EXHIBIT 5
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ESCROW AGREEMENT
Escrow Agreement (the "Escrow Agreement") dated as of October 31, 2006
(the "Effective Date") by and between PI SPE CI LLC (the "Assignee") and
Investors Bank & Trust Company, as escrow agent hereunder (the "Escrow Agent").
WHEREAS, X.X. Xxxxxx Securities Inc. (in such capacity, the "Initial
Purchaser") and Xxxxx Corning (the "Issuer") have entered into an equity
commitment agreement dated May 10, 2006 (as amended, supplemented, or otherwise
modified, the "Commitment Agreement") pursuant to which the Initial Purchaser
agreed to purchase Unsubscribed Shares (as defined therein) on the Closing Date
(as defined therein);
WHEREAS, the Initial Purchaser and the several backstop purchasers (the
"Backstop Purchasers") have entered into a syndication agreement dated May 10,
2006 (as amended, supplemented, or otherwise modified, the "Syndication
Agreement"), pursuant to which the Backstop Purchasers agreed to purchase from
the Initial Purchaser Unsubscribed Shares purchased from the Issuer by the
Initial Purchaser pursuant to the Commitment Agreement;
WHEREAS, certain Backstop Purchasers (each, an "Assignor") and the
Assignee have entered into 13 separate assignment agreements, dated October 24,
2006 or October 25, 2006, as the case may be (each, an "Assignment Agreement"),
pursuant to which each Assignor individually assigned, and the Assignee
assumed, certain rights and obligations of each Assignor under the Syndication
Agreement with respect to each such Assignor's commitment to purchase
Unsubscribed Shares equal in the aggregate to 2,460,268 Unsubscribed Shares
(the "Assigned Shares");
WHEREAS, pursuant to Section 1(d) of the Assignment Agreements and
Section 1(f) of the Syndication Agreement, the Assignee has notified the
Initial Purchaser that the Assignee's purchase of Unsubscribed Shares is
subject to the terms of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and the expiration or termination of the
applicable waiting period with respect to such purchase (the "HSR Condition")
has not occurred;
WHEREAS, the Assignee is required, pursuant to Section 1(f) of the
Syndication Agreement, to enter into this Escrow Agreement; and
WHEREAS, the Initial Purchaser and the Issuer have entered into a
registration rights agreement, dated as of July 7, 2006 (as amended,
supplemented, or otherwise modified, the "Registration Rights Agreement"), with
respect to certain shares of New Common Stock (as defined therein).
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. APPOINTMENT. The Assignee hereby appoints the Escrow Agent as escrow
agent for the purposes set forth herein, and the Escrow Agent hereby accepts
such appointment under the terms and conditions set forth herein.
2. ESCROW PROPERTY. Simultaneous with the execution and delivery of this
Escrow Agreement, the Assigned Shares are being deposited by the Initial
Purchaser with the Escrow Agent (the "Share Escrow"). The Assignee represents
and warrants that, pursuant to Section 1(d) of each of the Assignment
Agreements, it has the authority under the Syndication Agreement to cause the
Assigned Shares to be deposited in the Share Escrow and to appoint the Escrow
Agent as the escrow agent for the purposes set forth herein. The Escrow Agent
may assume without inquiry that the Share Escrow constitutes all the shares
subject to the Assignment Agreements and that it represents all of the Assigned
Shares that the Escrow Agent is required to hold. The Escrow Agent shall (i)
safeguard and treat the Share Escrow and any Profit Escrow (as defined below
and, together with the Share Escrow, the "Escrow Property") in an escrow
account in accordance with the provisions of hereof and (ii) hold, administer
and dispose of the Escrow Property subject to and only in accordance with the
terms and conditions hereof.
3. ADMINISTRATION OF ESCROW PROPERTY. (a) The Share Escrow shall be
registered in the name of the Escrow Agent and held in a share escrow account
at the Escrow Agent (the "Share Escrow Account"). During the term of this
Escrow Agreement, except for the rights specifically provided for herein, the
Assignee shall have no rights with respect to the Share Escrow. Without
limiting the generality of the foregoing, except for the Profit Escrow and the
right to receive the Share Escrow under Section 4(a), unless and until the HSR
Condition has occurred, the Assignee shall have none of the indicia of
ownership of the Assigned Shares and, therefore, shall have no right to vote,
or direct the vote of, the Share Escrow or to otherwise exercise any of the
rights of a stockholder of the Issuer in respect of the Share Escrow. The
Escrow Agent will not deliver to the Assignee or to any person acting on its
behalf any proxy statements, proxy cards, written consents in lieu of
stockholder meetings or any other document or instrument it may receive with
respect to the Share Escrow. Dividends or distributions upon the Share Escrow
accrued or distributed in shares of common stock of the Issuer shall be added
to the Share Escrow and held in the Share Escrow Account and shall be
administered by the Escrow Agent in accordance with this Escrow Agreement. The
Escrow Agent shall have no voting rights in respect of the Share Escrow and
therefore shall not complete and return to the Issuer any proxy cards, written
consents in lieu of stockholder meetings or any other document or instrument it
may receive in connection with any meeting of stockholders, or requests for
written consents in lieu of meetings of stockholders, of the Issuer.
(b) Any and all dividends or other amounts accrued or distributed
in respect of the Share Escrow (other than of shares of common stock of the
Issuer which shall, upon receipt by the Escrow Agent be deemed to be Share
Escrow and placed in the escrow account) during the term of this Escrow
Agreement shall be held by the Escrow Agent in a profit escrow account pursuant
to the terms and conditions herein (all such dividends or other profits other
than shares of common stock of the Issuer, the "Profit Escrow"). All cash
amounts received by the Escrow Agent in respect of the Profit Escrow shall be
invested and reinvested by the Escrow Agent as described in Schedule 1 attached
hereto. The Escrow Agent shall have the right to liquidate any such investments
held pursuant to the immediately preceding sentence and shall liquidate such
investments, but solely in order to provide funds necessary to make required
payments under this Escrow Agreement. The Escrow Agent shall have no liability
for any loss sustained as a result of any investment made pursuant to the
instructions of the parties hereto or as a result of any liquidation of any
investment prior to its maturity or for the failure of the parties to give the
Escrow Agent instructions to invest or reinvest the Profit Escrow.
4. DISPOSITION AND TERMINATION. (a) The Escrow Agent shall, within one
business day after receiving written notice from the Initial Purchaser and the
Assignee that the HSR Condition has occurred, deliver the Share Escrow and the
Profit Escrow to the Assignee with a duly executed stock power and shall, if
requested by Assignee, direct the transfer agent for the Share Escrow to
transfer and register such shares in the name of Assignee or its assigns.
(b) If the Escrow Agent shall not have received written notice from
the Initial Purchaser and the Assignee that the HSR Condition has occurred by
January 29, 2007, the Escrow Agent shall, by 5:00 p.m. New York City time on
January 30, 2007, (i) in accordance with the procedures described in Schedule 1
and applicable law, commence selling all of the Share Escrow (a "Sale"), and
distribute all of the net proceeds of such Sale to the Assignee upon receipt
thereof and (ii) distribute the Profit Escrow to the Assignee.
(c) Upon delivery or disposition and distribution of the Share
Escrow and the Profit Escrow by the Escrow Agent pursuant to Sections 4(a) or
(b) above, as applicable, this Escrow Agreement shall terminate, subject to the
provisions of Section 8.
5. ESCROW AGENT. The Escrow Agent undertakes to perform only such duties
as are expressly set forth herein and no duties shall be implied. The Escrow
Agent shall have no liability under and no duty to inquire as to the provisions
of any agreement other than this Escrow Agreement. The Escrow Agent may rely
upon and shall not be liable for acting or refraining from acting upon any
written notice, instruction or request furnished to it hereunder and believed
by it to be genuine and to have been signed or presented by the proper party or
parties. The Escrow Agent shall be under no duty to inquire into or investigate
the validity, accuracy or content of any such document. The Escrow Agent shall
have no duty to solicit any payments, dividends or other profits in respect of
the Escrow Property that may be due. The Escrow Agent shall not be liable for
any action taken or omitted by it, except to the extent that a court of
competent jurisdiction determines that the Escrow Agent's gross negligence or
willful misconduct was the primary cause of any loss to the Assignee. The
Escrow Agent may execute any of its powers and perform any of its duties
hereunder directly or through agents or attorneys (and shall be liable only for
the careful selection of any such agent or attorney) and may consult with
counsel, accountants and other skilled persons to be selected and retained by
it. The Escrow Agent shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the advice or opinion of any such
counsel, accountants or other skilled persons. In the event that the Escrow
Agent shall be uncertain as to its duties or rights hereunder or shall receive
instructions, claims or demands from any party hereto which, in its opinion,
conflict with any of the provisions of this Escrow Agreement, it shall be
entitled to refrain from taking any action and its sole obligation shall be to
keep safely all property held in escrow until it shall be directed otherwise in
writing by the Assignee or by a final order or judgment of a court of competent
jurisdiction.
6. SUCCESSION. The Escrow Agent may resign and be discharged from its
duties or obligations hereunder by giving 10 days advance notice in writing of
such resignation to the Assignee, specifying a date when such resignation shall
take effect. The Escrow Agent shall have the right to withhold an amount equal
to any amount due and owing to the Escrow Agent, plus any costs and expenses
the Escrow Agent shall reasonably believe may be incurred by the Escrow Agent
in connection with the termination of the Escrow Agreement. Any corporation or
association into which the Escrow Agent may be merged or converted or with
which it may be consolidated, or any corporation or association to which all or
substantially all the escrow business of the Escrow Agent's corporate trust
line of business may be transferred, shall be the Escrow Agent under this
Escrow Agreement without further act.
7. FEES. The Assignee agrees to (i) pay the Escrow Agent upon execution of
this Escrow Agreement and from time to time thereafter reasonable compensation
for the services to be rendered hereunder, which unless otherwise agreed in
writing shall be as described in Schedule 1, and (ii) pay or reimburse the
Escrow Agent upon request for all reasonable and documented expenses,
disbursements and advances, including reasonable attorney's fees and expenses,
incurred or made by it in connection with the preparation, execution,
performance, delivery, modification and termination of this Escrow Agreement,
including in connection with any required public filings to be made by the
Escrow Agent..
8. INDEMNITY. The Assignee shall indemnify, defend and save harmless the
Escrow Agent and its directors, officers, agents and employees (the
"indemnitees") from all loss, liability or expense (including the reasonable
and documented fees and expenses of in house or outside counsel) arising out of
or in connection with (i) the Escrow Agent's execution and performance of this
Escrow Agreement, except in the case of any indemnitee to the extent that such
loss, liability or expense is due to the gross negligence or willful misconduct
of such indemnitee, or (ii) its following any instructions or other directions
from the Initial Purchaser or the Assignee, except to the extent that its
following any such instruction or direction is expressly forbidden by the terms
hereof. The parties hereto acknowledge that the foregoing indemnities shall
survive the resignation or removal of the Escrow Agent or the termination of
this Escrow Agreement.
9. NO LIENS. The Escrow Property shall be held as an escrow account and
shall not be subject to any Lien, trustee process or any other judicial process
of any creditor of any party hereto. Except as contemplated by Section 13(b),
no portion of the Escrow Property or any beneficial interests therein may be
pledged, sold, assigned or transferred, including by operation of law, by the
Assignee or be taken or reached by any legal or equitable process in
satisfaction of any debt or other liability of the Assignee, prior to the
delivery to the Assignee of the Escrow Property by the Escrow Agent.
10. TINS. The Assignee represents that its Taxpayer Identification Number
("TIN") assigned by the Internal Revenue Service ("IRS") or any other taxing
authority is set forth in Schedule 1. Upon execution of this Escrow Agreement,
the Assignee shall provide the Escrow Agent with a fully executed W-8 or W-9
IRS form, which shall include such party's TIN. In addition, all income earned
under the Escrow Agreement shall be allocated and/or paid as directed in a
written direction of the Assignee, as set forth herein, and reported by the
recipient to the IRS or any other taxing authority. Notwithstanding such
written directions, the Escrow Agent shall report and, as required withhold any
taxes as it determines may be required by any law or regulation in effect at
the time of the distribution. In the absence of timely direction, all proceeds
of the Share Escrow or the Profit Escrow shall be retained in the Escrow
Property for the benefit of the Assignee and reinvested from time to time by
the Escrow Agent as provided in this Escrow Agreement. In the event that any
earnings remain undistributed at the end of any calendar year, the Escrow Agent
shall report to the IRS or such other authority such earnings as it deems
appropriate or as required by any applicable law or regulation or, to the
extent consistent therewith, as directed in writing by the Assignee. In
addition, the Escrow Agent shall withhold any taxes it deems appropriate and
shall remit such taxes to the appropriate authorities.
11. NOTICES. All communications hereunder shall be in writing and shall be
deemed to be duly given and received:
(a) upon delivery if delivered personally or upon confirmed
transmittal if by facsimile;
(b) on the next Business Day (as hereinafter defined) if sent by
overnight courier; or
(c) four (4) Business Days after mailing if mailed by prepaid
registered mail, return receipt requested, to the appropriate notice
address set forth on Schedule 1 or at such other address as any party
hereto may have furnished to the other parties in writing by registered
mail, return receipt requested.
In the event that the Escrow Agent, in its sole discretion, shall determine
that an emergency exists, the Escrow Agent may use such other means of
communication as the Escrow Agent deems appropriate. "Business Day" shall mean
any day other than a Saturday, Sunday or any other day on which the Escrow
Agent located at the notice address set forth on Schedule 1 is authorized or
required by law or executive order to remain closed.
12. SECURITY PROCEDURES. In the event funds transfer instructions are given
(other than in writing at the time of execution of this Escrow Agreement, as
indicated in Schedule 1 attached hereto), whether in writing, by facsimile or
otherwise, the Escrow Agent is authorized to seek confirmation of such
instructions by telephone call-back to the person or persons designated on
schedule 2 hereto ("Schedule 2"), and the Escrow Agent may rely upon the
confirmation of anyone purporting to be the person or persons so designated.
The persons and telephone numbers for call-backs may be changed only in a
writing actually received and acknowledged by the Escrow Agent. If the Escrow
Agent is unable to contact any of the authorized representatives identified in
Schedule 2, the Escrow Agent is hereby authorized to seek confirmation of such
instructions by telephone call-back to any one or more of the executive
officers ("Executive Officers") of the Assignee, as the Escrow Agent may
select. Such "Executive Officer" shall deliver to the Escrow Agent a fully
executed Incumbency Certificate, and the Escrow Agent may rely upon the
confirmation of anyone purporting to be any such officer. The Escrow Agent may
rely solely upon any account numbers or similar identifying numbers provided by
the Assignee to identify (i) the beneficiary, (ii) the beneficiary's bank, or
(iii) an intermediary bank. The Escrow Agent may apply any of the escrowed
funds for any payment order it executes using any such identifying number, even
when its use may result in a person other than the beneficiary being paid, or
the transfer of funds to a bank other than the beneficiary's bank or an
intermediary bank designated. The parties to this Escrow Agreement acknowledge
that these security procedures are commercially reasonable.
13. MISCELLANEOUS. (a)The provisions of this Escrow Agreement may be
waived, altered, amended or supplemented, in whole or in part, only by a
writing signed by each of the parties hereto and by the Initial Purchaser.
(b) Neither this Escrow Agreement nor any right or interest
hereunder may be assigned in whole or in part by any party, except as provided
in Section 6, without the prior consent of the other parties, except as
provided in Section 6.
(c) Nothing in this Escrow Agreement is intended to confer upon any
person any legal or equitable right, remedy or claim under or by reason of this
Agreement other than the parties hereto and the Initial Purchaser.
(d) This Escrow Agreement shall be governed by and construed under
the laws of the State of New York. Each party hereto irrevocably waives any
objection on the grounds of venue, forum non-conveniens or any similar grounds
and irrevocably consents to service of process by mail or in any other manner
permitted by applicable law and consents to the jurisdiction of the courts
located in the State of New York. The parties further hereby waive any right to
a trial by jury with respect to any lawsuit or judicial proceeding arising or
relating to this Escrow Agreement.
(e) The Assignee will supply all supplemental documentation as the
Escrow Agent shall reasonably request, including in order to comply with the
Escrow Agent's obligations arising under and compliance with federal
anti-terrorism and anti-money laundering laws.
(f) The Assignee acknowledges that regulations of the Comptroller
of the Currency grant the Assignee the right to receive brokerage confirmations
of security transactions as they occur. The Assignee specifically waives such
notification to the extent permitted by law and acknowledges that the Assignee
will receive periodic cash transaction statements, which will detail all
investment transactions.
(g) No party to this Escrow Agreement is liable to any other party
for losses due to, or if it is unable to perform its obligations under the
terms of this Escrow Agreement because of, acts of God, fire, floods, strikes,
equipment or transmission failure, or other causes reasonably beyond its
control.
(h) This Escrow Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(i) The provisions of this Agreement will be deemed severable and
the invalidity or unenforceability of any provision will not affect the
validity or enforceability of the other provisions hereof.
(j) Each of the parties hereto shall not be liable to the other,
directly or indirectly, for any special or consequential damages, even if such
party has been advised of the possibility of such damages.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as
of the date first set forth above.
INVESTORS BANK & TRUST COMPANY
AS ESCROW AGENT
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx XxXxxxx
Title: Managing Director
PI SPE CI LLC
AS ASSIGNEE
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Authorized Person
