Draft of September 30, 1996
CPS/CCL SPIN-OFF TAX INDEMNIFICATION AGREEMENT
This SPIN-OFF TAX INDEMNIFICATION AGREEMENT ("Agreement") is
made and entered into this __ day of ______, 1996, by and among CORNING
PHARMACEUTICAL SERVICES INC., a Delaware corporation ("CPS") and CORNING
CLINICAL LABORATORIES INC., a Delaware corporation ("CCL").
WITNESSETH
WHEREAS, Corning Incorporated, a New York corporation
("Corning"), is the common parent of an affiliated group of corporations within
the meaning of Code1 Section 1504 which includes CPS and CCL;
WHEREAS, Corning has determined to effect the Distributions
pursuant to a Transaction Agreement (the "Transaction Agreement") dated of even
date herewith;
WHEREAS, the IRS has issued the IRS Ruling which states the
tax treatment of the Distributions and the Other Transactions; and
WHEREAS, the parties hereto are entering into this Agreement
to indemnify CPS as hereinafter provided in the event the CPS Distribution or
the Other Transactions fail to qualify for the tax treatment stated in the IRS
Ruling due to actions by CCL.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the parties hereby agree
as follows:
ARTICLE 1: Representations and Covenants
SECTION 1.01. Representations. (a) CCL has reviewed the
materials submitted to the IRS in connection with the IRS Ruling and, to the
best of CCL's knowledge, these materials, including, without limitation, any
statements and representations concerning CCL, its business, operations capital
structure and/or organization, are complete and accurate in all material
respects. CCL shall, and shall cause each member of the CCL Group, to comply
with each such representation and statement concerning CCL and the CCL Group
made in the materials so submitted, the IRS Ruling and any subsequent IRS
ruling, including without limitation, statements as to the creation, funding and
operation of employee
--------
1 Capitalized terms not defined herein have the meaning given to them in Annex
A.
compensation plans by CCL. With respect to any representation or statement made
by or on behalf of CCL in connection with the IRS Ruling and any subsequent IRS
ruling and to the extent such representation or statement relates to future
actions or events under their control, neither CCL nor any member of the CCL
Group will take any action during the Restricted Period that would have caused
such representation or statement to be untrue if CCL had planned or intended to
take such action at the time such representation or statement was made by or on
behalf of CCL.
(b) CCL hereby represents and warrants to CPS that CCL has no
present intention to undertake any of the transactions set forth in Section 1.02
(a) (iii) or to cease to engage in the active conduct of the trade or business
(within the meaning of Section 355(b)(2) of the Code) of providing clinical
laboratory testing services.
SECTION 1.02. Covenants. (a) CCL covenants and agrees with CPS
that during the Restricted Period:
(i) CCL will continue to engage in the clinical laboratory
testing business in the U.S. and will continue to maintain in the U.S. a
substantial portion of its assets and business operations as they existed prior
to the Distributions, provided that the foregoing shall not be deemed to
prohibit CCL from entering into or acquiring other businesses or operations
which may or may not be consistent with its business and operations as they
existed prior to the Distributions so long as CCL continues to engage in such
clinical business in the U.S. and continues to so maintain such substantial
portion in the U.S.;
(ii) CCL will continue to manage and to own (A) directly
assets which represent at least fifty percent (50%) of the Gross Assets which
CCL managed and owned directly immediately after the Distributions, and (B)
directly or indirectly through one or more entities, assets which represent at
least 50% of the Gross Assets which CCL owned indirectly through one or more
entities immediately after the Distributions;
(iii) except as provided in Section 1.02(c), neither CCL, nor
any of its Affiliates nor any of their respective, directors, officers or other
representatives will undertake, authorize, approve, recommend, permit,
facilitate, or enter into any contract, or consummate any transaction with
respect to: (A) the issuance of CCL Common Stock (including options, warrants,
rights or securities exercisable for, or convertible into, CCL Common Stock) in
a single transaction or in a series of related or unrelated transactions or
otherwise or in the aggregate which would exceed (or could exceed if any such
options, warrants or rights were exercised or such securities were converted)
fifty percent (50%) when expressed as a percentage of the outstanding shares of
CCL Common Stock immediately following the Distributions; (B) the issuance of
any class or series of capital stock or any other instrument (other than CCL
Common Stock and options, warrants, rights or securities exercisable for, or
convertible into, CCL Common Stock) that would constitute equity for federal tax
purposes (such classes or series of capital stock and other instruments being
referred to herein as
2
"Disqualified CCL Stock"); (C) the issuance of any options, rights, warrants,
securities or similar arrangements exercisable for, or convertible into,
Disqualified CCL Stock; (D) any redemptions, repurchases or other acquisitions
of capital stock or other equity interests in CCL in a single transaction or a
series of related or unrelated transactions, unless such redemptions,
repurchases or other acquisitions (1) satisfy the following requirements: (a)
there is a "sufficient business purpose" (within the meaning of Section
4.05(1)(b) of Revenue Procedure 96-30) for the transaction, (b) the stock to be
purchased, redeemed or otherwise acquired is widely held, (c) the stock
purchases or other acquisitions will be made on the open market, and (d) the
amount of stock purchases, redemption, or other acquisitions in a single
transaction or in a series of related or unrelated transactions will not exceed
an amount of stock representing twenty percent (20%) of the outstanding stock of
CCL immediately following the Distributions; or (2) are made in connection with
employee equity compensation plans of CCL and do not result, individually or in
the aggregate, in the acquisition of more than ten percent (10%) of the voting
power in respect of the outstanding stock of CCL immediately following the
Distributions, (E) the dissolution, merger , or complete or partial liquidation
of CCL or any announcement of such action; or (F) the waiver, amendment,
termination or modification of any provision of the CCL Rights Plan in
connection with, or in order to permit or facilitate, any acquisition or
proposed acquisition of Beneficial Ownership of capital stock or other equity
interest in CCL.
(b) Following the six-month anniversary of the Distribution
Date, CCL and its Affiliates may take any action or engage in conduct otherwise
prohibited by Section 1.02 so long as prior to such action or conduct, as the
case may be, Corning or CCL receives (A) a ruling from the IRS in form and
substance reasonably satisfactory to Corning to the effect that the proposed
action or conduct, as the case may be, will not cause the CPS Distribution or
the Other Transactions to fail to qualify for the tax treatment stated in the
IRS Ruling or otherwise to be taxable for federal income tax purposes, or (B) an
Opinion of Counsel in form and substance reasonably satisfactory to Corning to
the effect that the proposed action or conduct, as the case may be, will not
cause the CPS Distribution or the Other Transactions to fail to qualify for the
tax treatment stated in the IRS Ruling or otherwise to be taxable for federal
income tax purposes.
ARTICLE 2: CCL Indemnity Obligations
SECTION 2.01. Tax Indemnities. (a) If CCL, or another member
of the CCL Group (collectively the "Indemnifying Party") shall take any action
prohibited by Article 1 or shall violate a representation or covenant contained
in Article 1, and the CPS Distribution or any of the Other Transactions shall
fail to qualify for the tax treatment stated in the IRS Ruling primarily as a
result of such action or violation, then the Indemnifying Party shall (jointly
or severally) indemnify and hold harmless CPS and each member of the CPS Group
(collectively the "Indemnified Party") against any and all Taxes imposed upon or
incurred by the Indemnified Party as a result of the failure, including, without
limitation, any liability of the
3
Indemnified Party arising from Taxes imposed on shareholders of CPS to the
extent any shareholder or shareholders of CPS successfully seek recourse against
the Indemnified Party on account of any such failure, or any liability for such
Taxes which the Indemnified Party may assume or otherwise provide for.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, if, during the Restricted Period, any Person or Group of Affiliated
Persons or Associated Persons acquires Beneficial Ownership of twenty percent
(20%) or more of CCL Common Stock (or any other class of outstanding CCL stock)
or commences a tender or other purchase offer for the capital stock of CCL upon
consummation of which such Person or Group of Affiliated Persons or Associated
Persons would acquire Beneficial Ownership of twenty percent (20%) or more of
the CCL Common Stock (or any other class of outstanding CCL stock) and the CPS
Distribution or any of the Other Transactions shall fail to qualify for the tax
treatment stated in the IRS Ruling primarily as a result of such acquisition or
tender or other purchase offer; then the Indemnifying Party shall indemnify and
hold harmless the Indemnified Party against any and all Taxes imposed upon or
incurred by the Indemnified Party and/or its shareholders as a result of the
failure of either Distribution or the Other Transactions to so qualify.
(c) The Indemnified Party shall be indemnified and held harmless under
Section 2.01(a) without regard to the fact that the Indemnified Party may have
received a supplemental ruling from the IRS or an Opinion of Counsel as
contemplated by Section 1.02(c). The Indemnified Party shall be indemnified and
held harmless under Section 2.01(b) without regard to whether an acquisition of
Beneficial Ownership results from a transaction which is not prohibited under
Article 1.
ARTICLE 3: Calculation of Indemnity Amounts
SECTION 3.01. Amount of Indemnified Liability. The amount
indemnified against under Article 2 ("Indemnified Liability") for a tax based on
or determined with reference to income shall be deemed to be the amount of the
tax computed by multiplying (i) the taxing jurisdiction's highest marginal tax
rate applicable to taxable income of corporations such as the Indemnified Party
on income of the character subject to tax and indemnified against under Article
2 for the taxable period in which the Distributions occur, times (ii) the gain
or income of the Indemnified Party which is subject to tax in the taxing
jurisdiction and indemnified against under Article 2. In the case of an
Indemnified Liability attributable to a payment owed to a shareholder or
shareholders of CPS, the amount of the Indemnified Liability shall be equal to
the amount so owed, including without limitation, interest, costs, additions,
expenses and penalties. All amounts payable under this Agreement shall be paid
on an after-tax basis. If an Indemnified Liability is of a type that constitutes
a deduction from income in any taxable period in determining the Indemnified
Party's liability for a tax based upon or determined with reference to income,
the amount of the Indemnified Liability shall be reduced by the reduction in the
tax liability of the Indemnified Party.
4
ARTICLE 4: Procedural Matters
SECTION 4.01. General. (a) If either the Indemnified Party or
the Indemnifying Party receives any written notice of deficiency, claim or
adjustment or any other written communication from a taxing authority that may
result in an Indemnified Liability, the party receiving such notice or
communication shall promptly give written notice thereof to the other party,
provided that any delay by the Indemnified Party in so notifying an Indemnifying
Party shall not relieve the Indemnifying Party of any liability hereunder,
except to the extent (i) such delay restricts the ability of the Indemnifying
Party to contest the resulting Indemnified Liability administratively or in the
courts in accordance with Section 4.02 and (ii) the Indemnifying Party is
materially and adversely prejudiced by such delay.
(b) The parties hereto undertake and agree that from and after
such time as they obtain knowledge that any representative of a taxing authority
has begun to investigate or inquire into either Distribution or any of the Other
Transactions (whether or not such investigation or inquiry is a formal or
informal investigation or inquiry), the party obtaining such knowledge shall (i)
notify the other party thereof, provided that any delay by the Indemnified Party
in so notifying the Indemnifying Party shall not relieve the Indemnifying Party
of any liability hereunder (except to the extent (A) such delay restricts the
ability of the Indemnifying Party to contest the resulting Indemnified Liability
administratively or in the courts in accordance with Section 4.02 and (B) the
Indemnifying Party is materially and adversely prejudiced by such delay), (ii)
consult with the other party from time to time as to the conduct of such
investigation or inquiry, (iii) provide the other party with copies of all
correspondence with such taxing authority or any representative thereof
pertaining to such investigation or inquiry, and (iv) arrange for a
representative of the other party to be present at all meetings with such taxing
authority or any representative thereof pertaining to such investigation or
inquiry.
SECTION 4.02. Contests. (a) Provided that (i) the Indemnifying
Party shall furnish the Indemnified Party with evidence reasonably satisfactory
to the Indemnified Party of its ability to pay the full amount of the
Indemnified Liability and (ii) the Indemnifying Party acknowledges in writing
that the asserted liability is an Indemnified Liability, the Indemnifying Party
shall assume and direct the defense or settlement of any hearing, arbitration,
suit or other proceeding (each a "Proceeding") commenced, filed or otherwise
initiated or convened to investigate or resolve the existence and extent of such
liability.
(b) If the Indemnified Liability is grouped with other
unrelated asserted liabilities or issues in the Proceeding, the parties shall
use their respective best efforts to cause the Indemnified Liability to be the
subject of a separate proceeding. If such severance is not possible, the
Indemnifying Party shall assume and direct and be responsible only for the
matters relating to the Indemnified Liability.
5
(c) If at any time during a Proceeding controlled by the
Indemnifying Party pursuant to Section 4.02(a) the Indemnifying Party fails to
provide evidence reasonably satisfactory to the Indemnified Party of its ability
to pay the full amount of the Indemnified Liability or the Indemnified Party
reasonably determines, after due investigation, that the Indemnifying Party
could not pay the full amount of the Indemnified Liability, then the Indemnified
Party may assume control of the Proceedings upon seven (7) days written notice.
(d) The Indemnifying Party shall pay all out-of-pocket
expenses and other costs related to the Indemnified Liability, including but not
limited to fees for attorneys, accountants, expert witnesses or other
consultants retained by the Indemnifying Party and/or the Indemnified Party,
other than fees for attorneys, accountants, expert witnesses or other
consultants retained solely by the Indemnified Party and incurred at any time
during which the Indemnifying Party is controlling and directing the Proceeding
in respect of which such fees are incurred. To the extent that any such expenses
and other costs have been or are paid by an Indemnified Party, the Indemnifying
Party shall promptly reimburse the Indemnified Party therefor.
(e) The Indemnifying Party shall not pay (unless otherwise
required by a proper notice of levy and after prompt notification to the
Indemnified Party of receipt of notice and demand for payment), settle,
compromise or conceded any portion of the Indemnified Liability without the
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld. The Indemnifying Party shall, on a timely basis, keep the
Indemnified Party informed of all developments in the Proceeding and provide the
Indemnified Party with copies of all pleadings, briefs, orders, and other
written papers.
(f) Any Proceeding which is not controlled or which is no
longer controlled by the Indemnifying Party pursuant to Section 4.02 shall be
controlled and directed exclusively by the Indemnified Party, and any related
out-of-pocket expenses and other costs incurred by the Indemnified Party,
including but not limited to, fees for attorneys, accountants, expert witnesses
or other consultants, shall be reimbursed by the Indemnifying Party. The
Indemnified Party will not be required to pursue the claim in the federal
district court, Court of Claims or any state court if as a prerequisite to such
Court's jurisdiction, the Indemnified Party is required to pay the asserted
liability unless the funds necessary to invoke such jurisdiction are provided by
the Indemnifying Party.
SECTION 4.03. Time and Manner of Payment. The Indemnifying
Party shall pay to the Indemnified Party the amount of the Indemnified Liability
and any expenses or other costs indemnified against (less any amount paid
directly by the Indemnifying Party to the taxing authority) no less than (7)
business days prior to the date payment of the Indemnified Liability is to be
made by any party to the taxing authority. Such payment shall be paid by wire
transfer of immediately available funds to an account designated by the
Indemnified Party by written notice to the Indemnifying Party prior to the due
date of such payment. If the Indemnifying Party delays making payment beyond the
due date hereunder, such party shall
6
pay interest on the amount unpaid at the IRS Penalty Rate for each day and the
actual number of days for which any amount due hereunder is unpaid.
SECTION 4.04. Refunds. In connection with this Agreement,
should an Indemnified Party receive a refund in respect of amounts paid by an
Indemnifying Party to any taxing authority on its behalf, or should any such
amounts that would otherwise be refundable to the Indemnifying Party be applied
by the taxing authority to obligations of the Indemnified Party unrelated to an
Indemnified Liability, then such Indemnified Party shall, promptly following
receipt (or notification of credit), remit such refund and any related interest
to the Indemnifying Party.
SECTION 4.05. Cooperation. The parties shall cooperate with
one another in a timely manner in any administrative or judicial proceeding
involving any matter that may result in an Indemnified Liability.
ARTICLE 5: General Provisions
SECTION 5.01. Notices. All notices, requests, claims 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 5.01)
listed below:
To CPS:
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Telecopy:
Attn: General Counsel
To CCL:
One Xxxxxxx Avenue
Teterboro, New Jersey 07608-1070210
Telecopy:
Attn: General Counsel
SECTION 5.02. Miscellaneous. This Agreement, including the
attachments, 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. 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
7
taken together shall constitute one and the same agreement. 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 5.03.
This Agreement shall be binding upon and inure solely to the benefit of the
parties hereto and their respective subsidiaries, 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 5.03. 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 5.04. 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.
Notwithstanding the previous sentence, CCL shall not assign this Agreement or
any rights, interests or obligations hereunder, or delegate performance of any
of its obligations hereunder, without the consent of CPS.
SECTION 5.05. 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 5.06. Governing Law and Severability. 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. 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 as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
8
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 PHARMACEUTICAL CORNING CLINICAL
SERVICES LABORATORIES INC.
By__________________________________ By_________________________________
Name: Name:
Title: Title:
9
Draft of August 12, 1996
ANNEX A
DEFINITIONS
"Affiliate" shall mean, when used with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with such Person.
"Affiliated Person" shall have the meaning ascribed to such term in the
Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder.
"Associated Person" shall have the meaning ascribed to such term in the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
"Beneficial Ownership" shall have the meaning ascribed to such term in the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
"CCL Common Stock" shall mean the common stock, [$0.50] par value [with attached
Preferred Stock Purchase Rights] of CCL.
"CCL Distribution" shall mean the distribution by Corning to the Corning
shareholders of the CCL Common Stock.
"CCL Group" shall mean the affiliated group of corporations as defined in
Section 1504(a) of the Code of which CCL (or any successor thereto) is the
common parent, excluding CPS and the other members of the CPS Group.
"CCL Rights Plan" shall mean the Preferred Share Purchase Rights Plan of CCL as
governed by the Rights Agreement, dated as of __________, 1996, between CCL and
____________________, as Rights Agent.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
Treasury regulations promulgated thereunder, including any comparable successor
legislation.
"Corning Group" shall mean the affiliated group of corporations as defined in
Section 1504(a) of the Code of which Corning (or any successor thereto) is the
common parent, excluding for tax periods of the Corning Group commencing
subsequent to the Distribution Date, CCL and the other members of the CCL Group
and CPS and other members of the CPS Group.
"CPS Common Stock" shall mean the common stock, [$0.50] par value [with attached
Preferred Stock Purchase Rights] of CPS.
"CPS Distribution" shall mean the distribution by CCL to the CCL shareholders of
the CPS Common Stock.
"CPS Group" shall mean the affiliated group of corporations as defined in
Section 1504(a) of the Code of which CPS (or any successor thereto) is the
common parent.
"CPS Rights Plan" shall mean the Preferred Share Purchase Rights Plan of CPS as
governed by the Rights Agreement, dated as of __________, 1996, between CPS and
____________________, as Rights Agent.
"Distributions" shall mean the each of the CCL Distribution and the CPS
Distribution, including any transfers relating to the CCL Distribution or the
CPS Distribution.
"Distribution Date" shall mean such date as has been or hereafter will be
determined by Corning's Board of Directors as the date as of which the
Distributions shall be effected.
"Gross Assets" shall mean, when used with respect to a specified Person, the
fair market value of such Person's assets unencumbered by any liabilities.
"Group" shall have the meaning ascribed to such term in the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"IRS" shall mean the U.S. Internal Revenue Service.
"IRS Penalty Rate" shall mean the rate of interest imposed from time to time on
underpayments of income tax pursuant to Code section 6621.
"IRS Ruling" shall mean the private letter ruling (together with any
supplements) issued by the IRS in respect of the Ruling Request.
"Opinion of Counsel" shall mean an opinion of independent tax counsel of
recognized national standing and experienced in the issues to be addressed and
otherwise reasonably acceptable to Corning, which sets forth an Unqualified Tax
Opinion in form and substance satisfactory to Corning. In no event shall Corning
be required to conclude that an opinion is satisfactory if there is any risk,
however remote, that the transaction which is the subject of the opinion will
cause either of the Distributions to be taxable to any extent under the Code.
"Other Transactions" shall mean the transactions related to the Distributions
and described in Parts I through IV of the Ruling Request.
2
"Person" shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"Restricted Period" shall mean the two year period following the Distribution
Date.
"Ruling Period" shall mean the period commencing on the Distribution Date and
ending on the later of (i) the third anniversary of the close of the taxable
year of Corning in which the Distributions occur, and (ii) the first anniversary
of the date on which there shall have expired all statutes of limitations in
respect of taxable periods for which Taxes might be imposed or otherwise
assessed in respect of the Distributions and the Other Transactions.
"Ruling Request" shall mean the request for rulings, as amended and
supplemented, under Section 355 of the Code, as filed on behalf of Corning on
June 17, 1996, in respect of the Distributions.
"Taxes" shall mean all federal, state, local and foreign gross or net income,
gross receipts, withholding, franchise, transfer, estimated or other taxes or
similar charges and assessments, including all interest, penalties and additions
imposed with respect to such amounts.
"Unqualified Tax Opinion" shall mean (a) an unqualified "will" opinion of tax
counsel to the effect that a transaction does not disqualify either of the
Distributions from qualifying for tax-free treatment for the shareholders of
Corning and CCL and any member of the Corning Group and the CCL Group under Code
section 355 and any other applicable sections of the Code, assuming that the
Distributions would have qualified for tax-free treatment if such transaction
did not occur. An Unqualified Tax Opinion may rely upon, and assume the accuracy
of, any representations contained in any application for a letter ruling from
the IRS, and any representations contained in an officer's certificate delivered
by an officer of Corning, CCL or CPS to such counsel.
3
