Exhibit 8.1
A Partnership Including Boston
Professional Corporations Chicago
600 13th Street, N.W. London
Washington, D.C. 20005-3096 Los Angeles
202-756-8000 Miami
Facsimile 202-756-8087 Munich
http.//www.mwe.com New York
Orange County
Silicon Valley
Washington, D.C.
MCDERMOTT, WILL & EMERY
January 9, 2003
IMS Health Incorporated
1499 Post Road
Fairfield, Connecticut 06842
Ladies and Gentlemen:
We have acted as special tax counsel to IMS Health Incorporated ("IMS
Health") in connection with the proposed exchange offer pursuant to which IMS
Health (i) will exchange its shares of Cognizant Technology Solutions
Corporation ("Cognizant") class B common stock ("Cognizant Class B Common
Stock") for shares of IMS Health common stock ("IMS Health Common Stock")
tendered by IMS Health stockholders and (ii) may distribute to the IMS Health
stockholders substantially simultaneously any Cognizant Class B Common Stock
that IMS Health would otherwise continue to own after completion of the exchange
(the foregoing transactions are referred to collectively herein as the
"Exchange"), as contemplated by (i) the registration statement on Form S-4 (and
all exhibits and attachments thereto), Registration No. 333-101216, filed with
the United States Securities and Exchange Commission (the "Commission") on
November 14, 2002, as amended by Amendment No. 1 (and all exhibits and
attachments thereto) filed with the Commission on December 23, 2002, and
Amendment No. 2 (and all exhibits and attachments thereto) filed with the
Commission on
IMS Health Incorporated
January 9, 2003
Page 2
January 9, 2003 (collectively, the "Registration Statement"), (ii) the
Distribution Agreement between IMS Health and Cognizant dated January 7, 2003
(the "Distribution Agreement"), and attached as Exhibit 10.13 to the
Registration Statement, and (iii) the tender offer statement on Schedule TO (and
all exhibits and attachments thereto) filed with the Commission on January 9,
2003 (the "Schedule TO"). You have requested our opinion regarding certain
United States federal income tax consequences of the Exchange.
In rendering our opinion, we have examined and relied on (i) the
Registration Statement; (ii) the Schedule TO; (iii) the Distribution Agreement;
(iv) the representations made to us by IMS Health and Cognizant in certificates
dated January 9, 2003, including any exhibits thereto (the "IMS Health
Certificate" and the "Cognizant Certificate," respectively); (v) the
representations to be made to us in certificates to be executed by Venetia
Kontogouris and Robert E. Weissman, both directors of Cognizant (the
"Kontogouris Certificate" and the "Weissman Certificate," respectively); (vi)
the opinion delivered by Goldman, Sachs & Co. on January 8, 2003, to the Board
of Directors of IMS Health (the "Goldman, Sachs Opinion"); (vii) the opinion
delivered by Bear, Stearns & Co. Inc. on January 8, 2003, to the Board of
Directors of IMS Health (the "Bear, Stearns Opinion"); and (viii) such other
instruments and documents related to the Exchange as we have deemed necessary or
appropriate to enable us to render the opinion set forth below. The IMS Health
Certificate, the Cognizant Certificate, the Kontogouris Certificate, and the
Weissman Certificate are referred to collectively herein as the "Certificates."
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January 9, 2003
Page 3
In addition, we have assumed that (i) the Exchange will be consummated in
the manner contemplated by the Distribution Agreement, the Registration
Statement, and the Schedule TO and in accordance with the provisions of the
Distribution Agreement and the exhibits to the Schedule TO, and that none of the
terms or conditions contained therein have been or will be waived or modified in
any material respect; (ii) the Registration Statement, the Schedule TO, the
Distribution Agreement, the Certificates, and such other documents and records
that we have considered reflect all of the material facts relating to the
Exchange; (iii) the statements concerning the Exchange set forth in the
Registration Statement, the Schedule TO, the Goldman, Sachs Opinion, and the
Bear, Stearns Opinion, including the purposes of the parties for consummating
the Exchange, are accurate and complete; and (iv) the representations contained
in the Certificates are accurate and complete without regard to any
qualification as to knowledge or belief contained therein. In our examination of
the materials described herein, we also have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, and the conformity to the original
documents of all documents submitted to us as certified or photostatic copies
and the authenticity of the originals thereof. We have not independently
verified any factual matters relating to the Exchange in connection with the
preparation of this opinion. Accordingly, our opinion does not take into account
any matters not set forth herein that might have been disclosed by independent
verification. In the course of preparing our opinion, nothing has come to our
attention that would lead us to believe that any of the facts, representations,
or other information on which we have relied in rendering our opinion is
incorrect.
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January 9, 2003
Page 4
Based solely on the foregoing and subject to the exceptions,
qualifications, and limitations set forth herein, we are of the opinion that,
for United States federal income tax purposes:
(i) the distribution of the Cognizant Class B Common Stock by IMS Health
pursuant to the Exchange should be tax-free to IMS Health;
(ii) no gain or loss should be recognized by, and no amount should be
included in the income of, the IMS Health stockholders upon their
receipt of shares of Cognizant Class B Common Stock in the Exchange;
(iii) for those IMS Health stockholders that surrender all of their shares
of IMS Health Common Stock in the Exchange, the aggregate tax basis
of the shares of Cognizant Class B Common Stock held by each such
stockholder after the Exchange, including any fractional share
interest with respect to which cash is received as described in (vi)
below, should be the same as the aggregate tax basis of the shares
of IMS Health Common Stock exchanged therefor;
(iv) for those IMS Health stockholders that do not surrender all of their
shares of IMS Health Common Stock in the Exchange, each such
stockholder's aggregate tax basis in the shares of IMS Health Common
Stock held before the Exchange should be allocated between the
shares of IMS Health Common Stock and shares of Cognizant Class B
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January 9, 2003
Page 5
Common Stock, including any fractional share interest with respect
to which cash is received as described in (vi) below, held by such
stockholder after the Exchange in proportion to their relative fair
market values;
(v) the holding period of the shares of Cognizant Class B Common Stock
received by the IMS Health stockholders in the Exchange, including
any fractional share interests with respect to which cash is
received as described in (vi) below, should include the holding
period of the shares of IMS Health Common Stock with respect to
which the shares of Cognizant Class B Common Stock were received;
and
(vi) if a stockholder of IMS Health receives cash as the result of an
independent exchange agent sale of a fractional share of Cognizant
Class B Common Stock on behalf of the stockholder, the stockholder
should recognize gain or loss in an amount equal to the difference
between the tax basis allocable to such fractional share interest
and the amount of cash received.
Our opinion is based on an analysis of the Code, final, temporary, and
proposed Treasury Regulations thereunder, current administrative rulings,
judicial decisions, and other applicable authorities as of the date hereof. The
analysis of the United States federal income tax consequences of the proposed
transactions involves a careful application of the relevant
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January 9, 2003
Page 6
legal standards to the facts related to the Exchange. The legal analysis of the
Exchange is particularly dependent on the accuracy and completeness of the
facts, information, covenants, representations, and warranties contained in the
documents described herein. Thus, any change or inaccuracy in such facts,
information, covenants, representations, or warranties (including, without
limitation, events occurring subsequent to the Exchange) could affect the
conclusions stated herein. Our opinion is not binding on, and does not foreclose
the possibility of a contrary determination by, the Internal Revenue Service
("Service") or by a court of competent jurisdiction, or of a contrary position
by the Service or the Treasury Department in regulations or rulings issued in
the future. Furthermore, Congress can change the tax laws and can do so
retroactively. By rendering our opinion, we do not undertake to advise you of
any change in any law that may occur after the date of this opinion.
Except as set forth above, we express no opinion to any party as to
any tax consequences, whether United States federal, state, local, or foreign,
of the Exchange or of any other transaction or event contemplated by or referred
to in the Distribution Agreement, the Registration Statement, or the Schedule
TO. Our opinion does not address United States federal income tax consequences
that may vary with, or are contingent on, a stockholder's individual
circumstances. In particular, our opinion does not address (i) tax basis issues
with respect to stockholders participating in the Exchange who own blocks of
shares of IMS Health Common Stock with different per-share tax bases or (ii) any
tax consequences to stockholders participating in the Exchange who do not hold
their shares of IMS Health Common Stock as capital assets.
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January 9, 2003
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Our opinion is rendered to IMS Health solely in connection with the
Exchange and may not be relied on, used, circulated, quoted, or referred to by
IMS Health for any other purpose or relied on by, or furnished to, any other
person (except for governmental authorities) without our prior written consent.
We consent to the use of our name in the offering circular-prospectus included
in the Registration Statement and cross-referenced in the Schedule TO, and to
the filing of this opinion with the Commission as an exhibit to the Registration
Statement and the Schedule TO. In giving this consent, we do not hereby admit
that we are within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ MCDERMOTT, WILL & EMERY