDGE; CONTROL AND PERFECTION.
Section 2.1. THE PLEDGE. The Holders from time to time acting through
the Purchase Contract Agent, as their attorney-in-fact, hereby pledge and grant
to the Collateral Agent, for the benefit of the Company, as collateral security
for the performance when due by such Holders of their respective obligations
under the related Purchase Contracts, a security interest in (i) all of the
right, title and interest of such Holders (a) in the Preferred Securities
constituting a part of the securities and all Proceeds thereof (including any
Proceeds from the repayment of the Preferred Securities by the Trust) and any
7
12
Treasury Securities delivered in exchange for such Preferred Securities in
accordance with Section 4 hereof, in each case that have been Transferred to or
received by the Collateral Agent and not released by the Collateral Agent to
such Holders under the provisions of this Agreement (the "Collateral"); (b) in
payments made by Holders pursuant to Section 4.4; (c) in the Collateral Account
and all securities, financial assets and other property credited thereto and all
security entitlements related thereto; (d) in any Debentures delivered to the
Collateral Agent upon the occurrence of an Investment Company Event or a
liquidation of the Trust as provided in Section 6.3 and (e) all proceeds of the
foregoing. Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Income PRIDES, shall cause the Preferred Securities comprising a part of the
Income PRIDES to be delivered to the Collateral Agent for the benefit of the
Company by physically delivering such securities to the Securities Intermediary
endorsed in blank and causing the Securities Intermediary to credit the
Collateral Account with such securities and send the Collateral Agent a
confirmation of the deposit of such securities. In the event a Holder of Income
PRIDES so elects, such Holder may Transfer Treasury Securities to the Collateral
Agent for the benefit of the Company in exchange for the release by the
Collateral Agent on behalf of the Company of Preferred Securities to the
Purchase Contract Agent on behalf of such Holder. Treasury Securities shall be
Transferred to the Collateral Account maintained by the Collateral Agent at the
Securities Intermediary by book-entry transfer to the Collateral Account in
accordance with the TRADES Regulations and other applicable law and by the
notation by the Securities Intermediary on its books that a Security Entitlement
with respect to such Treasury Securities has been credited to the Collateral
Account. For purposes of perfecting the Pledge under applicable law, including,
to the extent applicable, the TRADES Regulations, the Uniform Commercial Code as
adopted and in effect in any applicable jurisdiction or Revised Article 8 as
made applicable by the TRADES Regulations, the Collateral Agent shall be the
agent of the Company as provided herein. The pledge provided in this Section 2.1
is herein referred to as the "Pledge" and the Preferred Securities or Treasury
Securities subject to the Pledge, excluding any Preferred Securities or Treasury
Securities released from the Pledge as provided in Section 4 hereof, are
hereinafter referred to as
8
13
"Pledged Preferred Securities" or the "Pledged Treasury Securities,"
respectively. Subject to the Pledge and the provisions of Section 2.2 hereof,
the Holders from time to time shall have full beneficial ownership of the
Collateral. Whenever directed by the Collateral Agent acting on behalf of the
Company, the Securities Intermediary shall have the right to reregister the
Preferred Securities or any other securities held in physical form in its name.
Except as may be required in order to release Preferred Securities in
connection with a Holder's election to convert its investment from an Income
Pride to a Growth Pride, or except as otherwise required to release securities
as specified herein, the Collateral Agent shall not relinquish physical
possession of any certificate evidencing a Preferred Security prior to the
termination of this Agreement. If it becomes necessary for the Collateral Agent
to relinquish physical possession of a certificate in order to release a portion
of the Preferred Securities evidenced thereby from the Pledge, the Collateral
Agent shall use its best efforts to obtain physical possession of a replacement
certificate evidencing any Preferred Securities remaining subject to the Pledge
hereunder registered to it or indorsed in blank within fifteen days of the date
it relinquished possession. The Collateral Agent shall promptly notify the
Company of its failure to obtain possession of any such replacement certificate
as required hereby.
Section 2.2. CONTROL AND PERFECTION. In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, hereby authorize and direct the Securities Intermediary
(without the necessity of obtaining the further consent of the Purchase Contract
Agent or any of the Holders), and the Securities Intermediary agrees, to comply
with and follow any instructions and entitlement orders (as defined in ss.
8-102(a)(8) of Revised Article 8) that the Collateral Agent on behalf of the
Company may give in writing with respect to the Collateral Account, the
Collateral credited thereto and any security entitlements with respect to any
thereof. Such instructions and entitlement orders may, without limitation,
direct the Securities Intermediary to transfer, redeem, sell, liquidate, assign,
deliver or otherwise
9
14
dispose of the Preferred Securities, the Treasury Securities and any security
entitlements with respect thereto and to pay and deliver any income, proceeds or
other funds derived therefrom to the Company. The Holders from time to time
acting through the Purchase Contract Agent hereby further authorize and direct
the Collateral Agent, as agent of the Company, to itself issue instructions and
entitlement orders, and to otherwise take action, with respect to the Collateral
Account, the Collateral credited thereto and any security entitlements with
respect to any thereof, pursuant to the terms and provisions hereof, all without
the necessity of obtaining the further consent of the Purchase Contract Agent or
any of the Holders. In addition, to further protect and perfect the Pledge, the
Securities Intermediary agrees that it will, until Revised Article 8 becomes
effective in New York, at all times ▇▇▇▇ its books with respect to the
Collateral Account to show that all securities credited thereto are subject to
the Pledge in favor of the Collateral Agent for the benefit of the Company. The
Collateral Agent shall be the Agent of the Company and shall act as directed in
writing by the Company. Without limiting the generality of the foregoing, the
Collateral Agent shall issue entitlement orders to the Securities Intermediary
when and as directed by the Company.
Section 3. DISTRIBUTIONS ON PLEDGED COLLATERAL. So long as the Purchase
Contract Agent is the registered owner of the Pledged Preferred Securities it
shall receive all payments thereon. If the Pledged Preferred Securities are
reregistered, such that the Collateral Agent becomes the registered holder, all
payments of the Stated Amount of, or cash distributions on, any Pledged
Preferred Securities and all payments of the principal of, or cash distributions
on, any Pledged Treasury Securities received by the Collateral Agent that are
properly payable hereunder shall be paid by the Collateral Agent by wire
transfer in same day funds:
(i) In the case of (A) cash distributions with respect to
Pledged Preferred Securities and (B) any payments of the Stated Amount
with respect to any Preferred Securities that have been released from
the Pledge pursuant to Section 4.3 hereof, to the Purchase Contract
Agent, for the benefit of the relevant Holders of Securities, to the
account designated by the Purchase Contract Agent for such
10
15
purpose, no later than 2:00 p.m., New York City time, on the Business
Day such payment is received by the Collateral Agent (provided that in
the event such payment is received by the Collateral Agent on a day
that is not a Business Day or after 12:30 p.m., New York City time, on
a Business Day, then such payment shall be made no later than 10:30
a.m., New York City time, on the next succeeding Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Holders of the Growth PRIDES to the accounts
designated by them in writing for such purpose no later than 2:00 p.m.,
New York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received
by the Collateral Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day); and
(iii) In the case of payments of the Stated Amount of any
Pledged Preferred Securities or the principal of any Pledged Treasury
Securities, to the Company on the relevant Payment Date in accordance
with the procedure set forth in Section 6.2(a) or 6.2(b) hereof, in
full satisfaction of the respective obligations of the Holders under
the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount on account of any
Preferred Security that, at the time of such payment, is a Pledged Preferred
Security or a Holder of a Growth PRIDES shall receive any payments of principal
on account of any Treasury Securities that, at the time of such payment, are
Pledged Treasury Securities, the Purchase Contract Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of the Company (and
promptly deliver the same over to the Company) for application to the obliga-
11
16
tions of the Holders under the related Purchase Contracts, and the Holders shall
acquire no right, title or interest in any such payments of Stated Amount or
principal so received.
Section 4. SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF PREFERRED
SECURITIES.
Section 4.1. SUBSTITUTION OF PREFERRED SECURITIES AND THE ESTABLISHMENT
OF GROWTH PRIDES. At any time on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, a Holder of Income PRIDES shall
have the right to substitute Treasury Securities for the Pledged Preferred
Securities securing such Holder's obligations under the Purchase Contract(s)
comprising a part of its Income PRIDES in integral multiples of 20 Income PRIDES
by (a) Transferring to the Collateral Agent Treasury Securities having a Value
equal to the Stated Amount of the Pledged Preferred Securities to be released
and (b) delivering the related Income PRIDES to the Purchase Contract Agent,
accompanied by a notice, substantially in the form of Exhibit B hereto, to the
Purchase Contract Agent stating that such Holder has Transferred Treasury
Securities to the Collateral Agent pursuant to clause (a) above (stating the
Value of the Treasury Securities Transferred by such Holder) and requesting that
the Purchase Contract Agent instruct the Collateral Agent to release from the
Pledge the Pledged Preferred Securities related to such Income PRIDES. The
Purchase Contract Agent shall instruct the Collateral Agent in the form provided
in Exhibit A. Upon receipt of Treasury Securities from a Holder of Income PRIDES
and the related instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Preferred Securities and shall promptly Transfer such
Preferred Securities, free and clear of any lien, pledge or security interest
created hereby, to the Purchase Contract Agent.
Section 4.2. PLEDGE OF PREFERRED SECURITIES AND REESTABLISHMENT OF
INCOME PRIDES. At any time on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, a Holder of Growth PRIDES shall
have the right to establish or reestablish Income PRIDES consisting of the
Purchase Contracts and Preferred Securities in integral multiples of 20 Income
PRIDES by (a) Transferring to the Collateral Agent Preferred Securities having a
Value equal to the Stated Amount of the
12
17
Pledged Treasury Securities to be released and (b) delivering the related Growth
PRIDES to the Purchase Contract Agent, accompanied by a notice, substantially in
the form of Exhibit B hereto, to the Purchase Contract Agent stating that such
Holder has Transferred Preferred Securities to the Collateral Agent pursuant to
clause (a) above and requesting that the Purchase Contract Agent instruct the
Collateral Agent to release from the Pledge the Pledged Treasury Securities
related to such Growth PRIDES. The Purchase Contract Agent shall instruct the
Collateral Agent in the form provided in Exhibit A. Upon receipt of the
Preferred Securities from such Holder and the instruction from the Purchase
Contract Agent, the Collateral Agent shall release the Treasury Securities and
shall promptly Transfer such Treasury Securities, free and clear of any lien,
pledge or security interest created hereby, to the Purchase Contract Agent.
Section 4.3. TERMINATION EVENT. Upon receipt by the Collateral Agent of
written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Preferred Securities and
Pledged Treasury Securities to the Purchase Contract Agent for the benefit of
the Holders of the Income PRIDES and the Growth PRIDES, respectively, free and
clear of any lien, pledge or security interest or other interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Preferred Securities or of the Pledged Treasury Securities, as the case may be,
as provided by this Section 4.3, the Purchase Contract Agent shall (i) use its
best efforts to obtain an opinion of a nationally recognized law firm reasonably
acceptable to the Collateral Agent to the effect that, as a result of the
Company's being the debtor in such a bankruptcy case, the Collateral Agent will
not be prohibited from releasing or Transferring the Collateral as provided in
this Section 4.3, and shall deliver such opinion to the Collateral Agent within
ten days after the occurrence of such Termination Event, and if (y) the Purchase
Contract Agent shall be unable to obtain such opinion within ten days after the
occurrence of such Termination Event or (z) the
13
18
Collateral Agent shall continue, after delivery of such opinion, to refuse to
effectuate the release and Transfer of all Pledged Preferred Securities or of
the Pledged Treasury Securities, as the case may be, as provided in this Section
4.3, then the Purchase Contract Agent shall within fifteen days after the
occurrence of such Termination Event commence an action or proceeding in the
court with jurisdiction of the Company's case under the Bankruptcy Code seeking
an order requiring the Collateral Agent to effectuate the release and transfer
of all Pledged Preferred Securities or of the Pledged Treasury Securities, as
the case may be, as provided by this Section 4.3 or (ii) commence an action or
proceeding like that described in subsection (i)(z) hereof within ten days after
the occurrence of such Termination Event.
Section 4.4. CASH SETTLEMENT. Upon receipt by the Collateral Agent of
(a) notice from the Purchase Contract Agent prior to the Purchase Contract
Settlement Date, as provided in the Purchase Contract Agreement, that a Holder
elects to effect a Cash Settlement with respect to some or all of such Holder's
Purchase Contracts in accordance with the terms of the Purchase Contracts and
the Purchase Contract Agreement and (b) payment by such Holder on or prior to
5:00 p.m., New York City time, on the second Business Day immediately preceding
the Purchase Contract Settlement Date, of the Purchase Price of such Purchase
Contracts by certified or cashiers check payable to or upon the order of the
Company, or wire transfer in immediately available funds, then the Collateral
Agent shall, upon the written direction of the Purchase Contract Agent, promptly
invest any Cash received from a Holder in connection with a Cash Settlement in
Permitted Investments that will mature on the Purchase Contract Settlement Date.
Upon the receipt of the proceeds of any such investment, the Collateral Agent
shall pay such funds to the Company on the Purchase Contract Settlement Date.
After payment of the Purchase Price to the Company on the Purchase Contract
Settlement Date, the Collateral Agent shall release from the Pledge and promptly
Transfer to the Purchase Contract Agent Pledged Preferred Securities or Pledged
Treasury Securities with a principal amount equal to the product of the Stated
Amount and the number of Purchase Contracts as to which such Holder has elected
to effect a Cash Settlement. The Collateral Agent shall distribute, when
received, any funds in respect of the interest earned from any such
14
19
investment to the Purchase Contract Agent, for payment to the relevant Holders.
Section 4.5. EARLY SETTLEMENT. Upon written notice to the Collateral
Agent by the Purchase Contract Agent that one or more Holders of Securities have
elected to effect Early Settlement of their respective obligations under the
Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Preferred Securities in the case of a
holder of Income PRIDES or (b) Pledged Treasury Securities in the case of a
holder of Growth PRIDES, as the case may be, with a principal amount equal to
the product of (i) the Stated Amount times (ii) the number of such Purchase
Contracts as to which such Holders have elected to effect Early Settlement and
shall Transfer all such Pledged Preferred Securities or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge created hereby, to
the Purchase Contract Agent for the benefit of the Holders.
Section 4.6. APPLICATION OF PROCEEDS SETTLEMENT. (a) In the event a
Holder of Income PRIDES has not made an effective Cash Settlement or an Early
Settlement of the Purchase Contract(s) underlying its Income PRIDES, such Holder
shall be deemed to have elected to pay for the shares of Common Stock to be
issued under such Purchase Contract(s) from the Proceeds of the related Pledged
Preferred Securities. The Collateral Agent shall, by 10:00 a.m., New York City
time, on the Business Day immediately preceding the Purchase Contract Settlement
Date, without any instruction from such Holder of Income PRIDES, present the
related Preferred Securities to the Institutional Trustee for repayment at the
Repayment Price. The Collateral Agent shall, at the written direction of the
Purchase Contract Agent, promptly invest any Cash received in respect of the
repayment of the
15
20
Pledged Preferred Securities in overnight Permitted Investments. On the Purchase
Contract Settlement Date, the Collateral Agent shall apply the proceeds of any
such investment to pay to the Company an amount equal to the product of the
Stated Amount and the number of Preferred Securities repaid by the Institutional
Trustee at the Purchase Price. The Collateral Agent shall distribute any funds
received in respect of the investment earnings from such investment when
received to the Purchase Contract Agent for payment to the relevant Holders.
(b) In the event a holder of Growth PRIDES has not made an Early Settlement of
the Purchase Contract(s) underlying its Growth PRIDES, such holder shall be
deemed to have elected to pay for the shares of Common Stock to be issued under
such Purchase Contract(s) from the Proceeds of the related Pledged Treasury
Securities. On the Business Day immediately prior to the Purchase Contract
Settlement Date, the Collateral Agent shall, at the written direction of the
Purchase Contract Agent, invest the Cash proceeds of the maturing Pledged
Treasury Securities in overnight Permitted Investments. Without receiving any
instruction from the Holder of Growth PRIDES, the Collateral Agent shall apply
the Proceeds of the related Pledged Treasury Securities to the settlement of
such Purchase Contracts on the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities and the investment earnings from the investment in overnight
Permitted Investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent shall distribute
such excess, when received, to the Purchase Contract Agent for the benefit of
the holder of the related Purchase Contracts.
Section 5. VOTING RIGHTS -- PREFERRED SECURITIES. The Purchase Contract
Agent may exercise, or refrain from exercising, any and all voting and other
consensual rights pertaining to the Pledged Preferred Securities or any part
thereof for any purpose not inconsistent with the terms of this Agreement and in
accordance with the terms of the Purchase Contract Agreement; provided, that the
Purchase Contract Agent shall not exercise or, as the case may be, shall not
refrain from exercising such right if, in the judgment of the Company, such
action would
16
21
impair or otherwise have a material adverse effect on the value of all or any of
the Pledged Preferred Securities; and provided, further, that the Purchase
Contract Agent shall give the Company and the Collateral Agent at least five
days' prior written notice of the manner in which it intends to exercise, or its
reasons for refraining from exercising, any such right. Upon receipt of any
notices and other communications in respect of any Pledged Preferred Securities,
including notice of any meeting at which holders of Preferred Securities are
entitled to vote or solicitation of consents, waivers or proxies of holders of
Preferred Securities, the Collateral Agent shall use reasonable efforts to send
promptly to the Purchase Contract Agent such notice or communication, and as
soon as reasonably practicable after receipt of a written request therefor from
the Purchase Contract Agent, execute and deliver to the Purchase Contract Agent
such proxies and other instruments in respect of such Pledged Preferred
Securities (in form and substance satisfactory to the Collateral Agent) as are
prepared by the Purchase Contract Agent with respect to the Pledged Preferred
Securities.
Section 6. RIGHTS AND REMEDIES; INVESTMENT COMPANY EVENT
Section 6.1. RIGHTS AND REMEDIES OF THE COLLATERAL AGENT. (a) The
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code as in effect in
the State of New York (the "Code") (whether or not the Code is in effect in the
jurisdiction where the rights and remedies are asserted), Revised Article 8 and
the TRADES Regulations and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities is a part under the related Purchase Contracts, the
Collateral Agent shall have and may exercise, with refer-
17
22
ence to such Pledged Treasury Securities and such obligations of such Holder,
any and all of the rights and remedies available to a secured party under the
Code, Revised Article 8 and the TRADES Regulations after default by a debtor,
and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the Stated Amount of, or
cash distributions on, the Pledged Preferred Securities, or (ii) the principal
of the Pledged Treasury Securities, subject, in each case, to the provisions of
Section 3, and as otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of Securities, in the
event such Holder becomes the holder of a Growth PRIDES, agrees that, from time
to time, upon the written request of the Collateral Agent, the Purchase Contract
Agent or such Holder shall execute and deliver such further documents and do
such other acts and things as the Collateral Agent may reasonably request in
order to maintain the Pledge, and the perfection and priority thereof, and to
confirm the rights of the Collateral Agent hereunder. The Purchase Contract
Agent shall have no liability to any Holder for executing any documents or
taking any such acts requested by the Collateral Agent hereunder, except for
liability for its own negligent act, its own negligent failure to act or its own
willful misconduct.
Section 6.2. INVESTMENT COMPANY EVENT, ETC. Upon the occurrence of an
Investment Company Event or a liquidation of the Trust, a principal amount of
the Debentures constituting the assets of the Trust and underlying the Preferred
Securities equal to the aggregated Stated Amount of the Pledged Preferred
Securities shall be delivered to the Collateral Agent in exchange for the
Pledged Preferred Securities. In the event the Collateral Agent receives such
Debentures in respect of Pledged Preferred Securities upon the occurrence of an
Investment Company Event or liquidation of the Trust, the Collateral Agent shall
Transfer the Debentures to the Collateral Account in the manner specified herein
for Pledged Preferred Securities to secure the obligations of the Hold-
ers of Income PRIDES to purchase the Company's Common
18
23
Stock under the related Purchase Contracts. Thereafter, the Collateral Agent
shall have such security interests, rights and obligations with respect to the
Debentures as it had in respect of the Pledged Preferred Securities as provided
in Articles II, III, IV, V and VI hereof.
Section 7. REPRESENTATION AND WARRANTIES; COVENANTS.
Section 7.1. REPRESENTATIONS AND WARRANTIES. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security
interest in and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the
Collateral and, in the case of Collateral delivered
in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or
has the right to Transfer, the Collateral it
Transfers to the Collateral Agent, free and clear of
any security interest, lien, encumbrance, calls,
liabilities to pay money or other restrictions other
than the security interest and lien granted under
Section 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral
Account, the Collateral Agent, for the benefit of the
Company, will have a valid and perfected first
priority security interest therein (assuming that
any central clearing operation or any Intermediary
or other entity not within the control of the Holder
involved in the Transfer of the Collateral,
including the Collateral Agent, gives the notices and
takes the action required of
19
24
it hereunder and under applicable law for perfection
of that interest and assuming the establishment and
exercise of control pursuant to Section 2.2 hereof);
and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in
the creation of any security interest, lien or other
encumbrance on the Collateral other than the security
interest and lien granted under Section 2 hereof or
violate any provision of any existing law or regula-
tion applicable to it or of any mortgage, charge,
pledge, indenture, contract or undertaking to which
it is a party or which is binding on it or any of its
assets.
Section 7.2. COVENANTS. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders
will create or purport to create or allow to subsist
any mortgage, charge, lien, pledge or any other
security interest whatsoever over the Collateral or
any part of it other than pursuant to this Agreement;
and
(b) neither the Purchase Contract Agent nor such Holders
will sell or otherwise dispose (or attempt to
dispose) of the Collateral or any part of it except
for the beneficial interest therein, subject to the
pledge hereunder, transferred in connection with
the Transfer of the Securities.
Section 8. THE COLLATERAL AGENT. It is hereby agreed as follows:
20
25
Section 8.1. APPOINTMENT, POWERS AND IMMUNITIES. The Collateral Agent
shall act as agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. The
Collateral Agent: (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or obligations
shall be inferred from this Agreement against the Collateral Agent, nor shall
the Collateral Agent be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof; (b) shall not be responsible for any
recitals contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by it under, this Agreement, the
Securities or the Purchase Contract Agreement, or for the value, validity,
effectiveness, genuineness, enforce- ability or sufficiency of this Agreement
(other than as against the Collateral Agent), the Securities or the Purchase
Contract Agreement or any other document referred to or provided for herein or
therein or for any failure by the Company or any other Person (except the
Collateral Agent) to perform any of its obligations hereunder or thereunder or
for the perfection, priority or, except as expressly required hereby,
maintenance of any security interest created hereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder (except pursuant to directions furnished under Section 8.2 hereof,
subject to Section 8.6 hereof); (d) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under any other document or
instrument referred to or provided for herein or in connection herewith or
therewith, except for its own negligence or willful misconduct; and (e) shall
not be required to advise any party as to selling or retaining, or taking or
refraining from taking any action with respect to, any securities or other
property deposited hereunder. Subject to the foregoing, during the term of this
Agreement, the Collateral Agent shall take all reasonable action in connection
with the safekeeping and preservation of the Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. In no event shall the Collateral
Agent be liable for any amount in excess
21
26
of the Value of the Collateral. Notwithstanding the foregoing, the Collateral
Agent and Securities Intermediary in its individual capacity hereby waive any
right of setoff, bankers lien, liens or perfection rights as securities
intermediary or any counterclaim with respect to any of the Collateral.
Section 8.2. INSTRUCTIONS OF THE COMPANY. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; PROVIDED, HOWEVER, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent shall be adequately indemnified as provided herein. Nothing in this
Section 8.2 shall impair the right of the Collateral Agent in its discretion to
take any action or omit to take any action which it deems proper and which is
not inconsistent with such direction.
Section 8.3. RELIANCE BY COLLATERAL AGENT. Each of the Securities
Intermediary and the Collateral Agent shall be entitled to rely upon any
certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent
and the Securities Intermediary. As to any matters not expressly provided for by
this Agreement, the Collateral Agent and the Securities Intermediary shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
in accordance with instructions given by the Company in accordance with this
Agreement.
Section 8.4. RIGHTS IN OTHER CAPACITIES. The Collateral Agent and the
Securities Intermediary and their affiliates may (without having to account
therefor to the Company) accept deposits from, lend money to, make their
investments in and generally engage in any kind of bank-
22
27
ing, trust or other business with the Purchase Contract Agent and any Holder of
Securities (and any of their respective subsidiaries or affiliates) as if it
were not acting as the Collateral Agent, and the Collateral Agent and its
affiliates may accept fees and other consideration from the Purchase Contract
Agent and any Holder of Securities without having to account for the same to the
Company; PROVIDED that each of the Securities Intermediary and the Collateral
Agent covenants and agrees with the Company that it shall not accept, receive or
permit there to be created in favor of itself and shall take no affirmative
action to permit there to be created in favor of any other Person, any security
interest, lien or other encumbrance of any kind in or upon the Collateral.
Section 8.5. NON-RELIANCE ON COLLATERAL AGENT. Neither the Securities
Intermediary nor the Collateral Agent shall be required to keep itself informed
as to the performance or observance by the Purchase Contract Agent or any Holder
of Securities of this Agreement, the Purchase Contract Agreement, the Securities
or any other document referred to or provided for herein or therein or to
inspect the properties or books of the Purchase Contract Agent or any Holder of
Securities. The Collateral Agent shall not have any duty or responsibility to
provide the Company with any credit or other information concerning the affairs,
financial condition or business of the Purchase Contract Agent or any Holder of
Securities (or any of their respective affiliates) that may come into the
possession of the Collateral Agent or the Securities Intermediary or any of
their respective affiliates.
Section 8.6. COMPENSATION AND INDEMNITY. The Company agrees: (i) to pay
the Collateral Agent from time to time such compensation as shall be agreed in
writing between the Company and the Collateral Agent for all services rendered
by it hereunder and (ii) to indemnify the Collateral Agent and the Securities
Intermediary for, and to hold each of them harmless from and against, any loss,
liability or expense incurred without negligence, willful misconduct or bad
faith on its part, arising out of or in connection with the acceptance or
administration of its powers and duties under this Agreement, including the
costs and expenses (including reasonable fees and expenses of counsel) of
defending itself against any claim or
23
28
liability in connection with the exercise or performance of such powers and
duties.
Section 8.7. FAILURE TO ACT. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto and/or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent shall be entitled, after
prompt notice to the Company and the Purchase Contract Agent, at its sole
option, to refuse to comply with any and all claims, demands or instructions
with respect to such property or funds so long as such dispute or conflict shall
continue, and the Collateral Agent shall not be or become liable in any way to
any of the parties hereto for its failure or refusal to comply with such
conflicting claims, demands or instructions. The Collateral Agent shall be
entitled to refuse to act until either (i) such conflicting or adverse claims or
demands shall have been finally determined by a court of competent jurisdiction
or settled by agreement between the conflicting parties as evidenced in a
writing, satisfactory to the Collateral Agent or (ii) the Collateral Agent shall
have received security or an indemnity satisfactory to the Collateral Agent
sufficient to save the Collateral Agent harmless from and against any and all
loss, liability or expense which the Collateral Agent may incur by reason of its
acting. The Collateral Agent may in addition elect to commence an inter- pleader
action or seek other judicial relief or orders as the Collateral Agent may deem
necessary. Notwithstanding anything contained herein to the contrary, the
Collateral Agent shall not be required to take any action that is in its opinion
contrary to law or to the terms of this Agreement, or which would in its opinion
subject it or any of its officers, employees or directors to liability.
Section 8.8. RESIGNATION OF COLLATERAL AGENT. Subject to the
appointment and acceptance of a successor Collateral Agent as provided below,
(a) the Collateral Agent may resign at any time by giving notice thereof to the
Company and the Purchase Contract Agent as attorney-in-fact for the Holders of
Securities, (b) the Collateral Agent may be removed at any time by the Company
and (c) if the Collateral Agent fails to perform any of its material obligations
hereunder in any material respect for a period of not less than 20 days after
receiving written notice of such failure by the Purchase Contract
24
29
Agent and such failure shall be continuing, the Collateral Agent may be removed
by the Purchase Contract Agent. The Purchase Contract Agent shall promptly
notify the Company of any removal of the Collateral Agent pursuant to clause (c)
of the immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent. If no
successor Collateral Agent shall have been so appointed and shall have accepted
such appointment within 30 days after the retiring Collateral Agent's giving of
notice of resignation or such removal, then the retiring Collateral Agent may
petition any court of competent jurisdiction for the appointment of a successor
Collateral Agent. The Collateral Agent shall be a bank which has an office in
New York, New York with a combined capital and surplus of at least $50,000,000.
Upon the acceptance of any appointment as Collateral Agent hereunder by a
successor Collateral Agent, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, and the retiring Collateral Agent shall take
all appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor Collateral Agent. The retiring
Collateral Agent shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent hereunder. After any retiring Collateral Agent's
resignation hereunder as Collateral Agent, the provisions of this Section 8
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Collateral Agent.
Section 8.9. RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.10. SURVIVAL. The provisions of this Section 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent.
25
30
Section 8.11. INDEMNITY. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent or the
Securities Intermediary, or any of them, incurred without any act or deed that
is found to be attributable to gross negligence on the part of the Collateral
Agent or the Securities Intermediary.
Section 9. Amendment.
----------
Section 9.1. AMENDMENT WITHOUT CONSENT OF HOLDERS. Without the consent
of any Holders, the Company, the Collateral Agent and the Purchase Contract
Agent, at any time and from time to time, may amend this Agreement, in form
satisfactory to the Company, the Collateral Agent and the Purchase Contract
Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company so long as such covenants or such surrender do not
adversely affect the validity, perfection or priority of the security
interests granted or created hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to such
matters or questions arising under this Agreement, provided such action
shall not adversely affect the interests of the Holders.
26
31
Section 9.2. AMENDMENT WITH CONSENT OF HOLDERS. With the consent of the
Holders of not less than 66 2/3% of the Purchase Contracts at the time
outstanding, by act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
authorized by a Board Resolution, the Purchase Contract Agent and the Collateral
Agent may amend this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in respect of the
Securities; PROVIDED, HOWEVER, that no such supplemental agreement shall,
without the consent of the Holder of each Outstanding Security affected thereby,
(1) change the amount or type of Collateral underlying a
Security (except for the rights of holders of Income PRIDES to
substitute the Treasury Securities for the Trust Preferred Securities
or the rights of holders of Growth PRIDES to substitute Trust Preferred
Securities for the Treasury Securities), impair the right of the Holder
of any Security to receive distributions on the underlying Collateral
or otherwise adversely affect the Holder's rights in or to such
Collateral; or
(2) otherwise effect any action that would require the consent
of the Holder of each Outstanding Security affected thereby pursuant to
the Purchase Contract Agreement if such action were effected by an
agreement supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment; or
(4) materially and adversely alter the rights of the holders
of Preferred Securities.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
Section 9.3. EXECUTION OF AMENDMENTS. In executing any amendment
permitted by this Section, the Collateral Agent and the Purchase Contract Agent
shall be entitled to receive and (subject to Section 6.1 hereof, with
27
32
respect to the Collateral Agent, and Section 7.1 of the Purchase Contract
Agreement, with respect to the Purchase Contract Agent) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied.
Section 9.4. EFFECT OF AMENDMENTS. Upon the execution of any amendment
under this Section, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
Section 9.5. REFERENCE TO AMENDMENTS. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if required
by the Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Security Certificates.
Section 10. MISCELLANEOUS.
Section 10.1. NO WAIVER. No failure on the part of the Collateral Agent
or any of its agents to exercise, and no course of dealing with respect to, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
or any of its agents of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
28
33
Section 10.2. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting
the foregoing, the above choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account. The Company,
the Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
Section 10.3. NOTICES. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
Section 10.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent and the Purchase Contract Agent, and the Holders
from time to time of the Securities, by their
29
34
acceptance of the same, shall be deemed to have agreed to be bound by the
provisions hereof and to have ratified the agreements of, and the grant of the
Pledge hereunder by, the Purchase Contract Agent.
Section 10.5. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 10.6. SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or en- forceability of such provision in any other
jurisdiction.
Section 10.7. EXPENSES, ETC. The Company agrees to reimburse the
Collateral Agent for: (a) all reasonable out-of-pocket costs and expenses of the
Collateral Agent (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
30
35
Section 10.8. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
any other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase Contract
Agreement or any Purchase Contract or any other agreement or instrument
relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
31
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
▇▇▇▇▇ CORNING
By:
-------------------------------------
Name:
Title:
Address for Notices:
▇▇▇▇▇ Corning
▇▇▇▇▇ Corning World Headquarters
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy:
The Bank of New York as Purchase
Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By:
-------------------------------------
Name:
Title:
Address for Notices:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy:
32
37
The Chase Manhattan Bank
as Collateral Agent and as
Securities Intermediary
By:
----------------------------------
Name: ▇. ▇'▇▇▇▇▇
Title: Senior Trust Officer
Address for Notices:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Admin-
istration Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
33
38
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration Department
Re: FELINE PRIDES of ▇▇▇▇▇ Corning (the "Compa-
ny"), and ▇▇▇▇▇ Corning Capital II
We hereby notify you in accordance with Section 4.1 of the
Pledge Agreement, dated as of ______ __, 1997, (the "Pledge Agreement") among
the Company, yourselves, as Collateral Agent, and ourselves, as Purchase
Contract Agent and as attorney-in-fact for the holders of [Income PRIDES]
[Growth PRIDES] from time to time, that the holder of securities listed below
(the "Holder") has elected to substitute [$_____ aggregate principal amount of
Treasury Securities] [$_______Stated Amount of Preferred Securities] in exchange
for an equal Value of [Pledged Preferred Securities] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Preferred Securities] to you, as Collateral Agent. We hereby
instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged
Preferred Securities], to release the Preferred Securities] [Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES] to us in accordance
with the Holder's instructions. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date: THE BANK OF NEW YORK
--------------
By:
----------------------------
Name:
Title:
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities] for the [Pledged Preferred
Securities] [Pledged Treasury Securities]:
--------------------------- -------------------------
Name Social Security or other
Taxpayer Identification
Number, if any
---------------------------
Address
---------------------------
---------------------------
A-1
39
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Re: FELINE PRIDES of ▇▇▇▇▇ Corning (the "Compa-
ny"), and ▇▇▇▇▇ Corning Capital II
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent, $_______ aggregate
principal amount of [Treasury Securities] [Preferred Securities] in exchange for
an equal Value of [Pledged Preferred Securities] [Pledged Treasury Securities]
held by the Collateral Agent (the "Pledge Agreement"), in accordance with
Section 4.1 of the Pledge Agreement, dated ________ __, 1997, between you, the
Company and the Collateral Agent. The undersigned Holder hereby instructs you to
instruct the Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Preferred Securities] [Pledged Treasury Securities] related
to such [Income PRIDES] [Growth PRIDES]. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Dated:
-------------- --------------------------
Signature
Please print name and address of Registered Holder:
--------------------------- -------------------------
Name Social Security or other
Taxpayer Identification
Number, if any
---------------------------
Address
---------------------------
---------------------------
B-1