Exhibit 10.1
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of June 30, 1998, between COGNIZANT
CORPORATION, a Delaware corporation (the "Corporation") and IMS HEALTH
INCORPORATED, a Delaware corporation ("IMS HEALTH").
WHEREAS, the Corporation acting through its direct and indirect
subsidiaries, currently conducts a number of businesses, including, without
limitation, (i) providing television audience measurement services (the "Xxxxxxx
Media Research Business"), (ii) providing information and decision support
services to the pharmaceutical and healthcare industries (the "IMS Business"),
(iii) providing software-based administrative and analytical solutions to the
managed care industry (the "ERISCO Business"), (iv) making venture capital
investments in emerging healthcare businesses (the "Enterprises Business") and
(v) providing software application and development services specializing in Year
2000 conversion services (the "Technology Solutions Business").
WHEREAS, the Board of Directors of the Corporation has determined that it
is appropriate, desirable and in the best interests of the holders of shares of
common stock, par value $0.01 per share, of the Corporation (the "Cognizant
Common Stock"), as well as of the Corporation and its businesses, to reorganize
the Corporation to separate from the Corporation all businesses currently
conducted by the Corporation other than the Xxxxxxx Media Research Business and
to cause such businesses to be owned and conducted, directly or indirectly, by
IMS HEALTH;
WHEREAS, in order to effect the separation, the Board of Directors of the
Corporation has determined that it is appropriate, desirable and in the best
interests of the holders of Cognizant Common Stock, as well as of the
Corporation and its businesses, for the Corporation (i) to take certain steps to
reorganize the Corporation's Subsidiaries (as defined herein) and businesses,
including prior to the Distribution (as defined herein) (A) causing Media
Licensing Associates, Inc. ("Media Licensing") to withdraw its interest in
Cognizant Licensing Associates, L.P. ("Licensing Associates"), and, in
connection therewith, to receive the shares of common stock of Gartner Group,
Inc. ("Gartner") held by Licensing Associates, (B) upon the completion of the
transaction described in (A), causing Media Licensing to merge with and into
NMR, with NMR as the surviving corporation, (C) upon the completion of the
transaction described in (B), to cause NMR to merge with and into the
Corporation, with the Corporation as the surviving corporation renamed "Xxxxxxx
Media Research, Inc.", (D) causing I.M.S. International, Inc. to merge with and
into IMS HEALTH, with IMS HEALTH as the surviving corporation, (E) upon the
completion of the transaction described in (D), causing IMS America Ltd. to
merge with and into IMS HEALTH, with IMS HEALTH as the surviving corporation,
(F) upon the completion of the transaction described in (E), causing the
Corporation to contribute all of the non-stock assets and liabilities held
directly by the Corporation (other than assets specified herein to remain with
the Corporation after the Distribution) to IMS HEALTH, (G) upon the completion
of the transaction described in (F), causing the Corporation to contribute all
the capital stock held by the Corporation in Cognizant Technology Solutions
Corporation, Cognizant Enterprises Inc., Gartner, Erisco, Inc., I.M.S. Services
Nederland B.V., IMS Italia S.p.A., IMS Japan K.K., Cognizant India Holdings
Corporation, IMS ChinaMetrik Incorporated, Cognizant Transportation Services
Corporation, DBHC Inc., IMS
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Holdings (UK) Limited, Sales Technologies, Inc., Xxxxx International, Inc. and
any other first tier subsidiary of the Corporation not related to the NMR
Business and (ii) upon the completion of such reorganization to distribute to
the holders of the Cognizant Common Stock all the outstanding shares of common
stock of IMS HEALTH (the "IMS HEALTH Common Shares"), together with the
associated Rights (as defined herein), as set forth herein;
WHEREAS, each of the Corporation and IMS HEALTH has determined that it is
necessary and desirable, on or prior to the Distribution Date (as defined
herein), to allocate and transfer those assets and to allocate and assign
responsibility for those liabilities in respect of the activities of the
businesses of such entities and those assets and liabilities in respect of other
businesses and activities of the Corporation and its current and former
Subsidiaries and other matters; and
WHEREAS, each of the Corporation and IMS HEALTH has determined that it is
necessary and desirable to set forth the principal corporate transactions
required to effect such Distribution and to set forth other agreements that will
govern certain other matters following the Distribution.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I. DEFINITIONS
SECTION I.1. General. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Action" shall mean any action, suit, arbitration, inquiry, proceeding
or investigation by or before any court, any governmental or other regulatory or
administrative agency, body or commission or any arbitration tribunal.
(b) "Affiliate" shall mean, when used with respect to a specified person,
another person that controls, is controlled by, or is under common control with
the person specified. As used herein, "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such person, whether through the ownership of voting securities
or other interests, by contract or otherwise.
(c) "Agent" shall have the meaning set forth in Section 2.1(b).
(d) "Agreement Disputes" shall have the meaning set forth in Section 6.1.
(e) "Ancillary Agreements" shall mean all of the written agreements,
instruments, assignments or other arrangements (other than this Agreement)
entered into in connection with the transactions contemplated hereby, including,
without limitation, the
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Conveyancing and Assumption Instruments, the Employee Benefits Agreement, the
Tax Allocation Agreement and the Transition Services Agreement.
(f) "Assets" shall mean assets, properties and rights (including goodwill),
wherever located (including in the possession of vendors or other third parties
or elsewhere), whether real, personal or mixed, tangible, intangible or
contingent, in each case whether or not recorded or reflected or required to be
recorded or reflected on the books and records or financial statements of any
person, including, without limitation, the following:
(i) all accounting and other books, records and files whether in
paper, microfilm, microfiche, computer tape or disc, magnetic tape or any
other form;
(ii) all apparatus, computers and other electronic data processing
equipment, fixtures, machinery, equipment, furniture, office equipment,
automobiles, trucks, aircraft and other transportation equipment, special
and general tools, test devices, prototypes and models and other tangible
personal property;
(iii) all inventories of materials, parts, raw materials, supplies,
work-in-process and finished goods and products;
(iv) all interests in real property of whatever nature, including
easements, whether as owner, mortgagee or holder of a Security Interest in
real property, lessor, sublessor, lessee, sublessee or otherwise;
(v) all interests in any capital stock or other equity interests of
any Subsidiary or any other person, all bonds, notes, debentures or other
securities issued by any Subsidiary or any other person, all loans,
advances or other extensions of credit or capital contributions to any
Subsidiary or any other person and all other investments in securities of
any person;
(vi) all license agreements, leases of personal property, open
purchase orders for raw materials, supplies, parts or services, unfilled
orders for the manufacture and sale of products and other contracts,
agreements or commitments;
(vii) all deposits, letters of credit and performance and surety
bonds;
(viii) all written technical information, data, specifications,
research and development information, engineering drawings, operating and
maintenance manuals, and materials and analyses prepared by consultants and
other third parties;
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(ix) all domestic and foreign patents, copyrights, trade names,
trademarks, service marks and registrations and applications for any of the
foregoing, mask works, trade secrets, inventions, data bases, other
proprietary information and licenses from third persons granting the right
to use any of the foregoing;
(x) all computer applications, programs and other software, including
operating software, network software, firmware, middleware, design
software, design tools, systems documentation and instructions;
(xi) all cost information, sales and pricing data, customer prospect
lists, supplier records, customer and supplier lists, customer and vendor
data, correspondence and lists, product literature, artwork, design,
development and manufacturing files, vendor and customer drawings,
formulations and specifications, quality records and reports and other
books, records, studies, surveys, reports, plans and documents;
(xii) all prepaid expenses, trade accounts and other accounts and
notes receivable;
(xiii) all rights under contracts or agreements, all claims or rights
against any person arising from the ownership of any asset, all rights in
connection with any bids or offers and all claims, choses in action or
similar rights, whether accrued or contingent;
(xiv) all rights under insurance policies and all rights in the nature
of insurance, indemnification or contribution;
(xv) all licenses, permits, approvals and authorizations which have
been issued by any Governmental Authority;
(xvi) cash or cash equivalents, bank accounts, lock boxes and other
deposit arrangements; and
(xvii) interest rate, currency, commodity or other swap, collar, cap
or other hedging or similar agreements or arrangements.
(g) "Assignee" shall have the meaning set forth in Section 2.1(f).
(h) "Business Entity" shall mean any corporation, partnership, limited
liability company or other entity which may legally hold title to Assets.
(i) "Claims Administration" shall mean the processing of claims made under
the Shared Policies, including, without limitation, the reporting of claims to
the insurance carriers and the management of the defense of claims.
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(j) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
the Treasury regulations promulgated thereunder, including any successor
legislation.
(k) "Cognizant Common Stock" shall have the meaning set forth in the
recitals hereto.
(l) "Commission" shall mean the U.S. Securities and Exchange Commission.
(m) "Conveyancing and Assumption Instruments" shall mean, collectively, the
various agreements, instruments and other documents heretofore entered into and
to be entered into to effect the transfer of Assets and the assumption of
Liabilities in the manner contemplated by this Agreement, or otherwise arising
out of or relating to the transactions contemplated by this Agreement, which
shall be in substantially the forms attached hereto as Schedule 1.1(m) for
transfers to be effected pursuant to New York law or the laws of one of the
other states of the United States, or, if not appropriate for a given transfer,
and for transfers to be effected pursuant to non-U.S. laws, shall be in such
other form or forms as the parties agree and as may be required by the laws of
such non-U.S. jurisdictions.
(n) the "Corporation" or "Cognizant" shall mean Cognizant Corporation, a
Delaware corporation, which will change its name in connection with the
Distribution to "Xxxxxxx Media Research, Inc.".
(o) "Corporation Debt" shall mean have the meaning set forth in Section
2.1(n).
(p) "Distribution" shall mean the distribution on the Distribution Date to
holders of record of shares of Cognizant Common Stock as of the Distribution
Record Date of the IMS HEALTH Common Shares owned by the Corporation on the
basis of one IMS HEALTH Common Share for each outstanding share of Cognizant
Common Stock.
(q) "Distribution Date" shall mean June 30, 1998.
(r) "Distribution Record Date" shall mean June 25, 1998.
(s) "Effective Time" shall mean immediately prior to the midnight, New York
time, that ends the 24-hour period comprising June 30, 1998.
(t) "Employee Benefits Agreement" shall mean the Employee Benefits
Agreement between the Corporation and IMS HEALTH.
(u) "Enterprises Business" shall have the meaning set forth in the recitals
hereto.
(v) "ERISCO Business" shall have the meaning set forth in the recitals
hereto.
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(w) "Governmental Authority" shall mean any federal, state, local, foreign
or international court, government, department, commission, board, bureau,
agency, official or other regulatory, administrative or governmental authority.
(x) "IMS Business" shall have the meaning set forth in the recitals hereto.
(y) "IMS HEALTH Assets" shall mean, collectively, all the rights and Assets
owned or held by the Corporation or any Subsidiary of the Corporation
immediately prior to the Effective Time, except the NMR Assets.
(z) "IMS HEALTH Business" shall mean each and every business conducted at
any time by the Corporation or any Subsidiary of the Corporation prior to the
Effective Time (including, without limitation, the IMS Business, the ERISCO
Business, the Enterprises Business and the Technology Solutions Business),
except an NMR Business.
(aa) "IMS HEALTH Common Shares" shall have the meaning set forth in the
recitals hereto.
(bb) "IMS HEALTH Contracts" shall mean all the contracts and agreements to
which the Corporation or any of its Affiliates who are not individuals is a
party or by which it or any of its Affiliates who are not individuals is bound
immediately prior to the Effective Time, except the NMR Contracts.
(cc) "IMS HEALTH Group" shall mean IMS HEALTH and each person (other than
any member of the NMR Group) that is a Subsidiary of the Corporation immediately
prior to the Effective Time.
(dd) "IMS HEALTH Indemnitees" shall mean IMS HEALTH, each member of the IMS
HEALTH Group, each of their respective present and former directors, officers,
employees and agents and each of the heirs, executors, successors and assigns of
any of the foregoing, except the NMR Indemnitees, as well as any present and
former directors, officers, employees and agents of the Corporation prior to the
Effective Time and each of their heirs, executors, successors and assigns.
(ee) "IMS HEALTH Liabilities" shall mean collectively, all obligations and
Liabilities of the Corporation or any Subsidiary of the Corporation immediately
prior to the Effective Time, except the NMR Liabilities.
(ff) "IMS HEALTH Policies" shall mean all Policies, current or past, which
are owned or maintained by or on behalf of the Corporation or any Subsidiary of
the Corporation immediately prior to the Effective Time which do not relate to
the NMR Business and which Policies are either maintained by IMS HEALTH or a
member of the IMS HEALTH Group or are assignable to IMS HEALTH or a member of
the IMS HEALTH Group.
(gg) "Indemnifiable Losses" shall mean any and all losses, liabilities,
claims, damages, demands, costs or expenses (including, without limitation,
reasonable attorneys' fees and
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any and all out-of-pocket expenses) reasonably incurred in investigating,
preparing for or defending against any Actions or potential Actions or in
settling any Action or potential Action or in satisfying any judgment, fine or
penalty rendered in or resulting from any Action.
(hh) "Indemnifying Party" shall have the meaning set forth in Section 3.3.
(ii) "Indemnitee" shall have the meaning set forth in Section 3.3.
(jj) "Indemnity and Joint Defense Agreement" shall mean the Indemnity and
Joint Defense Agreement dated as of October 28, 1996 by and among the
Corporation, The Dun & Bradstreet Corporation and ACNielsen Corporation.
(kk) "Information Statement" shall mean the Information Statement sent to
the holders of shares of Cognizant Common Stock in connection with the
Distribution, including any amendment or supplement thereto.
(ll) "Insurance Administration" shall mean, with respect to each Shared
Policy, the accounting for premiums, retrospectively-rated premiums, defense
costs, indemnity payments, deductibles and retentions, as appropriate, under the
terms and conditions of each of the Shared Policies; and the reporting to excess
insurance carriers of any losses or claims which may cause the per-occurrence,
per claim or aggregate limits of any Shared Policy to be exceeded, and the
distribution of Insurance Proceeds as contemplated by this Agreement.
(mm) "Insurance Proceeds" shall mean those monies (i) received by an
insured from an insurance carrier or (ii) paid by an insurance carrier on behalf
of an insured, in either case net of any applicable premium adjustment,
retrospectively-rated premium, deductible, retention, or cost of reserve paid or
held by or for the benefit of such insured.
(nn) "Insured Claims" shall mean those Liabilities that, individually or in
the aggregate, are covered within the terms and conditions of any of the Shared
Policies, whether or not subject to deductibles, co-insurance, uncollectibility
or retrospectively-rated premium adjustments.
(oo) "IRI Action" shall mean the complaint filed in the United States
District Court for the Southern District of New York on July 29, 1996 by
Information Resources, Inc. naming as defendants The Dun & Bradstreet
Corporation, X. X. Xxxxxxx Company and IMS International, Inc.
(pp) "Liabilities" shall mean any and all losses, claims, charges, debts,
demands, actions, causes of action, suits, damages, obligations, payments, costs
and expenses, sums of money, accounts, reckonings, bonds, specialties,
indemnities and similar obligations, exonerations, covenants, contracts,
controversies, agreements, promises, doings, omissions, variances, guarantees,
make whole agreements and similar obligations, and other liabilities, including
all contractual obligations, whether absolute or contingent, matured or
unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown,
whenever arising, and including those arising under any
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law, rule, regulation, Action, threatened or contemplated Action (including the
costs and expenses of demands, assessments, judgments, settlements and
compromises relating thereto and attorneys' fees and any and all costs and
expenses, whatsoever reasonably incurred in investigating, preparing or
defending against any such Actions or threatened or contemplated Actions), order
or consent decree of any governmental or other regulatory or administrative
agency, body or commission or any award of any arbitrator or mediator of any
kind, and those arising under any contract, commitment or undertaking, including
those arising under this Agreement or any Ancillary Agreement, in each case,
whether or not recorded or reflected or required to be recorded or reflected on
the books and records or financial statements of any person.
(qq) "Xxxxxxx Media Research Business" shall have the meaning set forth in
the recitals hereto.
(rr) "1996 Distribution" shall mean the distribution described in the 1996
Distribution Agreement.
(ss) "1996 Distribution Agreement" shall mean the Distribution Agreement
among the Corporation, The Dun & Bradstreet Corporation and ACNielsen
Corporation dated as of October 28, 1996.
(tt) "NMR" shall mean Xxxxxxx Media Research, Inc., a Delaware corporation
and a wholly-owned subsidiary of the Corporation.
(uu) "NMR Assets" shall mean:
(i) the ownership interests in those Business Entities listed on
Schedule 1.1(au)(i);
(ii) any and all Assets that are expressly contemplated by this
Agreement, including those on the list of pre-Distribution reorganization
transactions attached as Schedule 1.1(au)(ii) hereto, or any Ancillary
Agreement (or included on any Schedule hereto or thereto) as Assets which
have been or are to be transferred to the Corporation, NMR or any other
member of the NMR Group prior to the Effective Time or are to remain with
the Corporation, NMR or any member of the NMR Group subsequent to the
Effective Time;
(iii) any Assets reflected on the NMR Balance Sheet or the accounting
records supporting such balance sheet and any Assets acquired by or for NMR
or any member of the NMR Group subsequent to the date of such balance sheet
which, had they been so acquired on or before such date and owned as of
such date, would have been reflected on such balance sheet if prepared on a
consistent basis, subject to any dispositions of any of such Assets
subsequent to the date of such balance sheet;
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(iv) subject to Article VII, any rights of any member of the NMR Group
under any of the Policies, including any rights thereunder arising from and
after the Effective Time in respect of any Policies that are occurrence
policies;
(v) any NMR Contracts, any rights or claims arising thereunder, and
any other rights or claims or contingent rights or claims primarily
relating to or arising from any NMR Asset or the NMR Business;
(vi) the minute books and similar corporate records of the
Corporation; and
(vii) any and all Assets of the Corporation from and after the
Effective Time.
Notwithstanding the foregoing, the NMR Assets shall not in any event
include:
(v) the Corporation's rights arising from or related to the Corporation's
agreements to acquire Xxxxx International Inc. ("Xxxxx") or Pharmaceutical
Marketing Services Inc. ("PMSI"), or any of the assets of Xxxxx or PMSI; or
(w) any rights of the Corporation under (i) the 1996 Distribution Agreement
or (ii) the Tax Allocation Agreement, Employee Benefits Agreement or any
Ancillary Agreement referred to in the 1996 Distribution Agreement (except in
each case to the extent provided in this Agreement or any Ancillary Agreement to
this Agreement); or
(x) the Corporation's interest in the capital stock of the Gartner Group,
Inc. and any other Assets listed or described on Schedule 1.1(au)(x); or
(y) any Assets primarily relating to or used in any terminated or divested
Business Entity, business or operation formerly owned or managed by or
associated with the Corporation, NMR or any NMR Business, except for those
Assets primarily relating to or used in those Business Entities, businesses or
operations listed on Schedule 1.1(au)(y); or
(z) any and all Assets that are expressly contemplated by this Agreement or
any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be
transferred or conveyed to any member of the IMS HEALTH Group.
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In the event of any inconsistency or conflict which may arise in the
application or interpretation of any of the foregoing provisions, for the
purpose of determining what is and is not an NMR Asset, any item explicitly
included on a Schedule referred to in this Section 1.1(au) shall take priority
over any provision of the text hereof, and clause (ii) shall take priority over
clause (iii) hereof of this Section 1.1(au).
(vv) "NMR Balance Sheet" shall mean the consolidated balance sheet of the
NMR Group, including the notes thereto, as of March 31, 1998, set forth as
Schedule 1.1(av) hereto.
(ww) "NMR Business" shall mean (i) the Xxxxxxx Media Research Business,
(ii) the businesses of the members of the NMR Group, (iii) any other business
conducted by the Corporation or any Subsidiary of the Corporation primarily
through the use of the NMR Assets, (iv) the businesses of Business Entities
acquired or established by or for NMR or any of its Subsidiaries after the date
of this Agreement and (v) the business of the Corporation from and after the
Effective Time.
(xx) "NMR Contracts" shall mean the following contracts and agreements to
which the Corporation or any of its Affiliates who are not individuals is a
party or by which it or any of its Affiliates who are not individuals or any of
their respective Assets is bound, whether or not in writing, except for any such
contract or agreement that is not expressly contemplated to be transferred or
assigned to the Corporation, NMR or any other member of the NMR Group prior to
the Effective Time, or to remain with the Corporation, NMR or any other member
of the NMR Group subsequent to the Effective Time, pursuant to any provision of
this Agreement or any Ancillary Agreement:
(i) the TAM Master Agreement (as defined herein), the Intellectual
Property Agreement referred to in the 1996 Distribution Agreement (except
to the extent it relates to intellectual property used by the IMS HEALTH
Group) and any contracts or agreements listed or described on Schedule
1.1(ax)(i);
(ii) any contract or agreement entered into in the name of the
Corporation, or in the name of, or expressly on behalf of, any division,
business unit or member of the NMR Group except for those contracts listed
or described on Schedule 1.1(ax)(ii) or which are primarily for the benefit
of any division, business unit or member of the IMS HEALTH Group;
(iii) any contract or agreement that relates primarily to the NMR
Business;
(iv) federal, state and local government and other contracts and
agreements that are listed or described on Schedule 1.1(ax)(iv) and any
other government contracts or agreements entered into after the date hereof
and prior to the Effective Time that relate primarily to the NMR Business;
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(v) any contract or agreement representing capital or operating
equipment lease obligations reflected on the NMR Balance Sheet, and
obligations as lessee under those contracts or agreements listed on
Schedule 1.1(ax)(v);
(vi) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the Ancillary Agreements
to be transferred or assigned to the Corporation or any member of the NMR
Group prior to the Effective Time or to remain with the Corporation or any
member of the NMR Group subsequent to the Effective Time; and
(vii) any guarantee, indemnity, representation or warranty of any
member of the NMR Group.
(yy) "NMR Group" shall mean (i) NMR, (ii) each Business Entity which is
contemplated to become a Subsidiary of the Corporation or NMR hereunder prior to
the Effective Time or to remain a Subsidiary of the Corporation or NMR hereunder
subsequent to the Effective Time, which shall include those identified as such
on Schedule 1.1(au)(i) hereto, which Schedule shall also indicate the amount of
the Corporation's or NMR's direct or indirect ownership interest therein, and
(iii) the Corporation from and after the Effective Time.
(zz) "NMR Indemnitees" shall mean NMR, each member of the NMR Group, each
of their respective present and former directors, officers, employees and agents
and each of the heirs, executors, successors and assigns of any of the
foregoing.
(aaa) "NMR Liabilities" shall mean:
(i) any and all Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto or thereto,
including Schedule 1.1(ba) hereto) as Liabilities to be assumed by the
Corporation or any member of the NMR Group prior to the Effective Time or
to remain with the Corporation or any member of the NMR Group subsequent to
the Effective Time, and all agreements, obligations and Liabilities of the
Corporation or any member of the NMR Group under this Agreement or any of
the Ancillary Agreements;
(ii) all Liabilities (other than Taxes and any employee-related
Liabilities which are subject to the provisions of the Tax Allocation
Agreement and the Employee Benefits Agreement, respectively), primarily
relating to, arising out of or resulting from:
(A) the operation of the NMR Business, as conducted at any time
prior to, on or after the Effective Time (including any Liability
relating to, arising out of or resulting from any act or failure to
act by any director,
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officer, employee, agent or representative (whether or not such act or
failure to act is or was within such person's authority));
(B) the operation of any business conducted by the Corporation or
any Subsidiary of the Corporation at any time from and after the
Effective Time (including any Liability relating to, arising out of or
resulting from any act or failure to act by any director, officer,
employee, agent or representative (whether or not such act or failure
to act is or was within such person's authority)); or
(C) any NMR Assets;
whether arising before, on or after the Effective Time;
(iii) all Liabilities reflected as liabilities or obligations on the
NMR Balance Sheet or the accounting records supporting such balance sheet,
and all Liabilities arising or assumed after the date of such balance sheet
which, had they arisen or been assumed on or before such date and been
retained as of such date, would have been reflected on such balance sheet,
subject to any discharge of such Liabilities subsequent to the date of the
NMR Balance Sheet; and
(iv) the Corporation Debt.
Notwithstanding the foregoing, the NMR Liabilities shall not include:
(x) any Liabilities that are expressly contemplated by this Agreement or
any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to
be assumed by IMS HEALTH or any member of the IMS HEALTH Group, including any
Liabilities set forth in Schedule 1.1(ba)(x);
(y) any Liabilities primarily relating to, arising out of or resulting from
any terminated or divested Business Entity, business or operation formerly owned
or managed by or associated with the Corporation or any NMR Business except for
Liabilities primarily relating to, arising out of or resulting from those
Business Entities, businesses or operations listed in Schedule 1.1(ba)(y); or
(z) all agreements and obligations of any member of the IMS HEALTH Group
under this Agreement or any of the Ancillary Agreements.
(bbb) "NMR Policies" shall mean all Policies, current or past, which are
owned or maintained by or on behalf of the Corporation or any Subsidiary of the
Corporation immediately prior to the Effective Time, which do not relate to the
IMS HEALTH Business.
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(ccc) "person" shall mean any natural person, Business Entity, corporation,
business trust, joint venture, association, company, partnership, other entity
or government, or any agency or political subdivision thereof.
(ddd) "Policies" shall mean insurance policies and insurance contracts of
any kind (other than life and benefits policies or contracts), including,
without limitation, primary, excess and umbrella policies, comprehensive general
liability policies, director and officer liability, fiduciary liability,
automobile, aircraft, property and casualty, workers' compensation and employee
dishonesty insurance policies, bonds and self-insurance and captive insurance
company arrangements, together with the rights, benefits and privileges
thereunder.
(eee) "Provider" shall have the meaning set forth in Section 5.1.
(fff) "Recipient" shall have the meaning set forth in Section 5.1.
(ggg) "Records" shall have the meaning set forth in Section 4.1.
(hhh) "Rights" shall have the meaning set forth in Section 2.1(c).
(iii) "Rules" shall have the meaning set forth in Section 6.2.
(jjj) "Security Interest" shall mean any mortgage, security interest,
pledge, lien, charge, claim, option, right to acquire, voting or other
restriction, right-of-way, covenant, condition, easement, encroachment,
restriction on transfer, or other encumbrance of any nature whatsoever.
(kkk) "Shared Policies" shall mean all Policies, current or past, which are
owned or maintained by or on behalf of the Corporation or any Subsidiary of the
Corporation immediately prior to the Effective Time which relate to the IMS
HEALTH Business and the NMR Business.
(lll) "Shared Transaction Services Agreement" shall mean the Shared
Transaction Services Agreement between the Corporation and IMS HEALTH.
(mmm) "Subsidiary" shall mean any corporation, partnership or other entity
of which another entity (i) owns, directly or indirectly, ownership interests
sufficient to elect a majority of the Board of Directors (or persons performing
similar functions) (irrespective of whether at the time any other class or
classes of ownership interests of such corporation, partnership or other entity
shall or might have such voting power upon the occurrence of any contingency) or
(ii) is a general partner or an entity performing similar functions (e.g., a
trustee).
(nnn) "TAM Master Agreement" shall mean the master agreement between the
Corporation and ACNielsen Corporation dated as of October 28, 1996, including
any agreements ancillary thereto, relating to the conduct of the television
audience measurement business after the 1996 Distribution.
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(ooo) "Tax" shall have the meaning set forth in the Tax Allocation
Agreement.
(ppp) "Tax Allocation Agreement" shall mean the Tax Allocation Agreement
between the Corporation and IMS HEALTH.
(qqq) "Technology Solutions Business" shall have the meaning set forth in
the recitals hereto.
(rrr) "Third Party Claim" shall have the meaning set forth in Section 3.3.
(sss) "Transition Services Agreement" shall mean the Amended and Restated
Transition Services Agreement among the Corporation, IMS HEALTH, The Dun &
Bradstreet Corporation, The New Dun & Bradstreet Corporation, ACNielsen
Corporation and Gartner Group, Inc.
SECTION I.2. References; Interpretation. References in this Agreement to
any gender include references to all genders, and references to the singular
include references to the plural and vice versa. The words "include", "includes"
and "including" when used in this Agreement shall be deemed to be followed by
the phrase "without limitation". Unless the context otherwise requires,
references in this Agreement to Articles, Sections, Exhibits and Schedules shall
be deemed references to Articles and Sections of, and Exhibits and Schedules to,
such Agreement. Unless the context otherwise requires, the words "hereof",
"hereby" and "herein" and words of similar meaning when used in this Agreement
refer to this Agreement in its entirety and not to any particular Article,
Section or provision of this Agreement.
ARTICLE II. DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS
SECTION II.1. The Distribution and Other Transactions.
(a) Certain Transactions. On or prior to the Distribution Date:
(i) the Corporation shall, on behalf of itself and its Subsidiaries,
transfer or cause to be transferred to IMS HEALTH or another member of the
IMS HEALTH Group, effective prior to or as of the Effective Time, all of
the Corporation's and its Subsidiaries' right, title and interest in the
IMS HEALTH Assets.
(ii) IMS HEALTH shall to the extent not already held by the
Corporation or a member of the NMR Group, on behalf of itself and its
Subsidiaries, transfer or cause to be transferred to the Corporation or a
member of the NMR Group, effective prior to or as of the
15
Effective Time, all of IMS HEALTH's and its Subsidiaries' right, title and
interest in the NMR Assets.
(iii) the Corporation or IMS HEALTH, as applicable, shall be entitled
to designate the Business Entity within the NMR Group or the IMS HEALTH
Group, as applicable, to which any Assets are to be transferred pursuant to
this Section 2.1(a).
(b) Stock Dividend to the Corporation. On or prior to the Distribution
Date, IMS HEALTH shall issue to the Corporation as a stock dividend (i) such
number of IMS HEALTH Common Shares as will be required to effect the
Distribution, as certified by the Corporation's stock transfer agent (the
"Agent"). In connection therewith the Corporation shall deliver to IMS HEALTH
for cancellation the share certificate held by it representing IMS HEALTH Common
Shares and shall receive a new certificate or certificates representing the
total number of IMS HEALTH Common Shares to be owned by the Corporation after
giving effect to such stock dividend.
(c) Charters; By-laws; Rights Plans. On or prior to the Distribution Date,
all necessary actions shall have been taken to provide for the adoption of the
form of Certificate of Incorporation and By-laws and the execution and delivery
of the form of Rights Agreement, relating to the preferred share purchase rights
relating to the IMS HEALTH Common Shares (the "Rights"), filed by IMS HEALTH
with the Commission as exhibits to IMS HEALTH's Registration Statement on Form
10 (or any amendment thereto).
(d) Directors. On or prior to the Distribution Date, the Corporation as the
sole stockholder of IMS HEALTH, shall have taken all necessary action to cause
the Board of Directors of IMS HEALTH to consist of the individuals identified in
the Information Statement as directors of IMS HEALTH.
(e) Certain Licenses and Permits. Without limiting the generality of the
obligations set forth in Section 2.1(a), on or prior to the Distribution Date or
as soon as reasonably practicable thereafter:
(i) all transferable licenses, permits and authorizations issued by
any Governmental Authority which do not relate primarily to the NMR
Business but which are held in the name of the Corporation or any member of
the NMR Group, or in the name of any employee, officer, director,
stockholder or agent of the Corporation or any such member, or otherwise,
on behalf of a member of the IMS HEALTH Group shall be duly and validly
transferred or caused to be transferred by the Corporation to the
appropriate member of the IMS HEALTH Group; and
(ii) all transferable licenses, permits and authorizations issued by
Governmental Authorities which relate primarily to the NMR Business but
which are held in the name of any member of the IMS HEALTH Group, or in the
name of any employee, officer, director, stockholder, or agent of any such
member, or otherwise, on behalf of a member of the NMR
16
Group shall be duly and validly transferred or caused to be transferred by IMS
HEALTH to the Corporation or the appropriate member of the NMR Group.
(f) Transfer of Agreements. Without limiting the generality of the
obligations set forth in Section 2.1(a):
(i) the Corporation hereby agrees that on or prior to the Distribution
Date or as soon as reasonably practicable thereafter, subject to the
limitations set forth in this Section 2.1(f), it will, and it will cause
each member of the NMR Group to, assign, transfer and convey to the
appropriate member of the IMS HEALTH Group all of the Corporation's or such
member of the NMR Group's respective right, title and interest in and to
any and all IMS HEALTH Contracts;
(ii) IMS HEALTH hereby agrees that on or prior to the Distribution
Date or as soon as reasonably practicable thereafter, subject to the
limitations set forth in this Section 2.1(f), it will, and it will cause
each member of the IMS HEALTH Group to, assign, transfer and convey to the
Corporation or the appropriate member of the NMR Group all of IMS HEALTH's
or such member of the IMS HEALTH Group's respective right, title and
interest in and to any and all NMR Contracts;
(iii) subject to the provisions of this Section 2.1(f), any agreement
to which any of the parties hereto or any of their Subsidiaries is a party
that inures to the benefit of both the NMR Business and the IMS HEALTH
Business shall be assigned in part so that each party shall be entitled to
the rights and benefits inuring to its business under such agreement;
(iv) the assignee of any agreement assigned, in whole or in part,
hereunder (an "Assignee") shall assume and agree to pay, perform, and fully
discharge all obligations of the assignor under such agreement or, in the
case of a partial assignment under paragraph (f)(iii), such Assignee's
related portion of such obligations as determined in accordance with the
terms of the relevant agreement, where determinable on the face thereof,
and otherwise as determined in accordance with the practice of the parties
prior to the Distribution; and
(v) notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign any agreement, in
whole or in part, or any rights thereunder if the agreement to assign or
attempt to assign, without the consent of a third party, would constitute a
breach thereof or in any way adversely affect the rights of the assignor or
Assignee thereof. Until such consent is obtained, or if an attempted
assignment thereof would be ineffective or would adversely affect the
rights of any party hereto so that the intended Assignee would not, in
fact, receive all such rights, the parties will cooperate with each other
in any arrangement designed to provide for the intended Assignee the
benefits of, and to permit the intended Assignee to assume liabilities
under, any such agreement.
17
(g) Consents. The parties hereto shall use their commercially reasonable
efforts to obtain required consents to transfer and/or assignment of licenses,
permits and authorizations of Governmental Authorities and of agreements
hereunder.
(h) Delivery of Shares to Agent. The Corporation shall deliver to the Agent
the share certificates representing the IMS HEALTH Common Shares issued to the
Corporation by IMS HEALTH pursuant to Section 2.1(b) which are to be distributed
to the holders of Cognizant Common Stock in the Distribution and shall instruct
the Agent to distribute, on or as soon as practicable following the Distribution
Date, certificates representing such IMS HEALTH Common Shares to holders of
record of shares of Cognizant Common Stock on the Distribution Record Date as
further contemplated by the Information Statement and herein. IMS HEALTH shall
provide all share certificates that the Agent shall require in order to effect
the Distribution.
(i) Certain Liabilities. For purposes of this Agreement, including Article
III hereof, IMS HEALTH agrees with the Corporation that:
(i) any and all Liabilities arising from or related to Cognizant's
agreements to acquire Xxxxx and PMSI or any filings with the Commission or
any other governmental or regulatory authority related thereto shall be
deemed to be IMS HEALTH Liabilities and not NMR Liabilities;
(ii) any and all Liabilities arising from or based upon "controlling
person" liability relating to the Form 10 (or any amendment thereto) filed
by IMS HEALTH shall be deemed to be IMS HEALTH Liabilities and not NMR
Liabilities; and
(iii) notwithstanding Section 2.1(m) below, any and all Liabilities
arising from or related to the spin-off of the Corporation and ACNielsen
Corporation from The Dun & Bradstreet Corporation pursuant to the 1996
Distribution Agreement, other than those set forth on Schedule 2.1(i) or
allocated to NMR pursuant to Section 2.1(j), shall be deemed to be IMS
HEALTH Liabilities and not NMR Liabilities.
(j) Certain Contingencies. For purposes of this Agreement, including
Article III hereof, each of IMS HEALTH and the Corporation agrees that:
(i) notwithstanding anything to the contrary herein or in the Tax
Allocation Agreement, each of the Corporation and IMS HEALTH shall be
liable for a portion of the liabilities related to certain prior business
transactions to the extent and in the circumstances described in Schedule
2.1(j)(i);
(ii) subject to Section 2.1(p), any and all Liabilities of Cognizant
under the Indemnity and Joint Defense Agreement or otherwise related to the
IRI Action, including legal fees and expenses related thereto, shall be
allocated 75% to the IMS HEALTH Group (and thereby become IMS HEALTH
Liabilities hereunder) and 25% to the NMR Group (and thereby become NMR
Liabilities hereunder); provided that (X) any such legal fees and
18
expenses incurred prior to January 1, 1999 shall be IMS HEALTH Liabilities
and not NMR Liabilities and (Y) any such legal fees and expenses incurred
during 1999 that are NMR Liabilities will be reimbursed to IMS HEALTH on
the first business day after January 1, 2000 with respect to fees incurred
through November 30, 1999 and notified to the Corporation, and within 10
business days after notice to the Corporation of other such fees incurred
in 1999; and provided further that the aggregate amount of NMR Liabilities
under Section 2.1(j)(i) and this Section 2.1(j)(ii) shall be limited to
$125 million, and any amounts in excess of $125 million shall be IMS HEALTH
Liabilities; and
(iii) notwithstanding anything to the contrary herein or in the Tax
Allocation Agreement, each of the Corporation and IMS HEALTH agree that the
Corporation's interests in certain prior business transactions described on
Schedule 2.1(j)(i) of the 1996 Distribution Agreement shall be held by IMS
HEALTH or a member of the IMS HEALTH Group and not by NMR or any member of
the NMR Group and any rights or Liabilities arising in connection with such
interests and any transactions relating thereto shall be IMS HEALTH rights
and Liabilities and not NMR rights and Liabilities.
(k) Matters Relating to Certain Partnerships. Each of the Corporation and
IMS HEALTH agrees that the interests in Cognizant Licensing Associates, L.P.
held by members of the NMR Group will be retired prior to the Distribution.
(l) Certain Acquisitions. The Corporation shall contribute to IMS HEALTH
any Assets relating to Xxxxx and PMSI which the Corporation acquires pursuant to
its agreements to acquire such companies.
(m) Undertaking of IMS HEALTH. On or prior to the Distribution Date, IMS
HEALTH will undertake to each of The Dun & Bradstreet Corporation and ACNielsen
Corporation to be jointly and severally liable for all "Cognizant Liabilities"
(as defined in the 1996 Distribution Agreement) under the 1996 Distribution
Agreement pursuant to an undertaking substantially in the form of Exhibit 2.1(m)
hereto.
(n) Corporation Debt. In connection with the Distribution, the Corporation
shall borrow an aggregate of $300 million, the proceeds of which will be used to
pay expenses of the Distribution and to repay existing intercompany indebtedness
to certain members of the IMS HEALTH Group. This $300 million of debt shall be
an obligation of the Corporation after the Distribution.
(o) Cognizant Common Stock Held by IMSA. IMS HEALTH agrees that promptly
after the Distribution Date IMS HEALTH will sell the 800,000 shares of Cognizant
Common Stock which IMS HEALTH will own as a result of Cognizant Common Stock
currently held by IMS America Ltd.
(p) 1996 Distribution. The Corporation agrees that it will not take any
action it is required or permitted to take pursuant to the terms of (i) the 1996
Distribution Agreement or (ii)
19
the Indemnity and Joint Defense Agreement, the Tax Allocation Agreement, the
Employee Benefits Agreement or any Ancillary Agreement referred to in the 1996
Distribution Agreement (other than the TAM Master Agreement and the Intellectual
Property Agreement (to the extent such action relates to intellectual property
used by the NMR Group)), in each such case without the prior written consent of
IMS HEALTH. The Corporation agrees that it will take any action pursuant to the
terms of the agreements referred to in clauses (i) and (ii) of the preceding
sentence that it is requested to take by IMS HEALTH; provided that IMS HEALTH
agrees to consult with the Corporation regarding the terms and conditions of any
settlement agreement relating to the IRI Action which would require the
Corporation to contribute to the amount of the settlement thereunder; and
provided further that if the Corporation reasonably asserts that such settlement
would cause financial hardship to the Corporation then the obligations of the
Corporation under this Agreement with respect to the payment of its portion of
such settlement shall be adjusted as follows:
(I) if the payment date for the settlement (the "Payment Date") occurs
prior to the second anniversary of the Distribution Date, then (A) the
Corporation shall pay 50% of the amount that it would otherwise be
obligated to pay hereunder in respect of such settlement on the Payment
Date, (B) IMS HEALTH shall pay the remaining 50% of such amount on behalf
of the Corporation on the Payment Date and (C) the Corporation shall
reimburse IMS HEALTH for the amount IMS HEALTH pays pursuant to clause (B)
(plus interest thereon at the prevailing three-month treasury rate) in two
equal installments to be paid on each of the first and second anniversaries
of the Payment Date; and
(II) if the Payment Date occurs on or after the second anniversary of
the Distribution Date but prior to the third anniversary of the
Distribution Date, then (A) the Corporation shall pay 66 2/3% of the amount
that it would otherwise be obligated to pay hereunder in respect of such
settlement on the Payment Date, (B) IMS HEALTH shall pay the remaining 33
1/3% of such amount on behalf of the Corporation on the Payment Date and
(C) the Corporation shall reimburse IMS HEALTH for the amount IMS HEALTH
pays pursuant to clause (B) (plus interest thereon at the prevailing
three-month treasury rate) on the first anniversary of the Payment Date.
Notwithstanding the foregoing, if the Payment Date occurs on or after the third
anniversary of the Distribution Date, then no adjustment shall be made to the
obligations of the Corporation under this Agreement with respect to the payment
of its portion of such settlement.
(q) Cognizant Restricted Stock. At the time of the Distribution, the
Corporation shall contribute to IMS HEALTH any IMS HEALTH Common Shares received
by the Corporation as a result of the forfeiture of restricted Cognizant Common
Stock by employees of the Corporation in connection with the Distribution.
20
(r) New Assistance Agreement. As soon as reasonably practicable after the
Distribution Date, the Corporation and IMS HEALTH shall enter into an amendment
to the Assistance Agreement (the "1996 Assistance Agreement") among the State of
Connecticut, acting by the Department of Economic and Community Development, The
Dun & Bradstreet Corporation, ACNielsen Corporation and the Corporation dated
October 30, 1996 pursuant to which the Corporation will be released from its
obligations under the 1996 Assistance Agreement in consideration for (i) the
Corporation's agreement to maintain no less than 170 Full Time Positions (as
defined in the 1996 Assistance Agreement) and (ii) IMS HEALTH's agreement to
maintain no less than 17 Full Time Positions (as defined in the 1996 Assistance
Agreement), in each such case for the remainder of the term of the 1996
Assistance Agreement. The Corporation and IMS HEALTH shall cooperate with one
another in negotiating such amendment and shall use their respective reasonable
efforts to conclude such negotiations on or prior to July 15, 1998.
(s) Other Transactions. On or prior to the Distribution Date, each of the
Corporation and IMS HEALTH shall consummate those other transactions in
connection with the Distribution that are contemplated by the ruling request
submissions by the Corporation to the Internal Revenue Service in respect of the
ruling granted on May 21, 1998, and not specifically referred to in
subparagraphs (a)-(r) above. After the Distribution Date, each of the
Corporation and IMS HEALTH will exercise good faith commercially reasonable
efforts to consummate as promptly as practicable all other transactions which
must be consummated in order fully to complete the Distribution and any of the
transactions contemplated hereby or by any of the Ancillary Agreements.
SECTION II.2. Intercompany Accounts. The parties acknowledge that the
Corporation has transferred $417 million to IMS HEALTH to repay intercompany
indebtedness to certain members of the IMS HEALTH Group existing as of May 31,
1998. On the Distribution Date, the Corporation shall transfer the remaining
cash balances referred to in Section 2.3 below to IMS HEALTH as a contribution
of capital. If there is a net amount due and payable from either party to the
other for intercompany receivables, payables and loans with respect to the month
of June, 1998, the amount characterized as a capital contribution by the
Corporation to IMS HEALTH shall be adjusted by such net amount due and no cash
payment in respect thereof shall be made.
SECTION II.3. Cash Balances. In addition to any other obligations hereunder
or under any Ancillary Agreement or otherwise, on the Distribution Date, the
Corporation shall contribute to IMS HEALTH all cash in the Corporation's
accounts other than the estimated cash amounts set forth on Schedule 2.3.
Promptly after the Distribution Date, but no later than July 31, 1998, the
Corporation and IMS HEALTH shall determine the actual amounts for each item on
Schedule 2.3. Any net variance between such actual amounts and the estimated
amounts set forth on Schedule 2.3 shall be paid by the appropriate party to the
other party on or promptly after July 31, 1998 (including the closing market
price on June 30, 1998 of the APAC Teleservices, Inc. shares held pursuant to
the Escrow Agreement identified in Schedule 1.1(ax)(ii)). If additional
variances are discovered thereafter and prior to December 31, 1998, the
appropriate party shall pay the amount thereof promptly to the other party.
21
SECTION II.4. Assumption and Satisfaction of Liabilities. Except as
otherwise specifically set forth in any Ancillary Agreement, and subject to
Section 2.3 hereof, from and after the Effective Time, (i) the Corporation
shall, and shall cause each member of the NMR Group to, assume, pay, perform and
discharge all NMR Liabilities and (ii) IMS HEALTH shall, and shall cause each
member of the IMS HEALTH Group to, assume, pay, perform and discharge all IMS
HEALTH Liabilities. To the extent reasonably requested to do so by another party
hereto, each party hereto agrees to sign such documents, in a form reasonably
satisfactory to such party, as may be reasonably necessary to evidence the
assumption of any Liabilities hereunder.
SECTION II.5. Resignations. (a) Subject to Section 2.5(b), the Corporation
and NMR shall cause all their employees to resign or be terminated, effective
not later than the Effective Time, from all positions as officers or directors
of any member of the IMS HEALTH Group in which they serve, and IMS HEALTH shall
cause all its employees to resign or be terminated, effective not later than the
Effective Time, from all positions as officers or directors of the Corporation
or any members of the NMR Group in which they serve.
(b) No person shall be required by any party hereto to resign from any
position or office with another party hereto if such person is disclosed in the
Information Statement as the person who is to hold such position or office
following the Distribution.
SECTION II.6. Further Assurances. In case at any time after the Effective
Time any further action is reasonably necessary or desirable to carry out the
purposes of this Agreement and the Ancillary Agreements, the proper officers of
each party to this Agreement shall take all such necessary action. Without
limiting the foregoing, the Corporation and IMS HEALTH shall use their
commercially reasonable efforts promptly to obtain all consents and approvals,
to enter into all amendatory agreements and to make all filings and applications
that may be required for the consummation of the transactions contemplated by
this Agreement and the Ancillary Agreements, including, without limitation, all
applicable governmental and regulatory filings.
SECTION II.7. Limited Representations or Warranties. Each of the parties
hereto agrees that no party hereto is, in this Agreement or in any other
agreement or document contemplated by this Agreement or otherwise, making any
representation or warranty whatsoever, as to title or value of Assets being
transferred. It is also agreed that, notwithstanding anything to the contrary
otherwise expressly provided in the relevant Conveyancing and Assumption
Instrument, all Assets either transferred to or retained by the parties, as the
case may be, shall be "as is, where is" and that (subject to Section 2.6) the
party to which such Assets are to be transferred hereunder shall bear the
economic and legal risk that such party's or any of the Subsidiaries' title to
any such Assets shall be other than good and marketable and free from
encumbrances. Similarly, each party hereto agrees that, except as otherwise
expressly provided in the relevant Conveyancing and Assumption Instrument, no
party hereto is representing or warranting in any way that the obtaining of any
consents or approvals, the execution and delivery of any amendatory agreements
and the making of any filings or applications contemplated by this Agreement
will satisfy the provisions of any or all applicable agreements or the
requirements of any or all applicable laws or judgments, it being agreed that
the party to which any Assets are transferred shall bear the economic and legal
risk
22
that any necessary consents or approvals are not obtained or that any
requirements of laws or judgments are not complied with.
SECTION II.8. Guarantees. (a) Except as otherwise specified in any
Ancillary Agreement, the Corporation and IMS HEALTH shall use their commercially
reasonable efforts to have, on or prior to the Distribution Date, or as soon as
practicable thereafter, the Corporation and any member of the NMR Group removed
as guarantor of or obligor for any IMS HEALTH Liability, including, without
limitation, in respect of those guarantees set forth on Schedule 2.8(a) to the
extent that they relate to IMS HEALTH Liabilities.
(b) Except as otherwise specified in any Ancillary Agreement, the
Corporation and IMS HEALTH shall use their commercially reasonable efforts to
have, on or prior to the Distribution Date, or as soon as practicable
thereafter, any member of the IMS HEALTH Group removed as guarantor of or
obligor for any NMR Liability, including, without limitation, in respect of
those guarantees set forth on Schedule 2.8(b) to the extent that they relate to
NMR Liabilities.
(c) If the Corporation or IMS HEALTH is unable to obtain, or to cause to be
obtained, any such required removal as set forth in clauses (a) or (b) of this
Section 2.8, the applicable guarantor or obligor shall continue to be bound as
such and, unless not permitted by law or the terms thereof, the relevant
beneficiary shall or shall cause one of its Subsidiaries, as agent or
subcontractor for such guarantor or obligor to pay, perform and discharge fully
all the obligations or other liabilities of such guarantor or obligor thereunder
from and after the date hereof.
SECTION II.9. Witness Services. At all times from and after the
Distribution Date, each of the Corporation and IMS HEALTH shall use their
commercially reasonable efforts to make available to the other, upon reasonable
written request, its and its Subsidiaries' officers, directors, employees and
agents as witnesses to the extent that (i) such persons may reasonably be
required in connection with the prosecution or defense of any Action in which
the requesting party may from time to time be involved and (ii) there is no
conflict in the Action between the requesting party and the Corporation or IMS
HEALTH as applicable. A party providing witness services to the other party
under this Section shall be entitled to receive from the recipient of such
services, upon the presentation of invoices therefor, payments for such amounts,
relating to disbursements and other out-of-pocket expenses (which shall be
deemed to exclude the costs of salaries and benefits of employees who are
witnesses), as may be reasonably incurred in providing such witness services.
23
SECTION II.10. Certain Post-Distribution Transactions. (a)(i) The
Corporation shall comply and shall cause its Subsidiaries to comply with and
otherwise not take action inconsistent with each representation and statement
made to the Internal Revenue Service in connection with the request by the
Corporation for a ruling letter in respect of the Distribution as to certain tax
aspects of the Distribution and (ii) until two years after the Distribution
Date, the Corporation will maintain its status as a company engaged in the
active conduct of a trade or business, as defined in Section 355(b) of the Code.
(b)(i) IMS HEALTH shall comply and shall cause its Subsidiaries to comply
with and otherwise not take action inconsistent with each representation and
statement made to the Internal Revenue Service in connection with the request by
the Corporation for a ruling letter in respect of the Distribution as to certain
tax aspects of the Distribution and (ii) until two years after the Distribution
Date, IMS HEALTH will maintain its status as a company engaged in the active
conduct of a trade or business, as defined in Section 355(b) of the Code.
(c) The Corporation agrees that until two years after the Distribution
Date, it will not (i) merge or consolidate with or into any other corporation,
(ii) liquidate or partially liquidate, (iii) sell or transfer all or
substantially all of its assets (within the meaning of Rev. Proc. 77-37, 1977 -
2 C.B. 568) in a single transaction or series of related transactions, (iv)
redeem or otherwise repurchase any Cognizant Common Stock (other than as
described in Section 4.05(1)(b) of Rev. Proc. 96-30, 1996-1 C.B. 696), or (v)
take any other action or actions which in the aggregate would have the effect of
causing or permitting one or more persons to acquire directly or indirectly
stock representing a 50 percent or greater interest (within the meaning of
Section 355(e) of the Code) in the Corporation, unless prior to taking such
action the Corporation has obtained (and provided to IMS HEALTH) a written
opinion of a law firm reasonably acceptable to IMS HEALTH, or a supplemental
ruling from the Internal Revenue Service, that such action or actions will not
result in (i) the Distribution failing to qualify under Section 355(a) of the
Code or (ii) the IMS HEALTH Common Shares failing to qualify as qualified
property for purposes of Section 355(c)(2) of the Code by reason of Section
355(e) of the Code.
(d) Notwithstanding anything to the contrary herein or in the Tax
Allocation Agreement, if the Corporation or IMS HEALTH (or any of their
respective Subsidiaries) fails to comply with any of its obligations under
Sections 2.10(a), 2.10(b) and 2.10(c) above or takes or fails to take any action
on or after the Distribution Date, and such failure to comply, action or
omission contributes to a determination that (i) the Distribution fails to
qualify under Section 355(a) of the Code or (ii) the IMS HEALTH Common Shares
fail to qualify as qualified property for purposes of Section 355(c)(2) of the
Code by reason of Section 355(e) of the Code, then such party shall indemnify
and hold harmless the other party and each member of the consolidated group of
which the other party is a member from and against any and all federal, state
and local taxes, including any interest, penalties or additions to tax, imposed
upon or incurred by such other party, any member of its group or any stockholder
of either party as a result of the failure of the Distribution to qualify under
Section 355(a) of the Code or the application of Section 355(e). The obligation
of the Corporation to indemnify IMS HEALTH pursuant to the preceding sentence
shall not be affected by the delivery of any legal opinion or supplemental
ruling under Section 2.10(c).
24
SECTION II.11. Transfers Not Effected Prior to the Distribution; Transfers
Deemed Effective as of the Distribution Date. To the extent that any transfers
contemplated by this Article II shall not have been consummated on or prior to
the Distribution Date, the parties shall cooperate to effect such transfers as
promptly following the Distribution Date as shall be practicable. Nothing herein
shall be deemed to require the transfer of any Assets or the assumption of any
Liabilities which by their terms or operation of law cannot be transferred;
provided, however, that the parties hereto and their respective Subsidiaries
shall cooperate to seek to obtain any necessary consents or approvals for the
transfer of all Assets and Liabilities contemplated to be transferred pursuant
to this Article II. In the event that any such transfer of Assets or Liabilities
has not been consummated, from and after the Distribution Date the party
retaining such Asset or Liability shall hold such Asset in trust for the use and
benefit of the party entitled thereto (at the expense of the party entitled
thereto) or retain such Liability for the account of the party by whom such
Liability is to be assumed pursuant hereto, as the case may be, and take such
other action as may be reasonably requested by the party to whom such Asset is
to be transferred, or by whom such Liability is to be assumed, as the case may
be, in order to place such party, insofar as is reasonably possible, in the same
position as would have existed had such Asset or Liability been transferred as
contemplated hereby. As and when any such Asset or Liability becomes
transferable, such transfer shall be effected forthwith. The parties agree that,
as of the Distribution Date, each party hereto shall be deemed to have acquired
complete and sole beneficial ownership over all of the Assets, together with all
rights, powers and privileges incident thereto, and shall be deemed to have
assumed in accordance with the terms of this Agreement all of the Liabilities,
and all duties, obligations and responsibilities incident thereto, which such
party is entitled to acquire or required to assume pursuant to the terms of this
Agreement.
SECTION II.12. Conveyancing and Assumption Instruments. In connection with
the transfers of Assets and the assumptions of Liabilities contemplated by this
Agreement, the parties shall execute or cause to be executed by the appropriate
entities the Conveyancing and Assumption Instruments in substantially the form
contemplated hereby for transfers to be effected pursuant to New York law or the
laws of one of the other states of the United States or, if not appropriate for
a given transfer, and for transfers to be effected pursuant to non-U.S. laws, in
such other form as the parties shall reasonably agree, including the transfer of
real property with deeds as may be appropriate. The transfer of capital stock
shall be effected by means of delivery of stock certificates and executed stock
powers and notation on the stock record books of the corporation or other legal
entities involved, or by such other means as may be required in any non-U.S.
jurisdiction to transfer title to stock and, to the extent required by
applicable law, by notation on public registries.
SECTION II.13. Ancillary Agreements. On or prior to the Distribution Date,
each of the Corporation and IMS HEALTH shall enter into, and/or (where
applicable) shall cause members of the NMR Group or the IMS HEALTH Group, as
applicable, to enter into, the Ancillary Agreements and any other agreements in
respect of the Distribution reasonably necessary or appropriate in connection
with the transactions contemplated hereby and thereby.
25
SECTION II.14. Corporate Names. (a) Except as otherwise specifically
provided in any Ancillary Agreement:
(i) on or prior to the Distribution Date, the Corporation shall change
its name to remove any reference to "Cognizant" therein;
(ii) as soon as reasonably practicable after the Distribution Date but
in any event within six months thereafter, the Corporation will, at its own
expense, remove (or, if necessary, on an interim basis, cover up) any and
all exterior signs and other identifiers located on any of its property or
premises or on the property or premises used by it or its Subsidiaries
(except property or premises to be shared with IMS HEALTH or its
Subsidiaries after the Distribution) which refer or pertain to Cognizant or
which include the Cognizant name, logo or other trademark or other
intellectual property utilizing Cognizant;
(iii) as soon as reasonably practicable after the Distribution Date
but in any event within six months thereafter, the Corporation will, and
will cause its Subsidiaries to, remove from all letterhead, envelopes,
invoices and other communications media of any kind, all references to
Cognizant, including the "Cognizant" name, logo and any other trademark or
other intellectual property utilizing Cognizant (except that the
Corporation shall not be required to take any such action with respect to
materials in the possession of customers), and neither the Corporation nor
its Subsidiaries shall use or display the "Cognizant" name, logo or other
trademarks or intellectual property utilizing Cognizant without the prior
written consent of any assignee of the Corporation's rights to the
"Cognizant" name, logo or other trademarks or intellectual property
utilizing Cognizant;
(iv) as soon as reasonably practicable after the Distribution Date,
but in any event within six months thereafter, the Corporation will cause
its Subsidiaries to change their corporate names to the extent necessary to
remove and eliminate any reference to Cognizant, including the "Cognizant"
name; provided, however, that notwithstanding the foregoing requirements of
this Section 2.14(a), if the Corporation has exercised good faith efforts
to comply with this clause (iv) but is unable, due to regulatory or other
circumstance beyond its control, to effect a corporate name change in
compliance with applicable law, then the Corporation or its Subsidiary will
not be deemed to be in breach hereof if it continues to exercise good faith
efforts to effectuate such name change and does effectuate such name change
within nine months after the Distribution Date, and, in such circumstances,
such party may continue to include in exterior signs and other identifiers
and in letterhead, envelopes, invoices and other communications references
to the name which includes references to Cognizant, but only to the extent
necessary to identify such party and only until such party's corporate name
can be changed to remove and eliminate such references; and
(v) notwithstanding the foregoing clauses (i) through (iv), nothing
herein or in any Ancillary Agreement shall require the Corporation to take
any action to remove any reference to Cognizant, including the "Cognizant"
name, from any stock certificate relating to shares of Cognizant Common
Stock outstanding on or prior to the Effective Time;
26
provided that from and after the Effective Time, any newly issued stock
certificates representing Cognizant Common Stock (which at the Effective
Time will become NMR Common Stock) shall not have any reference to
Cognizant, including the "Cognizant" name.
(b) Except as otherwise specifically provided in any Ancillary Agreement:
(i) as soon as reasonably practicable after the Distribution Date but
in any event within six months thereafter, IMS HEALTH will, at its own
expense, remove (or, if necessary, on an interim basis, cover up) any and
all exterior signs and other identifiers located on any of their respective
property or premises owned or used by them or their respective Subsidiaries
(except property or premises to be shared with the Corporation or its
Subsidiaries after the Distribution) which refer or pertain to NMR or which
include the "Xxxxxxx Media Research" or "Nielsen" name, logo or other
trademark or other NMR intellectual property;
(ii) as soon as reasonably practicable after the Distribution Date but
in any event within six months thereafter, IMS HEALTH will, and will cause
its respective Subsidiaries to, remove from all letterhead, envelopes,
invoices and other communications media of any kind, all references to NMR,
including the "Xxxxxxx Media Research" or "Nielsen" name, logo and any
other trademark or other NMR intellectual property (except that IMS HEALTH
shall not be required to take any such action with respect to materials in
the possession of customers), and neither IMS HEALTH nor any of its
Subsidiaries shall use or display the "Xxxxxxx Media Research" or "Nielsen"
name, logo or other trademarks or NMR intellectual property without the
prior written consent of the Corporation; and
(iii) as soon as reasonably practicable after the Distribution Date
but in any event within six months thereafter, IMS HEALTH will, and will
cause its Subsidiaries to, change their corporate names to the extent
necessary to remove and eliminate any reference to NMR, including the
"Xxxxxxx Media Research" or "Nielsen" name; provided, however, that
notwithstanding the foregoing requirements of this Section 2.14(b), if IMS
HEALTH has exercised good faith efforts to comply with this clause (iii)
but is unable, due to regulatory or other circumstance beyond its control,
to effect a corporate name change in compliance with applicable law, then
IMS HEALTH or its Subsidiary will not be deemed to be in breach hereof if
it continues to exercise good faith efforts to effectuate such name change
and does effectuate such name change within nine months after the
Distribution Date, and, in such circumstances, such party may continue to
include in exterior signs and other identifiers and in letterhead,
envelopes, invoices and other communications references to the name which
includes references to NMR but only to the extent necessary to identify
such party and only until such party's corporate name can be changed to
remove and eliminate such references.
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ARTICLE III. INDEMNIFICATION
SECTION III.1. Indemnification by the Corporation. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, the Corporation shall indemnify, defend and hold harmless the IMS
HEALTH Indemnitees from and against any and all Indemnifiable Losses of the IMS
HEALTH Indemnitees arising out of, by reason of or otherwise in connection with
the NMR Liabilities or alleged NMR Liabilities, including any breach by the
Corporation of any provision of this Agreement or any Ancillary Agreement.
SECTION III.2. Indemnification by IMS HEALTH. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, IMS HEALTH shall indemnify, defend and hold harmless the NMR
Indemnitees from and against any and all Indemnifiable Losses of the NMR
Indemnitees arising out of, by reason of or otherwise in connection with the IMS
HEALTH Liabilities or alleged IMS HEALTH Liabilities, including any breach by
IMS HEALTH of any provision of this Agreement or any Ancillary Agreement.
SECTION III.3. Procedures for Indemnification.
(a) Third Party Claims. If a claim or demand is made against an NMR
Indemnitee or a IMS HEALTH Indemnitee (each, an "Indemnitee") by any person who
is not a party to this Agreement (a "Third Party Claim") as to which such
Indemnitee is entitled to indemnification pursuant to this Agreement, such
Indemnitee shall notify the party which is or may be required pursuant to
Section 3.1 or Section 3.2 hereof to make such indemnification (the
"Indemnifying Party") in writing, and in reasonable detail, of the Third Party
Claim promptly (and in any event within 15 business days) after receipt by such
Indemnitee of written notice of the Third Party Claim; provided, however, that
failure to give such notification shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure (except that the Indemnifying Party shall
not be liable for any expenses incurred during the period in which the
Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver
to the Indemnifying Party, promptly (and in any event within five business days)
after the Indemnitee's receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnitee relating to the Third Party
Claim.
If a Third Party Claim is made against an Indemnitee, the Indemnifying
Party shall be entitled to participate in the defense thereof and, if it so
chooses and acknowledges in writing its obligation to indemnify the Indemnitee
therefor, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided that such counsel is not reasonably objected to by
the Indemnitee. Should the Indemnifying Party so elect to assume the defense of
a Third Party Claim, the Indemnifying Party shall, within 30 days (or sooner if
the nature of the Third Party Claim so requires), notify the Indemnitee of its
intent to do so, and the Indemnifying Party shall thereafter not be liable to
the Indemnitee for legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense thereof; provided, that such
Indemnitee shall have the right to employ counsel to represent such Indemnitee
if, in such Indemnitee's reasonable judgment, a conflict of interest between
such Indemnitee and such Indemnifying Party exists in respect of such claim
which
28
would make representation of both such parties by one counsel inappropriate, and
in such event the fees and expenses of such separate counsel shall be paid by
such Indemnifying Party. If the Indemnifying Party assumes such defense, the
Indemnitee shall have the right to participate in the defense thereof and to
employ counsel, subject to the proviso of the preceding sentence, at its own
expense, separate from the counsel employed by the Indemnifying Party, it being
understood that the Indemnifying Party shall control such defense. The
Indemnifying Party shall be liable for the fees and expenses of counsel employed
by the Indemnitee for any period during which the Indemnifying Party has failed
to assume the defense thereof (other than during the period prior to the time
the Indemnitee shall have given notice of the Third Party Claim as provided
above). If the Indemnifying Party so elects to assume the defense of any Third
Party Claim, all of the Indemnitees shall cooperate with the Indemnifying Party
in the defense or prosecution thereof, including by providing or causing to be
provided, Records and witnesses as soon as reasonably practicable after
receiving any request therefor from or on behalf of the Indemnifying Party.
If the Indemnifying Party acknowledges in writing responsibility for a
Third Party Claim, then in no event will the Indemnitee admit any liability with
respect to, or settle, compromise or discharge, any Third Party Claim without
the Indemnifying Party's prior written consent; provided, however, that the
Indemnitee shall have the right to settle, compromise or discharge such Third
Party Claim without the consent of the Indemnifying Party if the Indemnitee
releases the Indemnifying Party from its indemnification obligation hereunder
with respect to such Third Party Claim and such settlement, compromise or
discharge would not otherwise adversely affect the Indemnifying Party. If the
Indemnifying Party acknowledges in writing liability for a Third Party Claim,
the Indemnitee will agree to any settlement, compromise or discharge of a Third
Party Claim that the Indemnifying Party may recommend and that by its terms
obligates the Indemnifying Party to pay the full amount of the liability in
connection with such Third Party Claim and releases the Indemnitee completely in
connection with such Third Party Claim and that would not otherwise adversely
affect the Indemnitee; provided, however, that the Indemnitee may refuse to
agree to any such settlement, compromise or discharge if the Indemnitee agrees
that the Indemnifying Party's indemnification obligation with respect to such
Third Party Claim shall not exceed the amount that would be required to be paid
by or on behalf of the Indemnifying Party in connection with such settlement,
compromise or discharge. If an Indemnifying Party elects not to assume the
defense of a Third Party Claim, or fails to notify an Indemnitee of its election
to do so as provided herein, such Indemnitee may compromise, settle or defend
such Third Party Claim.
Notwithstanding the foregoing, the Indemnifying Party shall not be entitled
to assume the defense of any Third Party Claim (and shall be liable for the fees
and expenses of counsel incurred by the Indemnitee in defending such Third Party
Claim) if the Third Party Claim seeks an order, injunction or other equitable
relief or relief for other than money damages against the Indemnitee which the
Indemnitee reasonably determines, after conferring with its counsel, cannot be
separated from any related claim for money damages. If such equitable relief or
other relief portion of the Third Party Claim can be so separated from that for
money damages, the Indemnifying Party shall be entitled to assume the defense of
the portion relating to money damages.
29
(b) In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Third-Party Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Third-Party Claim against any claimant or plaintiff asserting
such Third-Party Claim. Such Indemnitee shall cooperate with such Indemnifying
Party in a reasonable manner, and at the cost and expense of such Indemnifying
Party, in prosecuting any subrogated right or claim.
(c) The remedies provided in this Article III shall be cumulative and shall
not preclude assertion by any Indemnitee of any other rights or the seeking of
any and all other remedies against any Indemnifying Party.
SECTION III.4. Indemnification Payments. Indemnification required by this
Article III shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or loss,
liability, claim, damage or expense is incurred.
ARTICLE IV. ACCESS TO INFORMATION
SECTION IV.1. Provision of Corporate Records.
(a) Other than in circumstances in which indemnification is sought pursuant
to Article III (in which event the provisions of such Article will govern),
after the Distribution Date, upon the prior written request by IMS HEALTH for
specific and identified agreements, documents, books, records or files
(collectively, "Records") which relate to (x) IMS HEALTH or the conduct of the
IMS HEALTH Business up to the Effective Time, or (y) any Ancillary Agreement to
which the Corporation and IMS HEALTH are parties, as applicable, the Corporation
shall arrange, as soon as reasonably practicable following the receipt of such
request, for the provision of appropriate copies of such Records (or the
originals thereof if IMS HEALTH has a reasonable need for such originals) in the
possession or control of the Corporation or any of its Subsidiaries, but only to
the extent such items are not already in the possession or control of IMS
HEALTH.
(b) Other than in circumstances in which indemnification is sought pursuant
to Article III (in which event the provisions of such Article will govern),
after the Distribution Date, upon the prior written request by the Corporation
for specific and identified Records which relate to (x) the Corporation, NMR or
the conduct of the NMR Business up to the Effective Time, or (y) any Ancillary
Agreement to which IMS HEALTH and the Corporation are parties, as applicable,
IMS HEALTH shall arrange, as soon as reasonably practicable following the
receipt of such request, for the provision of appropriate copies of such Records
(or the originals thereof if the Corporation has a reasonable need for such
originals) in the possession or control of IMS HEALTH or any of its
Subsidiaries, but only to the extent such items are not already in the
possession or control of the Corporation.
30
SECTION IV.2. Access to Information. Other than in circumstances in which
indemnification is sought pursuant to Article III (in which event the provisions
of such Article will govern), from and after the Distribution Date, each of the
Corporation and IMS HEALTH shall afford to the other and its authorized
accountants, counsel and other designated representatives reasonable access
during normal business hours, subject to appropriate restrictions for
classified, privileged or confidential information, to the personnel,
properties, books and records of such party and its Subsidiaries insofar as such
access is reasonably required by the other party and relates to (x) such other
party or the conduct of its business prior to the Effective Time or (y) any
Ancillary Agreement to which each of the party requesting such access and the
party requested to grant such access are parties.
SECTION IV.3. Reimbursement; Other Matters. Except to the extent otherwise
contemplated by any Ancillary Agreement, a party providing Records or access to
information to the other party under this Article IV shall be entitled to
receive from the recipient, upon the presentation of invoices therefor, payments
for such amounts, relating to supplies, disbursements and other out-of-pocket
expenses, as may be reasonably incurred in providing such Records or access to
information.
SECTION IV.4. Confidentiality. Each of (i) the Corporation and its
Subsidiaries and (ii) IMS HEALTH and its Subsidiaries shall not use or permit
the use of (without the prior written consent of the other) and shall keep, and
shall cause its consultants and advisors to keep, confidential all information
concerning the other parties in its possession, its custody or under its control
(except to the extent that (A) such information has been in the public domain
through no fault of such party or (B) such information has been later lawfully
acquired from other sources by such party or (C) this Agreement or any other
Ancillary Agreement or any other agreement entered into pursuant hereto permits
the use or disclosure of such information) to the extent such information (w)
relates to or was acquired during the period up to the Effective Time, (x)
relates to any Ancillary Agreement, (y) is obtained in the course of performing
services for the other party pursuant to any Ancillary Agreement, or (z) is
based upon or is derived from information described in the preceding clauses
(w), (x) or (y), and each party shall not (without the prior written consent of
the other) otherwise release or disclose such information to any other person,
except such party's auditors and attorneys, unless compelled to disclose such
information by judicial or administrative process or unless such disclosure is
required by law and such party has used commercially reasonable efforts to
consult with the other affected party or parties prior to such disclosure.
SECTION IV.5. Privileged Matters. The parties hereto recognize that legal
and other professional services that have been and will be provided on or prior
to the Distribution Date have been and will be rendered for the benefit of each
of the Corporation, the members of the NMR Group and the members of the IMS
HEALTH Group, and that each of the Corporation, the members of the NMR Group and
the members of the IMS HEALTH Group should be deemed to be the client for the
purposes of asserting all privileges which may be asserted under applicable law.
To allocate the interests of each party in the information as to which any party
is entitled to assert a privilege, the parties agree as follows:
31
(a) The Corporation shall be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information
which relates solely to the NMR Business, whether or not the privileged
information is in the possession of or under the control of the Corporation or
IMS HEALTH. The Corporation shall also be entitled, in perpetuity, to control
the assertion or waiver of all privileges in connection with privileged
information that relates solely to the subject matter of any claims constituting
NMR Liabilities, now pending or which may be asserted in the future, in any
lawsuits or other proceedings initiated against or by the Corporation, whether
or not the privileged information is in the possession of or under the control
of the Corporation or IMS HEALTH.
(b) IMS HEALTH shall be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the IMS HEALTH Business, whether or not the privileged
information is in the possession of or under the control of the Corporation or
IMS HEALTH. IMS HEALTH shall also be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information
which relates solely to the subject matter of any claims constituting IMS HEALTH
Liabilities, now pending or which may be asserted in the future, in any lawsuits
or other proceedings initiated against or by IMS HEALTH whether or not the
privileged information is in the possession of or under the control of the
Corporation or IMS HEALTH.
(c) The parties hereto agree that they shall have a shared privilege, with
equal right to assert or waive, subject to the restrictions in this Section 4.5,
with respect to all privileges not allocated pursuant to the terms of Sections
4.5(a) and (b). All privileges relating to any claims, proceedings, litigation,
disputes, or other matters which involve both the Corporation and IMS HEALTH in
respect of which both parties retain any responsibility or liability under this
Agreement, shall be subject to a shared privilege among them.
(d) No party hereto may waive any privilege which could be asserted under
any applicable law, and in which the other party hereto has a shared privilege,
without the consent of the other party, except to the extent reasonably required
in connection with any litigation with third-parties or as provided in
subsection (e) below. Consent shall be in writing, or shall be deemed to be
granted unless written objection is made within twenty (20) days after notice
upon the other party requesting such consent.
(e) In the event of any litigation or dispute between or among any of the
parties hereto, any party and a Subsidiary of another party hereto, or a
Subsidiary of one party hereto and a Subsidiary of another party hereto, either
such party may waive a privilege in which the other party has a shared
privilege, without obtaining the consent of the other party, provided that such
waiver of a shared privilege shall be effective only as to the use of
information with respect to the litigation or dispute between the parties and/or
their Subsidiaries, and shall not operate as a waiver of the shared privilege
with respect to third parties.
(f) If a dispute arises between or among the parties hereto or their
respective Subsidiaries regarding whether a privilege should be waived to
protect or advance the interest of any
32
party, each party agrees that it shall negotiate in good faith, shall endeavor
to minimize any prejudice to the rights of the other parties, and shall not
unreasonably withhold consent to any request for waiver by another party. Each
party hereto specifically agrees that it will not withhold consent to waiver for
any purpose except to protect its own legitimate interests.
(g) Upon receipt by any party hereto or by any Subsidiary thereof of any
subpoena, discovery or other request which arguably calls for the production or
disclosure of information subject to a shared privilege or as to which another
party has the sole right hereunder to assert a privilege, or if any party
obtains knowledge that any of its or any of its Subsidiaries' current or former
directors, officers, agents or employees have received any subpoena, discovery
or other requests which arguably calls for the production or disclosure of such
privileged information, such party shall promptly notify the other party or
parties of the existence of the request and shall provide the other party or
parties a reasonable opportunity to review the information and to assert any
rights it or they may have under this Section 4.5 or otherwise to prevent the
production or disclosure of such privileged information.
(h) The transfer of all Records and other information pursuant to this
Agreement is made in reliance on the agreement of the Corporation and IMS
HEALTH, as set forth in Sections 4.4 and 4.5, to maintain the confidentiality of
privileged information and to assert and maintain all applicable privileges. The
access to information being granted pursuant to Sections 4.1 and 4.2 hereof, the
agreement to provide witnesses and individuals pursuant to Sections 2.9 and 3.3
hereof, the furnishing of notices and documents and other cooperative efforts
contemplated by Section 3.3 hereof, and the transfer of privileged information
between and among the parties and their respective Subsidiaries pursuant to this
Agreement shall not be deemed a waiver of any privilege that has been or may be
asserted under this Agreement or otherwise.
SECTION IV.6. Ownership of Information. Any information owned by one party
or any of its Subsidiaries that is provided to a requesting party pursuant to
Article III or this Article IV shall be deemed to remain the property of the
providing party. Unless specifically set forth herein, nothing contained in this
Agreement shall be construed as granting or conferring rights of license or
otherwise in any such information.
SECTION IV.7. Limitation of Liability. (a) No party shall have any
liability to any other party in the event that any information exchanged or
provided pursuant to this Agreement which is an estimate or forecast, or which
is based on an estimate or forecast, is found to be inaccurate.
(b) Other than in connection with Section 2.2, no party or any Subsidiary
thereof shall have any liability or claim against any other party or any
Subsidiary of any other party based upon, arising out of or resulting from any
agreement, arrangement, course of dealing or understanding existing on or prior
to the Distribution Date (other than this Agreement or any Ancillary Agreement
or any agreement entered into in connection herewith or in order to consummate
the transactions contemplated hereby or thereby), unless such agreement,
arrangement, course of dealing or understanding is listed on Schedule 4.7(b)
hereto, and any such liability or
33
claim, whether or not in writing, which is not reflected on such Schedule, is
hereby irrevocably cancelled, released and waived.
SECTION IV.8. Other Agreements Providing for Exchange of Information. The
rights and obligations granted under this Article IV are subject to any specific
limitations, qualifications or additional provisions on the sharing, exchange or
confidential treatment of information set forth in any Ancillary Agreement.
ARTICLE V. ADMINISTRATIVE SERVICES
SECTION V.1. Performance of Services. Beginning on the Distribution Date,
each party will provide, or cause one or more of its Subsidiaries to provide, to
the other party and its Subsidiaries such services on such terms as may be set
forth in the Shared Transaction Services Agreement. Except as otherwise set
forth in such agreement or any Schedule thereto, the party that is to provide
the services (the "Provider") will use (and will cause its Subsidiaries to use)
commercially reasonable efforts to provide such services to the other party (the
"Recipient") and its Subsidiaries in a satisfactory and timely manner and as
further specified in such agreement.
SECTION V.2. Independence. Unless otherwise agreed in writing, all
employees and representatives of the Provider providing the scheduled services
to the Recipient will be deemed for purposes of all compensation and employee
benefits matters to be employees or representatives of the Provider and not
employees or representatives of the Recipient. In performing such services, such
employees and representatives will be under the direction, control and
supervision of the Provider (and not the Recipient) and the Provider will have
the sole right to exercise all authority with respect to the employment
(including, without limitation, termination of employment), assignment and
compensation of such employees and representatives.
SECTION V.3. Non-exclusivity. Nothing in this Agreement precludes any party
from obtaining, in whole or in part, services of any nature that may be
obtainable from the other party from its own employees or from providers other
than the other party.
ARTICLE VI. DISPUTE RESOLUTION
34
SECTION VI.1. Negotiation. In the event of a controversy, dispute or claim
arising out of, in connection with, or in relation to the interpretation,
performance, nonperformance, validity or breach of this Agreement or otherwise
arising out of, or in any way related to this Agreement or the transactions
contemplated hereby, including, without limitation, any claim based on contract,
tort, statute or constitution (but excluding any controversy, dispute or claim
arising out of any agreement relating to the use or lease of real property if
any third party is a party to such controversy, dispute or claim) (collectively,
"Agreement Disputes"), the general counsels of the parties shall negotiate in
good faith for a reasonable period of time to settle such Agreement Dispute,
provided such reasonable period shall not, unless otherwise agreed by the
parties in writing, exceed 30 days from the time the parties began such
negotiations; provided further that in the event of any arbitration in
accordance with Section 6.2 hereof, the parties shall not assert the defenses of
statute of limitations and laches arising for the period beginning after the
date the parties began negotiations hereunder, and any contractual time period
or deadline under this Agreement or any Ancillary Agreement to which such
Agreement Dispute relates shall not be deemed to have passed until such
Agreement Dispute has been resolved.
SECTION VI.2. Arbitration. If after such reasonable period such general
counsels are unable to settle such Agreement Dispute (and in any event, unless
otherwise agreed in writing by the parties, after 60 days have elapsed from the
time the parties began such negotiations), such Agreement Dispute shall be
determined, at the request of any party, by arbitration conducted in New York
City, before and in accordance with the then-existing International Arbitration
Rules of the American Arbitration Association (the "Rules"). In any dispute
between the parties hereto, the number of arbitrators shall be one. Any judgment
or award rendered by the arbitrator shall be final, binding and nonappealable
(except upon grounds specified in 9 U.S.C. '10(a) as in effect on the date
hereof). If the parties are unable to agree on the arbitrator, the arbitrator
shall be selected in accordance with the Rules; provided that the arbitrator
shall be a U.S. national. Any controversy concerning whether an Agreement
Dispute is an arbitrable Agreement Dispute, whether arbitration has been waived,
whether an assignee of this Agreement is bound to arbitrate, or as to the
interpretation of enforceability of this Article VI shall be determined by the
arbitrator. In resolving any dispute, the parties intend that the arbitrator
apply the substantive laws of the State of New York, without regard to the
choice of law principles thereof. The parties intend that the provisions to
arbitrate set forth herein be valid, enforceable and irrevocable. The parties
agree to comply with any award made in any such arbitration proceeding that has
become final in accordance with the Rules and agree to enforcement of or entry
of judgment upon such award, by any court of competent jurisdiction, including
(a) the Supreme Court of the State of New York, New York County, or (b) the
United States District Court for the Southern District of New York, in
accordance with Section 8.17 hereof. The arbitrator shall be entitled, if
appropriate, to award any remedy in such proceedings, including, without
limitation, monetary damages, specific performance and all other forms of legal
and equitable relief; provided, however, the arbitrator shall not be entitled to
award punitive damages. Without limiting the provisions of the Rules, unless
otherwise agreed in writing by or among the parties or permitted by this
Agreement, the parties shall keep confidential all matters relating to the
arbitration or the award, provided such matters may be disclosed (i) to the
extent reasonably necessary in any proceeding brought to enforce the award or
for entry of a judgment upon the award and (ii) to the extent otherwise required
by law. Notwithstanding Article
35
32 of the Rules, the party other than the prevailing party in the arbitration
shall be responsible for all of the costs of the arbitration, including legal
fees and other costs specified by such Article 32. Nothing contained herein is
intended to or shall be construed to prevent any party, in accordance with
Article 22(3) of the Rules or otherwise, from applying to any court of competent
jurisdiction for interim measures or other provisional relief in connection with
the subject matter of any Agreement Disputes.
SECTION VI.3. Continuity of Service and Performance. Unless otherwise
agreed in writing, the parties will continue to provide service and honor all
other commitments under this Agreement and each Ancillary Agreement during the
course of dispute resolution pursuant to the provisions of this Article VI with
respect to all matters not subject to such dispute, controversy or claim.
ARTICLE VII. INSURANCE
SECTION VII.1. Policies and Rights Included Within Assets; Assignment of
Policies. (a) Policy Rights. The IMS HEALTH Assets shall include (i) any and all
rights of an insured party under each of the Shared Policies, subject to the
terms of such Shared Policies and any limitations or obligations of IMS HEALTH
contemplated by this Article VII, specifically including rights of indemnity and
the right to be defended by or at the expense of the insurer, with respect to
all claims, suits, actions, proceedings, injuries, losses, liabilities, damages
and expenses incurred or claimed to have been incurred on or prior to the
Distribution Date by any party in or in connection with the conduct of the IMS
HEALTH Business or, to the extent any claim is made against IMS HEALTH or any of
its Subsidiaries, the conduct of the NMR Business, and which claims, suits,
actions, proceedings, injuries, losses, liabilities, damages and expenses may
arise out of an insured or insurable occurrence under one or more of such Shared
Policies.
(b) Assignment of Shared Policies. Subject to the terms and conditions
hereof, the Corporation hereby assigns, transfers and conveys to IMS HEALTH all
of the Corporation's right, title and interest in and to any and all of the
Shared Policies, including, without limitation, the right of indemnity, the
right to be defended by or at the expense of the insurer and the right to any
applicable Insurance Proceeds thereunder; and the Corporation and IMS HEALTH
shall use their commercially reasonable efforts to obtain any required consents
of insurers to the assignment contemplated by this paragraph.
SECTION VII.2. Post-Distribution Date Claims. If, subsequent to the
Distribution Date, any person shall assert a claim against IMS HEALTH or any of
its Subsidiaries (including, without limitation, where IMS HEALTH or its
Subsidiaries are joint defendants with other persons) with respect to any claim,
suit, action, proceeding, injury, loss, liability, damage or expense incurred or
claimed to have been incurred on or prior to the Distribution Date in or in
connection with the conduct of the IMS HEALTH Business or, to the extent any
claim is made against IMS HEALTH or any of its Subsidiaries (including, without
limitation, where IMS HEALTH or its Subsidiaries are joint defendants with other
persons), in connection with the conduct of the NMR Business, and
36
which claim, suit, action, proceeding, injury, loss, liability, damage or
expense may arise out of an insured or insurable occurrence under one or more of
the Shared Policies, the Corporation shall, at the time such claim is asserted,
to the extent any such Policy may require that Insurance Proceeds thereunder be
collected directly by the named insured or anyone other than the party against
whom the Insured Claim is asserted, be deemed to designate, without need of
further documentation, IMS HEALTH as the agent and attorney-in-fact to assert
and to collect any related Insurance Proceeds under such Shared Policy.
SECTION VII.3. Administration; Other Matters. (a) Administration. After the
Distribution Date, IMS HEALTH shall be responsible for (i) Insurance
Administration of the Shared Policies and (ii) Claims Administration under such
Shared Policies with respect to NMR Liabilities and IMS HEALTH Liabilities;
provided that the assumption of such responsibilities by IMS HEALTH is in no way
intended to limit, inhibit or preclude any right to insurance coverage for any
Insured Claim of a named insured under such Policies as contemplated by the
terms of this Agreement; provided further that IMS HEALTH's assumption of the
administrative responsibilities for the Shared Policies shall not relieve the
party submitting any Insured Claim of the primary responsibility for reporting
such Insured Claim accurately, completely and in a timely manner or of such
party's authority to settle any such Insured Claim within any period permitted
or required by the relevant Policy; and provided further that all direct or
indirect communication with insurers relating to the Shared Policies shall be
conducted by IMS HEALTH. IMS HEALTH may discharge its administrative
responsibilities under this Section 7.3 by contracting for the provision of
services by independent parties. Each of the parties hereto shall administer and
pay any costs relating to defending its respective Insured Claims under Shared
Policies to the extent such defense costs are not covered under such Policies
and shall be responsible for obtaining or reviewing the appropriateness of
releases upon settlement of its respective Insured Claims under Shared Policies.
The disbursements, out-of-pocket expenses and direct and indirect costs of
employees or agents of IMS HEALTH relating to Claims Administration and
Insurance Administration contemplated by this Section 7.3(a) shall be treated in
accordance with the terms of the Transition Services Agreement, if still in
effect with respect to insurance and risk management, or, if the Transition
Services Agreement shall no longer be in effect with respect to insurance and
risk management, then each of the Corporation and IMS HEALTH shall be
responsible for its own Claims Administration and Insurance Administration.
(b) Exceeding Policy Limits. The Corporation and IMS HEALTH shall not be
liable to one another for claims not reimbursed by insurers for any reason not
within the control of the Corporation or IMS HEALTH, as the case may be,
including, without limitation, coinsurance provisions, deductibles, quota share
deductibles, self-insured retentions, bankruptcy or insolvency of an insurance
carrier, Shared Policy limitations or restrictions, any coverage disputes, any
failure to timely claim by the Corporation or IMS HEALTH or any defect in such
claim or its processing.
(c) Allocation of Insurance Proceeds. Insurance Proceeds received with
respect to claims, costs and expenses under the Shared Policies shall be paid to
IMS HEALTH, which shall thereafter administer the Shared Policies by paying the
Insurance Proceeds, as appropriate, to the Corporation with respect to NMR
Liabilities and to IMS HEALTH with respect to IMS HEALTH
37
Liabilities. Payment of the allocable portions of indemnity costs of Insurance
Proceeds resulting from such Policies will be made by IMS HEALTH to the
appropriate party upon receipt from the insurance carrier. In the event that the
aggregate limits on any Shared Policies are exceeded by the aggregate of
outstanding Insured Claims by both of the parties hereto, the parties agree to
allocate the Insurance Proceeds received thereunder based upon their respective
percentage of the total of their bona fide claims which were covered under such
Shared Policy (their "allocable portion of Insurance Proceeds"), and any party
who has received Insurance Proceeds in excess of such party's allocable portion
of Insurance Proceeds shall pay to the other party the appropriate amount so
that each party will have received its allocable portion of Insurance Proceeds
pursuant hereto. Each of the parties agrees to use commercially reasonable
efforts to maximize available coverage under those Shared Policies applicable to
it, and to take all commercially reasonable steps to recover from all other
responsible parties in respect of an Insured Claim to the extent coverage limits
under a Shared Policy have been exceeded or would be exceeded as a result of
such Insured Claim.
(d) Allocation of Deductibles. In the event that both parties have bona
fide claims under any Shared Policy for which an aggregate deductible is
reached, the parties agree that the aggregate amount of the deductible paid
shall be borne by the parties in the same proportion which the Insurance
Proceeds received by each such party bears to the total Insurance Proceeds
received under the applicable Shared Policy (their "allocable share of the
deductible"), and any party who has paid more than such share of the deductible
shall be entitled to receive from the other party an appropriate amount so that
each party has borne its allocable share of the deductible pursuant hereto.
(e) After the Distribution Date, each of IMS HEALTH and the Corporation
shall be responsible for its applicable deductible for workers' compensation,
general liability and automobile liability claims.
SECTION VII.4. Agreement for Waiver of Conflict and Shared Defense. In the
event that Insured Claims of both of the parties hereto exist relating to the
same occurrence, the parties shall jointly defend and waive any conflict of
interest necessary to the conduct of the joint defense. Nothing in this Article
VII shall be construed to limit or otherwise alter in any way the obligations of
the parties to this Agreement, including those created by this Agreement, by
operation of law or otherwise.
SECTION VII.5. Cooperation. The parties agree to use their commercially
reasonable efforts to cooperate with respect to the various insurance matters
contemplated by this Agreement.
38
ARTICLE VIII. MISCELLANEOUS
SECTION VIII.1. Complete Agreement; Construction. This Agreement, including
the Exhibits and Schedules, and the Ancillary Agreements shall constitute the
entire agreement between the parties with respect to the subject matter hereof
and shall supersede all previous negotiations, commitments and writings with
respect to such subject matter. In the event of any inconsistency between this
Agreement and any Schedule hereto, the Schedule shall prevail. Other than
Section 2.1(j), Section 2.7, Section 4.5 and Article VI, which shall prevail
over any inconsistent or conflicting provisions in any Ancillary Agreement,
notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the provisions of any Ancillary Agreement, such Ancillary
Agreement shall control.
SECTION VIII.2. Ancillary Agreements. Subject to the last sentence of
Section 8.1, this Agreement is not intended to address, and should not be
interpreted to address, the matters specifically and expressly covered by the
Ancillary Agreements.
SECTION VIII.3. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION VIII.4. Survival of Agreements. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
SECTION VIII.5. Expenses. Except as set forth on Schedule 8.5 or as
otherwise set forth in this Agreement or any Ancillary Agreement, all costs and
expenses incurred and for which invoices have been submitted on or prior to the
Distribution Date in connection with the preparation, execution, delivery and
required implementation of this Agreement and any Ancillary Agreement, the
Information Statement (including any registration statement on Form 10 (or any
amendment thereto) of which such Information Statement may be a part) and the
Distribution and the consummation of the transactions contemplated thereby shall
be charged to and paid by the Corporation; provided that if such costs and
expenses are not paid by the Corporation prior to the Effective Time, they shall
be charged to and paid by IMS HEALTH. Except as set forth on Schedule 8.5 or as
otherwise set forth in this Agreement or any Ancillary Agreement, all costs and
expenses incurred or for which invoices are submitted after the Distribution
Date in connection with the required implementation of this Agreement or any
Ancillary Agreement, the consummation of the Distribution or the consummation of
the transactions contemplated by this Agreement or any Ancillary Agreement shall
be charged to and paid by IMS HEALTH. Except as set forth on Schedule 8.5 or as
otherwise set forth in this Agreement or any Ancillary Agreement, each party
shall bear its own costs and expenses incurred after the Distribution Date. Any
amount or expense to be paid or reimbursed by any party hereto to any other
party hereto shall be so paid or reimbursed
39
promptly after the existence and amount of such obligation is determined and
demand therefor is made.
SECTION VIII.6. Notices. All notices and other communications hereunder
shall be in writing and hand delivered or mailed by registered or certified mail
(return receipt requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to the parties at
the following addresses (or at such other addresses for a party as shall be
specified by like notice) and will be deemed given on the date on which such
notice is received:
To the Corporation:
Xxxxxxx Media Research, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Chief Legal Officer
To IMS HEALTH:
IMS Health Incorporated
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attn: General Counsel
SECTION VIII.7. Waivers. The failure of any party to require strict
performance by any other party of any provision in this Agreement will not waive
or diminish that party's right to demand strict performance thereafter of that
or any other provision hereof.
SECTION VIII.8. Amendments. Subject to the terms of Section 8.11 hereof,
this Agreement may not be modified or amended except by an agreement in writing
signed by each of the parties hereto.
SECTION VIII.9. Assignment. (a) This Agreement shall not be assignable, in
whole or in part, directly or indirectly, by any party hereto without the prior
written consent of the other parties hereto, and any attempt to assign any
rights or obligations arising under this Agreement without such consent shall be
void.
(b) The Corporation will not distribute to its stockholders any interest in
any NMR Business Entity, by way of a spin-off distribution, split-off or
exchange of interests in a NMR Business Entity for any interest in the
Corporation held by NMR stockholders, or any similar
40
transaction or transactions, unless the distributed NMR Business Entity
undertakes to IMS HEALTH to be jointly and severally liable for all NMR
Liabilities hereunder.
(c) IMS HEALTH will not distribute to its stockholders any interest in any
IMS HEALTH Business Entity, by way of a spin-off distribution, split-off or
exchange of interests in a IMS HEALTH Business Entity for any interest in IMS
HEALTH held by IMS HEALTH stockholders, or any similar transaction or
transactions, unless the distributed IMS HEALTH Business Entity undertakes to
the Corporation to be jointly and severally liable for all IMS HEALTH
Liabilities hereunder.
SECTION VIII.10. Successors and Assigns. The provisions to this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and permitted assigns.
SECTION VIII.11. Termination. This Agreement (including, without
limitation, Article III hereof) may be terminated and the Distribution may be
amended, modified or abandoned at any time prior to the Distribution by and in
the sole discretion of the Corporation without the approval of IMS HEALTH or the
shareholders of the Corporation. In the event of such termination, no party
shall have any liability of any kind to any other party or any other person.
After the Distribution, this Agreement may not be terminated except by an
agreement in writing signed by the parties; provided, however, that Article III
shall not be terminated or amended after the Distribution in respect of the
third party beneficiaries thereto without the consent of such persons.
SECTION VIII.12. Subsidiaries. Each of the parties hereto shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such party or
by any entity that is contemplated to be a Subsidiary of such party on or after
the Distribution Date.
SECTION VIII.13. Third Party Beneficiaries. Except as provided in Article
III relating to Indemnitees, this Agreement is solely for the benefit of the
parties hereto and their respective Subsidiaries and Affiliates and should not
be deemed to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
SECTION VIII.14. Title and Headings. Titles and headings to sections herein
are inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.
SECTION VIII.15. Exhibits and Schedules. The Exhibits and Schedules shall
be construed with and as an integral part of this Agreement to the same extent
as if the same had been set forth verbatim herein.
SECTION VIII.16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
41
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE
OF NEW YORK.
SECTION VIII.17. Consent to Jurisdiction. Without limiting the provisions
of Article VI hereof, each of the parties irrevocably submits to the exclusive
jurisdiction of (a) the Supreme Court of the State of New York, New York County,
and (b) the United States District Court for the Southern District of New York,
for the purposes of any suit, action or other proceeding arising out of this
Agreement or any transaction contemplated hereby. Each of the parties agrees to
commence any action, suit or proceeding relating hereto either in the United
States District Court for the Southern District of New York or if such suit,
action or other proceeding may not be brought in such court for jurisdictional
reasons, in the Supreme Court of the State of New York, New York County. Each of
the parties further agrees that service of any process, summons, notice or
document by U.S. registered mail to such party's respective address set forth
above shall be effective service of process for any action, suit or proceeding
in New York with respect to any matters to which it has submitted to
jurisdiction in this Section 8.17. Each of the parties irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in (i) the Supreme Court of the State of New York, New York County, or
(ii) the United States District Court for the Southern District of New York, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
SECTION VIII.18. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
42
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
COGNIZANT CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive
Officer
IMS HEALTH INCORPORATED
By: /s/ Xxxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxxx X. Xxxx
Title: President and Chief Operating
Officer
DISTRIBUTION AGREEMENT
between
COGNIZANT CORPORATION
and
IMS HEALTH INCORPORATED
Dated as of June 30, 1998
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS.........................................................2
SECTION 1.1. General....................................................2
SECTION 1.2. References; Interpretation................................14
ARTICLE II. DISTRIBUTION AND OTHER TRANSACTIONS;
CERTAIN COVENANTS...............................................14
SECTION 2.1. The Distribution and Other Transactions...................14
SECTION 2.2. Intercompany Accounts.....................................20
SECTION 2.3. Cash Balances.............................................20
SECTION 2.4. Assumption and Satisfaction of Liabilities................20
SECTION 2.5. Resignations..............................................20
SECTION 2.6. Further Assurances........................................20
SECTION 2.7. Limited Representations or Warranties.....................21
SECTION 2.8. Guarantees................................................21
SECTION 2.9. Witness Services..........................................22
SECTION 2.10. Certain Post-Distribution Transactions....................22
SECTION 2.11. Transfers Not Effected Prior to the Distribution;
Transfers Deemed Effective as of the Distribution
Date ....................................................23
SECTION 2.12. Conveyancing and Assumption Instruments...................23
SECTION 2.13. Ancillary Agreements......................................24
SECTION 2.14. Corporate Names...........................................24
ARTICLE III. INDEMNIFICATION.................................................26
SECTION 3.1. Indemnification by the Corporation........................26
SECTION 3.2. Indemnification by IMS HEALTH.............................26
SECTION 3.3. Procedures for Indemnification............................26
SECTION 3.4. Indemnification Payments..................................28
ARTICLE IV. ACCESS TO INFORMATION............................................28
SECTION 4.1. Provision of Corporate Records............................28
SECTION 4.2. Access to Information.....................................29
SECTION 4.3. Reimbursement; Other Matters..............................29
SECTION 4.4. Confidentiality...........................................29
SECTION 4.5. Privileged Matters........................................29
SECTION 4.6. Ownership of Information..................................31
SECTION 4.7. Limitation of Liability...................................31
SECTION 4.8. Other Agreements Providing for Exchange of Information....32
ARTICLE V. ADMINISTRATIVE SERVICES...........................................32
SECTION 5.1. Performance of Services...................................32
SECTION 5.2. Independence..............................................32
SECTION 5.3. Non-exclusivity...........................................32
i
ARTICLE VI. DISPUTE RESOLUTION..............................................32
SECTION 6.1. Negotiation...............................................32
SECTION 6.2. Arbitration...............................................33
SECTION 6.3. Continuity of Service and Performance.....................34
ARTICLE VII. INSURANCE.......................................................34
SECTION 7.1. Policies and Rights Included Within Assets;
Assignment of Policies...................................34
SECTION 7.2. Post-Distribution Date Claims.............................34
SECTION 7.3. Administration; Other Matters.............................35
SECTION 7.4. Agreement for Waiver of Conflict and Shared Defense.......36
SECTION 7.5. Cooperation...............................................36
ARTICLE VIII. MISCELLANEOUS..................................................36
SECTION 8.1. Complete Agreement; Construction..........................36
SECTION 8.2. Ancillary Agreements......................................37
SECTION 8.3. Counterparts..............................................37
SECTION 8.4. Survival of Agreements....................................37
SECTION 8.5. Expenses..................................................37
SECTION 8.6. Notices...................................................37
SECTION 8.7. Waivers...................................................38
SECTION 8.8. Amendments................................................38
SECTION 8.9. Assignment................................................38
SECTION 8.10. Successors and Assigns...................................38
SECTION 8.11. Termination..............................................38
SECTION 8.12. Subsidiaries.............................................39
SECTION 8.13. Third Party Beneficiaries................................39
SECTION 8.14. Title and Headings.......................................39
SECTION 8.15. Exhibits and Schedules...................................39
SECTION 8.16. GOVERNING LAW............................................39
SECTION 8.17. Consent to Jurisdiction..................................39
SECTION 8.18. Severability.............................................40
ii
Exhibits
Exhibit 2.1(m) Undertaking of IMS Health Incorporated
iii
Schedules to Distribution Agreement
Schedules
1.1(m) Conveyance and assumption instruments
1.1(au)(i) Certain Business Entities and Subsidiaries to be included in the
NMR Group
1.1(au)(ii) Pre-Distribution reorganization transactions to transfer assets
to the Corporation or the NMR Group
1.1(au)(x) Certain assets not to be included as NMR Assets
1.1(au)(y) Certain Business Entities or businesses holding assets from
divested, terminated or former businesses which are to be
included as NMR Assets
1.1(av) Combined balance sheet of the NMR Group as of March 31, 1998
1.1(ax)(i) Certain contracts to be included as NMR Contracts
1.1(ax)(ii) Certain contracts in the name of the Corporation or NMR to be
included as IMS HEALTH Contracts
1.1(ax)(iv) Certain federal, state and local government contracts to be
included as NMR Contracts
1.1(ax)(v) Capital or operating lease obligations to be included as NMR
Contracts
1.1(ba)(i) Certain liabilities to be included as NMR Liabilities
1.1(ba)(x) Certain liabilities not to be included as NMR Liabilities
1.1(ba)(y) Certain Business Entities or businesses holding liabilities from
divested, terminated or former businesses which are to be
included as NMR Liabilities
2.1(i) Liabilities from 1996 Distribution to be included as NMR
Liabilities
2.1(j)(i) Allocation of Liabilities for certain prior business transactions
2.3 Cash Balances
2.8(a) Guarantees of IMS HEALTH Liabilities from which NMR Group
members are to be removed
2.8(b) Guarantees of NMR Liabilities from which IMS HEALTH Group
members are to be removed
4.7(b) Pre-existing agreements between the parties which continue
after the Distribution
iv
Exhibit 2.1(m)
IMS Health Incorporated
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
June 29, 1998
Xxxxx Xxxxx, Esq.
The Dun & Bradstreet Corporation
Xxx Xxxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000
Xxxx Xxxxxxx, Esq.
ACNielsen Corporation
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xx. Xxxxx and Xx. Xxxxxxx:
Reference is made to the Distribution Agreement (the "1996 Distribution
Agreement"), dated as of October 28, 1996, among Cognizant Corporation
("Cognizant"), The Dun & Bradstreet Corporation ("D&B") and ACNielsen
Corporation ("ACNielsen"). Cognizant has announced its intention to separate
into two separate companies through a distribution (the "IMS HEALTH
Distribution") to its stockholders of all of the shares of common stock of its
subsidiary IMS Health Incorporated ("IMS HEALTH"). In Section 8.9(c) of the 1996
Distribution Agreement, Cognizant agreed not to make a distribution such as the
IMS HEALTH Distribution unless it caused the distributed entity to undertake to
both D&B and ACNielsen to be jointly and severally liable for all Cognizant
Liabilities (as defined in the 1996 Distribution Agreement). Therefore, in
accordance with Section 8.9(c) of the 1996 Distribution Agreement and intending
to be legally bound hereby, from and after the effective time of the IMS HEALTH
Distribution, IMS HEALTH undertakes to each of D&B and ACNielsen to be jointly
and severally liable with Cognizant for all Cognizant Liabilities under the 1996
Distribution Agreement.
Very truly yours,
IMS HEALTH INCORPORATED
By:
-----------------------------
Name:
Title:
Schedule 2.1(j)(i)
Allocation of Liabilities Relating to Certain Prior Business Transactions
1. Any and all Liabilities of Cognizant for any audit adjustments to Taxes
arising out of the transactions and related agreements known as (a) Nieuw
Willemstad Partnership or Oud Philipsburg Partnership, involving X.X. Xxxxxxx
Company and The Dun & Bradstreet Corporation; (b) Duns Licensing Associates,
L.P., involving Dun & Bradstreet, Inc. and IMS America, Ltd.; and (c) D&B
Investors, L.P., involving Xxxxxx X. Xxxxxxxxx Corporation, IMS America, Ltd.
and Dun & Bradstreet, Inc. shall be allocated as follows: (x) IMS HEALTH shall
be liable for and shall pay all such Taxes allocated to Cognizant pursuant to
Section 2.1(j)(ii) of the 1996 Distribution Agreement until such Taxes, in the
aggregate, equal one hundred and thirty million dollars; and (y) IMS HEALTH and
the Corporation shall each be liable for and shall pay one-half of any such
Taxes allocated to Cognizant pursuant to Section 2.1(j)(ii) of the 1996
Distribution Agreement in excess of one hundred and thirty million dollars;
provided, that the Corporation's aggregate liability for Taxes pursuant to this
paragraph and for amounts described in Section 2.1(j)(ii) of the Distribution
Agreement shall not exceed one hundred and twenty-five million dollars;
provided, further, that prior to January 1, 2001, IMS HEALTH shall make any and
all payments for all of the Taxes referred to in clause (y) above, with the
Corporation reimbursing IMS HEALTH for its proportionate share thereof on the
first business day after such date.
2. The liability for any audit adjustments to Taxes arising out of the
transactions and related agreements known as Dun & Bradstreet Computer Leasing,
Inc. and Fillupar Leasing Partnership shall be allocated solely to IMS HEALTH.
3. To the extent that the allocation of liability for Taxes in this
Schedule 2.1(j) results in the sharing of liability for Taxes between IMS HEALTH
and the Corporation, Section 5.1 of the Tax Allocation Agreement, governing Tax
Audits and Controversies, shall be applied as though IMS HEALTH alone were
liable for all such Taxes and the Corporation were not liable for such Taxes;
provided, however, that IMS HEALTH shall not enter into any final settlement or
closing agreement without the consent of the Corporation, which consent may not
be unreasonably withheld. Where consent to any final settlement or closing
agreement is withheld, the Corporation shall continue or initiate further
proceedings, at its own expense, and the liability of IMS HEALTH shall be
limited to the liability that would have resulted for IMS HEALTH from the
proposed closing agreement or final settlement (including interest, additions to
tax and penalties which have accrued at that time).
