Exhibit 10.6
LICENSE AGREEMENT
This License Agreement ("Agreement"), dated as of May 15, 1998, between
Cognizant Corporation, a Delaware corporation ("Cognizant"), and Cognizant
Technology Solutions Corporation, a Delaware corporation (the "Company").
WHEREAS, the Company is a subsidiary of Cognizant;
WHEREAS, the Company expects to effect a public offering of its Class A
Common Stock (the "IPO");
WHEREAS, following completion of the IPO, Cognizant will continue to
control the Company and will continue to license the Cognizant name and certain
related trademarks, trade names and service marks to the Company as provided
herein; and
WHEREAS, Cognizant intends to reorganize (the "Reorganization") by
splitting the Xxxxxxx Media Research business from the rest of its businesses,
creating two publicly held companies, IMS Health Incorporated ("IMS HEALTH") and
Xxxxxxx Media Research and, in connection therewith, the capital stock of the
Company theretofore held by Cognizant will thereafter be held by IMS HEALTH;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained in this Agreement, Cognizant and the Company hereby agree
as follows:
ARTICLE I
LICENSE
1.1 GRANT OF LICENSE.
Cognizant hereby grants to the Company a non-exclusive and non-transferable
license (which is revocable under the circumstances set forth below) (the
"License") to use the name "Cognizant" and the trademarks, trade names and
service marks specified in Exhibit A hereto, as such Exhibit A may be amended
from time to time in accordance with Section 1.3(b) (such trademarks, trade
names and service marks hereinafter collectively referred to as the "Marks"),
solely for the purpose of identifying the Company and identifying and
advertising the Company's software development and maintenance services (the
"Scope of the License"). Notwithstanding the foregoing, the Company shall only
use the Marks in connection with operations, services and products of a quality
specified and approved by Cognizant in accordance with Section 1.7 hereof. The
Company shall have no right to transfer, assign or sublicense its rights with
regard to the License or authorize any person to use the Marks without
Cognizant's prior written consent and any such purported transfer, assignment or
sublicense without Cognizant's prior written consent shall be null and void;
PROVIDED, HOWEVER, that any subsidiary (as hereinafter defined) of the Company
that agrees in writing to be bound by the terms of this Agreement (a "Designated
Subsidiary") may use the Marks in accordance with the terms of this Agreement.
Notwithstanding the foregoing, in the event that a Designated Subsidiary ceases
to be a
subsidiary of the Company, the License shall automatically be deemed amended
(without any action by the parties hereto) to no longer license hereunder the
Marks for use by such Designated Subsidiary, and such Designated Subsidiary
shall, and the Company shall use commercially reasonable efforts to cause such
Designated Subsidiary to, cease as promptly as commercially reasonably
practicable, but no later than 10 days following such termination, all use of
the Marks in connection with all of such Designated Subsidiary's operations,
products and services and all rights of such Designated Subsidiary with respect
to the Marks shall revert automatically to Cognizant. The Company and each
Designated Subsidiary shall execute all additional documents that Cognizant may
reasonably request, both prior and subsequent to the expiration or earlier
termination of the License, in order to perfect, maintain, defend or terminate
any right of Cognizant in the Marks in any country of the world, as determined
by Cognizant in its sole discretion. As used herein, "subsidiary" shall mean
any corporation, partnership or other entity of which another entity (a) 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 (b) is a general partner or an entity
performing similar functions (e.g., a trustee).
1.2 COGNIZANT GUIDELINES AND STANDARDS.
The Company agrees that all advertising, promotion and use of the Marks by
the Company and the Designated Subsidiaries shall in all material respects be
consistent with such guidelines and standards of Cognizant as may be issued from
time to time and disclosed to the Company, it being agreed that the Company will
use commercially reasonable efforts to comply as promptly as practicable with
any such guidelines. The Company agrees that, in the conduct of the business
and activities of the Company and the Designated Subsidiaries under the Marks,
it shall, and shall cause each Designated Subsidiary to, adhere to the
appropriate ethical, legal and business standards and the standards of Cognizant
pertaining to the Company's and the Designated Subsidiaries' businesses and
operations, and the Company shall, and shall cause each Designated Subsidiary
to, knowingly do nothing to bring disrepute to or in any manner damage the
goodwill symbolized by the Marks and shall make available to Cognizant any
requested information necessary for Cognizant to evaluate any such effect on
said goodwill.
1.3 COGNIZANT RETENTION OF OWNERSHIP.
(a) The Company acknowledges and agrees that Cognizant is the owner of all
of the right, title and interest in the Marks and all goodwill associated
therewith and acknowledges the validity of all trademark and service xxxx
registrations of Cognizant pertaining thereto. The Company agrees that it
shall, and shall cause each of its officers, directors and Designated
Subsidiaries to, uphold the goodwill inherent in the Marks and to assist
Cognizant in any commercially reasonable manner to protect the rights of
Cognizant therein. All use of the Marks by the Company and the Designated
Subsidiaries (including all past, present and future use), and the goodwill
generated thereby, shall inure to the benefit of Cognizant and shall not vest in
the Company or in any Designated Subsidiary, and, for purposes of trademark
registration, all use of the Marks by the Company and the Designated
Subsidiaries shall be deemed to have been made for the benefit of Cognizant.
The Company and the Designated Subsidiaries shall not, without
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the prior written consent of Cognizant, file or prosecute any trademark, trade
name and/or service xxxx application for any of the Marks or any trademarks or
service marks confusingly similar thereto.
(b) Additional trademarks, trade names and service marks may be added to
Exhibit A hereto if (i) the Company makes a written request therefor to such
effect, which request shall specify in reasonable detail a description or
drawing of such trademarks, trade names or service marks and a description of
the manner in which such trademarks, trade name or service marks are to be used,
(ii) the Company shall have provided to Cognizant all additional information
reasonably requested by Cognizant with respect thereto within 10 Business Days
(as hereinafter defined) after such request and (iii) within 30 Business Days
after its receipt of the written request referred to in clause (i) above,
Cognizant shall have consented in writing to the inclusion of such trademark,
trade name or service xxxx on Exhibit A hereto. If the conditions set forth in
clauses (i), (ii) and (iii) above are satisfied, Exhibit A shall be deemed to
have been amended to include such trademark, trade name or service marks (and
such trademark, trade name or service marks shall become part of the Marks) and
promptly thereafter the parties shall execute and deliver to each other a
written instrument acknowledging such amendment and attaching Exhibit A, as so
amended, thereto. The Company acknowledges that Cognizant shall be the
exclusive owner of all of the right, title and interest in all the marks that
become part of the Marks subsequent to the date hereof. As used herein, the
term "Business Day" shall mean any day that is not a Saturday, Sunday or a day
on which banking institutions in New York, New York are not required to be open.
1.4 INFRINGEMENT.
The Company acknowledges that it is of the utmost importance to protect the
Marks against unfair competition, disparagement, infringement and dilution. The
Company shall as promptly as practicable notify Cognizant in writing of any
infringement of the Marks or of any act of unfair competition, disparagement or
dilution by third parties relating to the Marks, whenever such infringement or
act shall come to the Company's attention. Cognizant shall have the primary
responsibility promptly to initiate and pursue appropriate actions that, in the
reasonable judgment of Cognizant, are necessary to protect Cognizant's rights to
the Marks against such infringement or act; provided, however, that if, in the
reasonable judgment of the Company, Cognizant has not within 60 days after
written notification by the Company of such infringement or act, initiated and
pursued appropriate actions necessary to protect Cognizant's rights against such
infringement or act, the Company may commence a suit or other action in its name
that is necessary to protect the Marks with regard thereto. Cognizant and the
Company shall cooperate with each other to the fullest extent necessary to
maintain and/or implement the actions taken by the other under this Section 1.4,
including, without limitation, being joined as a necessary co-plaintiff in an
action brought hereunder. In any such action where the parties hereto are
co-plaintiffs, any recoveries, damages and costs (including attorneys' fees) or
proceeds of a settlement resulting from such action shall be equitably
apportioned between Cognizant and the Company.
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1.5 LICENSE FEE.
From the date hereof until the license terminates, the Company shall pay
Cognizant a fee of $1,000 per annum (the "License Fee"). The License Fee with
respect to the first 12-month period shall be payable in advance on the Closing
Date (as hereinafter defined) and the License Fee with respect to each 12-month
period thereafter shall be payable in advance on each successive anniversary of
the Closing Date; PROVIDED, HOWEVER, that if any such anniversary falls on a day
that is not a Business Day, the License Fee shall be paid on the next succeeding
Business Day. In the event the License is terminated prior to the end of any
such 12-month period, Cognizant shall refund to the Company the pro rata portion
of the License Fee relating to the remaining portion of such 12-month period.
1.6 TRANSACTIONS AFFECTING THE COMPANY, COGNIZANT AND THE MARKS.
The Company shall not, and shall cause each of the Designated Subsidiaries
not to, take any action with respect to the following matters without informing
Cognizant in advance in writing of all material facts relating thereto and
without obtaining Cognizant's prior written consent thereto: (a) the
commencement, settlement, defense of or consent to a judgment or decree or other
activity with respect to any suit, action or proceeding before any federal,
state, local or foreign court, agency, authority, instrumentality, arbitration
panel or other governmental body or authority involving the Marks, except as
otherwise provided in Section 1.4; (b) any changes in the Company's or the
Designated Subsidiaries' names, logos, signs, trademarks or other
identifications that might reasonably be expected to affect the appearance of,
the reputation of or the goodwill associated with the Marks or Cognizant; or (c)
any television, radio, newspaper, magazine or other advertising campaign or
strategy using the Marks or referring, directly or indirectly, to Cognizant.
1.7 TRADEMARK, TRADE NAME AND/OR SERVICE XXXX USAGE MARKING REQUIREMENTS AND
QUALITY CONTROL.
(a) The Company shall, and shall cause the Designated Subsidiaries to,
apply the appropriate statutory notice (i.e., the letter "R" in a circle, unless
the xxxx is unregistered, in which case, "TM" or "SM", as appropriate) or such
other notice as may be required by foreign jurisdictions in connection with the
use of the Marks and will, to the extent reasonably practicable, disclose that
use of the Marks is pursuant to the License granted herein by Cognizant.The
quality standards applied to the products and services bearing the Marks, or
offered in connection with the Marks, shall be as specified by Cognizant from
time to time in writing. Notwithstanding any other provision in this Article I,
all operations, products and services offered in connection with the Marks by
the Company and any Designated Subsidiary shall conform in all material respects
to such quality standards. To assure that the applicable quality standards are
maintained, Cognizant shall have the right to periodically inspect and evaluate
the use of the Marks; PROVIDED that such inspections and evaluations shall be
conducted (i) during regular business hours and (ii) in such manner as will not
interfere with the conduct of business by the Company or any Designated
Subsidiary, as the case may be, in the ordinary
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course. Upon request, the Company shall deliver to Cognizant samples of use of
the Marks by the Company and the Designated Subsidiaries. If Cognizant
disapproves of the quality of such samples, the Company and/or the Designated
Subsidiaries shall have 30 days to cure the deficiency and neither the Company
nor the Designated Subsidiaries may use the Marks in such manner unless and
until such deficiency is cured to Cognizant's reasonable satisfaction.
1.8 TERM AND TERMINATION OF LICENSE.
(a) The License granted pursuant to this Article I shall commence on the
Closing Date and, subject to termination in accordance with paragraph (b) or (c)
of this Section 1.8, shall continue in full force and effect for a term of 10
years and thereafter shall automatically be renewed without any required action
or consent of Cognizant the Company for successive 10-year terms. As used
herein, "Closing Date" shall mean the date of the closing of the IPO.
(b) The License shall terminate, subject to earlier termination in
accordance with Section 1.8(c), upon the earlier to occur of (i) the date on
which the Company gives written notice to Cognizant of the complete termination
of the use of the Marks by the Company and the Designated Subsidiaries or (ii)
the date that is 365 days from the date on which Cognizant gives written notice
to the Company that it has elected to terminate the License; PROVIDED, HOWEVER,
that Cognizant may not give the Company any such notice until the end of the
ninth year of the initial term or any renewal term.
(c) Cognizant shall have the right to terminate the License upon written
notice to the Company at any time if Cognizant notifies the Company in writing
that, in the reasonable judgment of Cognizant, the Company or any Designated
Subsidiary has failed to comply with any term or provision of this Article I and
such noncompliance is not cured to the reasonable satisfaction of Cognizant
within 30 days after the Company's receipt of such notice.
1.9 EFFECT OF TERMINATION; FURTHER ASSURANCES; ATTORNEY-IN FACT.
(a) Upon the termination of the License (other than as contemplated by
Section 2.1): (i) all rights of the Company and the Designated Subsidiaries
with respect to the Marks shall revert automatically to Cognizant and the
Company shall, and shall cause each of the Designated Subsidiaries to,
discontinue all use of the Marks within 30 days after such termination; (ii) to
the extent requested by Cognizant, the Company shall, and shall cause each
Designated Subsidiary to, as promptly as reasonably practicable but not later
than 30 days, at its own expense take all legal and administrative steps that
may be required to protect Cognizant's ownership of and goodwill symbolized by
the Marks; and (iii) the Company shall, and shall cause each of its Designated
Subsidiaries to, amend its respective charter or other organizational documents
to change each such person's name to one that does not include the word
"Cognizant" or any Xxxx or any variant or derivative thereof subject to any
required regulatory approval, which the Company will use commercially reasonable
efforts to obtain or cause to be obtained.
(b) The Company hereby appoints Cognizant as its agent and
attorney-in-fact to execute on its behalf and in its name any documents that
Cognizant, in its good faith reasonable judgment, deems necessary in order to
terminate any rights of the Company or the Designated
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Subsidiaries in respect of the Marks, however created, anywhere in the world
under or pursuant to this Agreement. This provision shall not relieve the
Company of its obligation to, as promptly as reasonably practicable, execute any
such documents upon the request of Cognizant.
ARTICLE II
MISCELLANEOUS
2.1 EFFECTIVENESS OF AGREEMENT.
This Agreement shall become effective on the date of the initial closing of
the IPO.
2.2 TRANSFER OF MARKS.
In the event that the Reorganization is consummated, simultaneously
therewith, Cognizant shall convey, sell, transfer, assign and deliver to the
Company, for no additional consideration, on an "as is, where is" basis, forever
all of the right, title, interest and claims of Cognizant in, to, relating to
and arising under the Marks, including, without limitation, all registrations,
registration applications, renewals or extensions relating thereto and all
goodwill associated therewith (the "Transfer"), and, upon the Transfer, the
License and Article I of this Agreement shall terminate. In connection with the
Transfer, Cognizant shall deliver to the Company such deeds, bills of sale,
endorsements, assignments and other good and sufficient instruments of sale,
transfer, conveyance and assignment as shall be identified by the Company and as
shall be reasonably necessary to sell, transfer, convey and assign to the
Company title to the Marks. Cognizant shall, at any time after the Transfer,
upon the reasonable request of the Company and at the Company's expense, do,
execute, acknowledge, deliver and file, or shall cause to be done, executed,
acknowledged, delivered and filed, all such further acts, transfers,
conveyances, assignments or assurances as may reasonably be required for
selling, transferring, conveying and/or assigning to the Company, the Marks.
2.3 ASSIGNABILITY OF AGREEMENT.
Except (a) by operation of law, (b) in connection with the sale of all or
substantially all the assets of a party hereto or (c) in connection with the
Reorganization, this Agreement shall not be assignable, in whole or in part,
directly or indirectly by either party hereto without the prior written consent
of the other, and any attempt to assign any rights or obligations arising under
this Agreement without such consent shall be void; PROVIDED, HOWEVER, that the
provisions of this Agreement shall be binding upon, inure to the benefit of and
be enforceable by Cognizant and the Company and their respective successors and
permitted assigns, including, without limitation, IMS HEALTH.
2.4 FURTHER ASSURANCES.
Subject to the provisions hereof, each of the parties hereto shall make,
execute, acknowledge and deliver such other actions and documents as may be
reasonably required in order to effectuate the purposes of this Agreement, and
to comply with all applicable laws, regulations, orders and decrees, and obtain
all required consents and approvals and make all
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required filings with any governmental agency, other regulatory or
administrative agency, commission or similar authority, as may be necessary or
desirable in connection herewith.
2.5 WAIVERS.
No failure or delay on the part of Cognizant or the Company in exercising
any right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, or any abandonment or discontinuance of
steps to enforce such a right, preclude any other or further exercise thereof or
the exercise of any other right. No modification or waiver of any provision of
this Agreement nor consent to any departure by Cognizant or the Company
therefrom shall in any event be effective unless the same shall be in writing,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Any consent or waiver by the Company under
this Section 2.4 shall be approved by the Independent Directors (as hereinafter
defined). As used herein, the "Independent Directors" shall mean a majority of
the members of the Board of Directors of the Company that are not employed by or
otherwise affiliated with Cognizant, the Company (other than solely as a result
of being a director thereof) or any of their respective affiliates.
2.6 ENTIRE AGREEMENT; RULES OF CONSTRUCTION.
This Agreement contains the entire understanding of the parties with
respect to the transactions contemplated hereby. 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, 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.
2.7 AMENDMENTS.
This Agreement may be amended or supplemented only in a writing executed by
the parties (provided that, in the case of the Company, such amendment or
supplement shall require the approval of the Independent Directors).
2.8 NOTICES.
All notices, requests and other communications hereunder shall be in
writing and shall be given (i) by mail (postage prepaid, registered or certified
mail, return receipt requested), (ii) by hand delivery, (iii) by nationally
recognized courier service or (iv) by telecopier, receipt confirmed addressed
as follows (or to such other address as shall be specified by a party by notice
pursuant hereto):
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(i) if to Cognizant, to:
Cognizant Corporation
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000;
with a copy to:
Cognizant Corporation
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Telecopier: (000) 000-0000; and
(ii) if to the Company, to:
Cognizant Technology Solutions Corporation
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Telecopier: (000) 000-0000;
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000.
Each such notice, request or communication shall be effective (i) if mailed,
three Business Days after mailing, (ii) if delivered by hand or by nationally
recognized courier service, when delivered and (iii) if given by telecopier,
when transmitted and the confirmation is received.
2.9 DISPUTE RESOLUTION.
(a) NEGOTIATION. In the event of a controversy, dispute or claim arising
out of, in connection with or relating 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 (collectively, "Agreement Disputes"), a representative
of each of Cognizant and the Company (the representative of the Company being
selected by the Independent Directors) shall negotiate in good faith for a
reasonable period of time to settle such Agreement Dispute; PROVIDED, HOWEVER,
that such reasonable period shall not, unless otherwise agreed by the parties in
writing, exceed 30 days from the time the parties began such
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negotiations; PROVIDED FURTHER that in the event of any arbitration in
accordance with Section 2.9(b) 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 to which such Agreement Dispute relates shall
not be deemed to have passed until such Agreement Dispute has been resolved.
(b) ARBITRATION. If after such reasonable period, such representatives
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 either 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. Section 10(a) as in effect on the date
hereof). If the parties are unable to agree on an arbitrator, the arbitrator
shall be selected in accordance with the Rules. 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 Section 2.9(b)
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 undersigned 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 the Supreme Court of the State of New York,
New York County, or the United States District Court for the Southern District
of New York. 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, that the arbitrator shall not be entitled to award punitive
damages. Without limiting the provisions of the Rules, unless otherwise agreed
in writing by 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 (A) to the extent reasonably necessary in any
proceeding brought to enforce the award or for entry of a judgment upon the
award and (B) to the extent otherwise required by law. Notwithstanding Article
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.
2.10 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the choice of law principles
thereof.
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2.11 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which shall, taken together, be
considered one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COGNIZANT CORPORATION
By:
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Name:
Title:
COGNIZANT TECHNOLOGY
SOLUTIONS CORPORATION
By:
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Name:
Title:
EXHIBIT A
MARKS
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Cognizant service and trademark
Interlocking C logo
