EXECUTION VERSION
Corning/Covance Spin-Off Tax Indemnification Agreement
This SPIN-OFF TAX INDEMNIFICATION AGREEMENT ("Agreement") is made and
entered into this 16th day of December, 1996, by and among CORNING INCORPORATED,
a New York corporation ("Corning") and COVANCE INC., a Delaware corporation
("Covance").
Witnesseth
WHEREAS, Corning is the common parent of an affiliated group of
corporations within the meaning of Code(1) Section 1504 which includes Covance;
WHEREAS, Corning has determined to effect the Distributions pursuant
to a Transaction Agreement and Plan of Reorganization (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 Corning as hereinafter provided in the event the Distributions or the
Other Transactions fail to qualify for the tax treatment stated in the IRS
Ruling due to actions by Covance.
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) Covance has reviewed the materials
submitted to the IRS in connection with the IRS Ruling and, to the best of
Covance's knowledge, these materials, including, without limitation, any
statements and representations concerning Covance, its business, operations
capital structure and/or organization, are complete and accurate in all material
respects. Covance shall, and shall cause each member of the Covance Group, to
comply with each such representation and statement concerning Covance and the
Covance 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
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1 Capitalized terms not defined herein have the meaning given
to them in Annex A.
operation of employee compensation plans by Covance. With respect to
any representation or statement made by or on behalf of Covance 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 Covance nor any member of the Covance Group will take any
action during the Restricted Period that would have caused such representation
or statement to be untrue if Covance had planned or intended to take such action
at the time such representation or statement was made by or on behalf of
Covance.
(b) Covance hereby represents and warrants to Corning that Covance
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
pharmaceutical services.
SECTION 1.02. Covenants. (a) Covance covenants and
agrees with Corning that during the Restricted Period:
(i) Covance will continue to engage in the pharmaceutical services
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
Covance 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 Covance continues to engage in such
pharmaceutical services business in the U.S. and continues to so maintain such
substantial portion in the U.S.;
(ii) Covance will continue to manage and to own (A) directly assets
which represent at least fifty percent (50%) of the Gross Assets which Covance
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 Covance owned indirectly through one or more entities
immediately after the Distributions;
(iii) except as provided in Section 1.02(c), neither Covance, 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 Covance Common Stock (including options,
warrants, rights or securities exercisable for, or convertible into, Covance
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 Covance Common Stock immediately following the
Distributions; (B) the issuance of any class or series of capital stock or any
other instrument (other than Covance Common Stock and options, warrants, rights
or securities exercisable for, or convertible into, Covance Common Stock) that
would constitute equity for federal tax purposes (such classes or series of
capital stock and other instruments being
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referred to herein as "Disqualified Covance Stock"); (C) the issuance of any
options, rights, warrants, securities or similar arrangements exercisable for,
or convertible into, Disqualified Covance Stock; (D) any redemptions,
repurchases or other acquisitions of capital stock or other equity interests in
Covance 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 Covance immediately following the
Distributions; or (2) are made in connection with employee equity compensation
plans of Covance 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 Covance immediately following the Distributions, (E) the
dissolution, merger , or complete or partial liquidation of Covance or any
announcement of such action; or (F) the waiver, amendment, termination or
modification of any provision of the Covance 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 Covance.
(b) In addition to the other representations, warranties, covenants
and agreements set forth in this Agreement, Covance and the Covance Group will
take, or refrain from taking, as the case may be, such actions as Corning may
reasonably request during the Ruling Period as necessary to insure that the
Distributions and the Other Transactions qualify for the tax treatment stated in
the IRS Ruling, including, without limitation, such actions as Corning
determines may be necessary to obtain and preserve the IRS Ruling or any
subsequent IRS ruling on which the parties can rely. Without limiting the
generality of the foregoing, Covance and the Covance Group shall cooperate with
Corning if Corning determines to obtain additional IRS rulings pertaining to
whether any actual or proposed change in facts and circumstances affects the tax
status of the Distributions or the Other Transactions.
(c) Following the six-month anniversary of the Distribution Date,
Covance 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 Covance receives (A) a ruling from the IRS in form and
substance reasonably satisfactory to Corning and upon which Corning can rely to
the effect that the proposed action or conduct, as the case may be, will not
cause the Distributions 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 and upon which Corning can rely to the effect that the
proposed action or conduct, as the case may be, will not cause the Distributions
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.
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ARTICLE 2: Covance Indemnity Obligations
SECTION 2.01. Tax Indemnities. (a) If Covance, or another member of
the Covance 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 either of the Distributions 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 Corning and each member of
the Corning 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 Indemnified Party
arising from Taxes imposed on shareholders of Corning to the extent any
shareholder or shareholders of Corning 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 Covance Common Stock (or any other class of outstanding Covance
stock) or commences a tender or other purchase offer for the capital stock of
Covance 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 Covance Common Stock (or any other class of outstanding Covance
stock) and either of the Distributions 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.
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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 Corning, 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.
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
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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.
(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.
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(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 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:
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To Corning:
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Telecopy:
Attn: General Counsel
To Covance:
Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
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 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, Covance 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 Corning.
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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.
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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 COVANCE INC.
By__________________________________ By_________________________________
Name: Name:
Title: Title:
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EXECUTION VERSION
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 Covance and the other members of the Covance Group.
"CCL Rights Plan" shall mean the Preferred Share Purchase Rights Plan of CCL as
governed by the Rights Agreement, dated as of December 30, 1996, between CCL and
Xxxxxx Trust and Savings Bank, 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 Covance and other members of the Covance Group.
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"Covance Common Stock" shall mean the common stock, $0.01 par value with
attached Preferred Stock Purchase Rights of Covance.
"Covance Distribution" shall mean the distribution by CCL to the CCL
shareholders of the Covance Common Stock.
"Covance Group" shall mean the affiliated group of corporations as defined in
Section 1504(a) of the Code of which Covance (or any successor thereto) is the
common parent.
"Covance Rights Plan" shall mean the Preferred Share Purchase Rights Plan of
Covance as governed by the Rights Agreement, dated as of December 31, 1996,
between Covance and Xxxxxx Trust and Savings Bank, as Rights Agent.
"Distributions" shall mean the each of the CCL Distribution and the Covance
Distribution, including any transfers relating to the CCL Distribution or the
Covance 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.
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"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 Covance to such counsel.
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