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FORM OF
DISTRIBUTION AGREEMENT
BETWEEN
CERIDIAN CORPORATION
(TO BE RENAMED ARBITRON INC.)
AND
NEW CERIDIAN CORPORATION
(TO BE RENAMED CERIDIAN CORPORATION)
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 References; Interpretation. . . . . . . . . . . . . . . . . . . . . .12
ARTICLE II DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS. . . . . . .12
2.1 The Transfer, the Distribution and Other Transactions.. . . . . . . .12
2.2 Ceridian Board Action; Conditions Precedent to the Distribution . . .15
2.3 [INTENTIONALLY OMITTED] . . . . . . . . . . . . . . . . . . . . . . .16
2.4 [INTENTIONALLY OMITTED] . . . . . . . . . . . . . . . . . . . . . . .16
2.5 Resignations. . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
2.6 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . .17
2.7 Limited Representations or Warranties . . . . . . . . . . . . . . . .17
2.8 Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
2.9 Litigation Services . . . . . . . . . . . . . . . . . . . . . . . . .18
2.10 [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . . . . . . . . . .18
2.11 Transfers Not Effected Prior to the Distribution; Transfers
Deemed Effective as of the Distribution Date . . . . . . . . . . . . . .18
2.12 Conveyancing and Assumption Instruments. . . . . . . . . . . . . . .19
2.13 Ancillary Agreements . . . . . . . . . . . . . . . . . . . . . . . .19
2.14 Corporate Names. . . . . . . . . . . . . . . . . . . . . . . . . . .19
2.15 Ordinary Course of Business. . . . . . . . . . . . . . . . . . . . .21
ARTICLE III INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . .21
3.1 Indemnification by the Corporation. . . . . . . . . . . . . . . . . .21
3.2 Indemnification by New Ceridian . . . . . . . . . . . . . . . . . . .21
3.3 Procedures for Indemnification. . . . . . . . . . . . . . . . . . . .22
3.4 Indemnification Payments. . . . . . . . . . . . . . . . . . . . . . .24
3.5 Limitation on Indemnification Obligations.. . . . . . . . . . . . . .24
3.6 Indemnification of Directors and Officers . . . . . . . . . . . . . .25
ARTICLE IV ACCESS TO INFORMATION . . . . . . . . . . . . . . . . . . . . . . .26
4.1 Provision of Corporate Records. . . . . . . . . . . . . . . . . . . .26
4.2 Access to Information . . . . . . . . . . . . . . . . . . . . . . . .27
4.3 Reimbursement; Other Matters. . . . . . . . . . . . . . . . . . . . .27
4.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . .27
4.5 Privileged Matters. . . . . . . . . . . . . . . . . . . . . . . . . .28
4.6 Ownership of Information. . . . . . . . . . . . . . . . . . . . . . .30
4.7 Limitation of Liability.. . . . . . . . . . . . . . . . . . . . . . .30
4.8 Other Agreements Providing for Exchange of Information. . . . . . . .30
ARTICLE V ADMINISTRATIVE SERVICES. . . . . . . . . . . . . . . . . . . . . . .30
5.1 Performance of Services . . . . . . . . . . . . . . . . . . . . . . .30
5.2 Independence. . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
5.3 Non-exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . .31
ARTICLE VI DISPUTE RESOLUTION. . . . . . . . . . . . . . . . . . . . . . . . .31
6.1 Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
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6.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
6.3 Continuity of Service and Performance . . . . . . . . . . . . . . . .32
6.4 Tax Matters Agreement Consents. . . . . . . . . . . . . . . . . . . .32
ARTICLE VII INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
7.1 Policies and Rights Included Within Assets; Assignment of Policies. .32
7.2 Post-Distribution Date Claims . . . . . . . . . . . . . . . . . . . .33
7.3 Administration; Other Matters.. . . . . . . . . . . . . . . . . . . .33
7.4 Agreement for Waiver of Conflict and Shared Defense . . . . . . . . .35
7.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . .35
8.1 Complete Agreement; Construction. . . . . . . . . . . . . . . . . . .35
8.2 Ancillary Agreements. . . . . . . . . . . . . . . . . . . . . . . . .35
8.3 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
8.4 Survival of Agreements. . . . . . . . . . . . . . . . . . . . . . . .36
8.5 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
8.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
8.7 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
8.8 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
8.9 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
8.10 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . .37
8.11 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
8.12 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
8.13 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . .37
8.14 Title and Headings . . . . . . . . . . . . . . . . . . . . . . . . .38
8.15 Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . .38
8.16 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . .38
8.17 Consent to Jurisdiction. . . . . . . . . . . . . . . . . . . . . . .38
8.18 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
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Schedule Description of Schedule
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<S> <S>
1.1(o) Conveyancing and Assumption Instruments
1.1(g) Debt Realignment Plan
1.1(ff) List of Divested Business Entities Relating to Arbitron
Business
1.1(gg) December 31, 1999 Media Information Balance Sheet
1.1(ii)(iii) Government Contracts Exclusively Relating to Media
Information Business
1.1(ii)(iv) Lease Agreements Relating to Media Information Business
1.1(ll) List of Certain Liabilities to remain with the
Corporation after Spin-off.
1.1(ll)A List of Certain Liabilities to be Assumed by New Ceridian
2.8(a) Guarantees where Corporation (Arbitron Inc.) is to be
removed as a Guarantor
2.8(b) Guarantees where New Ceridian is to be removed as a
guarantor of a Media Information Liability
7.3(b) Allocation of deductible with respect to Shared Insurance
Policies
7.3(e) Allocation of deductible for Workers' Compensation,
General Liability and Automotive Liability Claims.
8.5 Allocation of Expenses.
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DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of November ___, 2000, between CERIDIAN
CORPORATION, a Delaware corporation to be renamed Arbitron Inc. (the
"Corporation" or "Ceridian") and New Ceridian Corporation, a Delaware
corporation to be renamed Ceridian Corporation ("New Ceridian").
WHEREAS, Ceridian, acting through its direct and indirect subsidiaries and
divisions, currently conducts the Human Resources Business (as hereinafter
defined), the Comdata Business (as hereinafter defined) and the Media
Information Business (as hereinafter defined);
WHEREAS, the Board of Directors of Ceridian has determined that it is
appropriate, desirable and in the best interests of the holders of shares of
common stock, par value $.50 per share, of Ceridian (the "Ceridian Common
Stock"), as well as of Ceridian and its businesses, to reorganize Ceridian by:
(i) separating from Ceridian the Human Resources Business and the Comdata
Business by (a) causing the Human Resources Business and the Comdata Business to
be owned and conducted, directly or indirectly, by New Ceridian and its
subsidiaries and (b) causing the Media Information Business to continue to be
owned and conducted, directly or indirectly by, Ceridian and its remaining
subsidiaries; and (ii) distributing, following consummation of such separation
and division, as a dividend to the holders of Ceridian Common Stock all of the
outstanding shares of common stock, $.01 par value, of New Ceridian (the "New
Ceridian Common Shares"); and
WHEREAS, the Board of Directors of Ceridian has determined it appropriate and
desirable to change the name of Ceridian to Arbitron Inc. and to cause the name
of New Ceridian to be changed to Ceridian Corporation; and
WHEREAS, each of Ceridian and New Ceridian has determined that it is necessary
and desirable to set forth the principal corporate transactions required to
effect such separation, division and distribution and to set forth other
agreements that will govern certain other matters prior to and following such
separation, division and 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
1.1 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 or any claim brought pursuant to the Corporation's
internal grievance procedures.
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(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 mean The Bank of New York.
(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 Conveyancing and Assumption
Instruments, the Personnel Agreement, the Tax Matters Agreement and the
Transition Services Agreement.
(f) "Arbitron Business" means (a) the provision of media and marketing
research services to broadcasters, advertising agencies, advertisers,
on-line webcasters and cable television in the United States, the United
Kingdom, Japan and Mexico; (b) through a joint venture the provision of
media audience and consumer retail behavior research services to cable
systems, television broadcasters, magazines, and newspapers; and (c) the
provision of application software used to access and analyze media
audience information and through a joint venture software applications to
access and analyze consumer retail behavior and media usage.
(g) "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, choate or inchoate 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;
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(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;
(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,
choices 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;
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(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.
(h) "Assignee" shall have the meaning set forth in Section 2.1(f).
(i) "Business Entity" shall mean any corporation, partnership, limited
liability company or other entity which may legally hold title to Assets.
(j) "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.
(k) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and the Treasury regulations promulgated thereunder, including any
successor legislation.
(l) "Ceridian Common Stock" shall have the meaning set forth in the
recitals hereto.
(m) "Comdata Business" means (a) the provision of transaction
processing and decision support services to the transportation industry
(primarily trucking companies, truck stops and truck drivers, including
both the long haul and local fleets in the United States) involving the
use of a proprietary funds transfer card which facilitates truck driver
transactions and provides transaction control and trip information for
trucking companies and (b) the provision of transaction processing and
decision support services to other industries, including retail,
temporary staffing, and university sectors, primarily involving the use
of electronic cash cards for employee payroll and expense disbursements
and debit cards used as gift cards and retail promotions.
(n) "Commission" shall mean the U.S. Securities and Exchange
Commission.
(o) "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(o) for transfers
to be effected pursuant to Minnesota 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.
(p) "Corporation" or "Ceridian" shall mean Ceridian Corporation, a
Delaware corporation, which will change its name in connection with the
Distribution to "Arbitron Inc."
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(q) "Debt Realignment Plan" means the repayment, realignment,
refinancing, exchange and/or modification of certain debt of the
Corporation as described in Schedule 1.1(q) hereto.
(r) "Distribution" shall mean the distribution on the Distribution
Date to holders of record of shares of Ceridian Common Stock as of the
Distribution Record Date of the New Ceridian Common Shares owned by the
Corporation on the basis of one New Ceridian Common Share for each
outstanding share of Ceridian Common Stock.
(s) "Distribution Date" shall mean ___________, 2000.
(t) "Distribution Record Date" shall mean as of the close of business
of such date as may be determined by the Corporation's Board of Directors
as the record date for the Distribution.
(u) "Effective Time" shall mean immediately prior to the midnight, New
York time, ending the 24-hour period comprising the Distribution Date.
(v) "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.
(w) "Human Resources Business" means the provision of products,
software and services (including, without limitation,
transaction-oriented administrative services and software products,
primarily in areas such as payroll processing and tax filing, as well as
management support software and services such as benefits administration,
qualified plan administration, skills management, regulatory compliances,
employee training, work-life effectiveness and employee assistance
programs) to employers located in the United States, Canada and the
United Kingdom.
(x) "Indemnifiable Losses" shall mean any and all losses, liabilities,
claims, damages, demands, costs or expenses (including, without
limitation, reasonable and documented attorneys' fees and 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.
(y) "Indemnifying Party" shall have the meaning set forth in Section
3.3.
(z) "Indemnitee" shall have the meaning set forth in Section 3.3.
(aa) "Information Statement" shall mean the Information Statement sent
to the holders of shares of Ceridian Common Stock in connection with the
Distribution, including any amendment or supplement thereto.
(bb) "Insurance Administration" shall mean, with respect to each Shared
Policy, the accounting for premiums, retrospectively-rated premiums,
defense costs, indemnity
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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.
(cc) "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.
(dd) "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.
(ee) "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 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.
(ff) "Media Information Assets" shall mean:
(i) the ownership interests in CSW Research Limited, Ceridian
Infotech (India) Private Limited, and Euro Fieldwork Limited;
(ii) any Assets reflected on the Media Information Balance Sheet
or the accounting records supporting such balance sheet and any
Assets acquired by or for any member of the Media Information
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
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consistent basis, subject to any dispositions of any of such
Assets subsequent to the date of such balance sheet;
(iii) subject to Article VII, any rights of any member of the
Media Information 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;
(iv) any Media Information 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 Media
Information Asset or the Media Information Business;
(v) the Corporation's ownership interest in the Scarborough
Research Partnership; and
(vi) all Assets of the Corporation used exclusively in the
Arbitron Business.
Notwithstanding the foregoing, the Media Information Assets shall
not in any event include:
(A) 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 or any Media Information Business, except
for those Assets primarily relating to or used in those
Business Entities, businesses or operations listed on
Schedule 1.1(ff); or
(B) any and all Assets that are 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 New Ceridian Group.
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 a
Media Information Asset, any item explicitly included on a
Schedule referred to in this Section 1.l(ff) shall take priority
over any provision of the text hereof.
(gg) "Media Information Balance Sheet" shall mean the audited balance
sheet of the Media Information Business, including the notes thereto, as
of December 31, 1999, set forth as Schedule 1.1 (gg) hereto.
(hh) "Media Information Business" shall mean (i) the Arbitron Business,
(ii) the businesses of the members of the Media Information Group, (iii)
any other business conducted by the Corporation or any Subsidiary of the
Corporation primarily through the use of the Media Information Assets,
(iv) the businesses of Business Entities acquired or established by or
for the Media Information Group after the date of this Agreement and (v)
the business of the Corporation from and after the Effective Time.
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(ii) "Media Information Contracts" shall mean the following contracts
and agreements to which the Corporation or any of its Affiliates is a
party or by which it or any of its Affiliates 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 or any member of the Media Information Group
prior to the Effective Time, or to remain with the Corporation, or any
member of the Media Information Group subsequent to the Effective Time,
pursuant to any provision of this Agreement or any Ancillary Agreement:
(i) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member of
the Media Information Group;
(ii) any contract or agreement that relates exclusively to the
Media Information Business;
(iii) federal, state and local government and other contracts and
agreements that are listed or described on Schedule l.1(ii) (iii)
and any other government contracts or agreements entered into
after the date hereof and prior to the Effective Time that relate
exclusively to the Media Information Business;
(iv) any contract or agreement representing capital or operating
equipment lease obligations reflected on the Media Information
Balance Sheet, including obligations as lessee under those
contracts or agreements listed on Schedule 1.l(ii)(iv);
(v) 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 Media Information Group prior to the Effective Time
or to remain with the Corporation or any member of the Media
Information Group subsequent to the Effective Time; and
(vi) any guarantee, indemnity, representation or warranty of any
member of the Media Information Group.
(jj) "Media Information Group" shall mean (i) CSW Research Limited,
Ceridian Infotech (India) Private Limited, and Euro Fieldwork Limited,
and (ii) the Corporation from and after the Effective Time.
(kk) "Media Information Indemnitees" shall mean each member of the
Media Information 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.
(ll) "Media Information 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
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Schedule l.1(ll) hereto) as Liabilities to remain with the
Corporation or any member of the Media Information Group
subsequent to the Effective Time, and all agreements, obligations
and Liabilities of the Corporation or any member of the Media
Information Group under this Agreement or any of the Ancillary
Agreements;
(ii) all Liabilities (other than Taxes and any employee-related
Liabilities subject to the provisions of the Tax Matters Agreement
and the Personnel Agreement, respectively), primarily relating to,
arising out of or resulting from:
(A) the operation of the Media Information 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, 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 Media Information Assets; whether arising
before, on or after the Effective Time;
(iii) all Liabilities reflected as liabilities or obligations on
the Media Information 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 Media Information Balance Sheet; and
(iv) those Liabilities allocated to the Corporation pursuant to
the Debt Realignment Plan;
Notwithstanding the foregoing, the Media Information Liabilities
shall not include:
(A) 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 New
Ceridian or any member of the New Ceridian Group, including
any Liabilities set forth in Schedule 1.l(ll)(A);
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(B) 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 except for Liabilities
primarily relating to, arising out of or resulting from any
Business Entities, businesses or operations formerly owned
or managed by or associated with the Media Information
Group or the Media Information Business;
(C) all agreements and obligations of any member of the
New Ceridian Group under this Agreement or any of the
Ancillary Agreements; or
(D) any contingent liabilities to Bear, Stearns & Co.
Inc. in connection with its role as financial advisor to
the Corporation in connection with the Distribution
other than contingent Liabilites relating to material
misstatements or omissions relating to the Arbitron
business or the business of the members of the Media
Information Group which Liabilities, if any, will remain
Liabilities of the Corporation from and after the Effective
Time.
(mm) "Media Information 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 New Ceridian Business.
(nn) "New Ceridian Assets" means, 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 Media
Information Assets.
(oo) "New Ceridian Business" means each and every business conducted at
any time by Ceridian or any Subsidiary of Ceridian prior to the
Distribution Date (including, without limitation, the Human Resources
Business and the Comdata Business), except the Media Information
Business.
(pp) "New Ceridian Common Shares" shall have the meaning set forth in
the recitals hereto.
(qq) "New Ceridian Contracts" shall mean all the contracts and
agreements to which the Corporation or any of its Affiliates is a party
or by which it or any of its Affiliates is bound immediately prior to the
Effective Time, except the Media Information Contracts.
(rr) "New Ceridian Group" shall mean New Ceridian and each Person
(other than any member of the Media Information Group) that is a
Subsidiary of the Corporation immediately prior to the Effective Time.
(ss) "New Ceridian Indemnitees" shall mean New Ceridian, each member of
the New Ceridian 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
Media Information 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.
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(tt) "New Ceridian Liabilities" shall mean collectively, all
Liabilities allocated to New Ceridian pursuant to the Debt Realignment
Plan and all obligations and Liabilities of the Corporation or any
Subsidiary of the Corporation immediately prior to the Effective Time,
except the Media Information Liabilities.
(uu) "New Ceridian 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 Media Information Business and which Policies
are either maintained by New Ceridian or a member of the New Ceridian
Group or are assignable to New Ceridian or a member of the New Ceridian
Group.
(vv) "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.
(ww) "Personnel Agreement" shall mean the Personnel Agreement between
the Corporation and New Ceridian.
(xx) "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.
(yy) "Provider" shall have the meaning set forth in Section 5.1.
(zz) "Recipient" shall have the meaning set forth in Section 5.1.
(aaa) "Records" shall have the meaning set forth in Section 4.1.
(bbb) "Rules" shall have the meaning set forth in Section 6.2.
(ccc) "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.
(ddd) "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 New Ceridian Business and the Media Information
Business.
(eee) "Subsidiary" shall mean any corporation, partnership, limited
liability company or other entity of which another entity (i) owns,
directly or indirectly, ownership interests
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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, limited liability company 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).
(fff) "Tax" shall have the meaning set forth in the Tax Matters
Agreement.
(ggg) "Tax Matters Agreement" shall mean the Tax Matters Agreement
between the Corporation and New Ceridian.
(hhh) "Third Party Claim" shall have the meaning set forth in Section
3.3.
(iii) "Transition Services Agreement" shall mean the Transition Services
Agreement among the Corporation and New Ceridian.
1.2 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
2.1 THE TRANSFER, 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 New Ceridian,
effective prior to or as of the Effective Time, all of the
Corporation's and its Subsidiaries' right, title and interest in
the New Ceridian Assets. Notwithstanding anything in this
Agreement to the contrary, the Corporation shall contribute to New
Ceridian all cash in the Corporation's accounts other than an
amount up to a maximum of $25 million (which maximum amount may be
decreased prior to the Effective Time as determined by the Chief
Financial Officer of the Corporation as directed by the Board of
Directors of the Corporation) and any cash borrowed by the
Corporation under the Credit Agreement entered into by the
Corporation with the Bank of America and various other lenders, on
or after November 15, 2000.
(ii) Except as otherwise specifically set forth in any Ancillary
Agreement, from and after the Effective Time, (a) the Corporation
shall, and shall cause each
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member of the Media Information Group to, pay, perform and
discharge in due course all Media Information Liabilities to the
extent incurred by the Corporation or such member of the Media
Information Group and (b) New Ceridian shall, and shall cause each
member of the New Ceridian Group to, assume, pay, perform and
discharge in due course all New Ceridian Liabilities in accordance
with Section 2.1(a)(iii).
(iii) New Ceridian shall be entitled to designate the Business
Entity within the New Ceridian Group (A) to which any New Ceridian
Assets are to be transferred and (B) which assumes or is
obligated for any New Ceridian Liabilities, in each case pursuant
to this Section 2.1(a).
(iv) The Corporation shall cause CSW Research Limited, which is
presently an indirect second-tier, wholly-owned Subsidiary of the
Corporation, to become a direct wholly-owned Subsidiary of the
Corporation.
(b) ISSUANCE OF NEW CERIDIAN COMMON SHARES. In exchange for, and at
the time of, the contribution of the New Ceridian Assets and the
assumption of the New Ceridian Liabilities, New Ceridian shall issue that
number of New Ceridian Common Shares equal to the number of shares of
Ceridian Common Shares outstanding on the Distribution Record Date, less
any shares of Ceridian Common Stock forfeited by employees of the
Corporation in connection with the Distribution.
(c) CHARTERS; BY-LAWS. On or prior to the Distribution Date, all
necessary actions shall have been taken to provide for the adoption of
the form of Amended and Restated Certificate of Incorporation and Amended
and Restated By-laws in substantially the form filed by New Ceridian with
the Commission as exhibits to New Ceridian's Registration Statement on
Form 10 (the "Form 10").
(d) DIRECTORS. On or prior to the Distribution Date, the Corporation
as the sole stockholder of New Ceridian, shall have taken all necessary
action on or prior to the Distribution Date to cause the Board of
Directors of New Ceridian to consist of the individuals identified in the
Information Statement as directors of New Ceridian.
(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 all
transferable licenses, permits and authorizations issued by any
Governmental Authority which do not relate primarily to the Media
Information Business but which are held in the name of the Corporation or
any member of the Media Information 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 New Ceridian
Group shall be duly and validly transferred or caused to be transferred
by the Corporation to the appropriate member of the New Ceridian Group.
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(f) TRANSFER OF AGREEMENTS. 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) the Corporation hereby agrees that, subject to the
limitations set forth in this Section 2.1(f), it will, and it will
cause each member of the Media Information Group to, assign,
transfer and convey to the appropriate member of the New Ceridian
Group all of the Corporation's or such member of the Media
Information Group's respective right, title and interest in and to
any and all New Ceridian Contracts;
(ii) 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
Media Information Business and the New Ceridian Business shall be
assigned in part by the Corporation or New Ceridian, as
appropriate, so that each party shall be entitled to the rights
and benefits inuring to its business under such agreement; and
(iii) 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) (ii), 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.
(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. 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.
(h) DELIVERY OF SHARES TO AGENT. The Corporation shall deliver to the
Agent the share certificates representing the New Ceridian Common Shares
issued to the Corporation by New Ceridian pursuant to Section 2.1(b),
endorsed in blank, and shall instruct the Agent to distribute, on or as
soon as practicable following the Distribution Date, to each holder of
record of Ceridian Common Stock on the Distribution Record Date a
certificate or certificates representing one share of New Ceridian Common
Stock for each share of
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Ceridian Common Stock so held. New Ceridian 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, New Ceridian agrees with the Corporation that any and
all Liabilities arising from or based upon "controlling person" liability
relating to the Form 10 filed by New Ceridian shall be deemed to be New
Ceridian Liabilities and not Media Information Liabilities; provided
however, the foregoing provisions of this sentence shall not apply to any
Liabilities arising from or based upon material misstatements or
omissions relating to the Arbitron Business or the business of the
members of the Media Information Group which Liabilities, if any, will
remain Liabilities of the Corporation from and after the Effective Time.
Notwithstanding anything in this Agreement to the contrary, in the
event there is a Liability arising at the Effective Time and directly
and solely resulting from the Distribution or the transactions
referred to in Sections 2.1(a)(i) or 2.1(a)(ii) that is not otherwise
specifically allocated to the Corporation or New Ceridian pursuant to
the terms of this Distribution Agreement or the terms of any Ancillary
Agreement, such Liability shall be shared by the Corporation and New
Ceridian on an equal (i.e., 50/50) basis.
(j) DEBT REALIGNMENT PLAN. The Corporation and New Ceridian shall
each use commercially reasonable efforts so that, immediately prior to
the Distribution, the Debt Realignment Plan has been effected in
accordance with such plan.
(k) OTHER TRANSACTIONS. On or prior to the Distribution Date, each of
the Corporation and New Ceridian 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 ______, and not specifically
referred to in subparagraphs (a)-(j) above. After the Distribution Date,
each of the Corporation and New Ceridian 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.
2.2 CERIDIAN BOARD ACTION; CONDITIONS PRECEDENT TO THE DISTRIBUTION.
Ceridian's Board of Directors shall, in its sole discretion, establish the
Distribution Record Date and the Distribution Date and any appropriate
procedures in connection with the Distribution. In no event shall the
Distribution occur unless the following conditions shall, unless waived by
Ceridian in its sole discretion, have been satisfied:
(a) the Form 10 shall have been declared effective under the Exchange
Act;
(b) Ceridian shall have entered into agreements satisfactory to
Ceridian in its sole discretion for the financing necessary to consummate
the Distribution and the related transactions and Ceridian shall have
received the requisite funds pursuant to such financing agreements;
(c) New Ceridian's Board of Directors, as named in the Form 10, shall
have been elected by Ceridian, as sole stockholder of New Ceridian, and
the New Ceridian Amended and Restated Certificate and the New Ceridian
Amended and Restated Bylaws shall be in effect;
(d) the New Ceridian Common Stock shall have been approved for listing
on the New York Stock Exchange, subject to official notice of issuance;
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<PAGE>
(e) Ceridian's Board of Directors shall have formally approved the
Distribution and shall not have abandoned, deferred or modified the
Distribution at any time prior to the Distribution Date;
(f) the IRS Ruling shall be in full force and effect and shall not
have been modified and the representations made to the IRS therein shall
be true in all material respects;
(g) the transaction's transfer of assets and assumption of liabilities
as contemplated by Article II shall have been consummated in all material
respects and each of the Ancillary Agreements, in form and substance
satisfactory to Ceridian, shall have been executed by the parties thereto
and each of the transactions contemplated by the Ancillary Agreements to
be consummated on or prior to the Distribution Date shall have been
consummated;
(h) no preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a government,
regulatory or administrative agency or commission, and no statute, rule,
regulation or executive order promulgated or enacted by any Governmental
Authority, shall be in effect preventing the payment of the Distribution;
and
(i) the Board of Directors of Ceridian shall have received an opinion
satisfactory to the Board of Directors of Ceridian relating to the
solvency of each of New Ceridian and Ceridian and any other opinions
referred to in the Information Statement;
PROVIDED that the satisfaction of such conditions shall not create any
obligation on the part of Ceridian to effect the Distribution or in any way
limit Ceridian's power of termination set forth in Section 8.11 or alter the
consequences of any such termination from those specified in such Section.
2.3 [INTENTIONALLY OMITTED]
2.4 [INTENTIONALLY OMITTED]
2.5 RESIGNATIONS.
(a) Subject to Section 2.5(b), the Corporation shall cause all their
employees who will be in the Media Information Group to resign, effective
as of the Distribution Date, from all positions as officers or directors
of any member of the New Ceridian Group in which they serve, and New
Ceridian shall cause all its employees to resign, effective as of the
Effective Time, from all positions as officers or directors of the
Corporation or any members of the Media Information 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.
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2.6 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 reasonable action. Without
limiting the foregoing, the Corporation and New Ceridian 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. 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.
2.7 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 or are to be transferred shall bear the economic and legal risk
that any necessary consents or approvals are not obtained or that any
requirements of laws or judgments are not complied with.
2.8 GUARANTEES.
(a) Except as otherwise specified in any Ancillary Agreement, the
Corporation and New Ceridian 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 Media
Information Group removed as guarantor of or obligor for any New Ceridian
Liability, including, without limitation, in respect of those guarantees
set forth on Schedule 2.8(a) to the extent that they relate to New
Ceridian Liabilities.
(b) Except as otherwise specified in any Ancillary Agreement, the
Corporation and New Ceridian 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 New Ceridian Group removed as
guarantor of or obligor for any Media Information Liability, including,
without limitation, in respect of those guarantees set forth on Schedule
2.8(b) to the extent that they relate to Media Information Liabilities.
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(c) If the Corporation or New Ceridian 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.
2.9 LITIGATION SERVICES. At all times from and after the Distribution Date,
each of the Corporation and New Ceridian 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 or for
providing litigation assistance (such as cooperating in a factual background
investigation) 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 New Ceridian as
applicable. A party providing witness or litigation 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.
2.10 [INTENTIONALLY OMITTED]
2.11 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,
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which such party is entitled to acquire or required to assume pursunt to the
terms of this Agreement.
2.12 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 Minnesota 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.
2.13 ANCILLARY AGREEMENTS. Prior to the Distribution Date, each of the
Corporation and New Ceridian shall enter into, and/or (where applicable) shall
cause members of the Media Information Group or the New Ceridian 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.
2.14 CORPORATE NAMES.
(a) Except as otherwise specifically provided in any Ancillary
Agreement:
(i) on or after the Distribution Date, the Corporation shall
change its name to Arbitron Inc.;
(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 New Ceridian or its
Subsidiaries after the Distribution) which refer or pertain to New
Ceridian or which include the "Ceridian" name, logo
or other trademark or other intellectual property utilizing
"Ceridian;"
(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 "Ceridian," including the
"Ceridian" name, logo and any other trademark or other
intellectual property utilizing "Ceridian" (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
"Ceridian" name, logo
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<PAGE>
or other trademarks or intellectual property utilizing "Ceridian"
without the prior written consent of New Ceridian;
(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 "Ceridian," including the "Ceridian" 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 "Ceridian," 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
Ceridian, including the "Ceridian" name, from any stock
certificate relating to shares of Ceridian Common Stock
outstanding on or prior to the Effective Time; provided that from
and after the Effective Time, any newly issued stock certificates
representing Ceridian Common Stock (which at the Effective Time
will become common stock of Arbitron Inc.) shall not have any
reference to Ceridian, including the "Ceridian" 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, New Ceridian
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 the Media
Information Business or "Arbitron" name logo or other trademark or
other Media Information intellectual property;
(ii) as soon as reasonably practicable after the Distribution
Date but in any event within six months thereafter, New Ceridian
will, and will cause its respective Subsidiaries to, remove from
all letterhead, envelopes, invoices and other communications media
of any kind, all references to the "Arbitron" name, logo and any
other trademark or other Media Information intellectual property
(except that New Ceridian shall not be required to take any such
action with
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respect to materials in the possession of customers), and neither
New Ceridian nor any of its Subsidiaries shall use or display the
"Arbitron" name, logo or other trademarks or Media Information
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, New Ceridian
will, and will cause its Subsidiaries to, change their corporate
names to the extent necessary to remove and eliminate any
reference to the "Arbitron" name; provided, however, that
notwithstanding the foregoing requirements of this Section
2.14(b), if New Ceridian 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 New Ceridian 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
Arbitron 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.
2.15 ORDINARY COURSE OF BUSINESS. Except as otherwise provided in this
Agreement or any Ancillary Agreement during the period from the date of this
Agreement through the Distribution Date, each of the Corporation and New
Ceridian shall, and shall cause any entity that is a Subsidiary of such party at
any time during such period to, conduct its business in a manner substantially
consistent with the current and past operating practices and in the ordinary
course.
ARTICLE III
INDEMNIFICATION
3.1 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 New Ceridian
Indemnitees from and against any and all Indemnifiable Losses of the New
Ceridian Indemnitees arising out of, by reason of or otherwise in connection
with the Media Information Liabilities or alleged Media Information Liabilities,
including any breach by the Corporation of any provision of this Agreement or
any Ancillary Agreement.
3.2 INDEMNIFICATION BY NEW CERIDIAN. Except as otherwise specifically set
forth in any provision of this Agreement or of any Ancillary Agreement, New
Ceridian shall indemnify, defend and hold harmless the Media Information
Indemnitees from and against any and all Indemnifiable Losses of the Media
Information Indemnitees arising out of, by reason of or otherwise in connection
with the New Ceridian Liabilities or alleged New Ceridian Liabilities, including
any breach by New Ceridian of any provision of this Agreement or any Ancillary
Agreement.
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3.3 PROCEDURES FOR INDEMNIFICATION.
(a) THIRD PARTY CLAIMS. If a claim or demand is made against a Media
Information Indemnitee or a New Ceridian 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 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, subject
to the proviso of the preceding sentence, 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
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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.
(b) SUBROGATION. 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
or anyone else. 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.
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(c) OTHER CLAIMS. In the event that the Indemnitee asserts the
existence of a claim giving rise to Indemnifiable Losses (but excluding
claims resulting from the assertion of Liability by third parties), it
shall give notice to the Indemnifying Party specifying the nature and
amount of the claim asserted. In the event that the Indemnifying Party
contests the assertion of a claim by giving notice to the Indemnitee,
then if the parties hereto, acting in good faith, cannot reach agreement
with respect to such claim within ten days after such response notice,
the Indemnitee is entitled to seek any available legal remedy in a
manner consistent with the dispute resolution mechanism set forth in
Article VI.
(d) CONTRIBUTION. If the indemnification provided for in this Article
III is unavailable to an Indemnitee with respect to an Indemnifiable Loss
arising out of or related to information contained in the Information
Statement or Form 10, then the Indemnifying Party, in lieu of
indemnifying such Indemnitee, shall contribute to the amount paid or
payable by such Indemnitee as a result of such Indemnifiable Loss, in
such proportion as is appropriate to reflect the relative fault of the
Media Information Group, on the one hand, and the New Ceridian Group, on
the other hand. The relative fault of any party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by that party or one of
its Affiliates.
(e) NON-EXCLUSIVE REMEDY. 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.
(f) REMEDY LIMITATION. All disputes, controversies or claims
arising out of or relating to this Agreement or the breach, termination
or validity thereof ("Dispute") brought by a third party beneficiary to
this Agreement shall be exclusively and finally settled in accordance
with the dispute resolution mechanism set forth in Article VI. In the
event of a Dispute regarding the availability of third party benefits,
no third party benefits provided by this Agreement shall be available
to any third party beneficiary who pursues any form of dispute
resolution inconsistent with the dispute resolution mechanism set forth
in Article VI.
3.4 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.
3.5 LIMITATION ON INDEMNIFICATION OBLIGATIONS.
(a) INSURANCE. The amount that any Indemnifying Party is or may be
required to pay to any Indemnitee pursuant to this Article III shall be
reduced (retroactively or prospectively) by any Insurance Proceeds or
other amounts actually recovered from third parties by or on behalf of
such Indemnitee in respect of the related Indemnifiable Losses. The
existence of a claim by an Indemnitee for insurance or against a third
party in respect of any Indemnifiable Loss shall not, however, delay any
payment pursuant to the indemnification provisions contained herein and
otherwise determined to be due and owing by an Indemnifying Party.
Rather, the Indemnifying Party shall make payment in full of such amount
so determined to be due and owing by it against an assignment by the
Indemnitee to the Indemnifying Party of the entire claim of the
Indemnitee for such insurance or against such third party.
Notwithstanding any other provisions of this Agreement, it is the
intention of the parties hereto that no insurer or any other third party
shall be (i) entitled to a benefit it would not be entitled to receive in
the absence of the foregoing indemnification provisions; (ii) relieved of
the responsibility to pay any claims for which it is obligated; or (iii)
entitled to any subrogation rights with respect to any obligation
hereunder. If an Indemnitee shall have received the payment required by
this
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Agreement from an Indemnifying Party in respect of any Indemnifiable
Losses and shall subsequently actually receive Insurance Proceeds or
other amounts in respect of such Indemnifiable Losses, then such
Indemnitee shall hold such Insurance Proceeds in trust for the benefit of
such Indemnifying Party and shall pay to such Indemnifying Party a sum
equal to the amount of such Insurance Proceeds or other amounts actually
received, up to the aggregate amount of any payments received from such
Indemnifying Party pursuant to this Agreement in respect of such
Indemnifiable Losses.
(b) FOREIGN CURRENCY ADJUSTMENTS. In the event that any
indemnification payment required to be made hereunder or under any
Ancillary Agreement shall be denominated in a currency other than U.S.
Dollars, the amount of such payment shall be translated into U.S. Dollars
using the foreign exchange rate for such currency determined in
accordance with the following rules:
(i) With respect to any Indemnifiable Losses arising from the
payment by a financial institution under a guarantee, comfort
letter, letter of credit, foreign exchange contract or similar
instrument, the foreign exchange rate for such currency shall be
determined as of the date on which such financial institution
shall have been reimbursed;
(ii) With respect to any Indemnifiable Losses covered by
insurance, the foreign exchange rate for such currency shall be
the foreign exchange rate employed by the insurance company
providing such insurance in settling such Indemnifiable Losses
with the Indemnifying Party; and
(iii) With respect to any Indemnifiable Losses not covered by
either clause (i) or (ii) above, the foreign exchange rate for
such currency shall be determined as of the date that notice of
the claim with respect to such Indemnifiable Losses shall be given
to the Indemnitee.
(c) ADJUSTMENTS FOR TAXES. The amount of any Indemnifiable Loss shall
be:
(i) increased to take into account any net Tax cost actually
incurred by the Indemnitee arising from any payments received from
the Indemnifying Party (grossed up for such increase); and
(ii) reduced to take account of any net Tax benefit actually
realized by the Indemnitee arising from the incurrence or payment
of any such Indemnifiable Loss.
In computing the amount of such Tax cost or Tax benefit, the Indemnitee shall be
deemed to recognize all other items of income, gain, loss, deduction or credit
before recognizing any item arising from the receipt of any payment with respect
to an Indemnifiable Loss or the incurrence or payment of any Indemnifiable Loss.
3.6 INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Corporation and New
Ceridian shall, to the fullest extent permitted by Delaware law, indemnify,
defend and save harmless the persons
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who were officers and directors of Ceridian, immediately prior to the
Distribution Date, from and against any and all liability (including any
judgments, losses, damages, civil penalties, excise taxes, interest and any
other form of liability or expense of any kind) or claim of liability (as
defined above and including any investigatory action) to which they may be
subjected by reason of any act alleged to have been done or omitted to be done
arising out of service as a director or officer in connection with their service
as officers and directors of Ceridian and any related or affiliated entity,
including all expenses reasonably incurred in their defense if the Corporation
and New Ceridian fail to provide such defense after having been requested to do
so in writing. Regardless of whether the Corporation or New Ceridian assumes
such defense, counsel for such defense may be selected by the indemnified
officer or director. Defense costs shall be indemnified as incurred in the
course of the defense or investigation. The remedies provided by this Section
3.6 shall be cumulative and without prejudice to the assertion of any other
rights. To the extent that an officer or director receives payment under any
liability insurance or other indemnification arrangement with respect to a
matter covered by this Section 3.6, that officer or director shall reimburse the
party which has made payments to him or her hereunder, but no reimbursement
shall be required except to the extent that the total which he or she has
received from all sources is greater than the aggregate amount of his or her
liability and expense with respect to that matter. The liability of the
Corporation and New Ceridian with respect to the Indemnification provided in
this Section 3.6 shall be joint and several as to the officer or director in
question, but as between the Corporation and New Ceridian, such liabilityshall
be allocated to either the Media Information Group or the New Ceridian Group
based on whether the acts or omissions giving rise to the Liability are
attributable to officers or directors of the New Ceridian Group (in which case
such liability shall be allocated to the appropriate member of the New Ceridian
Group) or are attributable to officers or directors of the Media Information
Group (in which case such liability shall be allocated to the appropriate member
of the Media Information Group). Notwithstanding the third-party beneficiary
provisions of this Agreement, the officers and directors covered by this Section
3.6 shall be and shall be deemed to be beneficiaries of this Article III and
shall be entitled to enforce their rights hereunder through legal action or
otherwise.
ARTICLE IV
ACCESS TO INFORMATION
4.1 PROVISION OF CORPORATE RECORDS.
(a) The parties acknowledge that Records (as hereinafter defined) are
Assets and, accordingly, all of the Corporation's Records shall belong to
New Ceridian unless such Records exclusively relate to the Arbitron
Business in which event such Records shall belong to the Corporation
after the Effective Time.
(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 New Ceridian for specific and identified agreements, documents, books,
records or files (collectively, "Records") which relate to (x) New
Ceridian or the conduct of the New Ceridian Business up to the Effective
Time, or (y) any Ancillary Agreement to which the Corporation and New
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Ceridian 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 the party making the request has a reasonable need for such
originals) in the possession or control of the Corporation or any of its
Subsidiaries after the Effective Time, but only to the extent such items
are not already in the possession or control of the requesting party.
(c) 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, the Media Information Group or the conduct of the
Media Information Business up to the Effective Time, or (y) any Ancillary
Agreement to which New Ceridian and the Corporation are parties, as
applicable, New Ceridian 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 party making the
request has a reasonable need for such originals) in the possession or
control of New Ceridian or any of its Subsidiaries after the Effective
Time, but only to the extent such items are not already in the possession
or control of the requesting party.
4.2 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 New Ceridian 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.
4.3 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.
4.4 CONFIDENTIALITY. Each of the Corporation and its Subsidiaries and New
Ceridian 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 party or 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
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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.
4.5 PRIVILEGED MATTERS. The parties hereto recognize that legal and other
professional services that have been and will be provided prior to the
Distribution Date have been and will be rendered for the benefit of each of the
Corporation, the members of the Media Information Group and the members of the
New Ceridian Group, and that each of the Corporation, the members of the Media
Information Group and the members of the New Ceridian 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:
(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 Media Information Business,
whether or not the privileged information is in the possession of or
under the control of the Corporation or New Ceridian. 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 Media Information
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 New Ceridian.
(b) New Ceridian shall be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged
information which relates solely to the New Ceridian Business, whether or
not the privileged information is in the possession of or under the
control of the Corporation or New Ceridian. New Ceridian 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 New Ceridian
Liabilities, now pending or which may be asserted in the future, in any
lawsuits or other proceedings initiated against or by New Ceridian
whether or not the privileged information is in the possession of or
under the control of the Corporation or New Ceridian.
(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 New Ceridian in respect of which both parties retain
any responsibility or liability under this Agreement, shall be subject to
a shared privilege among them.
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(d) No party hereto may waive any privilege which could be asserted
under any applicable law, and in which any other party hereto has a
shared privilege, without the consent of the other party, except to the
extent reasonably required by the party seeking to waive the privilege in
connection with any litigation with third parties (and then only to the
limited extent necessary under the circumstances) or the resolution of
any Tax Claim as defined in the Tax Matters Agreement 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 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 written 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 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 made in connection with then
pending litigation 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 made in connection with pending
litigation 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 subpoena,
discovery or other request 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 New
Ceridian, 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 or litigation assistance pursuant to Sections 2.9 and 3.3
hereof, the furnishing of notices and documents and other cooperative
efforts contemplated by Section 3.3
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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.
4.6 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.
4.7 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) 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 claim, whether or not in
writing, which is not reflected on such Schedule, is hereby irrevocably
cancelled, released and waived.
4.8 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
5.1 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/or its Subsidiaries such services on such terms as may be set forth in
the Transition Services Agreement. Except as otherwise set forth in the
Transition Services 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 and/or its Subsidiaries (the "Recipient") in a satisfactory and timely
manner and as further specified in such Transition Services Agreement.
5.2 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
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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.
5.3 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
6.1 NEGOTIATION. In the event of a controversy, dispute or claim arising
out of, in connection with, or in relation to the formation, 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 (including any Dispute by a
third party arising under Section 3 herein 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 parties shall first
negotiate to settle such Agreement Dispute for a period not to exceed 30 days
from the time of receipt by a party of notice of an Agreement Dispute
("Notice"), unless otherwise agreed by the parties in writing; provided that
in the event of any arbitration in accordance with Section 6.2 hereof filed
within ninety (90) days of receipt of Notice, the parties shall not assert
the defenses of statute of limitations and laches arising for the period
beginning on the date of receipt of Notice.
6.2 ARBITRATION. After 30 days have elapsed from the time of receipt of
Notice of an Agreement Dispute, at the demand of any party the Agreement
Dispute shall be finally and exclusively determined by arbitration conducted
in Minneapolis, Minnesota, in accordance with the then-existing Commercial
Arbitration Rules of the American Arbitration Association (the "Rules")
except as modified herein. 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 the Federal Arbitration Act,
9 U.S.C. ss.1 et seq. as in effect on the date hereof). If the parties are
unable to agree on the arbitrator within thirty (30) days of receipt by
respondent of the demand, 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 Minnesota, 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
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award, by any court of competent jurisdiction, including but not limited to
the District Court, County of Hennepin, Fourth Judicial District, State of
Minnesota or the United States District Court for Minnesota in Minneapolis,
Minnesota, in accordance with Section 8.17 hereof. The arbitrator shall be
entitled, consistent with applicable law and the terms of this Agreement, 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 or liquidated damages and the parties hereby waive any right
thereto. 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) tothe 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 the Rules, the party other than the prevailing party in the
arbitration shall be responsible for all of the costs of the arbitration,
including reasonable legal fees and other costs. Nothing contained herein is
intended to or shall be construed to prevent any party 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. If a
court proceeding to stay litigation or compel arbitration is necessary, the
party who unsuccessfully opposes such proceeding shall pay all associated
costs, expenses and attorneys' fees which are reasonably incurred by the
other party.
6.3 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.
6.4 TAX MATTERS AGREEMENT CONSENTS. Notwithstanding any other provision of
this Agreement, the dispute resolution procedure set forth in Section 2.1(g)(4)
of the Tax Matters Agreement shall apply with respect to disagreements relating
to the application of Section 2.1(g) and the dispute resolution procedure set
forth in Section 7.3(c) of the Tax Matters Agreement shall apply with respect to
requests for consent pursuant to Section 7.3 of the Tax Matters Agreement.
ARTICLE VII
INSURANCE
7.1 POLICIES AND RIGHTS INCLUDED WITHIN ASSETS; ASSIGNMENT OF POLICIES.
(a) POLICY RIGHTS. The New Ceridian Assets shall include any and all
rights of an insured party under each of the New Ceridian Policies and
the Shared Policies, subject to the terms of such Shared Policies and
any limitations or obligations of New Ceridian 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 prior
to the Effective Time by any party in or in connection with the conduct
of the New Ceridian Business or, to the extent any claim is made
against New Ceridian or any of its Subsidiaries, the conduct of the
Media Information Business, and which claims, suits,
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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 New Ceridian all of the Corporation's right, title and interest in and
to any and all of the New Ceridian Policies and 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
New Ceridian shall use their commercially reasonable efforts to obtain
any required consents of insurers to the assignment contemplated by
this paragraph.
7.2 POST-DISTRIBUTION DATE CLAIMS. If, subsequent to the Distribution Date,
any person shall assert a claim against New Ceridian or any of its Subsidiaries
(including, without limitation, where New Ceridian 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 prior to the Effective Time in or in connection with the
conduct of the New Ceridian Business or, to the extent any claim is made against
New Ceridian or any of its Subsidiaries (including, without limitation, where
New Ceridian or its Subsidiaries are joint defendants with other persons), in
connection with the conduct of the Media Information Business, and 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, New Ceridian as the agent and attorney-in-fact to assert
and to collect any related Insurance Proceeds under such Shared Policy.
7.3 ADMINISTRATION; OTHER MATTERS.
(a) ADMINISTRATION. From and after the Distribution Date, New
Ceridian shall be responsible for (i) Insurance Administration of the
Shared Policies and (ii) Claims Administration under such Shared Policies
with respect to Media Information Liabilities and New Ceridian
Liabilities; provided that the assumption of such responsibilities by New
Ceridian 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 New Ceridian'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 New Ceridian. New Ceridian 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
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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 New Ceridian 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 New Ceridian shall be responsible for its own Claims
Administration and Insurance Administration.
(b) EXCEEDING POLICY LIMITS. Except as set forth in this Section
7.3(b), the Corporation and New Ceridian shall not be liable to one
another for claims not reimbursed by insurers for any reason not within
the control of the Corporation or New Ceridian, 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 New
Ceridian or any defect in such claim or its processing, provided that New
Ceridian shall be responsible for the amount of the difference, if any,
between the deductible set forth in any Shared Policy and the deductible
allocable to the Corporation as set forth in Schedule 7.3(b) hereto.
(c) ALLOCATION OF INSURANCE PROCEEDS. Insurance Proceeds received
with respect to claims, costs and expenses under the Shared Policies
shall be paid to New Ceridian, which shall thereafter administer the
Shared Policies by paying the Insurance Proceeds, as appropriate, to the
Corporation with respect to Media Information Liabilities and to New
Ceridian with respect to New Ceridian Liabilities. Payment of the
allocable portions of indemnity costs of Insurance Proceeds resulting
from such Policies will be made by New Ceridian 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 a deductible is
payable, the parties agree that the aggregate amount of the deductible
paid shall be borne by the parties in the same
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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. For purposes of
this Section 7.3(d), the amount of the relevant deductible under any
Shared Policy shall be that set forth in Schedule 7.3(b) hereto.
(e) CERTAIN DEDUCTIBLES. Effective as of the Distribution Date, each
of New Ceridian and the Corporation shall be responsible for its
applicable deductible for workers' compensation, general liability and
automobile liability claims as set forth in Schedule 7.3(e).
7.4 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.
7.5 COOPERATION. The parties agree to use their commercially reasonable
efforts to cooperate with respect to the various insurance matters contemplated
by this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 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.
8.2 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.
8.3 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.
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8.4 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.
8.5 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 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. 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 on or
prior to the Distribution Date and 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 Ceridian. 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
promptly after the existence and amount of such obligation is determined and
demand therefor is made.
8.6 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:
142 West 57th Street
New York, NY 10019-3300
Fax: (212) 887-1419
Attn: General Counsel
TO NEW CERIDIAN:
Corporate Officer
3311 E. Old Shakopee Road
Minneapolis, MN 55425-1640
Fax: (952) 853-7272
Attn: General Counsel
8.7 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.
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8.8 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.
8.9 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 Media Information Business Entity, by way of a spin-off
distribution, split-off or exchange of interests in a Media Information
Business Entity for any interest in the Corporation held by Media
Information stockholders, or any similar transaction or transactions,
unless the distributed Media Information Business Entity undertakes to
New Ceridian to be jointly and severally liable for all Media Information
Liabilities hereunder.
(c) New Ceridian will not distribute to its stockholders any interest
in any New Ceridian Business Entity, by way of a spin-off distribution,
split-off or exchange of interests in a New Ceridian Business Entity for
any interest in New Ceridian held by the Corporation's stockholders, or
any similar transaction or transactions, unless the distributed New
Ceridian Business Entity undertakes to the Corporation to be jointly and
severally liable for all New Ceridian Liabilities hereunder.
8.10 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.
8.11 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 New Ceridian or the stockholders 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.
8.12 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 and after
the Effective Time.
8.13 NO 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.
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8.14 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.
8.15 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.
8.16 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF MINNESOTA.
8.17 CONSENT TO JURISDICTION. Without limiting the provisions of Article VI
hereof, each of the parties irrevocably submits to the exclusive jurisdiction of
(a) the District Court, County of Hennepin, Fourth Judicial District, State of
Minnesota, and (b) the United States District Court for Minnesota in
Minneapolis, Minnesota, 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 Minnesota in Minneapolis,
Minnesota, or if such suit, action or other proceeding may not be brought in
such court for jurisdictional reasons, in the District Court, County of
Hennepin, Fourth Judicial District, State of Minnesota. 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 Minnesota
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 District
Court, County of Hennepin, Fourth Judicial District, State of Minnesota, or (ii)
the United States District Court for Minnesota in Minneapolis, Minnesota, 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.
8.18 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.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
CERIDIAN CORPORATION
By:
--------------------------------
Its:
-------------------------------
NEW CERIDIAN CORPORATION
By:
--------------------------------
Its:
-------------------------------
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DEBT REALIGNMENT PLAN
1. PRE-EFFECTIVE TIME ACTIONS.
(a) Ceridian and New Ceridian agree to use commercially reasonable
efforts to negotiate and enter into two separate credit facilities
pursuant to the two separate terms and conditions accompanying the
engagement letters executed by Ceridian on September ___, 2000,
and by Ceridian and New Ceridian on August ___, 2000.
(b) Subject to the Board of Directors of Ceridian determining not to
do so, Ceridian will give notice of (a) redemption of the 7-1/4%
Senior Notes due June 1, 2004 (the "Notes") in accordance with the
Indenture pursuant to which the Notes were issued (the
"Indenture") as necessary to permit such Notes to be redeemed on
or before the Effective Time and (b) the termination, and payment
of all obligations and liabilities owed by Ceridian under the
Amended and Restated Credit Agreement dated as of July 31, 1997
among Ceridian, Bank of America National Trust and Savings
Association, N.A. and various other lenders (the "Credit
Agreement") in accordance with the terms of the Credit Agreement
as necessary to permit the Credit Agreement to be terminated and
paid on or before the Effective Time.
2. ASSUMPTION OF CERTAIN DEBT.
Effective upon the transfer of assets described in Section 2.1(a)(1) of the
Distribution Agreement (the "Assumption Date"), New Ceridian will assume all of
the following liabilities and obligations of Ceridian:
(a) Liabilities and obligations of Ceridian under the Notes, the
Indenture and the Credit Agreement payable from and after the
Assumption Date for principal and any prepayment premium
thereunder, such that all remaining liabilities and obligations
not assumed by New Ceridian and retained and paid by Ceridian
thereunder, whether for principal, prepayment premium, accrued
interest or other liabilities or obligations thereunder, equals
$250 million.
(b) All liabilities and obligations of Ceridian under any guarantees
of any indebtedness for borrowed money of Ceridian Canada Ltd.,
including guarantees:
(i) dated as of January 30, 1993 of indebtedness to Toronto
Division under a revolving credit facility;
(ii) dated as of March 10, 1998 of indebtedness to CIBC under a
revolving credit facility; and
(iii) dated as of December 7, 1998 of an operating lease with IBM
Canada Ltd.
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(c) All liabilities and obligations of Ceridian under any guarantees
of obligations of Permicom Permits Services Ltd. to CIBC dated as of
August 27, 1999 of an obligation to CIBC.
(d) All liabilities and obligations of Ceridian under a capitalized
lease related to the Comdata Business in the approximate amount of
$200,000.
(e) All liabilities and obligations of Ceridian under any letters of
credit issued for the account of Ceridian, including those issued to
Travelers Insurance in connection with workers' compensation insurance
and to U.S. South Communications to assure certain performance of the
Comdata Business.
(f) All liabilities and obligations of Ceridian under any sale and
leaseback transaction relating to any headquarters building located in
Minnesota or Florida.
(g) Is based on assumption that Scottish debt is paid, and
performance and real estate lease guarantees are handled elsewhere.
3. PAYMENT OF NOTES AND CREDIT AGREEMENT.
If the actions described in Section 1 above have occurred, Ceridian and New
Ceridian shall pay, or cause to be paid on or before the Effective Time with
proceeds of the credit facilities described in Section 1(a), the obligations
owing under the Notes, the Indenture and the Credit Agreement.
