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S&S DRAFT
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TRANSACTION AGREEMENT
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dated as of November 22, 1996
by and among
CORNING INCORPORATED,
CORNING LIFE SCIENCES INC.,
CORNING CLINICAL LABORATORIES INC. (Delaware),
COVANCE INC.,
and
CORNING CLINICAL LABORATORIES INC. (Michigan)
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. General................................................................................. 2
SECTION 1.02. References; Interpretation.............................................................. 7
ARTICLE II
DISTRIBUTIONS AND OTHER TRANSACTIONS; CERTAIN COVENANTS
SECTION 2.01. Conditions Precedent.................................................................... 7
SECTION 2.02. The Distributions and Other Transactions................................................ 8
SECTION 2.03. Treatment of Fractional Shares.......................................................... 12
SECTION 2.04. Certain Intercompany Financial and Other Arrangements................................... 12
SECTION 2.05. Certain Indebtedness and Capital Structure.............................................. 13
SECTION 2.06. Further Assurances...................................................................... 13
SECTION 2.07. No Representations or Warranties........................................................ 14
SECTION 2.08. Guarantees.............................................................................. 14
SECTION 2.09. Certain Transactions.................................................................... 15
SECTION 2.10. Insurance............................................................................... 15
ARTICLE III
INDEMNIFICATION
SECTION 3.01. Indemnification by Corning.............................................................. 15
SECTION 3.02. Indemnification by CCL.................................................................. 22
SECTION 3.03. Indemnification by Covance.............................................................. 23
SECTION 3.04. Adjustments for Indemnification Obligations............................................. 23
SECTION 3.05. Procedures for Indemnification - Third Party Claims..................................... 23
SECTION 3.06. Survival of Indemnities................................................................. 25
SECTION 3.07. Payments................................................................................ 25
ARTICLE IV
ACCESS TO INFORMATION
SECTION 4.01. Provision of Corporate Records.......................................................... 25
SECTION 4.02. Access to Information................................................................... 25
SECTION 4.03. Reimbursement........................................................................... 26
SECTION 4.04. Confidentiality......................................................................... 26
ARTICLE V
DISPUTE RESOLUTION
SECTION 5.01. Good Faith Negotiations................................................................. 27
SECTION 5.02. Procedure............................................................................... 27
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ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01. Expenses................................................................................ 28
SECTION 6.02. Notices................................................................................. 28
SECTION 6.03. Complete Agreement; Construction........................................................ 29
SECTION 6.04. Ancillary Agreements.................................................................... 29
SECTION 6.05. Counterparts............................................................................ 29
SECTION 6.06. Survival of Agreements.................................................................. 29
SECTION 6.07. Waiver.................................................................................. 29
SECTION 6.08. Amendments.............................................................................. 30
SECTION 6.09. Assignment.............................................................................. 30
SECTION 6.10. Successors and Assigns.................................................................. 30
SECTION 6.11. Termination............................................................................. 30
SECTION 6.12. Subsidiaries............................................................................ 30
SECTION 6.13. Third Party Beneficiaries............................................................... 30
SECTION 6.14. Headings................................................................................ 30
SECTION 6.15. Specific Performance.................................................................... 30
SECTION 6.16. Governing Law........................................................................... 31
SECTION 6.17. Public Announcements.................................................................... 31
SECTION 6.18. Severability............................................................................ 31
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SCHEDULES
Schedule 2.08 Guarantees
EXHIBITS
Exhibit A Forms of Contribution Agreement, Liabilities Undertaking, ▇▇▇▇ of Sale
and Assignment and Instrument of Assignment and Assumption
Exhibit B Form of Plan of Liquidation and Dissolution of CLSI
Exhibit C Certificate of Ownership and Merger and Certificate of Merger, with
attached Agreement and Plan of Merger and Complete Liquidation
(Covance CAPS into Covance)
Exhibit D Form of Insurance Agreement
Exhibit E Form of Services Agreement
Exhibit F Form of Spin-off Tax Indemnification Agreements
Exhibit G Form of Tax Sharing Agreement
Exhibit H Forms of Amended Charter and By-Laws of CCL
Exhibit I Forms of Amended Charter and By-Laws of Covance
TRANSACTION AGREEMENT dated as of November 22, 1996, by and
among CORNING INCORPORATED, a New York corporation ("Corning"), CORNING LIFE
SCIENCES INC., a Delaware corporation ("CLSI"), CORNING CLINICAL LABORATORIES
INC., a Delaware corporation ("CCL"), COVANCE INC., a Delaware corporation
("Covance") and CORNING CLINICAL LABORATORIES INC., a Michigan corporation ("CCL
(MI)").
W I T N E S S E T H:
WHEREAS, Corning is the common parent of a consolidated group
which includes CLSI, CCL, Covance and CCL (MI);
WHEREAS, the Board of Directors of Corning has determined that
it is appropriate and desirable to distribute to the holders of shares of common
stock, par value $0.50 per share, of Corning (the "Corning Common Shares") all
the outstanding shares of common stock of CCL (the "CCL Common Stock") and,
immediately following such distribution, for CCL to distribute to the holders of
CCL Common Stock all the outstanding shares of common stock of Covance (the
"Covance Common Stock");
WHEREAS, each of Corning, CCL and Covance has determined that
it is necessary and desirable to set forth the principal corporate transactions
required to effect such distribution and to set forth other agreements that will
govern certain other matters following the distribution;
WHEREAS, each of Corning, CCL and Covance has determined that
it is necessary and desirable to allocate and assign responsibility for those
liabilities in respect of the activities of the businesses of such entities on
the Distribution Date (as defined herein) and those liabilities in respect of
other businesses and activities of Corning and its former subsidiaries and other
matters;
WHEREAS, Corning currently owns 100% of the stock of CLSI;
WHEREAS, CLSI currently owns 100% of the stock of CCL;
WHEREAS, CCL currently owns 100% of the stock of each
of Covance and CCL (MI);
WHEREAS, Covance currently owns 100% of the stock of
Covance Clinical and Periapproval Services Inc. (formerly
Corning Besselaar, Inc.) ("Covance CAPS"); and
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WHEREAS, prior to the Distribution Date, CLSI will contribute
to CCL substantially all of its assets other than the stock of CCL in exchange
for additional shares of CCL Common Stock, shares of voting preferred stock of
CCL and cash and will contribute to CCL (MI) certain of its obligations and
liabilities and Corning will cause CLSI to dissolve and Covance CAPS to be
merged with and into Covance.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. General. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Action" shall mean any action, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any governmental or other
regulatory or administrative agency, body or commission or any arbitration
tribunal.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, will control or will be controlled by or will be under common
control with the person specified immediately following the Effective Time.
"Agent" shall have the meaning as defined in Section 2.02(g).
"Agreement Disputes" shall have the meaning as defined in
Section 5.01.
"Ancillary Agreements" shall mean the Insurance Agreement, the
Intellectual Property Agreement, the Services Agreement, the Spin-off
Tax Indemnification Agreements and the Tax Sharing Agreement.
"Assignee" shall have the meaning as defined in Section
2.02(i)(ii).
"CCL" shall mean Corning Clinical Laboratories Inc., a
Delaware corporation.
"CCL Business" shall mean all businesses and operations
conducted by (i) CLSI, MRL Nucor, Inc. and all current and former
subsidiaries of CLSI (other than Covance Biotechnology Services Inc.
(formerly CORNING Bio Inc.), Covance and its
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Subsidiaries, Pharmaceutical Laboratory Services, Inc., Quanterra Incorporated,
California Analytical Laboratory, Chemical Research Laboratories, Inc., Enseco
Incorporated, ERCO, Rocky Mountain Analytical Laboratory and ▇▇▇▇▇▇▇▇▇/Alert
Laboratories, Inc.), including without limitation CCL (but excluding in any
event the environmental testing business previously conducted by CCL); and (ii)
any business entities acquired or established by or for CCL or any of its
Subsidiaries after the date of this Agreement.
"CCL Indemnitees" shall mean CCL, each Affiliate of CCL, each
of their respective directors and officers and each of the heirs, executors,
successors and assigns of any of the foregoing.
"CCL Liabilities" shall mean, collectively, (i) all the
Liabilities of CCL and its Subsidiaries under this Agreement and any of the
Ancillary Agreements, and (ii) all the Liabilities of the parties hereto or
their respective Subsidiaries (whenever arising whether prior to, at or
following the Effective Time) arising out of or in connection with or otherwise
relating to the management or conduct before or after the Effective Time of the
CCL Business.
"CCL (MI)" shall mean Corning Clinical Laboratories Inc., a
Michigan corporation.
"CCL Record Holders" shall mean all holders of CCL Common
Stock as of the Distribution Record Date, provided that the CCL Record Holders
shall be deemed to be determined immediately following the distribution of CCL
Common Stock to all Corning Record Holders.
"CLSI" shall mean Corning Life Sciences Inc., a Delaware
corporation.
"CLSI Revolver" shall mean the Revolving Credit Agreement
dated December 1, 1994 between Corning and CLSI.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Treasury regulations promulgated thereunder, including any
successor legislation.
"Commission" shall mean the Securities and Exchange
Commission.
"Company Policies" shall mean all Policies, current or past,
which are or at any time were maintained by or on behalf of or for the benefit
or protection of Corning or any of its predecessors which relate to the Corning
Business, the CCL Business or the Covance Business, or current or past
directors, officers, employees or agents of any of the foregoing Businesses.
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"Corning" shall mean Corning Incorporated, a New York
corporation.
"Corning Business" shall mean (i) all businesses and
operations of Corning and its subsidiaries other than the CCL Business and the
Covance Business and (ii) the environmental testing business previously
conducted by CCL and its Subsidiaries, including California Analytical
Laboratory, Chemical Research Laboratories, Inc., Enseco Incorporated, ERCO,
Quanterra Incorporated, Rocky Mountain Analytical Laboratory and ▇▇▇▇▇▇▇▇▇/Alert
Laboratories, Inc.
"Corning Indemnitees" shall mean Corning, each Affiliate of
Corning, each of their respective directors and officers and each of the heirs,
executors, successors and assigns of any of the foregoing.
"Corning Liabilities" shall mean all the Liabilities of
Corning and its Subsidiaries under this Agreement and any of the Ancillary
Agreements, and all the Liabilities of Corning and its subsidiaries that are not
CCL Liabilities or Covance Liabilities including, without limitation, all
Liabilities under any employee benefit plans maintained by Corning and any stock
option employment or consulting agreements to which Corning is a party,
including any such benefit plans or agreements covering or with persons who are
or were employees of CCL or Covance and their respective Subsidiaries.
Notwithstanding the foregoing, the remaining payment obligations under the
Agreement dated June 7, 1995 among Corning, CLSI and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and the
Consulting Agreement dated June 7, 1995 among Corning, CLSI and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
shall be CCL Liabilities and not Corning Liabilities.
"Corning Record Holders" shall mean all holders of record of
Corning Common Shares as of the Distribution Record Date.
"Covance" shall mean Covance Inc., a Delaware corporation (formerly
known as Corning Pharmaceutical Services Inc.).
"Covance Business" shall mean all businesses and operations conducted
by (i) all current and former subsidiaries of Covance and by Covance
Biotechnology Services Inc. and Pharmaceutical Laboratory Services, Inc. prior
to the Effective Time; and (ii) any business entities acquired or established by
or for Covance or any of its Subsidiaries after the date of this Agreement.
"Covance Indemnitees" shall mean Covance, each Affiliate of
Covance, each of their respective directors and officers and each of the heirs,
executors, successors and assigns of any of the foregoing.
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"Covance Liabilities" shall mean, collectively, (i) all the
Liabilities of Covance and its Subsidiaries under this Agreement and any of the
Ancillary Agreements, and (ii) all the Liabilities of the parties hereto or
their respective Subsidiaries (whenever arising whether prior to, at or
following the Effective Time) arising out of or in connection with or otherwise
relating to the management or conduct before or after the Effective Time of the
Covance Business.
"Distribution Date" shall mean December 31, 1996 or such later
date as may hereafter be determined by Corning's Board of Directors as the date
as of which the Distributions shall be effected.
"Distribution Record Date" shall mean December 31, 1996 or
such later date as may hereafter be determined by Corning's Board of Directors
as the record date for the Distributions.
"Distributions" shall mean the two consecutive distributions
in the following order on the Distribution Date to (i) all Corning Record
Holders of the CCL Common Stock owned by Corning and (ii) all CCL Record Holders
of the Covance Common Stock owned by CCL.
"Effective Time" shall mean 11:59 p.m., New York time, on the
Distribution Date.
"Exchange Act" shall mean the Securities and Exchange Act of
1934, as amended.
"Indemnifiable Losses" shall mean any and all losses,
liabilities, claims, damages, demands, costs or expenses (including, without
limitation, reasonable attorneys' fees and any and all reasonable and necessary
out-of-pocket expenses) whatsoever, including any and all losses, liabilities,
claims, damages, demands, costs or expenses reasonably incurred in
investigating, preparing for or defending against any Actions or potential
Actions, provided, however, that such Indemnifiable Losses shall not include
Taxes or other amounts indemnified against under the Spin-off Tax
Indemnification Agreements and the Tax Sharing Agreement.
"Indemnifying Party" shall have the meaning as defined in
Section 3.04.
"Indemnitee" shall have the meaning as defined in
Section 3.04.
"Information Statement" shall mean the Information Statement
sent to all the Record Holders in connection with the Distributions, including
any amendment or supplement thereto.
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"Insurance Agreement" shall mean the Insurance Agreement among
Corning, CCL and Covance, in substantially the form attached hereto as Exhibit
D.
"Intellectual Property Agreement" shall mean the Intellectual
Property and Licensing Agreement among Corning, CCL and Covance, in a form to be
agreed upon by the parties to this Agreement.
"Liabilities" shall mean any and all debts, liabilities and
obligations, absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising,
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any court, any governmental or other regulatory or administrative
agency or commission or any award of any arbitration tribunal, and those arising
under any contract, guarantee, commitment or undertaking.
"person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership or government, or any
agency or political subdivision thereof.
"Policies" shall mean insurance policies and insurance
contracts of any kind (other than life and benefits policies or contracts),
including, without limitation, primary, excess and umbrella policies,
comprehensive general liability policies, fiduciary liability, automobile,
aircraft, property and casualty, workers' compensation and employee dishonesty
insurance policies, bonds and self-insurance and captive insurance company
arrangements, together with the rights, benefits and privileges thereunder.
"Record Holders" shall mean the CCL Record Holders and the
Corning Record Holders, collectively.
"Records" shall have the meaning as defined in Section 4.01.
"Registration Statements" shall mean the registration
statements on Form 10 in respect of the CCL Common Stock and the Covance Common
Stock required to be filed with the Commission pursuant to Rule 12(b) under the
Exchange Act.
"Rules" shall have the meaning as defined in Section 5.02.
"Services Agreement" shall mean the Services Agreement among
Corning, CCL and Covance, in substantially the form attached hereto as Exhibit
E.
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"Spin-off Tax Indemnification Agreement" shall mean each of
the Spin-off Tax Indemnification Agreements between or among two or more of
Corning, CCL and Covance, in substantially the form attached hereto as Exhibit
F.
"Subsidiary" shall mean any corporation, partnership or other
entity of which another entity (i) will own, immediately following the Effective
Time, directly or indirectly, ownership interests sufficient to elect a majority
of the board of directors (or persons performing similar functions)
(irrespective of whether at the time any other class or classes of ownership
interests of such corporation, partnership or other entity shall or might have
such voting power upon the occurrence of any contingency) or (ii) will be,
immediately following the Effective Time, a general partner or an entity
performing similar functions; provided that Bio Imaging Technologies Inc. will
be deemed to be a Subsidiary of Covance and, National Imaging Associates will be
deemed to be a Subsidiary of CCL, in each case, for all purposes of this
Agreement.
"Tax" shall mean all federal, state, local and foreign gross
or net income, gross receipts, withholding, franchise, transfer, estimated or
other tax or similar charges and assessments, including all interest, penalties
and additions imposed with respect to such amounts.
"Tax Sharing Agreement" shall mean the Tax Sharing Agreement
among Corning, CCL and Covance, in substantially the form attached hereto as
Exhibit G.
"Third Party Claim" shall have the meaning as defined in
Section 3.05.
SECTION 1.02. References; Interpretation. References to an
"Exhibit" or to a "Schedule" are, unless otherwise specified, to one of the
Exhibits or Schedules attached to this Agreement, and references to a "Section"
are, unless otherwise specified, to one of the Sections of this Agreement.
ARTICLE II
DISTRIBUTIONS AND OTHER TRANSACTIONS; CERTAIN COVENANTS
SECTION 2.01. Conditions Precedent. Neither the Distributions
nor the related transactions set forth in this Agreement or in the Ancillary
Agreements shall become effective unless the following conditions have been
satisfied or waived by Corning on or before the Effective Time:
(a) The Registration Statements shall have been filed by
CCL and Covance, as applicable, with, and declared
effective by, the Commission and the Information
Statement shall have been mailed in a timely manner
to all holders of Corning Common Shares prior to the
Distribution Date.
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(b) Corning shall have received a favorable ruling from
the Internal Revenue Service to the effect that the
Distributions qualify as tax-free distributions under
Section 355 of the Code.
(c) Corning shall have received a favorable response from
the Commission to the "no-action request" letter
describing the Distributions filed by Corning with
the Commission.
(d) The New York Stock Exchange shall have approved the
CCL Common Stock and Covance Common Stock for listing
on its exchange, subject to official notice of
distribution.
(e) The financing arrangements among and between the
parties contemplated in the Information Statement
will have been consummated. CCL and Covance each
shall pay all of the expenses associated with their
respective financings.
SECTION 2.02. The Distributions and Other Transactions. (a)
Certain Transactions. Prior to the Distribution Date:
(i) Covance CAPS shall be merged with and into Covance
pursuant to the Certificate of Ownership and Merger between Covance
CAPS and Covance and the Certificate of Merger between Covance CAPS and
Covance, in substantially the forms attached hereto as Exhibit C, and
in accordance with all applicable filing requirements under the
Delaware General Corporation Law and the New Jersey Business
Corporation Act. As a result of the merger, Covance CAPS will cease to
exist and Covance will acquire the assets of Covance CAPS and assume
(or take the assets of Covance CAPS subject to) the liabilities of
Covance CAPS.
(ii) CLSI will contribute to CCL all of CLSI's assets other
than the stock of CCL and CLSI's rights under certain agreements that
CLSI agrees to transfer pursuant to Section 2.02(i) in exchange for
200,000 additional shares of CCL Common Stock, 1,000 shares of voting
preferred stock of CCL and $250,000 in cash from CCL pursuant to (A)
the Contribution Agreement between CLSI and CCL, (B) the Liabilities
Undertaking between CLSI and CCL (C) the Instrument of Assignment and
Assumption between CLSI and CCL and (D) the ▇▇▇▇ of Sale and Assignment
between CLSI and CCL, each in substantially the forms attached hereto
as Exhibit A, and in accordance with all applicable filing requirements
under the Delaware General Corporation Law. As a result of such
transactions, CCL will acquire the assets of CLSI and assume (or take
the assets of CLSI subject to) the liabilities of CLSI other than (A)
such obligations and liabilities for which either Corning or Covance is
responsible under this Agreement or the Ancillary Agreements and (B)
any obligations that CCL(MI) assumes pursuant to
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the following sentence. CCL (MI) shall assume (A) the first $2 million
in principal amount of obligations of CLSI owed by CLSI to Corning
under the CLSI Revolver and (B) the first $2 million of CLSI's
obligations under Section 6.06(a) of the Agreement and Plan of Merger
among Corning, Opera Acquisition Corp. and CLSI (then known as Damon
Corporation). Following such contributions and assumptions, CLSI shall
adopt a plan of liquidation and dissolve pursuant to the Plan of
Liquidation and Dissolution of CLSI, substantially in the form attached
hereto as Exhibit B, and in accordance with all applicable filing
requirements under the Delaware General Corporation Law. As a result of
such liquidation and dissolution, CLSI will distribute to Corning its
remaining assets, which will consist largely of the capital stock of
CCL, and CLSI will cease to exist.
(iii) No earlier than one day following the effective date for
the transactions described in Section 2.02(a)(ii), CCL will transfer to
certain of its subsidiaries the following shares of common stock that
CCL will have received from CLSI pursuant to the transactions described
in Section 2.02(a)(ii): (A) the shares of common stock of Corning
▇▇▇▇▇▇▇ Institute, (B) the shares of common stock of Corning Clinical
Laboratories Inc. (Mass.) and (C) the shares of common stock of Corning
Clinical Laboratories Inc. (MD).
(iv) No earlier than three (3) days following the later of the
effective dates for the transactions described in Sections 2.02(a)(i),
(ii) and (iii), CCL will transfer its Covance Common Stock, its entire
interest in Pharmaceutical Laboratory Services, Inc. and its entire
interest in Covance Biotechnology Services Inc. to Covance by
delivering to Covance stock certificates representing each of CCL's
share interests in such companies, accompanied by stock powers duly
endorsed by CCL and with all required stock transfer tax stamps
affixed. In connection therewith CCL shall deliver to Covance for
cancellation the share certificate currently held by it representing
Covance Common Stock and Covance shall issue to CCL new certificates
representing the total number of newly-issued shares of Covance Common
Stock sufficient in number to allow for an orderly and pro rata
distribution of such Covance Common Stock to the CCL common
shareholders.
(v) No earlier than three (3) days following the later of the
effective dates for the transactions described in Sections 2.02(a)(i),
(ii) and (iii), Corning will transfer its CCL Common Stock and its
entire interest in MRL Nucor, Inc. to CCL by delivering to CCL stock
certificates representing each of Corning's share interests in CCL and
MRL Nucor, Inc., accompanied by stock powers duly endorsed by Corning
and with all required stock transfer tax stamps affixed. In connection
therewith Corning shall deliver to CCL for cancellation the share
certificate then held by it representing CCL Common Stock and shall
receive new certificates representing the total number of newly-issued
shares of CCL Common Stock sufficient in number to
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allow for an orderly and pro rata distribution of such CCL Common Stock
to the Corning common shareholders.
(b) Ancillary Agreements. On or prior to the Distribution
Date, each of Corning, CCL and Covance shall have executed and
delivered to each of the others, each of the Ancillary Agreements.
(c) Charters; By-laws. On or prior to the Distribution Date:
(i) All necessary actions shall have been taken to provide for
the amendments of the Articles of Incorporation and By-laws for CCL,
such amendments to be in substantially the forms attached hereto as
Exhibit H.
(ii) All necessary actions shall have been taken to provide
for the amendments of the Articles of Incorporation and By-laws for
Covance, such amendments to be in substantially the forms attached
hereto as Exhibit I.
(d) Benefit Plans. On or prior to the Distribution Date, any
shareholder approvals deemed necessary for employee benefit plans shall
have been obtained.
(e) Directors. On or prior to the Distribution Date, Corning
as the sole shareholder of CCL, and CCL, as the sole shareholder of Covance,
shall have taken all necessary action by written consent on or prior to the
Distribution Date to elect to the Board of Directors of CCL and the Board of
Directors of Covance the individuals identified in the Information Statement as
directors of CCL and Covance, respectively.
(f) Consents. The parties hereto shall use their commercially
reasonable efforts to obtain any required consents to assignment of
agreements hereunder, if applicable.
(g) Delivery of Shares to Agent. Corning shall deliver to
▇▇▇▇▇▇ Trust and Savings Bank (the "Agent") the share certificates representing
the CCL Common Stock and CCL shall deliver to the Agent the share certificates
representing the Covance Common Stock and Corning and CCL shall instruct the
Agent to distribute, on or as soon as practicable following the Distribution
Date, such common stock to the Corning Record Holders and the CCL Record
Holders, as the case may be, as further contemplated by the Information
Statement and herein. CCL and Covance shall provide all share certificates that
the Agent shall require in order to effect the Distributions.
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(h) Sublease. Corning shall have entered into a sublease
agreement with National Imaging Associates, Inc. with respect to the
first floor of ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇.
(i) Transfer of Agreements. (i) CLSI hereby agrees that on or
prior to the date on which it is dissolved, subject to the limitations set forth
in this Section 2.02(i), it will assign, transfer and convey to Covance all of
CLSI's rights and obligations under (a) the Capital Contribution Agreement and
Shareholder Agreement dated February 22, 1995 among Corning BioPro Inc., CLSI,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, (b)
any and all existing stock option agreements between CLSI, Corning Bio Inc. and
individual employees of Corning Bio Inc., (c) the Registration Agreement dated
as of February 22, 1995 by and between Corning BioPro Inc. and CLSI, (d) the
Joint Escrow Instructions dated February 22, 1995 by and between Corning BioPro
Inc., CLSI, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and the Escrow Agent named therein, and (e) the
Joint Escrow Instructions dated February 22, 1995 by and between Corning BioPro
Inc., CLSI, ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ and the Escrow Agent named therein. CLSI hereby
further agrees that on or prior to the date on which it is dissolved, subject to
the limitations set forth in this Section 2.02(i), it will assign, transfer and
convey to Corning all of its rights and obligations under the lease agreement
dated October 5, 1995 between 2154 Trading Corporation and CLSI with respect to
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ and a sublease to National
Imaging Associates with respect to a portion of such premises. CCL hereby agrees
that on or prior to the Distribution Date or as soon as reasonably practicable
thereafter, subject to the limitations set forth in this Section 2.02(i), it
will assign, transfer and convey to Corning all of CCL's rights and obligations
under the Asset Transfer Agreement dated as of May 2, 1994, as amended, among
CCL, International Technology Corporation, IT Corporation and Quanterra
Incorporated and the related closing documents thereunder, including without
limitation the General Instrument of Assignment and Assumption dated June 28,
1994 between CCL and Quanterra Incorporated. Corning hereby agrees that on or
prior to the Distribution Date or as soon as reasonably practicable thereafter,
subject to the limitations set forth in this Section 2.02(i), it will assign,
transfer and convey to Covance all of Corning's rights and obligations under
that certain Registration Agreement dated as of February 22, 1995 by and between
Corning, ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇.
(ii) The assignee of any agreement assigned, in whole or in
part, hereunder (an "Assignee") shall assume and agree to pay, perform, and
fully discharge all obligations of the assignor under such agreement or such
Assignee's related portion of such obligations as determined in accordance with
the terms of the relevant agreement, where determinable on the face thereof, and
otherwise as determined in accordance with the practice of the parties prior to
the Distribution.
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(iii) Notwithstanding anything in this Agreement to the
contrary, this Agreement shall not constitute an agreement to assign any
agreement, in whole or in part, or any rights thereunder if the agreement to
assign or attempt to assign, without the consent of a third party, would
constitute a breach thereof or in any way adversely affect the rights of the
Assignee thereof. Until such consent is obtained, or if an attempted assignment
thereof would be ineffective or would adversely affect the rights of any party
hereto so that the Assignee would not, in fact, receive all such rights, the
parties will cooperate with each other in any arrangement designed to provide
for the Assignee the benefits of, and to permit the Assignee to assume
liabilities under, any such agreement.
(iv) Corning understands and agrees that approximately 10,968
Corning Common Shares are held to secure certain claims of CCL under that Escrow
Agreement dated as of October 9, 1994 (the "Escrow Agreement") among Corning,
The First National Bank of Boston and former shareholders of ▇▇▇▇▇ Research
Labs, as amended, and will act at CCL's direction and at CCL's expense with
respect to those shares. The remaining Corning Common Shares held under the
Escrow Agreement are being held for the benefit of Corning.
(j) Other Transactions. On or prior to the Distribution Date,
each of Corning, CCL and Covance shall have consummated those other transactions
in connection with the Distributions that are contemplated by the Information
Statement and the ruling request submission by Corning to the Internal Revenue
Service dated June 17, 1996, as supplemented, and not specifically referred to
in subparagraphs (a)-(i) above.
SECTION 2.03. Treatment of Fractional Shares. As soon as
practicable after the Distribution Date, the Agent shall determine the number of
whole shares and fractional shares of CCL and Covance allocable to each Corning
Record Holder and CCL Record Holder, respectively, as of the Distribution Record
Date, to aggregate all such fractional shares and sell the whole shares obtained
thereby, in open market transactions or otherwise, in each case at then
prevailing trading prices, and to cause to be distributed to each such holder to
which a fractional share shall be allocable such holder's ratable share of the
proceeds of such sale, after making appropriate deductions of the amount
required to be withheld for federal income tax purposes and after deducting an
amount equal to all brokerage charges, commissions and transfer taxes attributed
to such sale. In determining the manner and timing of selling the aggregated
fractional shares, the Agent shall use its independent judgment and shall
neither consult with nor communicate its plans to Corning, CCL or Covance.
SECTION 2.04. Certain Intercompany Financial and Other
Arrangements. (a) Intercompany Accounts. Without limiting the terms of Section
2.05, all intercompany receivables, payables and loans (other than receivables,
payables and loans otherwise specifically provided for in any of the Ancillary
Agreements or hereunder), including, without limitation, in respect of any cash
balances, any cash balances representing deposited checks or drafts for which
only a provisional credit has been allowed or any cash held in any centralized
cash management system, between Corning, CCL, Covance or any of their respective
Subsidiaries, on the one hand, and Corning, CCL, Covance or any of their
respective Subsidiaries, on the other hand, shall, as of the Effective Time, be
settled or contributed to capital, in each case as may be agreed in writing
prior to the Effective Time by duly authorized representatives of Corning, CCL
or Covance, as applicable. Notwithstanding the foregoing, on or after the
Distribution Date, CCL shall make a payment to Corning in an amount equal to
13
the excess, if any, of (i) the aggregate amount of cash and cash equivalents
held by CCL and its Subsidiaries on the Distribution Date over (ii) the sum of
the aggregate principal amount of Working Capital Loans and Swingline Loans
(each as defined in the credit agreement among CCL and the banks listed therein
to be entered into prior to the Distribution Date) outstanding on the
Distribution Date, plus $40,000,000 plus the net cash proceeds from the sales of
assets identified in the credit agreement received on or prior to the
Distribution Date. If the amount calculated in accordance with clause (ii) of
the preceding sentence, less $10,000,000, is greater than the amount calculated
in accordance with clause (i) then, on or after the Distribution Date, Corning
shall make a payment to CCL in an amount equal to the difference between such
calculations.
(b) Operations in Ordinary Course. Each of CCL and Covance
covenants and agrees that, except as otherwise provided in any Ancillary
Agreement, during the period from the date of this Agreement through the
Distribution Date, it will, and will cause any entity that is a Subsidiary of
such party at any time during such period to, conduct its business in a manner
substantially consistent with current and past operating practices and in the
ordinary course, including, without limitation, with respect to the payment and
administration of accounts payable and the administration of accounts
receivable, the purchase of capital assets and equipment and the management of
inventories.
SECTION 2.05. Certain Indebtedness and Capital Structure.
Corning, CCL and Covance each agree to use their respective commercially
reasonable efforts to achieve both an allocation of consolidated indebtedness of
Corning and a capital structure (including cash position) of each of CCL and
Covance so as to substantially reflect the respective capital structures after
the Distributions of CCL and Covance set forth in the Information Statement
under the headings "Capitalization of CCL" and "Capitalization of Covance".
SECTION 2.06. Further Assurances. In case at any time after
the Effective Time any further action is reasonably necessary or desirable to
carry out the purposes of this Agreement and the Ancillary Agreements, the
proper officers of each party to this Agreement shall take all such necessary
action. Without limiting the foregoing, Corning, CCL and Covance shall use their
commercially reasonable efforts to obtain all consents and approvals, to enter
into all amendatory agreements and to make all filings and applications that may
be required for the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements, including, without limitation, all
applicable governmental and regulatory filings.
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SECTION 2.07. No Representations or Warranties. Each of the
parties hereto understands and agrees that, except as otherwise expressly
provided, no party hereto is, in this Agreement, in any Ancillary Agreement or
in any other agreement or document contemplated by this Agreement or otherwise,
making any representation or warranty whatsoever, including, without limitation,
as to title, value or legal sufficiency.
SECTION 2.08. Guarantees. (a) Except as otherwise specified in
any Ancillary Agreement, Corning, CCL and Covance shall use their commercially
reasonable efforts to have, on or prior to the Distribution Date, or as soon as
practicable thereafter, Corning and any of its Subsidiaries removed as guarantor
of or obligor for any CCL Liability or Covance Liability, including, without
limitation, in respect of those guarantees set forth on Schedule 2.08(a), and to
the extent any such guarantee is not removed, CCL or Covance, as the case may
be, will indemnify Corning for all Indemnifiable Losses related to or arising
from such guarantee, in accordance with the procedures set forth in Section 3.05
and will pay Corning a fee reflecting Corning's continuing role as guarantor.
(b) Except as otherwise specified in any Ancillary Agreement,
Corning, CCL and Covance shall use their commercially reasonable efforts to
have, on or prior to the Distribution Date, or as soon as practicable
thereafter, CCL and any of its Subsidiaries removed as guarantor of or obligor
for any Corning Liability or Covance Liability, including, without limitation,
in respect of those guarantees set forth on Schedule 2.08(b), and to the extent
any such guarantee is not removed, Corning or Covance, as the case may be, will
indemnify CCL for all Indemnifiable Losses related to or arising from such
guarantee, in accordance with the procedures set forth in Section 3.05 and will
pay CCL a fee reflecting CCL's continuing role as guarantor.
(c) Except as otherwise specified in any Ancillary Agreement,
Corning, CCL and Covance shall use their commercially reasonable efforts to
have, on or prior to the Distribution Date, or as soon as practicable
thereafter, Covance and any of its Subsidiaries removed as guarantor of or
obligor for any Corning Liability or CCL Liability, including, without
limitation, in respect of those guarantees set forth on Schedule 2.08(c), and to
the extent any such guarantee is not removed, Corning or CCL, as the case may
be, will indemnify Covance for all Indemnifiable Losses related to or arising
from such guarantee, in accordance with the procedures set forth in Section 3.05
and will pay Covance a fee reflecting Covance's continuing role as guarantor.
15
SECTION 2.09. Certain Transactions. (a) On or prior to the
Distribution Date, and in accordance to Section 2.02(b), Corning, CCL and
Covance shall enter into (i) the Tax Sharing Agreement which shall govern, among
other things, their respective rights and obligations with respect to Taxes of
CCL and Covance and each of their respective Subsidiaries for all periods
through the Distribution Date and certain other tax-related matters; and (ii)
the Spin-off Tax Indemnification Agreements which shall, among other things,
restrict CCL and Covance from engaging in certain activities that might
jeopardize the continuing tax-free treatment of the Distributions.
(b) Following the Distribution Date, Corning, CCL and Covance
shall each comply with and otherwise not take any action inconsistent with each
representation and statement made, or to be made, to the Commission in
connection with the "no-action request" letter describing the Distributions
filed by Corning with the Commission.
SECTION 2.10. Insurance. Except as contemplated by the
Insurance Agreement, any and all coverage of CCL, Covance and their respective
Subsidiaries under Company Policies has terminated or will terminate (and will
not be replaced by Corning) no later than the Effective Time.
ARTICLE III
INDEMNIFICATION
SECTION 3.01. Indemnification by Corning. (a) Except as
otherwise specifically set forth in any provision of this Agreement or of any
Ancillary Agreement, Corning shall indemnify and hold harmless the CCL
Indemnitees and the Covance Indemnitees from and against any and all
Indemnifiable Losses of the CCL Indemnitees and the Covance Indemnitees,
respectively, arising out of, by reason of or otherwise in connection with (i)
the Corning Liabilities or (ii) the breach by Corning of any provision of this
Agreement or any Ancillary Agreement.
(b) Corning shall indemnify and hold harmless CCL and its
Subsidiaries from and against any and all monetary payments by or on behalf of
CCL or any of its Subsidiaries (other than criminal fines or penalties imposed
upon former or current employees of CCL or its subsidiaries) to the United
States government or one of the States of the United States or any of their
respective departments, branches or agencies arising out of any investigation or
claim by or on behalf of the United States government or one of the States of
the United States or any of their respective departments, branches or agencies,
whether criminal, civil or administrative in nature which investigation or claim
has been settled prior to the Distribution Date or is pending as of the
Distribution Date pursuant to service of subpoena or other notice of such
investigation to Corning, CCL or any of its Subsidiaries, as well as any qui tam
proceeding for which a complaint was filed prior to the Distribution Date
whether or not Corning, CCL or any Subsidiary of CCL has been served with such
complaint or otherwise been notified of the pendency of such action, but only to
the extent such investigations or claims arise out of or are related to alleged
violations of (i) the federal civil False Claims Act (31 USC ss. 3729, et seq.)
and its criminal counterpart (18 USC ss. 287), (ii) Medicare and Medicaid fraud
(42 USC ss. 1320a-7(b)(a)(1)), (iii) the Civil Monetary Penalties Law (42 USC
▇▇.▇▇. 1320a-7a and 1320a-7(b)(b)), (iv) mail fraud and wire fraud statutes (18
USC ▇▇.▇▇. 1341 and 1343), (v) false statements (18 USC ss. 1301), (vi)
conspiracy (18 USC ss. 371), (vii) money laundering (18 USC ss. 1956, et seq.),
(viii) RICO (18 USC ss. 1961), (ix) Title II of the Health Insurance Portability
and Accountability Act of 1996, (x) Title XVIII of the Social Security
16
Act (42 USC ▇▇.▇▇. 1395-1395ccc) (the Medicare statute), (xi) Title XIX of the
Social Security Act (42 USC ▇▇.▇▇. 1396, et seq.) (the Medicaid statute), (xii)
the Programs Fraud Civil Remedies Act (31 USC ▇▇.▇▇. 3801, et seq.); or (xiii)
the federal Anti-Kickback Act (42 USC ▇▇.▇▇. 52, et seq.) arising out of the
billing or alleged overbilling by CCL or any past or present subsidiary of CLSI
(or any of their predecessors) of any federal program or agency, or any
federally supported state health care program or agency, or any beneficiary of
any of them, for services provided to any such beneficiary thereof by CCL, any
Subsidiary of CCL or any past or present subsidiary of CLSI (or any of their
predecessors).
(c) In the event that CCL or its Subsidiaries make monetary
payments in excess of forty-two million dollars ($42,000,000) within the period
beginning on the Distribution Date and ending five (5) years thereafter in
respect of claims by nongovernmental persons relating to or arising out of the
investigations or claims referred to in Section 3.01(b) and alleging
overbillings of such person or any beneficiary of such person by CCL, its
Subsidiaries or any past or present subsidiary of CLSI (or any of their
predecessors) for services provided prior to the Distribution Date to such
person or beneficiary thereof by CCL, its Subsidiaries or any past or present
subsidiary of CLSI (or any of their predecessors), then Corning shall indemnify
and hold harmless CCL and its Subsidiaries from and against fifty percent (50%)
of up to fifty million dollars ($50,000,000) in the aggregate of such monetary
payments actually paid by CCL or any Subsidiary of CCL in excess of such
forty-two million dollars ($42,000,000) in respect of such alleged overbillings.
(d) (i) Except as otherwise agreed by Corning and CCL or
unless otherwise required by a change in applicable law or regulations, a
contrary judicial decision, adverse determination by a Taxing authority, or a
contrary published ruling (in each case, subsequent to the date hereof), all
payments made by Corning to CCL, or to another party for the benefit of CCL,
pursuant to Section 3.01(b) and Section 3.01(c) shall be treated as nontaxable
capital contributions by Corning to CCL and the parties shall report the
payments consistent with such treatment for Tax purposes
(ii) Each amount indemnified against by Corning pursuant to
Section 3.01(b) and Section 3.01(c) shall be reduced by (1) the product of (x)
the amount of any Tax deduction used to reduce the Tax liability of CCL, any CCL
Subsidiary (CCL and the CCL Subsidiaries shall be referred to in this Section
3.01(d) individually as a "CCL Company" and collectively as the "CCL Companies")
or any combined or consolidated group which has any of the CCL Companies as a
member and which does not have Corning as a member (referred to in this Section
3.01(d) as the "CCL Group") to the extent such Tax deduction is attributable to
the portion of the payment, loss, expense or other item indemnified against by
Corning and (y) the maximum marginal statutory rate (exclusive of any surtax
rate or other marginal rate imposed in lieu of a surtax to eliminate the
benefits of a lower marginal rate) at which the Tax to which such deduction
relates is imposed for the taxable year in which the CCL Company or the CCL
Group uses the Tax deduction to reduce its Tax liability, and (2) the amount of
any other Tax
17
credit, benefit or other similar item (a "Tax Benefit Item") used to reduce the
Tax liability of any CCL Company or the CCL Group to the extent the Tax Benefit
Item is attributable to the portion of the payment, loss, expense or other item
indemnified against by Corning.
(iii) For purposes of determining whether any Tax deduction or
Tax Benefit Item of any CCL Company attributable to the portion of a payment,
loss, expense or other item indemnified against by Corning (a "Corning
Deduction") is used to reduce the Tax liability of any CCL Company or the CCL
Group, it shall be assumed that all losses and deductions of such CCL Company or
the CCL Group (including carryforwards and carrybacks (unless otherwise excluded
below) of net operating losses or other items) other than Corning Deductions are
applied in reduction of such CCL Company's or the CCL Group's Tax liability
before any Corning Deductions are so applied, except that Tax deductions and Tax
Benefit Items attributable to the following items shall be deemed to be applied
to reduce such CCL Company's or the CCL Group's Tax liability after using (in
determining such Tax liability) all available Corning Deductions: (i) Special
Events (as defined below), (ii) claims against which Corning has partially
indemnified CCL pursuant to Section 3.01(c) (other than payments applied toward
the $42,000,000 threshold specified in Section 3.01(c)) and (iii) carrybacks of
losses or other Tax items from Tax years subsequent to the Tax year in which the
amount indemnified against under Sections 3.01(b) or (3.01(c) is paid by
Corning. Special Event shall mean a material event that is unusual in nature or
occurs infrequently (but not both) and is unrelated to normal operations
(including, without limitation, entering or exiting businesses, sales or other
dispositions, litigation or regulatory settlements, restructuring reserves), but
does not include operating items such as start-up expenses and receivable
reserves. For this purpose, material means an event or series of related events
involving amounts exceeding 5 percent of CCL's pre-tax income (determined on a
consolidated basis).
(iv) Corning shall make estimated payments to CCL, or another
party for the benefit of CCL, pursuant to Section 3.01(b) and Section 3.01(c)
(the "Estimated Payments") which shall be calculated in good faith by CCL and
Corning by taking into account the adjustments required by Section 3.02(d)(ii)
and Section 3.01(d)(iii) to the extent practical (based on information available
to the parties at the time the Estimated Payment is made as to the proper tax
treatment of the item, CCL's projected Tax liability (including for estimated
Tax payments), or losses for the year in which the Estimated Payment is made
(without taking into account the use of Corning Deductions in future years),
prior Tax return positions and other factors the parties deem relevant).
Estimated Payments shall be paid by Corning (1) if paid to a CCL Company, as
directed by CCL, within 15 business days after written notice from CCL to
Corning indicating that the underlying obligation indemnified against by Corning
has been paid by a CCL Company (which notice shall include any documentation
reasonably requested by Corning establishing the amount and Tax treatment of
such payment) or, (2) if paid directly by Corning for the benefit of a CCL
Company, within 15 business days after written notice from CCL that the
obligation has been settled or is otherwise due (which notice shall include to
whom such payment should be made, the amount of the payment, an executed copy of
the
18
settlement or other agreement and any other documentation reasonably requested
by Corning establishing the amount and Tax treatment of such payment); provided,
however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent Corning shall have been
actually prejudiced as a result of such failure.
(v) Within 60 business days following the close of the Tax
year in which an Estimated Payment is made and each tax year thereafter until
the Corning Deductions (as adjusted under Sections 3.01(d)(ii) and 3.01(d)(iii))
are fully used by the CCL Companies to reduce the Tax liability of the CCL Group
or any CCL Member, CCL shall compute the amount by which any reduction in the
Tax liability of a CCL Company or the CCL Group for such Tax year attributable
to a Corning Deduction decreases the after-Tax indemnity payable by Corning
under Sections 3.02(d)(ii) and (iii). CCL shall submit such computation in
writing to Corning (together with such other documentation as is reasonably
necessary to demonstrate how the reduction was computed) for review and approval
by Corning, which approval shall not be unreasonably withheld, within 20
business days of the receipt by Corning of such computation prepared by CCL. If
Corning does not approve of such computation and the parties cannot otherwise
agree on such computation, then the disagreement shall be resolved under Section
3.01(d)(ix). Promptly following agreement by the parties as to the computation
required under this paragraph, either CCL shall pay to Corning an adjusting
payment if the amount of such after-Tax indemnity payable by Corning under
Sections 3.01(d)(ii) and 3.01(d)(iii) is less than the aggregate amount of
Estimated Payments made to CCL for such Tax year and prior years (net of any
prior adjusting payments) or Corning shall pay to CCL an adjusting payment if
the amount of such after-Tax indemnity payable by Corning under Section
3.02(d)(ii) and (iii) exceeds the aggregate amount of Estimated Payments made to
CCL for such Tax year and prior years (net of any prior adjusting payments).
(vi) CCL shall consult with Corning and CCL and Corning shall
determine the Tax treatment by any CCL Company or the CCL Group of any payment,
loss, expense or other amount indemnified against by Corning under Section
3.01(b) or Section 3.01(c) provided that neither the CCL Group nor any CCL
Company nor Corning shall be required to take a position on any Tax return for
which there is no reasonable basis. If requested by CCL, Corning at its expense
will provide CCL with an opinion of independent tax counsel selected by Corning
(provided such counsel is not reasonably objected to by CCL) to the effect that
there exists a reasonable basis for the treatment proposed by Corning as part of
such determination. The parties shall report the payments consistent with the
treatment as determined by them for Tax purposes.
(vii) If any payments are made by Corning pursuant to Section
3.01(b) or Section 3.01(c), and calculated and paid pursuant to this Section
3.01(d), and the amount of the after-Tax indemnity payable by Corning pursuant
to such sections would have been different if the computation of such
indemnification payment were made at a later time (because of final settlements
or final dispositions of audit adjustments, administrative or judicial
proceedings,
19
amended returns, utilization or disallowance of Corning Deductions in subsequent
Tax periods or other reasons), then the amount of such indemnification shall be
recomputed by CCL and Corning at such later time by taking into account such
subsequent events and the parties shall make an adjusting payment between each
other as is appropriate because of such recomputation within 15 business days of
their agreement as to the amount of such adjusting payment.
(viii) (A) CCL shall notify Corning promptly (and in any event
within 15 business days) after receipt by any CCL Company of written notice of
any demand or claim by a Taxing authority relating to the Tax treatment of a
payment, loss, expense or other item indemnified against by Corning under
Section 3.01(b) or Section 3.01(c). Such notice shall contain factual
information (to the extent known to any CCL Company) describing the asserted tax
treatment in reasonable detail and shall include copies of any notice or other
document received from any Taxing authority. If the Taxing authority proposes in
writing an adjustment to a Corning Deduction, which adjustment if sustained
would reduce the amount of a Corning Deduction or otherwise increase the amount
indemnified against by Corning, CCL shall notify Corning promptly of such
adjustment and of all action taken or proposed to be taken by the Taxing
authority; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent Corning shall
have been actually prejudiced as a result of such failure.
(B) If Corning requests within 30 days (or sooner if
the nature of the proposed adjustment so requires) after CCL's notice that the
proposed adjustment to a Corning Deduction be contested, CCL shall contest the
proposed adjustment in good faith upon receipt of an opinion of independent tax
counsel selected by Corning (provided such counsel is not reasonably objected to
by CCL) to the effect that there exists a reasonable basis that CCL will prevail
in such contest; provided, that (i) CCL shall be required to contest any
proposed adjustment beyond the level of administrative proceedings only if the j
aggregate amount of the proposed adjustment (exclusive of penalties, interest
and additions to tax) exceeds $250,000, (ii) CCL shall determine the court of
competent jurisdiction in which to contest the proposed adjustment either before
or after payment of the Tax asserted to be payable as a result thereof, (iii)
Corning shall control with counsel selected by Corning (provided such counsel is
not reasonably objected to by CCL) the prosecution of any contested adjustment
or asserted deficiency in respect of a Corning Deduction arising from an amount
indemnified against by Corning under Section 3.01(b), and CCL shall control with
counsel selected by CCL (provided such counsel is not reasonably objected to by
Corning) the prosecution of any contested adjustment or asserted deficiency in
respect of a Corning Deduction arising from an amount indemnified against by
Corning under Section 3.01(c), (iv) the controlling party shall keep the other
party informed as to the progress of any contest or litigation and, if requested
by such other party, shall consult with such other party's tax counsel, and (v)
the controlling party shall not settle, compromise or otherwise concede the
adjustment or deficiency in respect of a Corning Deduction that the controlling
party is contesting without the consent of the other party, which consent shall
not be unreasonably withheld, provided, further, that any adverse
20
court determination will be required to be appealed only upon receipt of an
additional opinion from independent tax counsel that there exists a reasonable
basis that the appellate court will reverse such adverse determination. CCL
shall not be required to take any action pursuant to this Section 3.01(viii)(B)
in respect of a contesting Corning Deduction relating to an amount indemnified
against by Corning under Section 3.01(b) unless Corning shall have agreed to pay
(with no net after-Tax cost to CCL) all penalties, interest and additions to tax
that CCL may incur in connection with contesting a proposed adjustment to such
Corning Deduction. The controlling party shall pay all out-of-pocket expenses
and other costs relating to a contest of an adjustment to a Corning Deduction
("Expenses"), including but not limited to fees for attorneys, accountants,
expert witnesses or other consultants retained by (or selected or controlled by)
the controlling party incurred at any time during which the controlling party is
controlling and directing the proceeding in respect of which such fees are
incurred; provided, however, that Corning shall pay CCL, in respect of a
proceeding controlled by CCL that relates to or involves a proposed adjustment
or asserted deficiency in respect of a Corning Deduction attributable to an
amount indemnified against by Corning under Section 3.01(c), that proportion of
the Expenses relating to the proceeding and involving such deduction as is equal
to the ratio of (i) the amount of the adjustment or deficiency that relates to
such Corning Deduction at issue in the proceeding and (ii) the total adjustments
at issue in the proceeding that relate to claims by nongovernmental persons
described in Section 3.01(c).
(C) If asserted liabilities unrelated to the
matters contemplated herein become grouped with contests arising hereunder, the
parties shall use their respective best efforts to cause the contest arising
hereunder to be the subject of a separate proceeding. If such severance is not
possible, Corning shall control only the prosecution of any contested adjustment
or asserted deficiency in respect of a Corning Deduction arising from an amount
indemnified against by Corning under Section 3.01(b), and CCL shall have sole
discretion to determine the court of competent jurisdiction in which to contest
the proposed adjustment either before or after payment of the tax asserted to be
payable, provided that CCL shall not settle, compromise or otherwise concede any
such contested adjustment or asserted deficiency without the consent of Corning,
which consent shall not be unreasonably withheld. If CCL pays a disputed amount
of Taxes resulting from a disallowed Corning Deduction arising from an amount
indemnified against by Corning under Section 3.01(b) or Section 3.01(c), and
brings suit for refund, Corning shall advance the disputed amount of Taxes (but
only to the extent of the portion of such disputed Taxes as is attributable to
the disallowance of such Corning Deduction) to CCL within 15 business days of
such payment by CCL. If CCL subsequently receives a refund or credit, of all or
a part of the amount of disputed Taxes advanced by Corning, CCL shall promptly
pay (and in any event within 15 business days) to Corning an amount equal to the
portion of such refund or credit attributable to a Corning Deduction together
with any interest received (including by offset) by CCL from the Taxing
authority with respect to such portion. With respect to matters arising
hereunder controlled by Corning, and where deemed necessary by Corning, CCL
shall itself, and shall compel any
21
CCL Subsidiary to, authorize by appropriate powers of attorney such persons as
Corning shall designate to represent CCL, or such CCL Subsidiary, with respect
to such matters.
(ix) If Corning and CCL are unable to agree on the proper
calculation or treatment of a payment or other obligation, a Tax deduction or
Tax Benefit Item or any other item described in this Section 3.01(d), then such
disputed item or items shall be resolved by a nationally recognized accounting
or law firm chosen and mutually acceptable to both parties. Such accounting or
law firm shall resolve the dispute within 30 days of having the item or items
referred to it and such resolution shall be binding on the parties. The costs,
fees and expenses of the accounting or law firm shall be borne equally by
Corning and CCL. In the event the parties are not able to agree on an accounting
or law firm, each party shall select its own nationally recognized law firm (and
bear the costs, fees and expenses thereof) and such law firms shall select a
nationally recognized accounting or law firm which accounting or law firm shall
be deemed to be mutually acceptable to both parties for the purpose of applying
this provision. Nothing in this Section 3.01(d) shall require either party to
take any position on a Tax return or for Tax purposes for which there is no
reasonable basis.
(x) All payments under Sections 3.01(b), 3.01(c) and 3.01(d)
shall be made without gross-up for Taxes, except if (A) the Tax liability of
Corning or a consolidated or combined group which has Corning as a member and
which does not have CCL as a member (the "Corning Group") is actually reduced by
a Tax deduction attributable to the payment by Corning of an amount indemnified
against by Corning under Sections 3.01(b) or 3.01(c) in any tax year that ends
after the Distribution Date because such payment is properly treated as an
deduction against ordinary income for Corning or the Corning Group in computing
its Taxable income for such year (a "CCL Payment Deduction") and (B) the Tax
Liability of any CCL Company or the CCL Group for such year is actually
increased by such payment because such payment is properly treated as an item of
ordinary income for any CCL Company or the CCL Group, then Corning shall pay to
CCL an amount equal to the lesser of the amount of such Corning Tax reduction
and the amount of such CCL Tax increase, within 15 business days after the
parties agree on the amount of the Corning Tax reduction and CCL Tax increase,
provided, however, any payment by Corning to CCL shall be net of Taxes imposed
on Corning or the Corning Group in respect of amounts paid by CCL to Corning
under Section 3.01(d). For purposes of computing a Corning Tax increase, it
shall be assumed that all losses and deductions other than the CCL Payment
Deduction are applied to reduce the Tax Liability of Corning or the Corning
Group before the CCL Payment Deduction is so applied.
(e) Notwithstanding anything to the contrary in this
agreement, Corning shall not indemnify, defend or hold harmless CCL or any
Subsidiary of CCL against (x) costs and expenses relating to the investigations
or claims referred to in Sections 3.01(b) and (c) (including, without
limitation, fees and expenses of attorneys, consultants and other agents of CCL
or any Subsidiary of CCL), or (y) losses of revenues or profits that may arise
as a consequence of the claims or investigations referred to in Sections 3.01(b)
or 3.01(c) or the
22
settlements entered into or judgments rendered as a result thereof or as a
consequence of any exclusion from participation in any federal or state health
care program, or (z) any other consequential or incidental damages that may be
incurred by CCL or any Subsidiary of CCL, in each case which relates to the
billing of any person or any beneficiary of such person by CCL, any Subsidiary
of CCL or any past or present subsidiary of CLSI (or any of their predecessors)
for services provided to any such person or beneficiary thereof by CCL, any
Subsidiary of CCL or any past or present subsidiary of CLSI (or any of their
predecessors).
(f) All indemnification obligations of Corning pursuant to
this Section 3.01 may be made or assumed by an Affiliate of Corning to the
extent deemed necessary or desirable by Corning in its sole discretion;
provided, however, that Corning shall remain liable for such obligations.
SECTION 3.02. Indemnification by CCL. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, CCL shall indemnify and hold harmless the Corning Indemnitees and the
Covance Indemnitees from and against any and all Indemnifiable Losses of the
Corning Indemnitees and the Covance Indemnitees, respectively, arising out of,
by reason of or otherwise in connection with (i) the CCL Liabilities or (ii) the
breach by CCL of any provision of this Agreement or any Ancillary Agreement;
provided, however, that CCL is under no obligation to indemnify or hold harmless
Corning from and against any Indemnifiable Losses arising out of, or by reason
of or otherwise in connection with any and all monetary payments by Corning in
respect of (i) the investigations or claims referred to in Section 3.01(b) or
(ii) claims referred to in Section 3.01(c) as to which no CCL Indemnitee is a
party.
SECTION 3.03. Indemnification by Covance. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, Covance shall indemnify and hold harmless the Corning Indemnitees and
the CCL Indemnitees from and against any and all Indemnifiable Losses of the
Corning Indemnities and the CCL Indemnitees, respectively, arising out of, by
reason of or otherwise in connection with (i) the Covance Liabilities or (ii)
the breach by Covance of any provision of this Agreement or any Ancillary
Agreement.
SECTION 3.04. Adjustments for Indemnification Obligations. If
the amount that any party (an "Indemnifying Party") is or may be required to pay
to any other person (an "Indemnitee") pursuant to Section 3.01, Section 3.02 or
Section 3.03, as applicable, shall, at any time subsequent to the payment
required by this Agreement, be reduced by insurance or other recovery,
settlement or otherwise, the amount of such reduction, less any expenses
incurred in connection therewith, shall promptly be repaid by the Indemnitee to
the Indemnifying Party, up to the aggregate amount of any payments received from
such Indemnifying Party pursuant to this Agreement in respect of such
Indemnifiable Loss.
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SECTION 3.05. Procedures for Indemnification - Third Party
Claims. If a claim or demand is made against an Indemnitee by any person who is
not a party to this Agreement (a "Third Party Claim") as to which such
Indemnitee is entitled to indemnification pursuant to this Agreement, such
Indemnitee shall notify the Indemnifying Party in writing, and in reasonable
detail, of the Third Party Claim promptly (and in any event within 15 business
days) after receipt by such Indemnitee of written notice of the Third Party
Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually prejudiced as a result of such
failure (except that the Indemnifying Party shall not be liable for any expenses
incurred during the period in which the Indemnitee failed to give such notice).
If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
in the case of an Indemnifying Party's obligation to indemnify the Indemnitee
pursuant to Section 3.01(a), Section 3.01(b), Section 3.02 or Section 3.03, if
the Indemnifying Party so chooses and acknowledges in writing its obligation to
indemnify the Indemnitee therefor, to assume the defense thereof with counsel
selected by the Indemnifying Party; provided, however, that such counsel is not
reasonably objected to by the Indemnitee. Should the Indemnifying Party so elect
to assume the defense of a Third Party Claim, the Indemnifying Party shall not
be liable to the Indemnitee for legal or other expenses subsequently incurred by
the Indemnitee in connection with the defense thereof. If the Indemnifying Party
assumes such defense, the Indemnitee shall have the right to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Party, it being understood that the
Indemnifying Party shall control such defense. The Indemnifying Party shall be
liable for the fees and expenses of counsel employed by the Indemnitee for any
period during which the Indemnifying Party has failed to assume the defense
thereof. If the Indemnifying Party so elects to assume the defense of any Third
Party Claim, all of the Indemnitees shall cooperate with the Indemnifying Party
in the defense or prosecution thereof.
If the Indemnifying Party acknowledges in writing liability
for a Third Party Claim, then in no event will the Indemnitee admit any
liability with respect to, or settle, compromise or discharge, any Third Party
Claim without the Indemnifying Party's prior written consent, which consent
shall not be unreasonably withheld or delayed; provided, however, that the
Indemnitee shall have the right to settle, compromise or discharge such Third
Party Claim without the consent of the Indemnifying Party if the Indemnitee
releases the Indemnifying Party from its indemnification obligation hereunder
with respect to such Third Party Claim and such settlement, compromise or
discharge would not otherwise adversely affect the Indemnifying Party. If the
Indemnifying Party acknowledges in writing liability for a Third Party Claim,
the Indemnitee will agree to any settlement, compromise or discharge of a Third
Party Claim that the Indemnifying Party may recommend which by its terms (i)
obligates the Indemnifying Party to pay the full amount of its indemnification
obligation in connection with such Third Party Claim and (ii) releases the
Indemnitee completely in
24
connection with such Third Party Claim and which would not otherwise adversely
affect the Indemnitee; and provided further that the Indemnitee may refuse to
agree to any such proposed settlement, compromise or discharge if the Indemnitee
agrees that the Indemnifying Party's indemnification obligation with respect to
such Third Party Claim shall not exceed the amount that would be required to be
paid by or on behalf of the Indemnifying Party in connection with such proposed
settlement, compromise or discharge.
Notwithstanding the foregoing, the Indemnifying Party shall
not be entitled to assume the defense of any Third Party Claim (and shall be
liable for the fees and expenses of counsel incurred by the Indemnitee in
defending such Third Party Claim) if the Third Party Claim seeks an order,
injunction or other equitable relief or relief for other than money damages
against the Indemnitee which the Indemnitee reasonably determines, after
conferring with its counsel, cannot be separated from any related claim for
money damages. If such equitable relief or other relief portion of the Third
Party Claim can be so separated from that for money damages, the Indemnifying
Party shall be entitled to assume the defense of the portion relating to money
damages.
The provisions contained in Section 3.01(d) shall control in
the situations described particularly in that section.
SECTION 3.06. Survival of Indemnities. The obligations of
Corning, CCL and Covance under this Article III shall survive the sale or other
transfer by any of them of any assets or businesses, with respect to any
Indemnifiable Loss of any Indemnitee related to such assets or businesses.
SECTION 3.07. Payments. All payments under this Agreement
shall be made without gross-up for Taxes except as provided in Section
3.01(d)(x).
ARTICLE IV
ACCESS TO INFORMATION
SECTION 4.01. Provision of Corporate Records. From and after
the Distribution Date, upon the prior written request by Corning, CCL or Covance
for specific and identified agreements, documents, books, records or files
(collectively, "Records") relating to or affecting Corning, CCL or Covance, as
applicable, Corning, CCL or Covance, as the case may be, shall arrange, as soon
as reasonably practicable following the receipt of such request, for the
provision of appropriate copies of such Records (or other originals thereof if
the party making the request has a reasonable need for such originals) then in
the possession of Corning, CCL or Covance, as the case may be, or any of their
Subsidiaries, but only to the extent such items are not already in the
possession of the requesting party; provided, however, that nothing in this
Section 4.01 shall obligate a party to retain any records except to the extent
required by
25
law or by an Ancillary Agreement or to provide Records if the party reasonably
determines that such provision of Records would prevent it from claiming that
the Records were privileged or otherwise not subject to disclosure in any
Action.
SECTION 4.02. Access to Information. (a) From and after the
Distribution Date, each of Corning, CCL and Covance shall afford to the other
and its authorized accountants, counsel and other designated representatives
reasonable access during normal business hours, subject to appropriate
restrictions for classified, privileged or confidential information, to the
personnel, properties, books and records of such party and its Subsidiaries
insofar as such access is reasonably required by the other party.
(b) For a period of five years following the Distribution
Date, each of Corning, CCL and Covance shall provide to the other, promptly
following such time at which such documents shall be filed with the Commission,
all documents that shall be filed by it and by any of its respective
Subsidiaries with the Commission pursuant to the periodic and interim reporting
requirements of the Exchange Act, and the rules and regulations of the
Commission promulgated thereunder.
SECTION 4.03. Reimbursement. Except to the extent otherwise
contemplated by any Ancillary Agreement, a party providing Records or access to
information to the other party under this Article IV shall be entitled to
receive from the recipient, upon the presentation of invoices therefor, payments
for such amounts, relating to supplies, disbursement and other out-of-pocket
expenses, as may be reasonably incurred in providing such Records or access to
information.
SECTION 4.04. Confidentiality. (a) Each of (i) Corning and its
Subsidiaries, (ii) CCL and its Subsidiaries and (iii) Covance and its
Subsidiaries shall not use or permit the use of (without the prior written
consent of the other) and shall hold, and shall cause its directors, officers,
employees, agents, consultants and advisors to hold, in strict confidence, all
information concerning the other parties in its possession, its custody or under
its control (except to the extent that (x) such information has been in the
public domain through no fault of such party, (y) such information has been
later lawfully acquired from other sources by such party or (z) this Agreement,
any Ancillary Agreement or any other agreement entered into pursuant hereto
permits the use or disclosure of such information) to the extent such
information (i) was obtained prior to or relates to periods prior to the
Effective Time, (ii) relates to any Ancillary Agreement or (iii) is obtained in
the course of performing services for the other party pursuant to any Ancillary
Agreement, and each party shall not (without the prior written consent of the
other) otherwise release or disclose such information to any other person,
except such party's auditors and attorneys, unless compelled to disclose such
information by judicial or administrative process or unless such disclosure is
required by law and such party has used commercially reasonable efforts to
consult with the other affected party or parties prior to such disclosure.
26
(b) To the extent that a party hereto is compelled by judicial
or administrative process to disclose otherwise confidential information under
circumstances in which any evidentiary privilege would be available, such party
agrees to assert such privilege in good faith prior to making such disclosure.
Each of the parties hereto agrees to consult with each relevant other party in
connection with any such judicial or administrative process, including, without
limitation, in determining whether any privilege is available, and further
agrees to allow each such relevant party and its counsel to participate in any
hearing or other proceeding (including, without limitations, any appeal of an
initial order to disclose) in respect of such disclosure and assertion of
privilege.
ARTICLE V
DISPUTE RESOLUTION
SECTION 5.01. Good Faith Negotiations. In the event of a
controversy, dispute or claim arising out of, in connection with, or in relation
to the interpretation, performance, nonperformance, validity or breach of this
Agreement or otherwise arising out of, or in any way related to this Agreement,
including, without limitation, any claim based on contract, tort or statute
(collectively, "Agreement Disputes"), the general counsels of the relevant
parties shall negotiate in good faith for a reasonable period of time to settle
such Agreement Dispute.
SECTION 5.02. Procedure. If after such reasonable period such
general counsels are unable to settle such Agreement Dispute (and in any event
after 60 days have elapsed from the time the relevant parties began such
negotiations), such Agreement Dispute shall be determined, at the request of any
relevant party, by arbitration conducted in New York City, before and in
accordance with the then-existing Rules for Commercial Arbitration of the
American Arbitration Association (the "Rules"), and any judgment or award
rendered by the arbitrator shall be final, binding and nonappealable (except
upon grounds specified in 9 U.S.C. ss. 10(a) as in effect on the date hereof),
and judgment may be entered by any state or federal court having jurisdiction
thereof in accordance with Section 6.16 hereof. Unless the arbitrator otherwise
determines, the pre-trial discovery of the then-existing Federal Rules of Civil
Procedure and the then-existing Rules 46 and 47 of the Civil Rules for the
United States District Court for the Southern District of New York shall apply
to any arbitration hereunder. Any controversy concerning whether an Agreement
Dispute is an arbitrable Agreement Dispute, whether arbitration has been waived,
whether an assignee of this Agreement is bound to arbitrate, or as to the
interpretation of enforceability of this Article V shall be determined by the
arbitrator. The arbitrator shall be a retired or former judge of any United
States District Court or Court of Appeals or such other qualified person as the
relevant parties may agree to designate, provided, however, such individual has
had substantial professional experience with regard to settling sophisticated
commercial disputes. The parties intend that the provisions to arbitrate set
forth herein be valid, enforceable and irrevocable. The designation of a situs
or a
27
governing law for this Agreement or the arbitration shall not be deemed an
election to preclude application of the Federal Arbitration Act, if it would be
applicable. In his or her award the arbitrator shall allocate, in his or her
discretion, among the parties to the arbitration all costs of the arbitration,
including, without limitation, the fees and expenses of the arbitrator and
reasonable attorneys' fees, costs and expert witness expenses of the parties.
The undersigned agree to comply with any award made in any such arbitration
proceedings that has become final in accordance with the Rules and agree to the
entry of a judgment in any jurisdiction upon any award rendered in such
proceedings becoming final under the Rules. The arbitrator shall be entitled if
appropriate, to award any remedy in such proceedings, including, without
limitation, monetary damages, specific performance and all other forms of legal
and equitable relief; provided, however, the arbitrator shall not be entitled to
award punitive damages.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01. Expenses. Except as otherwise set forth in this
Agreement or any Ancillary Agreement, each of Corning, CCL and Covance shall
bear its own costs and expenses incurred on or prior to the Distribution Date
(whether or not paid on or prior to the Distribution Date) in connection with
the preparation, execution, delivery and implementation of this Agreement and
any Ancillary Agreement, the Information Statement, the Registration Statements
and the Distributions and the consummation of the transactions contemplated
thereby and the parties to this Agreement shall agree on an equitable allocation
of costs and expenses where any item is not clearly allocable to Corning, CCL or
Covance. Except as otherwise set forth in this Agreement or any Ancillary
Agreement, each party shall bear its own costs and expenses incurred after the
Distribution Date.
SECTION 6.02. Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
given or made (and shall be deemed to have been duly given or made upon receipt)
by delivery in person, by courier service, by cable, by telecopy, by telegram,
by telex or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the addresses (or at such other address
for a party as shall be specified in a notice given in accordance with this
Section 6.02) listed below (with copies to Shearman & Sterling at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇):
28
(a) To Corning Incorporated:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
(b) To CCL:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
(c) To Covance:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
SECTION 6.03. Complete Agreement; Construction. This
Agreement, including the Exhibits and Schedules, and the Ancillary Agreements
shall constitute the entire agreement between the parties hereto with respect to
the subject matter hereof and shall supersede all prior agreements and
undertakings, both written and oral, between the parties with respect to the
subject matter hereof and thereof. In the event of any inconsistency between
this Agreement and any Schedule hereto, the Schedule shall prevail.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of any Ancillary Agreement, such Ancillary
Agreement shall control.
SECTION 6.04. Ancillary Agreements. This Agreement is not
intended to address, and should not be interpreted to address, the matters
specifically and expressly covered by the Ancillary Agreements.
SECTION 6.05. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
29
SECTION 6.06. Survival of Agreements. Except as otherwise
contemplated by this Agreement, all covenants and agreements of the parties
contained in this Agreement shall survive the Distribution Date.
SECTION 6.07. Waiver. The parties to this Agreement may (a)
extend the time for the performance of any of the obligations or other acts of
the other party or parties, (b) waive any inaccuracies in the representations
and warranties of the other party or parties contained herein or in any document
delivered by the other party or parties pursuant hereto or (c) waive compliance
with any of the agreements or conditions of the other party or parties contained
herein. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party to be bound thereby. Any waiver of any
term or condition shall not be construed as a waiver of any subsequent breach or
a subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement. The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of any such rights.
SECTION 6.08. Amendments. Subject to the terms of Section 6.11
hereof, this Agreement may not be amended or modified except (a) by an
instrument in writing signed by, or on behalf of, the parties or (b) by a waiver
in accordance with Section 6.07.
SECTION 6.09. Assignment. This Agreement may not be assigned
by operation of law or otherwise without the express written consent of the
other parties (which consent may be granted or withheld in the sole discretion
of the parties), and any attempt to assign any rights or obligations arising
under this Agreement without such consent shall be void.
SECTION 6.10. Successors and Assigns. The provisions of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and permitted assigns.
SECTION 6.11. Termination. This Agreement (including, without
limitation, Article III hereof) may be terminated and the Distributions may be
amended, modified or abandoned at any time prior to the Distributions by and in
the sole discretion of Corning without the approval of CCL or Covance or the
shareholders of Corning. In the event of such termination, no party shall have
any liability of any kind to any other party or any other person. After the
Distributions, this Agreement may not be terminated except by an agreement in
writing signed by the parties; provided, however, that Article III shall not be
terminated or amended after the Distributions in respect of the third party
beneficiaries thereto without the consent of such persons.
SECTION 6.12. Subsidiaries. Each of the parties hereto
shall cause to be performed, and hereby guarantees the performance of, all
actions, agreements and obligations
30
set forth herein to be performed by any Subsidiary of such party or by any
entity that is contemplated to be a Subsidiary of such party on and after the
Distribution Date.
SECTION 6.13. Third Party Beneficiaries. Except as provided in
Article III relating to Indemnitees, this Agreement shall be binding upon and
inure solely to the benefit of the parties hereto and their respective
Subsidiaries, Affiliates and assigns and nothing herein, express or implied, is
intended to or shall confer upon any third parties any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 6.14. Headings. The descriptive headings contained
in this Agreement are for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 6.15. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.
SECTION 6.16. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York,
applicable to contracts executed in and to be performed entirely within that
state. Without limiting the provisions of Article V, all actions and proceedings
arising out of or relating to this Agreement shall be heard and determined in
any New York state or federal court sitting in the City of New York.
SECTION 6.17. Public Announcements. (a) Prior to the Effective
Time, neither CCL nor Covance shall make, or cause to be made, any press release
or public announcement in respect of this Agreement or the transactions
contemplated hereby or otherwise communicate with any news media without the
prior written consent of Corning.
(b) Following the Effective Time, no party to this Agreement
shall make, or cause to be made, any press release or public announcement in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without prior consultation with the other
parties, and the parties shall cooperate as to the timing and contents of any
such press release or public announcement.
SECTION 6.18. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely
31
as possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized.
CORNING INCORPORATED
by________________________________
Name:
Title:
CORNING LIFE SCIENCES INC.
by_________________________________
Name:
Title:
CORNING CLINICAL LABORATORIES INC.
(Delaware)
by__________________________________
Name:
Title:
COVANCE INC.
by__________________________________
Name:
Title:
CORNING CLINICAL LABORATORIES INC.
(Michigan)
by__________________________________
Name:
Title:
32