Draft of December 10, 1996
CORNING CLINICAL LABORATORIES INC.
[___]% Senior Subordinated Notes due 2006
Underwriting Agreement
December __, 1996
J.P. Morgan Securities Inc.,
Goldman, Sachs & Co.,
Lazard Freres & Co. LLC,
c/o J.P. Morgan Securities Inc.,
60 Wall Street,
New York, New York 10260.
Ladies and Gentlemen:
Corning Clinical Laboratories, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named above (the "Underwriters") an aggregate
of $150,000,000 principal amount of the Senior Subordinated Notes specified
above (the "Notes"). The Notes are to have the benefit of the full and
unconditional, joint and several, Guarantees of the Guarantors (each as defined
below). The Notes together with the Guarantees are hereinafter collectively
referred to as the "Securities."
1. (a) The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-15867) (the
"Initial Registration Statement") in respect of the Securities has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore
delivered to you, have been declared effective by the Commission in
such form; other than a registration statement, if any, increasing
the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement, or filed
with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto but excluding Form T-1 and
including the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the
time it was declared effective or such part of the Rule 462(b)
Registration Statement, if any, at the time it became or hereinafter
becomes effective, each as amended at the time such part of the
registration statement became or hereinafter becomes effective, are
hereinafter collectively called the "Registration Statement"; and
such form of final prospectus, in the form first filed pursuant to
Rule 424(b) under the Act, is hereinafter called the "Prospectus");
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and the forward looking statements made therein
were made by the Company with a reasonable basis and in good faith;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through J.P. Morgan Securities Inc. expressly for use
therein;
(iii) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and do not and will not, as
of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an
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untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and the forward looking statements made
therein were made by the Company with a reasonable basis and in good
faith; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through J.P. Morgan Securities Inc. expressly for use
therein;
(iv) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in
the Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated
in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or
increase in long-term debt of the Company or any of its subsidiaries
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus;
(v) The Company and its subsidiaries own all real property and
personal property material to their businesses described in the
Prospectus as owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are reflected in the
financial statements included in the Prospectus or such as do not
materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings
held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions
as are not material to the Company and its subsidiaries, taken as a
whole;
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus,
and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of
each other jurisdiction in which it
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owns or leases properties or conducts any business so as to require
such qualification, except to the extent that the failure so to
qualify or be in good standing would not have a material adverse
effect on the financial condition, results of operations, cash flows
or stockholders' equity of the Company and its subsidiaries, taken as
a whole (a "Material Adverse Effect"); each Guarantor has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
power and authority (corporate and other) to enter into its Guarantee
and own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except to
the extent that the failure so to qualify or be in good standing
would not, individually or in the aggregate, have a material adverse
effect on the financial condition, results of operations, cash flows
or stockholders' equity of such Guarantor and its subsidiaries, taken
as a whole (a "Guarantor Material Adverse Effect"); and each other
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation except to the extent that the failure
so to be in good standing would not, individually or in the
aggregate, have a Material Adverse Effect;
(vii) After giving effect to the Distributions (as defined in the
Prospectus), the Company will have the authorized capitalization as
set forth in the Prospectus, and all of the issued shares of capital
stock of the Company will have been duly and validly authorized and
issued and will be fully paid and non-assessable; all of the issued
shares of capital stock of each subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable and (except for directors' qualifying shares and
except as otherwise set forth in the Prospectus) are owned directly
or indirectly by the Company or its subsidiaries, free and clear of
all liens, encumbrances, equities or claims;
(viii) The Notes have been duly authorized and, when executed,
issued and delivered pursuant to this Agreement and when duly
authenticated by the Trustee, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
binding obligations of the Company, enforceable in accordance with
their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement
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thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at
law) and entitled to the benefits provided by the Indenture dated as
of December __, 1996 (the "Indenture") among the Company, each of the
Guarantors and The Bank of New York , as Trustee (the "Trustee"),
under which they are to be issued, which is substantially in the form
filed as an exhibit to the Registration Statement; the Indenture has
been duly authorized and duly qualified under the Trust Indenture Act
and when executed and delivered by the Company, the Guarantors and
the Trustee, will constitute a valid and binding instrument of the
parties thereto, enforceable in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law); and
the Notes and the Indenture will conform to the descriptions thereof
in the Prospectus;
(ix) Each Guarantor (as defined in the Indenture) has duly
authorized its Guarantee (as defined in the Indenture) of the Notes;
upon issuance of the Notes each Guarantee will be duly executed,
issued and delivered, will constitute a valid and binding obligation
of the related Guarantor, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at
law); the Notes are entitled to the benefits of the full and
unconditional, joint and several, Guarantees as provided in the
Indenture; and the Guarantees will conform to the description thereof
in the Prospectus;
(x) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture,
the Intercompany Agreements (as defined in the Indenture) and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, sale/leaseback
agreement, loan agreement or other similar financing agreement or
instrument or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets
of the Company or any of its
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subsidiaries is subject, except such breaches or violations as would
not, individually or in the aggregate, have a Material Adverse
Effect, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement, the Intercompany Agreements or the Indenture, except (A)
such consents, approvals, authorizations, orders, registrations or
qualifications the failure so to obtain would not, individually or in
the aggregate, have a Material Adverse Effect or as have been
obtained under the Act or the Trust Indenture Act, and as may be
required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Securities by the Underwriters
and (B) notice filings in connection with (1) changing the name of
the Company and certain subsidiaries and (2) substituting the
ultimate parent entity with respect to substantially all licenses and
accreditations, in each case in connection with the Distributions;
(xi) The issuance by each Guarantor of its related Guarantee and
the compliance by such Guarantor with all of the provisions of its
Guarantee and the Indenture and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement or other similar financing
agreement or instrument or other agreement or instrument to which
such Guarantor or any of its subsidiaries is a party or by which such
Guarantor or any of its subsidiaries is bound or to which any of the
property or assets of such Guarantor or any of its subsidiaries is
subject, except such breaches or violations as would not,
individually or in the aggregate, have a Guarantor Material Adverse
Effect, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of such
Guarantor or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over such
Guarantor or any of its subsidiaries or any of their properties; and
no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or
body is required for the issuance of such Guarantor's Guarantee or
the consummation by such Guarantor of the transactions contemplated
by its Guarantee or the
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Indenture, except (A) such consents, approvals, authorizations,
orders, registrations or qualifications the failure so to obtain
would not, individually or in the aggregate, have a Guarantor
Material Adverse Effect or as have been obtained under the Act or the
Trust Indenture Act, and as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters and (B) notice filings in connection
with (1) changing the name of the Company and certain subsidiaries
and (2) substituting the ultimate parent entity with respect to
substantially all licenses and accreditation, in each case in
connection with the Distributions;
(xii) None of the Company, the Guarantors or any other subsidiary
of the Company is in violation of its Certificate of Incorporation or
Bylaws or in default in the performance or observance of any
obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound except such defaults which would not,
individually or in the aggregate, have a Material Adverse Effect;
(xiii) Other than as set forth in the Prospectus, there are no
legal, governmental or, to the best of the Company's knowledge, qui
tam proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, would, individually or in
the aggregate, have a Material Adverse Effect; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(xiv) The Company is not and, after giving effect to the offering
and sale of the Securities, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xv) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located
in Cuba within the meaning of Section 517.075 of the Florida
Statutes;
(xvi) Price Waterhouse LLP, Deloitte & Touche LLP, Ernst & Young
LLP and Leverone & Company, who have certified certain financial
statements of the Company and its subsidiaries, are each independent
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public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(xvii) The Company and its subsidiaries hold all licenses,
permits, certificates and approvals that are required by, and have
satisfied all eligibility and other similar requirements that are
imposed by, hospital, health or similar regulatory bodies,
administrative agencies or other governmental bodies, agencies or
officials, or that are related to private or governmental programs
for the reimbursement or payment of health care costs, in each case
as required for the conduct of the respective businesses in which
they are engaged (i) as contemplated by the Prospectus and (ii) in
each jurisdiction or place where the conduct of their respective
businesses requires such licenses, permits, certificates or
approvals, or satisfaction of such requirements, except in each case
where the failure to hold any such license, permit, certificate or
approval, or to satisfy any such requirement, would not, individually
or in the aggregate, have a Material Adverse Effect; and
(xviii) All of the laboratories of the Company and its
subsidiaries eligible for accreditation by the College of American
Pathologists are so accredited; and all of the laboratories of the
Company are in compliance, in all material respects, with the
standards required by the Clinical Laboratory Improvement Amendments
of 1988 ("CLIA");
(b) Corning Incorporated, a New York corporation ("Corning"),
represents and warrants to, and agrees with, each of the Underwriters
that:
(i) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and do not and will not, as
of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and the forward looking statements made
therein were made by the Company with a reasonable basis and in good
faith; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through J.P. Morgan Securities Inc. expressly for use
therein;
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(ii) The consummation of the Distributions, the issue and sale of
the Securities by the Company and the compliance by Corning with all
of the provisions of the Intercompany Agreements and this Agreement
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, sale/leaseback
agreement, loan agreement or other similar financing agreement or
instrument or other agreement or instrument to which Corning or any
of its subsidiaries is a party or by which Corning or any of its
subsidiaries is bound or to which any of the property or assets of
Corning or any of its subsidiaries is subject, except such breaches
or violations as would not, individually or in the aggregate, have a
material adverse effect on the financial position, results of
operations, cash flows or stockholders' equity of Corning and its
subsidiaries, taken as a whole (a "Corning Material Adverse Effect"),
nor will such action result in any violation of the provisions of the
Certificate of Incorporation, as amended, or By-laws of Corning or
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over Corning or any
of its subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for
the consummation of the Distributions, the issue and sale of the
Securities by the Company or the consummation by Corning of the
transactions contemplated by the Intercompany Agreements or this
Agreement, except such consents, approvals, authorizations, orders,
registrations or qualifications the failure so to obtain would not,
individually or in the aggregate, have a Corning Material Adverse
Effect, or as have been obtained, and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters; and
Corning has taken all action (corporate and other) to authorize and
approve the Distributions;
(iii) Each of the Intercompany Agreements has been duly authorized
and, at the Time of Delivery, will be duly executed and delivered by
the parties thereto and will constitute a valid and binding agreement
of each of the parties thereto, enforceable against each of such
parties in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
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principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law);
(c) The Company and Corning, jointly and severally, represent and
warrant to, and agree with, each of the Underwriters that the
representations and other information set forth in the materials submitted
by Corning and the Company to the Internal Revenue Service ("IRS") in
connection with their request for a private letter ruling from the IRS
(the "IRS Ruling") were as of the date submitted, and remain as of the
date of this Agreement and will remain as of the Time of Delivery,
complete and accurate in all material respects; and as of the date of this
Agreement and as of the Time of Delivery, the IRS has neither revoked nor
threatened the revocation of the IRS Ruling and, to the best of Corning's
and the Company's knowledge, there exist no other reasons Corning or the
Company is or is likely to become unable to rely upon the IRS ruling.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of ....% of the principal amount thereof, plus accrued interest, if any,
from December __, 1996 to the Time of Delivery hereunder, the principal amount
of Securities set forth opposite the name of such Underwriter in Schedule I
hereto.
3. Upon the authorization by J.P. Morgan Securities Inc. of the release
of the Securities, the several Underwriters propose to offer the Securities for
sale upon the terms and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in
such names as J.P. Morgan Securities Inc. may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or
on behalf of the Company to J.P. Morgan Securities Inc., for the account
of each Underwriter, against payment by or on behalf of such Underwriter
of the purchase price therefor by wire transfer of immediately available
funds. The Company will cause the certificates representing the Securities
to be made available for checking and packaging at least twenty-four hours
prior to the Time of Delivery (as defined below) at the office of J.P.
Morgan Securities Inc., 60 Wall Street, New York, New York 10260 (the
"Designated Office"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on December __, 1996 or such other time
and date as J.P. Morgan Securities Inc., Corning and the Company may agree
upon in writing. Such time and date are herein called the "Time of
Delivery".
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(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross- receipt for the Securities and any additional documents requested
by the Underwriters pursuant to Section 7(p) hereof, will be delivered at
the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York
(the "Closing Location"), and the Securities will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at
the Closing Location at 2:00 p.m., New York City time, on the New York
Business Day next preceding the Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. (a) The Company and Corning, jointly and severally, agree with each
of the Underwriters:
(i) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement, Prospectus or, prior to the Distributions,
the Company's Registration Statement on Form 10, dated November 26,
1996 (the "Company's Form 10"), which shall be disapproved by the
Underwriters promptly after reasonable notice thereof; to advise the
Underwriters promptly after either of them receives notice thereof,
of the time when the Registration Statement, or any amendment
thereto, has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish
the Underwriters with copies thereof; to advise the Underwriters,
promptly after either of them receives notice thereof, of the
issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
Prospectus or the Company's Form 10 or the Registration Statement on
Form 10, dated November 22, 1996, of Covance Inc. (together with the
Company's Form 10, the "Form 10s") of the suspension of the
qualification of the Securities, the Company's common stock with
attached preferred stock purchase rights (the "Company Common Stock")
and Covance's common stock with attached preferred stock purchase
rights (the "Covance Common Stock") for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
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any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus
or Form 10s or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or Prospectus or Form 10s or
suspending any such qualification, to promptly use its best efforts
to obtain the withdrawal of such order;
(ii) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Underwriters may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Securities, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any
jurisdiction;
(iii) Prior to 5:00 p.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with copies of the Prospectus in
New York City in such quantities as the Underwriters may reasonably
request, and, if the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Securities
and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the
Prospectus in order to comply with the Act or the Trust Indenture
Act, to notify the Underwriters and upon the request of any
Underwriter to prepare and furnish without charge to such Underwriter
and to any dealer in securities as many copies as such Underwriter
may reasonably request of an amended Prospectus or a supplement to
the Prospectus which will correct such statement or omission or
effect such compliance; and in case any Underwriter is required to
deliver a prospectus in connection with sales of any of the
Securities at any time nine months or more after the time of issue of
the Prospectus, upon request of such Underwriter but at the expense
of such Underwriter, to prepare and deliver to such Underwriter as
many
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copies as such Underwriter may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(iv) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time,
on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for
the payment of such fee pursuant to Rule 111(b) under the Act;
(v) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(vi) Until the earlier of (A) the termination of the Escrow
Agreement in accordance with its terms and (B) the occurrence of the
Distributions, to take no action, directly or indirectly, to amend or
alter, in any material respect, or terminate any Intercompany
Agreement without the prior consent of the Underwriters, which
consent shall not be unreasonably withheld; provided, however, that
Corning and the Company may amend the Transaction Agreement (as
defined in the Indenture) to change or abandon the Distribution Date
(as defined therein) to such date as may be determined by Corning's
Board of Directors; and
(vii) In the event the Distributions occur, to cause the Company
to have the capitalization contemplated by the Prospectus as of the
date of the Distributions.
(b) The Company agrees with each of the Underwriters:
(i) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(ii) During the period beginning from the date hereof and
continuing to and including the later of the Time of Delivery and
such earlier time as you may notify the Company, not to offer, sell,
contract
-13-
to sell or otherwise dispose of, except as provided hereunder, debt
securities of the Company with a maturity of more than one year;
(iii) During a period of five years from the effective date of the
Registration Statement, to furnish to the Underwriters copies of all
written reports or other communications (financial or other)
furnished to stockholders, and to deliver to the Underwriters
(without duplication) as soon as they are available, (A) copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which the
Securities or any class of securities of the Company is listed and
(B) the documents specified in Section 1018 of the Indenture as in
effect at the Time of Delivery; and
(iv) To file with the Commission such reports on Form SR as may be
required by Rule 463 under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, the Indenture, the Blue Sky and Legal
Investment Memoranda, closing documents (including any compilations thereof) and
any other documents in connection with the offering, purchase, sale and delivery
of the Securities; (iii) all expenses in connection with the qualification of
the Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities; (v) the filing fees incident to, and
fees and disbursements of counsel for the Underwriters in connection with, any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Securities; (vi) the cost of preparing the Securities;
(vii) the fees and expenses of the Trustee and any agent of the Trustee and the
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities; and all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
-14-
7. The obligations of the Underwriters hereunder shall be subject, in the
sole discretion of the Underwriters, to the condition that all representations
and warranties and other statements of the Company and Corning herein are, at
and as of the Time of Delivery, true and correct, the condition that the Company
and Corning shall have performed all of their obligations hereunder theretofore
to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with
Section 5 (a) hereof; if the Company has elected to rely upon Rule 462(b),
the Rule 462(b) Registration Statement shall have become effective by
10:00 p.m., Washington, D.C. time, on the date of this Agreement; no stop
order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall
have been complied with to the reasonable satisfaction of the
Underwriters;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to the Underwriters such opinion or opinions, dated the Time of
Delivery, with respect to the incorporation of the Company, the validity
of the Indenture, the Securities, the Registration Statement, the
Prospectus, and such other related matters as the Underwriters may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
(c) Shearman & Sterling, counsel for the Company, shall have
furnished to the Underwriters their written opinion, dated the Time of
Delivery, in form and substance satisfactory to the Underwriters, to the
effect that:
(i) The Notes have been duly authorized, executed, authenticated,
issued and delivered and constitute valid and binding obligations of
the Company, enforceable in accordance with their terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency
(including all laws relating to fraudulent transfer), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law), and entitled to the benefits
provided by the Indenture;
-15-
(ii) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution
and delivery by the Trustee and due authorization by each Guarantor,
constitutes a valid and binding agreement of the Company and each
Guarantor, enforceable against the Company and each Guarantor in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency (including all laws relating to
fraudulent transfer), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law); duly qualified under the Trust Indenture Act;
(iii) Assuming due incorporation of each of the Guarantors and due
authorization, execution and delivery by each Guarantor, the
Guarantees of each Guarantor constitute valid and binding obligations
of each such Guarantor, enforceable in accordance with their terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency (including all laws relating to fraudulent transfer),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law);
(iv) The statements set forth in the Prospectus under the caption
"Description of the Notes", insofar as they purport to constitute a
summary of the terms of the Securities, and under the captions
"Description of the Credit Facility" and "Underwriting", insofar as
they purport to describe the provisions of the laws and documents
referred to therein, fairly present in all material respects the
information called for with respect to such matters and documents and
fairly summarize the matters and documents referred to therein;
(v) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to the
Time of Delivery (in each case, other than the financial statements
and related schedules and other financial and statistical data
included therein or omitted therefrom and the Statement of
Eligibility of the Trustee on Form T-1, as to which such counsel need
express no opinion) comply as to form in all material respects with
the requirements of the Act and the Trust Indenture Act and the rules
and regulations thereunder. Such counsel shall also state that such
counsel has not verified, and is not passing upon and does not assume
any responsibility for, the accuracy,
-16-
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except those set forth in
subparagraph (iv) above. Such counsel shall state that it has,
however, generally reviewed and discussed such statements with
certain officers of the Company, its counsel and its auditors, and
with your representatives. Such counsel shall state that in the
course of this review and discussion, no facts have come to such
counsel's attention that lead such counsel to believe that (i) the
Registration Statement or any amendment thereto (except for the
financial statements and other financial or statistical data included
therein or omitted therefrom, as to which such counsel need not
comment), at the time the Registration Statement or any such
amendment became effective, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or (ii) the Prospectus or any amendment or supplement
thereto (except for the financial statements and related schedules
and other financial and statistical data included therein or omitted
therefrom, as to which such counsel need not comment), as of its date
or the Time of Delivery, contained or contains any untrue statement
of a material fact or omitted or omits to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(d) Raymond C. Marier, Vice President and General Counsel of the
Company, shall have furnished to the Underwriters his written opinion,
dated the Time of Delivery, in form and substance satisfactory to the
Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, except
to the extent that the failure so to qualify or be in good standing
would not, individually or in the aggregate, have a Material Adverse
Effect (such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company,
provided that such counsel shall
-17-
state that such counsel believes that both the Underwriters and such
counsel are justified in relying upon such opinions and
certificates);
(iii) After giving effect to the Distributions, the Company will
have the authorized capitalization as set forth in the Prospectus,
and all of the issued shares of capital stock of the Company will
have been duly and validly authorized and issued and will be fully
paid and non-assessable;
(iv) Each Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued shares of
capital stock of each such Guarantor have been duly and validly
authorized and issued, are fully paid and non-assessable, and (except
for directors' qualifying shares and except as otherwise set forth in
the Prospectus) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims;
(v) Each Guarantor has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, except to the extent that the failure so to qualify or
be in good standing would not, individually or in the aggregate, have
a Guarantor Material Adverse Effect; and each Guarantor has duly
authorized, executed and delivered its Guarantee and the Indenture
(such counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Guarantors, provided
that such counsel shall state that such counsel believes that both
the Underwriters and such counsel are justified in relying upon such
opinions and certificates);
(vi) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal, governmental or qui tam
proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would, individually or in the
aggregate, have a Material Adverse Effect; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company;
-18-
(viii) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the
Indenture, the Intercompany Agreements and this Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, sale/leaseback agreement, loan agreement or
other similar financing agreement or any other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, except such
breaches or violations as would not, individually or in the
aggregate, have a Material Adverse Effect, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement, the Intercompany Agreements or the Indenture, except (A)
such consents, approvals, authorizations, orders, registrations or
qualifications the failure so to obtain would not, individually or in
the aggregate, have a Material Adverse Effect or as have been
obtained under the Act or the Trust Indenture Act and as may be
required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Securities, by the Underwriters
and (B) notice filings in connection with (1) changing the name of
the Company and certain subsidiaries and (2) substituting the
ultimate parent entity with respect to substantially all licenses and
accreditation, in each case in connection with the Distributions;
(x) To the best of such counsel's knowledge, the issuance of the
Guarantees and the compliance by each of the Guarantors with all of
the provisions of the Guarantees and the Indenture and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, sale/leaseback agreement, loan agreement or
other similar financing agreement or any other agreement or
instrument known to such counsel to which any Guarantor or any of its
subsidiaries is a party or by which
-19-
any Guarantor or any of its subsidiaries is bound or to which any of
the property or assets of any Guarantor or any of its subsidiaries is
subject, except such breaches of violations as would not,
individually or in the aggregate, have a Guarantor Material Adverse
Effect, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of any
Guarantor or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over any
Guarantor or any of its subsidiaries or any of their properties;
(xi) To the best of such counsel's knowledge, no consent,
approval, authorization, order, registration or qualification of or
with such court or governmental agency or body is required by any
Guarantor for the issuance of the Guarantees or the consummation by
such Guarantor of the transactions contemplated by this Agreement or
the Indenture, except (A) such consents, approvals, authorizations,
orders, registrations or qualifications the failure so to obtain
would not, individually or in the aggregate, have a Guarantor
Material Adverse Effect or as have been obtained under the Act or the
Trust Indenture Act and as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters and (B) notice filings in connection
with (1) changing the name of the Company and certain subsidiaries
and (2) substituting the ultimate parent entity with respect to
substantially all licenses and accreditation, in each case in
connection with the Distributions;
(xii) The statements set forth in the Prospectus under the
captions "Risk Factors -- Government Regulation" and "-- Government
Investigations and Related Claims", and "Business -- Regulation and
Reimbursement" and "-- Government Investigations and Related Claims",
insofar as they purport to describe the provisions of the laws and
documents referred to therein, fairly present in all material
respects the information called for with respect to such matters,
documents and laws and fairly summarize the matters, documents and
laws referred to therein;
(xiii) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in
the Investment Company Act;
(xiv) To the best of such counsel's knowledge, other than as
disclosed in the Prospectus, there are no current, pending or
threatened administrative or legal proceedings which are reasonably
likely to affect
-20-
(i) any of the Company's laboratory's accreditation with CAP, (ii)
the Company's qualification to perform services for, and receive
reimbursement from, Medicaid or Medicare or (iii) the Company's
ability to conduct the clinical testing business in any state,
except, in each case, for any such proceedings that, individually or
in the aggregate, would not have a Material Adverse Effect;
(xv) Each of the Intercompany Agreements to which the Company is a
party has been duly authorized, executed and delivered by the Company
and constitutes a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency
(including all laws relating to fraudulent transfer), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law);
(xvi) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior
to the Time of Delivery (in each case other than the financial
statements and related schedules and other financial and statistical
data included therein or omitted therefrom and the Statement of
Eligibility of the Trustee on Form T-1, as to which such counsel need
express no opinion) comply as to form in all material respects with
the requirements of the Act and the Trust Indenture Act and the rules
and regulations thereunder. Such counsel shall also state that such
counsel has not verified, and is not passing upon and does not assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
except those set forth in subparagraph (xii) above. Such counsel
shall state that it has, however, generally reviewed and discussed
such statements with certain officers of the Company, its counsel and
its auditors, and with your representatives. Such counsel shall state
that in the course of this review and discussion, no facts have come
to such counsel's attention that lead such counsel to believe that
(i) the Registration Statement or any amendment thereto (except for
the financial statements and other financial or statistical data
included therein or omitted therefrom, as to which such counsel need
not comment), at the time the Registration Statement or any such
amendment became effective, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or (ii) the Prospectus or any amendment or supplement
thereto (except for
-21-
the financial statements and related schedules and other financial
and statistical data included therein or omitted therefrom, as to
which such counsel need not comment), as of its date or the Time of
Delivery, contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such
counsel shall also state that such counsel does not know of any
amendment to the Registration Statement required to be filed or of
any contracts or other documents of a character required to be filed
as an exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus which are
not filed or described as required;
(e) William C. Ughetta, Senior Vice President and General Counsel of
Corning, shall have furnished to the Underwriters his written opinion,
dated the Time of Delivery, in form and substance satisfactory to the
Underwriters, to the effect that:
(i) Corning has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of New
York;
(ii) Each of the Intercompany Agreements to which Corning is a
party has been duly authorized, executed and delivered by Corning and
constitutes a valid and binding agreement of Corning, enforceable in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency (including all laws relating to
fraudulent transfer), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law);
(iii) The consummation of the Distributions, the issue and sale of
the Securities by the Company and the compliance by Corning with all
of the provisions of the Intercompany Agreements and this Agreement
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, sale/leaseback
agreement, loan agreement or other similar financing agreement or
instrument or other agreement or instrument to which Corning or any
of its subsidiaries is a party or by which Corning or any of its
subsidiaries is bound or to which any of the property or assets of
Corning or any of its subsidiaries is subject, except such breaches
or violations as would not, individually or
-22-
in the aggregate, have a Corning Material Adverse Effect, nor will
such action result in any violation of the provisions of the
Certificate of Incorporation, as amended, or By-laws of Corning or
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over Corning or any
of its subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for
the consummation of the Distributions, the issue and sale of the
Securities by the Company or the consummation by Corning of the
transactions contemplated by the Intercompany Agreements or this
Agreement, except such consents, approvals, authorizations, orders,
registrations or qualifications the failure so to obtain would not,
individually or in the aggregate, have a Corning Material Adverse
Effect or as have been obtained, and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters; and
Corning has taken all action (corporate and other) to authorize and
approve the Distributions;
(f) Jeffrey S. Hurwitz, Corporate Senior Vice President, General
Counsel and Secretary of Covance, shall have furnished to the Underwriters
his written opinion, dated the Time of Delivery, in form and substance
satisfactory to the Underwriters, to the effect that:
(i) Covance has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Delaware; and
(ii) Each of the Intercompany Agreements to which Covance is a
party has been duly authorized, executed and delivered by Covance and
constitutes a valid and binding agreement of Covance, enforceable in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency (including all laws relating to
fraudulent transfer), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law);
(g) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at the Time of Delivery,
Price Waterhouse LLP, shall have furnished to you, a letter or letters,
dated the respective dates of
-23-
delivery thereof, in form and substance satisfactory to the Underwriters
(the executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto);
(h) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus, (ii) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the
capital stock or increase in long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, or (iii) there shall not have been any adverse development in
the litigation described under "Business -- Government Investigations and
Related Claims", the effect of which, in any such case described in Clause
(i), (ii) or (iii), is in your judgment so material and adverse as to make
it impracticable to proceed with the public offering or the delivery of
the Securities on the terms and in the manner contemplated in the
Prospectus;
(i) The Securities shall have been rated at least B+ and B2 by
Standard & Poor's Rating Group and Moody's Investor Services, Inc.,
respectively, and on or after the date hereof (i) no downgrading shall
have occurred in such ratings and (ii) such ratings shall not have been
put under surveillance or review, with possible negative implications;
(j) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the NYSE or on NASDAQ; (ii) a suspension or
material limitation in trading in the Company's or Corning's securities on
the NYSE; (iii) a general moratorium on commercial banking activities in
New York declared by either Federal or New York State authorities; or (iv)
the outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war, if
the effect of any such event specified in this Clause (iv) in your
judgment makes it impracticable to proceed with the public offering or the
delivery of the Securities on the terms and in the manner contemplated in
the Prospectus; or (v) the occurrence of any material adverse change in
the existing financial, political or economic conditions in the United
States or elsewhere which, in your judgment, would materially and
adversely
-24-
affect the financial markets or the market for the Securities and other
debt securities;
(k) The Company has entered into the Credit Facility (as defined in
the Prospectus) in substantially the form contemplated by the Prospectus;
the Company has borrowed $350 million under the Credit Facility and has up
to $100 million available under the working capital portion of the Credit
Facility, substantially all of which will be available for borrowing at
the Time of Delivery; and there shall be no default or event of default
under the Credit Facility or the existence of any event which with notice
or lapse of time, or both, would constitute a default or an event of
default under the Credit Facility;
(l) The IRS Ruling shall be in full force and effect;
(m) The "no-action" letter from the Commission to Corning with
respect to the absence of a need to register the Company Common Stock and
Covance Common Stock issued in the Distributions shall be in full force
and effect;
(n) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement;
(o) The Escrow Agreement, in a form reasonably satisfactory to you,
shall have been duly executed and delivered by each of the parties
thereto, and all of the Intercompany Agreements (other than the Escrow
Agreement) shall have been duly and irrevocably placed in escrow with the
Escrow Agent pursuant to, and in accordance with, the Escrow Agreement;
(p) All of the conditions to the consummation of the Distributions
set forth in the Transaction Agreement, dated as of November 22, 1996,
among the Company, Corning, Corning Life Sciences Inc., Corning Clinical
Laboratories Inc. (MI) and Covance, shall have been satisfied or waived,
other than the sale of the Securities and the application of the proceeds
therefrom and the events contemplated by Section 5(a)(vii); and
(q) The Company and Corning shall have furnished or caused to be
furnished at the Time of Delivery certificates of officers of the Company
and Corning reasonably satisfactory to you as to the accuracy of the
representations and warranties of the Company and Corning herein at and as
of such Time of Delivery, as to the performance by the Company and Corning
of all of their obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and (h)
of this Section and as to such other matters as you may reasonably
request.
-25-
8. (a) The Company and Corning will, jointly and severally, indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, to which such Underwriter may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through J.P.
Morgan Securities Inc. expressly for use therein and provided, further,
that the Company and Corning shall not be liable to any Underwriter under
the indemnity agreement in this subsection (a) with respect to any
Preliminary Prospectus to the extent that any such loss, claim, damage or
liability of such Underwriter results from the fact that such Underwriter
sold Securities to a person as to whom it shall be established that there
was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus in any case where such delivery is required
by the Act if the Company has previously furnished copies thereof in
sufficient quantity to such Underwriter and the loss, claim, damage or
liability of such Underwriter results from an untrue statement or omission
of a material fact contained in the Preliminary Prospectus which was
identified in writing prior to the date of this Agreement to such
Underwriter and corrected in the Prospectus.
(b) Each Underwriter will indemnify and hold harmless the Company and
Corning against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue
-26-
statement or alleged untrue statement or omission or alleged omission was
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through J.P. Morgan Securities Inc. expressly for use therein;
and will reimburse the Company or Corning for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; provided,
however, that in the case of subsection (a)(i) or (b) the omission so to
notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection; and provided, further that in the case of subsection (a)(ii)
the omission so to notify the indemnifying party shall relieve the
indemnifying party from liability only to the extent it is actually
prejudiced by such omission. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under
such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b)
-27-
above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified
party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and Corning
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company
and Corning on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or Corning on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company, Corning and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be
-28-
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and Corning under this Section 8
shall be in addition to any liability which the Company or Corning may
otherwise have, including under the letter agreement, dated June 13, 1996,
between Corning and Goldman, Sachs & Co., under the letter agreement,
dated as of May 14, 1996, between Corning and Lazard Freres & Co. LLC and
under the letter agreement, dated as of December 11, 1996, between Corning
and J.P. Morgan Securities Inc., and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within
the meaning of the Act; and the obligations of the Underwriters under this
Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company or Corning
(including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company) and
to each person, if any, who controls the Company within the meaning of the
Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, the non-defaulting
Underwriters may in their discretion arrange for one or more of the
non-defaulting Underwriters or another party or other parties to purchase
such Securities on the terms contained herein. If within thirty-six hours
after such default by any Underwriter the non-defaulting Underwriters do
not arrange for the purchase of such Securities, then the Company shall be
entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to the non-defaulting
Underwriters to purchase such Securities on such terms. In the event that,
within the respective prescribed periods, the non-defaulting Underwriters
notify the Company that they have so arranged for the purchase of such
Securities, or the Company notifies the non-defaulting Underwriters that
it has so arranged for the purchase of such Securities, the non-defaulting
Underwriters or the Company shall have the right to postpone the Time of
Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements,
and the Company and Corning, jointly and severally, agree to file promptly
any amendments to the Registration Statement or the Prospectus which in
the opinion of the non-defaulting Underwriters may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include
any person
-29-
substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriters and the Company as provided in subsection (a)
above, the aggregate principal amount of such Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount
of all the Securities, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the principal amount of
Securities which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro
rata share (based on the principal amount of Securities which such
Underwriter agreed to purchase hereunder) of the Securities of such
defaulting Underwriter or Underwriters for which such arrangements have
not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriters and the Company as provided in subsection (a)
above, the aggregate principal amount of Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all
the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Securities of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be
borne by the Company and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for
its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, Corning and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter or the
Company or Corning, or any officer or director or controlling person of the
Company or Corning, and shall survive delivery of and payment for the
Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company and Corning shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are
-30-
not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters for all out-of-pocket expenses, including fees
and disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Securities, but the
Company and Corning shall then be under no further liability to any Underwriter
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, J.P. Morgan Securities Inc. shall act on
behalf of each of the Underwriters, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by J.P. Morgan Securities Inc.
All statements, requests, notices, and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to J.P. Morgan Securities Inc., 60 Wall Street, New York,
New York 10260, Attention: Registration Department; and if to the Company shall
be delivered or sent by mail, telex or facsimile transmission to the address of
the Company set forth in the Registration Statement, Attention: Secretary;
provided, however, that any notice to an Underwriter pursuant to Section 8 (c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by J.P. Morgan Securities Inc. upon request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company, Corning and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and Corning
and each person who controls the Company, Corning or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
-31-
original, but all such respective counterparts shall together constitute one and
the same instrument.
-32-
If the foregoing is in accordance with your understanding, please sign and
return to us seven counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between each of the Underwriters, the Company and Corning.
Very truly yours,
Corning Clinical Laboratories Inc.
By: ......................................
Name:
Title:
Corning Incorporated
By: .......................................
Name:
Title:
Accepted as of the date hereof:
J.P. Morgan Securities Inc.
................................................
Name:
Title:
................................................
(Goldman, Sachs & Co.)
................................................
(Lazard Freres & Co. LLC)
-33-
SCHEDULE I
Principal Amount
of Securities
Underwriter to be Purchased
J.P. Morgan Securities Inc............. $
Goldman, Sachs & Co....................
Lazard Freres & Co. LLC................
Total.......................................... $150,000,000
============
-34-
ANNEX I(a)
Pursuant to Section 7(g) of the Underwriting Agreement, Price Waterhouse LLP
shall furnish letters to the Underwriters to the effect that
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included in the
Prospectus or the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published rules and regulations thereunder; and, if applicable, they
have made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the unaudited consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the Underwriters and are attached hereto;
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus as
indicated in their reports thereon copies of which are attached hereto and
on the basis of specified procedures including inquiries of officials of the
Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published rules and regulations, nothing came to their attention
that cause them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the related published
rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis
of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects with
the disclosure requirements of Items 301, 302, 402 and 503(d), respectively,
of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred
to below, a reading of the latest available interim financial statements of
the Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited financial
statements included in the Prospectus, inquiries of officials of the Company
and its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in
the unaudited consolidated financial statements from which such data and
items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included in the Prospectus;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived any unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement
data and balance sheet items included in the Prospectus and referred to
in
2
Clause (B) were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements included in
the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of those statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock or any increase in the consolidated long-term debt of the Company
and its subsidiaries, or any decreases in consolidated net current assets
or stockholders' equity or other items specified by the Underwriters, or
any increases in any items specified by the Underwriters, in each case as
compared with amounts shown in the latest balance sheet included in the
Prospectus, except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in Clause
(E) there were any decreases in consolidated net revenues, EBITDAR,
income (loss) before taxes or net income or other items specified by the
Underwriters, or any increases in any items specified by the
Underwriters, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for decreases or
increases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Underwriters, which are derived from the
general accounting records of the Company and its subsidiaries, which appear
in the Prospectus, or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Underwriters, and have compared
certain of such amounts, percentages and financial information with the
3
accounting records of the Company and its subsidiaries and have found them
to be in agreement.
4