|
Exhibit 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF
MERGER
by and among
CHOICEPOINT INC.,
REED ELSEVIER GROUP
PLC
and
DEUCE ACQUISITION
INC.
Dated as of February 20,
2008
TABLE OF
CONTENTS
|
|
|
|
|
| |
|
|
|
Page |
|
|
ARTICLE I |
|
|
|
|
|
|
|
The Merger; Closing; Effective Time |
|
|
|
|
|
|
1.1.
|
|
The
Merger |
|
1 |
|
|
|
|
1.2.
|
|
Closing |
|
1 |
|
|
|
|
1.3.
|
|
Effective
Time |
|
2 |
|
|
|
|
|
ARTICLE II |
|
|
|
|
|
|
|
Articles of Incorporation and By-Laws of the Surviving
Corporation |
|
|
|
|
|
|
2.1.
|
|
The
Articles of Incorporation |
|
2 |
|
|
|
|
2.2.
|
|
The
By-Laws |
|
2 |
|
|
|
|
|
ARTICLE III |
|
|
|
|
|
|
|
Directors and Officers of the Surviving
Corporation |
|
|
|
|
|
|
3.1.
|
|
Directors |
|
2 |
|
|
|
|
3.2.
|
|
Officers |
|
2 |
|
|
|
|
|
ARTICLE IV |
|
|
|
|
|
|
|
Effect of the Merger on Capital Stock; Exchange of
Certificates |
|
|
|
|
|
|
4.1.
|
|
Effect on
Capital Stock |
|
3 |
|
|
|
|
4.2.
|
|
Exchange
of Certificates. |
|
3 |
|
|
|
|
4.3.
|
|
Treatment
of Stock Plans. |
|
6 |
|
|
|
|
4.4.
|
|
Adjustments to Prevent Dilution |
|
8 |
-i-
|
|
|
|
|
|
|
ARTICLE V |
|
|
|
|
|
|
|
Representations and Warranties |
|
|
|
|
|
|
5.1.
|
|
Representations and Warranties of the Company |
|
8 |
|
|
|
|
5.2.
|
|
Representations and Warranties of Parent and Merger
Sub |
|
27 |
|
|
|
|
|
ARTICLE VI |
|
|
|
|
|
|
|
Covenants |
|
|
|
|
|
|
6.1.
|
|
Interim
Operations. |
|
29 |
|
|
|
|
6.2.
|
|
Acquisition Proposals. |
|
33 |
|
|
|
|
6.3.
|
|
Proxy
Filing; Information Supplied |
|
36 |
|
|
|
|
6.4.
|
|
Shareholders Meeting |
|
36 |
|
|
|
|
6.5.
|
|
Cooperation; Information |
|
37 |
|
|
|
|
6.6.
|
|
Government Filings and Other Matters |
|
38 |
|
|
|
|
6.7.
|
|
Access
and Reports |
|
40 |
|
|
|
|
6.8.
|
|
Stock
Exchange De-listing; Deregistration |
|
40 |
|
|
|
|
6.9.
|
|
Publicity |
|
41 |
|
|
|
|
6.10.
|
|
Employee
Benefits |
|
41 |
|
|
|
|
6.11.
|
|
Expenses |
|
42 |
|
|
|
|
6.12.
|
|
Indemnification; Directors’ and Officers’
Insurance |
|
42 |
|
|
|
|
6.13.
|
|
Takeover
Statutes |
|
44 |
|
|
|
|
|
ARTICLE VII |
|
|
|
|
|
|
|
Conditions |
|
|
|
|
|
|
7.1.
|
|
Conditions to Each Party’s Obligation to Effect the
Merger |
|
45 |
|
|
|
|
7.2.
|
|
Conditions to Obligations of Parent and Merger Sub |
|
45 |
-ii-
|
|
|
|
|
|
7.3.
|
|
Conditions to Obligation of the Company |
|
46 |
|
|
|
|
|
ARTICLE VIII |
|
|
|
|
|
|
|
Termination |
|
|
|
|
|
|
8.1.
|
|
Termination by Mutual Consent |
|
47 |
|
|
|
|
8.2.
|
|
Termination by Either Parent or the Company |
|
47 |
|
|
|
|
8.3.
|
|
Termination by the Company |
|
47 |
|
|
|
|
8.4.
|
|
Termination by Parent |
|
48 |
|
|
|
|
8.5.
|
|
Effect of
Termination and Abandonment |
|
48 |
|
|
|
|
|
ARTICLE IX |
|
|
|
|
|
|
|
Miscellaneous and General |
|
|
|
|
|
|
9.1.
|
|
Survival |
|
50 |
|
|
|
|
9.2.
|
|
Modification or Amendment |
|
50 |
|
|
|
|
9.3.
|
|
Waiver of
Conditions |
|
50 |
|
|
|
|
9.4.
|
|
Counterparts |
|
50 |
|
|
|
|
9.5.
|
|
GOVERNING
LAW AND VENUE; WAIVER OF JURY TRIAL; SPECIFIC
PERFORMANCE |
|
51 |
|
|
|
|
9.6.
|
|
Notices |
|
52 |
|
|
|
|
9.7.
|
|
Entire
Agreement |
|
53 |
|
|
|
|
9.8.
|
|
No Third
Party Beneficiaries |
|
53 |
|
|
|
|
9.9.
|
|
Obligations of Parent and of the Company |
|
54 |
|
|
|
|
9.10.
|
|
Definitions |
|
54 |
|
|
|
|
9.11.
|
|
Severability |
|
54 |
|
|
|
|
9.12.
|
|
Interpretation; Construction |
|
54 |
-iii-
|
|
|
|
|
| Annex A |
|
Defined
Terms |
|
A-1 |
|
|
|
| Annex
B |
|
Articles
of Incorporation of the Surviving Corporation |
|
B-1 |
|
|
|
| Annex C |
|
By-Laws
of the Surviving Corporation |
|
C-1 |
-iv-
AGREEMENT AND PLAN OF
MERGER
AGREEMENT AND PLAN OF MERGER
(hereinafter called this “ Agreement ”), dated
as of February 20, 2008, by and among ChoicePoint Inc., a
Georgia corporation (the “ Company ”), Reed
Elsevier Group plc, a public limited company incorporated in
England and Wales (“ Parent ”), and Deuce
Acquisition Inc., a Georgia corporation and an indirect wholly
owned subsidiary of Parent (“ Merger Sub ,” the
Company and Merger Sub sometimes being hereinafter collectively
referred to as the “ Constituent Corporations
”).
RECITALS
WHEREAS, the boards of
directors of Parent, Reed Elsevier PLC and Reed Elsevier NV have
approved, and the boards of directors of Merger Sub and the Company
have adopted, this Agreement providing for the merger of Merger Sub
with and into the Company (the “ Merger ”);
and
WHEREAS, the Company, Parent
and Merger Sub desire to make certain representations, warranties,
covenants and agreements in connection with this
Agreement.
NOW, THEREFORE, in
consideration of the premises, and of the representations,
warranties, covenants and agreements contained herein, the parties
hereto agree as follows:
ARTICLE I
The Merger; Closing;
Effective Time
1.1. The Merger . Upon
the terms and subject to the conditions set forth in this
Agreement, at the Effective Time (as defined in Section 1.3),
Merger Sub shall be merged with and into the Company and the
separate corporate existence of Merger Sub shall thereupon cease.
The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the “ Surviving
Corporation ”), and the separate corporate existence of
the Company, with all its rights, privileges, immunities, powers
and franchises, shall continue unaffected by the Merger, except as
set forth in Article II. The Merger shall have the effects
specified in Section 14-2-1106 of the Georgia Business
Corporation Code (the “ GBCC ”).
1.2. Closing . Unless
otherwise mutually agreed in writing between the Company and
Parent, the closing for the Merger (the “ Closing
”) shall take place at the offices of Sullivan &
Cromwell LLP, 125 Broad Street, New York, New York 10004, at
9:00 A.M. (Eastern Time) on the fourth business day (the
“ Closing Date ”) following the day on which the
last to be satisfied or waived of the conditions set forth in
Article VII (other than those conditions that by their nature
are to be satisfied at the Closing, but subject to the satisfaction
or waiver of those conditions) shall be satisfied or waived
in
accordance with this Agreement. For
purposes of this Agreement, the term “ business day
” shall mean any day ending at 11:59 P.M. (Eastern Time)
other than a Saturday or Sunday or a day on which banks are
required or authorized to close in New York, New York or London,
England.
1.3. Effective Time .
As soon as practicable following the Closing, the Company and
Parent will cause a Certificate of Merger (the “
Certificate of Merger ”) to be completed, executed,
acknowledged and filed with the Secretary of State of the State of
Georgia as provided in Section 14-2-1105(b) and
Section 14-2-1105.1 of the GBCC. The Merger shall become
effective at the time when the Certificate of Merger has been duly
filed with the Secretary of State of the State of Georgia or at
such later time as may be agreed by the parties in writing and
specified in the Certificate of Merger (the “ Effective
Time ”).
ARTICLE II
Articles of Incorporation
and By-Laws of the Surviving Corporation
2.1. The Articles of
Incorporation . The articles of incorporation set forth in
Annex B shall be the articles of incorporation of the
Surviving Corporation (the “ Charter ”), until
duly amended as provided therein or by applicable Laws (as defined
in Section 5.1(i)).
2.2. The By-Laws . The
by-laws set forth in Annex C shall be the by-laws of the
Surviving Corporation (the “ By-Laws ”), until
duly amended as provided therein or by applicable Laws.
ARTICLE III
Directors and Officers of
the Surviving Corporation
3.1. Directors . The
parties hereto shall take all actions necessary so that the board
of directors of Merger Sub at the Effective Time shall, from and
after the Effective Time, be the directors of the Surviving
Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation
or removal in accordance with the Charter and the
By-Laws.
3.2. Officers . The
officers of the Company at the Effective Time shall, from and after
the Effective Time, be the officers of the Surviving Corporation
until their successors shall have been duly elected or appointed
and qualified or until their earlier death, resignation or removal
in accordance with the Charter and the By-Laws.
-2-
ARTICLE IV
Effect of the Merger on
Capital Stock; Exchange of Certificates
4.1. Effect on Capital
Stock . At the Effective Time, as a result of the Merger and
without any action on the part of the holder of any capital stock
of the Company:
(a) Merger
Consideration . Each share of the common stock, par value $0.10
per share, of the Company (a “ Share ” or,
collectively, the “ Shares ”) issued and
outstanding immediately prior to the Effective Time other than
(i) Shares owned by Parent, Merger Sub or any other direct or
indirect wholly owned subsidiary of Parent, Shares owned by the
Company or any direct or indirect wholly owned subsidiary of the
Company, and in each case not held on behalf of third parties
(which, for purposes of clarity, shall include any such Shares held
in the Executive Benefit Trust and the Employee Stock Benefit
Trust, which Shares shall be converted into the right to receive
the Per Share Merger Consideration (as defined below)), and
(ii) Shares that are owned by shareholders who are entitled to
dissent from the Merger and demand payment for such Shares and who
properly exercise and do not waive, withdraw or otherwise lose such
right pursuant to Article 13 of the GBCC (“ Dissenting
Shareholders ”, and each of the Shares in (i) and
(ii), an “ Excluded Share ” and collectively,
“ Excluded Shares ”) shall be converted into the
right to receive $50.00 per Share in cash (the “ Per Share
Merger Consideration ”). At the Effective Time, all of
the Shares shall cease to be outstanding, shall be cancelled and
shall cease to exist, and each certificate (a “
Certificate ”) formerly representing any of the Shares
(other than Excluded Shares) shall thereafter represent only the
right to receive the Per Share Merger Consideration, without
interest.
(b) Cancellation of
Excluded Shares . Each Excluded Share shall, by virtue of the
Merger and without any action on the part of the holder of the
Excluded Share, cease to be outstanding, be cancelled without
payment of any consideration therefor and shall cease to exist,
subject to any rights the holder thereof may have under
Section 4.2(f).
(c) Merger Sub . At
the Effective Time, each share of common stock, par value $0.10 per
share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into one share of common
stock, par value $0.10 per share, of the Surviving
Corporation.
4.2. Exchange of
Certificates .
(a) Paying Agent . At
the Effective Time, Parent shall deposit, or shall cause to be
deposited, with a paying agent selected by Parent with the
Company’s prior approval (such approval not to be
unreasonably withheld or delayed) (the “ Paying Agent
”), for the benefit of the holders of Shares, a cash amount
in immediately available funds necessary for the Paying Agent to
make payments under Section 4.1(a) (such cash
-3-
being hereinafter referred to as the
“ Exchange Fund ”). The Paying Agent shall
invest the Exchange Fund as directed by Parent; provided ,
that such investments shall be in obligations of or guaranteed by
the United States of America, in commercial paper obligations rated
A-1 or P-1 or better by Moody’s Investors Service, Inc. or
Standard & Poor’s Corporation, respectively, in
certificates of deposit, bank repurchase agreements or
banker’s acceptances of commercial banks with capital
exceeding $1 billion, or in money market funds having a rating in
the highest investment category granted by a recognized credit
rating agency at the time of acquisition or a combination of the
foregoing. Any interest and other income resulting from any such
investments shall become a part of the Exchange Fund, and any
amounts in excess of the amounts payable under Section 4.1(a)
shall be promptly returned to Parent.
(b) Exchange
Procedures . Promptly after the Effective Time (and in any
event within five business days following the Effective Time), the
Surviving Corporation shall cause the Paying Agent to mail to each
holder of record of Shares (other than holders of Excluded Shares)
(i) a letter of transmittal in customary form specifying that
delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates (or
affidavits of loss in lieu of the Certificates as provided in
Section 4.2(e)) to the Paying Agent, such letter of
transmittal to be in such form and have such other provisions as
Parent and the Company may reasonably agree, and
(ii) instructions for use in effecting the surrender of the
Certificates (or affidavits of loss in lieu of the Certificates as
provided in Section 4.2(e)) in exchange for the Per Share
Merger Consideration. Upon surrender of a Certificate (or affidavit
of loss in lieu of the Certificate as provided in
Section 4.2(e)) to the Paying Agent in accordance with the
terms of such letter of transmittal, duly executed, the holder of
such Certificate shall be entitled to receive in exchange therefor
a cash amount in immediately available funds (after giving effect
to any required tax withholdings as provided in
Section 4.2(g)) equal to (x) the number of Shares
represented by such Certificate (or affidavit of loss in lieu of
the Certificate as provided in Section 4.2(e)) multiplied by
(y) the Per Share Merger Consideration, and the Certificate so
surrendered shall forthwith be cancelled. No interest will be paid
or accrued on any amount payable upon due surrender of the
Certificates. In the event of a transfer of ownership of Shares
that is not registered in the transfer records of the Company, a
check for any cash to be exchanged upon due surrender of the
Certificate may be issued to such transferee if the Certificate
formerly representing such Shares is presented to the Paying Agent,
accompanied by all documents reasonably required to evidence and
effect such transfer and to evidence that any applicable stock
transfer taxes have been paid or are not applicable.
(c) Transfers . From
and after the Effective Time, there shall be no transfers on the
stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, any Certificate is presented to the Surviving
Corporation, Parent or the Paying Agent for transfer, it shall be
cancelled and exchanged for the cash amount in immediately
available funds to which the holder of the Certificate is entitled
pursuant to this Article IV.
-4-
(d) Termination of
Exchange Fund . Any portion of the Exchange Fund (including the
proceeds of any investments of the Exchange Fund) that remains
unclaimed by the shareholders of the Company for 180 calendar days
after the Effective Time shall be delivered to the Surviving
Corporation. Any holder of Shares (other than Excluded Shares) who
has not theretofore complied with this Article IV shall thereafter
look only to the Surviving Corporation for payment of the Per Share
Merger Consideration (after giving effect to any required tax
withholdings as provided in Section 4.2(g)) upon due surrender
of its Certificates (or affidavits of loss in lieu of the
Certificates), without any interest thereon. Notwithstanding the
foregoing, none of the Surviving Corporation, Parent, the Paying
Agent or any other Person shall be liable to any former holder of
Shares for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar Laws.
For the purposes of this Agreement, the term “ Person
” shall mean any individual, corporation (including
not-for-profit), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization,
Governmental Entity (as defined in Section 5.1(d)(i)) or other
entity of any kind or nature.
(e) Lost, Stolen or
Destroyed Certificates . In the event any Certificate shall
have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to
be lost, stolen or destroyed and, if required by Parent, the
posting by such Person of a bond in customary amount and upon such
terms as may be required by Parent as indemnity against any claim
that may be made against it or the Surviving Corporation with
respect to such Certificate, the Paying Agent will issue a check in
the amount (after giving effect to any required tax withholdings as
provided in Section 4.2(g)) equal to the number of Shares
represented by such lost, stolen or destroyed Certificate
multiplied by the Per Share Merger Consideration.
(f) Dissenters’
Rights . No Person who has exercised dissenters’ rights
pursuant to Article 13 of the GBCC shall be entitled to receive the
Per Share Merger Consideration with respect to the Shares owned by
such Person unless and until such Person shall have effectively
waived, withdrawn or lost such Person’s right to dissent
under the GBCC. Each Dissenting Shareholder shall be entitled to
receive only the payment provided by Article 13 of the GBCC with
respect to Shares owned by such Dissenting Shareholder. The Company
shall give Parent (i) prompt notice of any written demands for
payment, attempted withdrawals of such demands, and any other
instruments served pursuant to applicable Law that are received by
the Company relating to shareholders’ dissenters’
rights and (ii) the opportunity to direct all negotiations and
proceedings with respect to demand for payment under the GBCC. The
Company shall not, except with the prior written consent of Parent,
voluntarily make any payment with respect to any demands for
payment, offer to settle or settle any such demands or approve any
withdrawal of any such demands.
(g) Withholding Rights
. Each of Parent, the Surviving Corporation and the Paying Agent
shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of
Shares such amounts as it
-5-
reasonably determines in good faith it
is required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code of 1986, as amended
(the “ Code ”), or any other applicable state,
local or foreign Tax (as defined in Section 5.1(n)) Law. To
the extent that amounts are so withheld by Parent, the Surviving
Corporation or the Paying Agent, as the case may be, such withheld
amounts (i) shall be remitted by Parent, the Surviving
Corporation or the Paying Agent, as applicable, to the applicable
Governmental Entity, and (ii) to the extent so remitted, shall
be treated for all purposes of this Agreement as having been paid
to the holder of Shares in respect of which such deduction and
withholding was made by Parent, the Surviving Corporation or the
Paying Agent, as the case may be.
4.3. Treatment of Stock
Plans .
(a) Treatment of
Options . At the Effective Time each outstanding option to
purchase Shares (a “ Company Option ”) under the
Stock Plans (as defined in Section 5.1(b)(i)), to the extent
unvested shall vest in full upon the Effective Time (in accordance
with the terms of the Stock Plans as amended immediately prior to
the date hereof in accordance with Section 6.10(c)), and each
Company Option shall be cancelled and shall only entitle the holder
of such Company Option to receive, as soon as reasonably
practicable after the Effective Time, but in any event within five
business days thereafter, an amount in cash equal to the product of
(x) the total number of Shares subject to the Company Option
times (y) the excess, if any, of the Per Share Merger
Consideration over the exercise price per Share under such Company
Option, less applicable Taxes required to be withheld with respect
to such payment.
(b) Company Restricted
Shares . Each Share granted subject to vesting or other lapse
restrictions pursuant to any of the Company’s Stock Plans
(each, a “ Company Restricted Share ”) which is
outstanding immediately prior to the Effective Time shall vest in
full and become free of such restrictions as of the Effective Time
(in accordance with the terms of the Stock Plans as amended
immediately prior to the date hereof in accordance with
Section 6.10(c)) and, at the Effective Time, the holder
thereof shall be entitled to receive the Per Share Merger
Consideration with respect to each such Company Restricted Share in
accordance with Section 4.1, less applicable Taxes required to
be withheld with respect to such payment.
(c) Company Units . At
the Effective Time, each outstanding Share Equivalent Unit (each a
“ Company Unit ”) under the Stock Plans, to the
extent then unvested, shall vest in full upon the Effective Time
(in accordance with the terms of the Stock Plans as amended
immediately prior to the date hereof in accordance with
Section 6.10(c)), and each Company Unit shall be converted
into an obligation to pay the holder thereof an amount in cash
equal to the product of (x) the total number of Shares subject
to such Company Unit immediately prior to the Effective Time times
(y) the Per Share Merger Consideration. Such obligation shall
be payable in accordance with and at the time set forth under the
terms of the agreement, plan or arrangement relating to such
Company Unit (or, if earlier, on the death of the holder thereof)
and, prior to the time of
-6-
payment, such unpaid amounts shall be
credited with interest at the applicable federal rate at the
Closing provided for in Section 1274(d) of the Code compounded
semiannually, and such payments when paid will be subject to
withholding of applicable Taxes required to be withheld.
(d) Company Deferred
Shares . At the Effective Time, each outstanding deferred Share
(each, a “ Deferred Share ”) under the Stock
Plans shall vest in full upon the Effective Time and be converted
into an obligation to pay an amount in cash equal to the product of
(x) the total number of Shares subject to such Deferred Share
immediately prior to the Effective Time times (y) the Per
Share Merger Consideration. Such obligation shall be payable in
full (without exercise of discretionary proration) on the later of
(i) the Effective Time and (ii) the first business day
following January 1, 2009 (or, if earlier, on the death of the
holder thereof) and, prior to the time of payment, such unpaid
amounts shall be credited with interest at the applicable federal
rate at the Closing provided for in Section 1274(d) of the
Code compounded semiannually, and such payments when paid will be
subject to withholding of applicable Taxes required to be
withheld.
(e) Company Awards .
At the Effective Time, each right of any kind, contingent or
accrued, to acquire or receive Shares or benefits measured by the
value of Shares, and each award of any kind consisting of Shares
that may be held, awarded, outstanding, payable or reserved for
issuance under the Stock Plans and any other Company Benefit Plans,
other than Company Options, Company Units, Company Restricted
Shares and Deferred Shares (collectively, the “ Company
Awards ”), shall be converted into an obligation to pay,
at the time specified in the applicable plan, agreement or
arrangement, an amount in cash equal to (x) the number of
Shares subject to such Company Award immediately prior to the
Effective Time times (y) the Per Share Merger Consideration
(or, if the Company Award provides for payments to the extent the
value of the Shares exceed a specified reference price, the amount,
if any, by which the Per Share Merger Consideration exceeds such
reference price). Such obligation shall be payable or distributable
in accordance with the terms of the agreement, plan or arrangement
relating to such Company Awards (or, if earlier, on the death of
the holder thereof) and, prior to the time of distribution, such
amounts shall be permitted to be deemed invested in an investment
option under the applicable plan, and when paid will be subject to
withholding of applicable Taxes required to be withheld.
(f) Corporate Actions
. At or prior to the Effective Time, the Company, the board of
directors of the Company and the compensation committee of the
board of directors of the Company, as applicable, shall adopt
resolutions or take action by written consent in lieu of a meeting,
and use reasonable best efforts to effectuate the provisions of
Section 4.3(a), Section 4.3(b), Section 4.3(c),
Section 4.3(d) and Section 4.3(e). The Company shall use
reasonable best efforts to ensure that after the Effective Time
neither Parent nor the Surviving Corporation will be required to
deliver Shares or other capital stock of the Company to any Person
pursuant to or in settlement of Company Options, Company Restricted
Shares, Company Units, Deferred Shares or Company Awards or
otherwise.
-7-
4.4. Adjustments to
Prevent Dilution . In the event that the Company changes the
number of Shares, or securities convertible or exchangeable into or
exercisable for Shares, issued and outstanding prior to the
Effective Time as a result of a reclassification, stock split
(including a reverse stock split), stock dividend or distribution,
recapitalization, merger, issuer tender or exchange offer, or other
similar transaction, the Per Share Merger Consideration shall be
equitably adjusted.
ARTICLE V
Representations and
Warranties
5.1. Representations and
Warranties of the Company . Except as set forth in the Company
Reports filed with or furnished to the Securities and Exchange
Commission (the “ SEC ”) prior to the date of
this Agreement (excluding, in each case, any disclosures set forth
in any risk factor section and in any section relating to forward
looking statements) or in the corresponding sections or subsections
of the disclosure letter delivered to Parent by the Company prior
to entering into this Agreement (the “ Company Disclosure
Letter ”) (it being agreed that disclosure of any item in
any section or subsection of the Company Disclosure Letter shall be
deemed disclosure with respect to any other section or subsection
to which the relevance of such item is reasonably apparent), the
Company hereby represents and warrants to Parent and Merger Sub
that:
(a) Organization, Good
Standing and Qualification . Each of the Company and its
Subsidiaries is a legal entity duly organized, validly existing and
in good standing under the Laws of its respective jurisdiction of
organization and has all requisite corporate or similar power and
authority to own, lease and operate its properties and assets and
to carry on its business as presently conducted and is qualified to
do business and is in good standing as a foreign corporation or
other legal entity in each jurisdiction where the ownership,
leasing or operation of its assets or properties or conduct of its
business requires such qualification, except where the failure to
be so organized, qualified or in good standing, or to have such
power or authority, is not, individually or in the aggregate,
reasonably likely to have a Material Adverse Effect or prevent,
materially delay or materially impair the consummation of the
transactions contemplated by this Agreement. The Company has made
available to Parent complete and correct copies of the
Company’s and its Subsidiaries’ articles of
incorporation and by-laws or similar governing documents, each as
amended to the date of this Agreement, and each as so made
available is in full force and effect. Section 5.1(a) of the
Company Disclosure Letter contains a correct and complete list of
the Company’s Subsidiaries and each jurisdiction where the
Company and its Subsidiaries are organized.
As used in this Agreement,
the term (i) “ Subsidiary ” means, with
respect to any Person, any other Person of which at least a
majority of the securities or ownership
-8-
interests having by their terms ordinary
voting power to elect a majority of the board of directors,
managers or other persons performing similar functions is directly
or indirectly owned or controlled by such Person and/or by one or
more of its Subsidiaries, (ii) “ Significant
Subsidiary ” is as defined in Rule 1.02(w) of
Regulation S-X promulgated pursuant to the Securities Exchange
Act of 1934, as amended (the “ Exchange Act ”)
and (iii) “ Material Adverse Effect ” with
respect to the Company means a material adverse effect on the
financial condition, properties, assets, liabilities, business or
results of operations of the Company and its Subsidiaries, taken as
a whole; provided , however , that none of the
following, in and of itself or themselves, shall constitute a
Material Adverse Effect with respect to the Company:
(A) changes in the economy or
financial markets generally in the United States or other countries
in which the Company conducts material operations or changes that
are the result of acts of war or terrorism;
(B) changes that are the
result of factors generally affecting the authentication,
background screening, credentialing and insurance services, and
related data and analytics industries, and the insurance business
process software industry;
(C) any loss of, or adverse
change in, the relationship of the Company or any of its
Subsidiaries with its customers, employees, privacy advocacy groups
or suppliers caused by or directly relating to the pendency or the
announcement of the transactions contemplated by this
Agreement;
(D) changes in Laws or United
States generally accepted accounting principles (“
GAAP ”) or rules and policies of the Public Company
Accounting Oversight Board;
(E) any failure by the
Company to meet any estimates of revenues or earnings for any
period ending on or after the date of this Agreement and prior to
the Closing, provided , that the exception in this clause
shall not prevent or otherwise affect a determination that any
change, effect, circumstance or development underlying such failure
has resulted in, or contributed to, a Material Adverse Effect;
and
(F) any action or omission
required pursuant to the terms of this Agreement or pursuant to the
express written request of Parent;
provided ,
further , that, with respect to clauses (A),
(B) and (D), such change, event, circumstance or development
does not disproportionately adversely affect the Company and its
Subsidiaries compared to other companies of similar size operating
in the authentication, background screening, credentialing and
insurance services, and related data and analytics industries, and
the insurance business process software industry. For purposes of
clarity, any Remedial Actions undertaken by Parent or the Company
pursuant to Parent’s obligations in Section 6.5 shall
not be counted towards any calculation of Material Adverse
Effect.
-9-
(b) Capital Structure
.
(i) The authorized capital
stock of the Company consists of 400,000,000 Shares, of which
67,859,898 Shares were outstanding as of the close of business on
February 18, 2008, and 10,000,000 shares of preferred stock,
of which no shares are outstanding. All of the outstanding Shares
have been duly authorized and are validly issued, fully paid and
nonassessable. Other than 11,863,437 Shares reserved for issuance
under the Company’s 1997 Omnibus Incentive Plan, 2003 Omnibus
Incentive Plan, as amended, and 2006 Omnibus Incentive Plan, as
amended, DBT Online Inc. Stock Option Plan and the Deferred
Compensation Plan and Deferred Compensation Plan No. 2
(collectively, the “ Stock Plans ”) and Shares
subject to issuance under the Stock Plans, the Company has no
Shares reserved for or subject to issuance. Section 5.1(b)(i)
of the Company Disclosure Letter contains a correct and complete
list as of February 14, 2008 of options, phantom stock,
restricted stock, deferred shares, share equivalent units and
Stock-based performance units under the Stock Plans, including the
holder to whom the applicable security was issued, date of grant,
type of award, term, number of Shares and, where applicable,
exercise price per Share. Each of the outstanding shares of capital
stock or other securities of each of the Company’s
Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and owned by the Company or by a direct or indirect
wholly owned Subsidiary of the Company, free and clear of any lien,
charge, pledge, security interest, claim or other encumbrance
(each, a “ Lien ”). Except as set forth above,
there are no preemptive or other outstanding rights, options,
warrants, conversion rights, stock appreciation rights, redemption
rights, repurchase rights, agreements, arrangements, calls,
commitments or rights of any kind that obligate the Company or any
of its Subsidiaries to issue or sell any shares of capital stock or
other securities of the Company or any of its Subsidiaries or any
securities or obligations convertible or exchangeable into or
exercisable for, or giving any Person a right to subscribe for or
acquire, any securities of the Company or any of its Subsidiaries,
and no securities or obligations evidencing such rights are
authorized, issued or outstanding. Upon any issuance of Shares in
accordance with the terms of the Stock Plans, such Shares will be
duly authorized, validly issued, fully paid and nonassessable and
free and clear of any Liens. The Company does not have outstanding
any bonds, debentures, notes or other obligations the holders of
which have the right to vote (or convertible into or exercisable
for securities having the right to vote) with the shareholders of
the Company on any matter.
(ii) Section 5.1(b)(ii)
of the Company Disclosure Letter sets forth (x) each of the
Company’s Subsidiaries and the ownership interest of the
Company in each such Subsidiary, as well as the ownership interest
of any other
-10-
Person or Persons in each
such Subsidiary and (y) the Company’s or its
Subsidiaries’ capital stock, equity interest or other direct
or indirect ownership interest in any other Person other than
securities in a publicly traded company held for investment by the
Company or any of its Subsidiaries and consisting of less than 1%
of the outstanding capital stock of such company. The Company does
not own, directly or indirectly, any voting interest in any Person
that requires an additional filing by Parent under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the “ HSR Act ”).
(iii) Each Company Option
(A) was granted in compliance with all applicable Laws and all
of the terms and conditions of the Stock Plan pursuant to which it
was issued, (B) has an exercise price per Share equal to or
greater than the fair market value of a Share on the date of such
grant as reported on the NYSE (as defined in
Section 5.1(e)(ii)) and (C) qualifies for the Tax and
accounting treatment afforded to such Company Option in the
Company’s Tax Returns (as defined in Section 5.1(n)) and
the Company Reports, respectively.
(c) Corporate Authority;
Approval and Fairness .
(i) The Company has all
requisite corporate power and authority and has taken all corporate
action necessary in order to execute, deliver and perform its
obligations under this Agreement and to consummate the Merger,
subject only to approval of this Agreement by the holders of a
majority of the outstanding Shares entitled to vote on such matter
at a shareholders’ meeting duly called and held for such
purpose (the “ Company Requisite Vote ”). This
Agreement has been duly executed and delivered by the Company and
constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar Laws of general
applicability relating to or affecting creditors’ rights and
to general equity principles (the “ Bankruptcy and Equity
Exception ”).
(ii) The board of directors
of the Company has (A) unanimously adopted this Agreement and
approved the Merger and the other transactions contemplated by this
Agreement and resolved to recommend the approval of this Agreement
to the holders of Shares (the “ Company Recommendation
”), (B) received the opinions of its financial advisor,
Goldman Sachs & Co., dated on or prior to the date of this
Agreement, to the effect that, as of the date of such opinion, the
Per Share Merger Consideration is fair, from a financial point of
view, to the holders of Shares and (C) directed that this
Agreement be submitted to the holders of Shares for their approval.
The board of directors of the Company has taken all action so that
neither Parent nor Merger Sub will be an “interested
shareholder” or prohibited from entering into or consummating
a “business combination” with the Company (in each case
as such term is used in Article 11 of the GBCC) as a result of the
execution of this Agreement or the consummation of the transactions
in the manner contemplated hereby.
-11-
(d) Governmental Filings;
No Violations; Certain Contracts .
(i) Other than the filings
and/or notices pursuant to Section 1.3, under the Exchange Act
and the HSR Act, and the approvals of the Governmental Entities
listed in Section 5.1(d)(i) of the Company Disclosure Letter,
no notices, reports or other filings are required to be made by the
Company with, nor are any consents, registrations, approvals,
permits or authorizations required to be obtained by the Company
from, any Federal, state or foreign governmental or regulatory
authority, agency, commission, body, court or other legislative,
executive or judicial governmental entity (each a “
Governmental Entity ”), in connection with the
execution, delivery and performance of this Agreement by the
Company and the consummation of the Merger and the other
transactions contemplated hereby, or in connection with the
continuing operation of the business of the Company and its
Subsidiaries following the Effective Time, except those that the
failure to make or obtain are not, individually or in the
aggregate, reasonably likely to have a Material Adverse Effect or
prevent, materially delay or materially impair the consummation of
the transactions contemplated by this Agreement.
(ii) The execution, delivery
and performance of this Agreement by the Company do not, and the
consummation of the Merger and the other transactions contemplated
hereby will not, constitute or result in (A) a breach or
violation of, or a default under, the articles of incorporation or
by-laws of the Company or similar governing documents of any of its
Subsidiaries, in each case as in effect, (B) with or without
notice, lapse of time or both, a breach or violation of, a
termination, cancellation or modification (or right of termination,
cancellation or modification) or default under, the payment of
additional fees, the creation or acceleration of any obligations
under or the creation of a Lien on any of the assets of the Company
or any of its Subsidiaries pursuant to any agreement, lease,
license, contract, settlement, consent, note, mortgage, indenture,
arrangement or other obligation not otherwise terminable by the
other party thereto on 90 calendar days’ or less notice
(each, a “ Contract ”) binding upon the Company
or any of its Subsidiaries or, assuming compliance with the matters
referred to in Section 5.1(d)(i), under any Law to which the
Company or any of its Subsidiaries is subject, or (C) any
change in the rights or obligations of any party under any Contract
binding upon the Company or any of its Subsidiaries, except, in the
case of clause (B) or (C) above, for any such breach,
violation, termination, default, creation, acceleration or change
that is not, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect or prevent, materially delay or
materially impair the consummation of the transactions contemplated
by this Agreement.
-12-
(e) Company Reports;
Financial Statements .
(i) The Company has filed or
furnished, as applicable, on a timely basis, all forms, statements,
certifications, reports and documents required to be filed or
furnished by it with the SEC pursuant to the Exchange Act or the
Securities Act of 1933, as amended (the “ Securities
Act ”) since December 31, 2005 (the “
Applicable Date ”) (the forms, statements, reports and
documents filed or furnished since the Applicable Date and those
filed or furnished subsequent to the date of this Agreement,
including any amendments thereto, the “ Company
Reports ”). Each of the Company Reports, at the time of
its filing or being furnished complied in all material respects or,
if not yet filed or furnished, will comply in all material respects
with the applicable requirements of the Securities Act, the
Exchange Act and the Sarbanes-Oxley Act of 2002 (the “
Sarbanes-Oxley Act ”), and any rules and regulations
promulgated thereunder applicable to the Company Reports. As of
their respective dates (or, if amended prior to the date of this
Agreement, as of the date of such amendment), the Company Reports
did not, and any Company Reports filed with or furnished to the SEC
subsequent to the date of this Agreement will not, contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which
they were made, not misleading.
(ii) The Company is in
compliance in all material respects with the applicable listing and
corporate governance rules and regulations of the New York Stock
Exchange (the “ NYSE ”). Except as permitted by
the Exchange Act, including Section 13(k)(2) and
Section 13(k)(3) thereof or rules of the SEC, since the
enactment of the Sarbanes-Oxley Act, neither the Company nor any of
its Affiliates has made, arranged or modified (in any material way)
any extensions of credit in the form of a personal loan to any
executive officer or director of the Company or any of its
Affiliates. For purposes of this Agreement, the term “
Affiliate ” when used with respect to any party shall
mean any Person who is an “affiliate” of that party
within the meaning of Rule 405 promulgated under the
Securities Act.
(iii) The Company maintains
disclosure controls and procedures required by Rule 13a-15 or
Rule 15d-15 under the Exchange Act. Such disclosure controls and
procedures are effective to ensure that material information
required to be disclosed by the Company is recorded and reported on
a timely basis to the individuals responsible for the preparation
of the Company’s filings with the SEC and other public
disclosure documents. The Company maintains internal control over
financial reporting (as defined in Rule 13a-15 or
Rule 15d-15, as applicable, under the Exchange Act). Such
internal control over financial reporting is effective in providing
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with GAAP and includes policies and
procedures that (i) pertain to the
-13-
maintenance of records that
in reasonable detail accurately and fairly reflect the transactions
and dispositions of the assets of the Company, (ii) provide
reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP,
and that receipts and expenditures of the Company are being made
only in accordance with authorizations of management and directors
of the Company, and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that
could have a material effect on its financial statements. The
Company has disclosed, based on the most recent evaluation of its
chief executive officer and its chief financial officer prior to
the date of this Agreement, to the Company’s auditors and the
audit committee of the Company’s board of directors
(A) any significant deficiencies in the design or operation of
its internal controls over financial reporting that are reasonably
likely to adversely affect the Company’s ability to record,
process, summarize and report financial information and has
identified for the Company’s auditors and audit committee of
the Company’s board of directors any material weaknesses in
internal control over financial reporting and (B) any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal control over financial reporting. The Company has made
available to Parent (i) a summary of any such disclosure made
by management to the Company’s auditors and audit committee
since the Applicable Date and (ii) any communication since the
Applicable Date made by management or the Company’s auditors
to the audit committee required or contemplated by listing
standards of the NYSE, the audit committee’s charter or
professional standards of the Public Company Accounting Oversight
Board. Since the Applicable Date, no material complaints from any
source regarding accounting, internal accounting controls or
auditing matters, and no concerns from Company employees regarding
questionable accounting or auditing matters, have been received by
the Company. The Company has made available to Parent a summary of
all complaints or concerns relating to other matters made since the
Applicable Date through the Company’s whistleblower hot line
or equivalent system for receipt of employee concerns regarding
possible violations of Law. No attorney representing the Company or
any of its Subsidiaries, whether or not employed by the Company or
any of its Subsidiaries, has reported evidence of a violation of
securities Laws, breach of fiduciary duty or similar violation by
the Company or any of its officers, directors, employees or agents
to the Company’s chief legal officer, audit committee (or
other committee designated for the purpose) of the board of
directors or the board of directors pursuant to the rules adopted
pursuant to Section 307 of the Sarbanes-Oxley Act or any
policy of the Company contemplating such reporting, including in
instances not required by those rules.
(iv) Each of the consolidated
balance sheets included in or incorporated by reference into the
Company Reports (including the related notes and schedules) fairly
presents in all material respects, or, in the case of
Company
-14-
Reports filed after the date
of this Agreement, will fairly present in all material respects the
consolidated financial position of the Company and its consolidated
Subsidiaries as of its date and each of the consolidated statements
of income, shareholders’ equity and cash flows included in or
incorporated by reference into the Company Reports (including any
related notes and schedules) fairly presents in all material
respects, or in the case of Company Reports filed after the date of
this Agreement, will fairly present in all material respects the
results of operations, retained earnings (loss) and changes in
financial position, as the case may be, for the periods set forth
therein (subject, in the case of unaudited statements, to notes and
normal year-end audit adjustments that will not be material in
amount or effect), in each case in accordance with GAAP
consistently applied during the periods involved, except as may be
noted therein.
(f) Absence of Certain
Changes . Since December 31, 2006 through the date hereof,
the Company and its Subsidiaries have conducted their respective
businesses only in accordance with the ordinary course of such
businesses consistent with past practices and there has not
been:
(i) any change in the
financial condition, properties, assets, liabilities, business or
results of their operations or any circumstance, occurrence or
development (including any adverse change with respect to any
circumstance, occurrence or development existing on or prior to
December 31, 2006) of which the Company has knowledge which,
individually or in the aggregate, has had or is reasonably likely
to have a Material Adverse Effect or prevent, materially delay or
materially impair the consummation of the transactions contemplated
by this Agreement;
(ii) any declaration, setting
aside or payment of any dividend or other distribution with respect
to any shares of capital stock of the Company or any of its
Subsidiaries (except for dividends or other distributions by any
direct or indirect wholly owned Subsidiary to the Company or to any
wholly owned Subsidiary of the Company), or any repurchase,
redemption or other acquisition by the Company or any of its
Subsidiaries of any outstanding shares of capital stock or other
securities of the Company or any of its Subsidiaries;
(iii) any material change in
any method of financial accounting or accounting practice by the
Company or any of its Subsidiaries;
(iv) (A) any increase in the
compensation or benefits payable or to become payable to its
officers or employees (except for increases in the ordinary course
of business and consistent with past practice or, in the case of
employees who are not officers, off-cycle salary increases that are
consistent with general salary increases of the Company) or
(B) any establishment, adoption, entry into or amendment of
any collective bargaining, bonus, profit sharing, equity, thrift,
compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of
any director, officer or employee, except to the extent required by
applicable Law; or
-15-
(v) any agreement to do any
of the foregoing
As used in this Agreement,
the term “knowledge” when used in the phrases “to
the knowledge of the Company,” “of which the Company
has knowledge,” or “the Company has no knowledge”
or words of similar import shall mean the actual knowledge of the
Persons listed in Section 5.1(f) of the Company Disclosure
Letter.
(g) Litigation and
Liabilities . There are no civil, criminal or administrative
actions, suits, claims, oppositions, litigations, objections,
hearings, arbitrations, investigations or other proceedings
(“ Actions ”) pending or, to the knowledge of
the Company, threatened against the Company or any of its
Subsidiaries or obligations or liabilities of the Company or any of
its Subsidiaries, whether or not accrued, contingent or otherwise,
(including those relating to matters involving any Environmental
Law (as defined in Section 5.1(m))), except (a) as
reflected or reserved against in the Company’s consolidated
balance sheets (and the notes thereto) included in the Company
Reports filed prior to the date of this Agreement, (b) for
obligations or liabilities incurred in the ordinary course of
business since December 31, 2006, or (c) for those that
are not, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect or prevent, materially delay or
materially impair the consummation of the transactions contemplated
by this Agreement. Neither the Company nor any of its Subsidiaries
is subject to any material Actions involving the privacy of
consumers. Neither the Company nor any of its Subsidiaries is a
party to or subject to the provisions of any judgment, order, writ,
injunction, decree, award, stipulation or settlement (“
Judgment ”) of any Governmental Entity which is,
individually or in the aggregate, reasonably likely to have a
Material Adverse Effect or prevent, materially delay or materially
impair the consummation of the transactions contemplated by this
Agreement.
(h) Employee Benefits
.
(i) All benefit and
compensation plans, employment agreements, contracts, policies or
arrangements covering current or former employees of the Company
and its Subsidiaries (the “ Employees ”) and
current or former directors of the Company, including, but not
limited to, “employee benefit plans” within the meaning
of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (“ ERISA ”), and deferred
compensation, severance, stock option, stock purchase, stock
appreciation rights, Company stock based, incentive and bonus plans
(collectively, the “ Company Benefit Plans ”),
other than Company Benefit Plans maintained outside of the United
States primarily for the benefit of Employees working outside of
the United States (such plans hereinafter being referred to as
“ Company Non-U.S. Benefit Plans ”), are listed
in Section 5.1(h)(i) of the Company Disclosure Letter, and
each Company Benefit Plan which has received a favorable opinion
letter from the IRS National Office,
-16-
including any master or
prototype plan, has been separately identified. True and complete
copies of all Company Benefit Plans listed in
Section 5.1(h)(i) of the Company Disclosure Letter, including
any trust instruments, insurance contracts, the most recent
actuarial report and, with respect to any employee stock ownership
plan, loan agreements forming a part of any Company Benefit Plans,
and all amendments thereto have been made available or provided to
Parent.
(ii) All Company Benefit
Plans, other than “multiemployer plans” within the
meaning of Section 3(37) of ERISA (each, a “
Multiemployer Plan ”) and Company Non-U.S. Benefit
Plans (collectively, “ Company U.S. Benefit Plans
”), are in substantial compliance with ERISA, the Code and
other applicable Laws. Each Company U.S. Benefit Plan which is
subject to ERISA (a “ Company ERISA Plan ”) that
is an “employee pension benefit plan” within the
meaning of Section 3(2) of ERISA (a “ Company Pension
Plan ”) intended to be qualified under
Section 401(a) of the Code, has received a favorable
determination letter from the Internal Revenue Service (the “
IRS ”) covering all tax Law changes prior to the
Economic Growth and Tax Relief Reconciliation Act of 2001 or has
applied to the IRS for such favorable determination letter within
the applicable remedial amendment period under Section 401(b)
of the Code, and, to the knowledge of the Company, no circumstances
exist that could reasonably be expected to result in the loss of
the qualification of such Plan under Section 401(a) of the
Code. Neither the Company nor any of its Subsidiaries has engaged
in a transaction with respect to any Company ERISA Plan that,
assuming the taxable period of such transaction expired as of the
date of this Agreement, would subject the Company or any Subsidiary
to a tax or penalty imposed by either Section 4975 of the Code
or Section 502(i) of ERISA in an amount which would be
material. Any voluntary employees’ beneficiary association
within the meaning of Section 501(c)(9) of the Code which
provides benefits under a U.S. Benefit Plan has (A) received
an opinion letter from the IRS recognizing its exempt status under
Section 501(c)(9) of the Code and (B) filed a timely
notice with the IRS pursuant to Section 505(c) of the Code,
and, to the knowledge of the Company, no circumstances exist that
could reasonably be expected to result in the loss of such exempt
status under Section 501(c)(9) of the Code.
(iii) Neither the Company,
any or its Subsidiaries nor any entity which is considered one
employer with the Company under Section 4001 of ERISA or
Section 414 of the Code (an “ Company ERISA
Affiliate ”) (x) maintains or contributes to or has
within the past six years maintained or contributed to a Company
Pension Plan that is subject to Subtitles C or D of Title IV of
ERISA or (y) maintains or has an obligation to contribute to
or has within the past six years maintained or had an obligation to
contribute to a Multiemployer Plan. All contributions required to
be made under each Company Benefit Plan, as of the date of this
Agreement, have been timely made or, if not required to be made or
paid on or before the date hereof, to the extent required by
generally accepted accounting principles, any unpaid obligations in
respect of each Company Benefit
-17-
Plan have been properly
accrued and reflected in the most recent consolidated balance sheet
filed or incorporated by reference in the Company Reports prior to
the date of this Agreement.
(iv) As of the date of this
Agreement, there is no material pending or, to the knowledge of the
Company threatened, claims (other than routine claims for benefits)
or litigation relating to the Company Benefit Plans, and to the
knowledge of the Company, there is no basis for any such claims or
litigation. Neither the Company nor any of its Subsidiaries has any
obligations for retiree health and life benefits under any Company
ERISA Plan or collective bargaining agreement except for health
continuation coverage as required by Section 4980B of the Code
or Part 6 of Title I of ERISA. The Company or its Subsidiaries may
amend or terminate any such plan at any time without incurring any
liability thereunder other than in respect of claims incurred prior
to such amendment or termination.
(v) Neither the execution of
this Agreement, shareholder approval of this Agreement nor the
consummation of the transactions contemplated hereby will
(w) entitle any employees of the Company or any of its
Subsidiaries to severance pay or any increase in severance pay upon
any termination of employment after the date of this Agreement,
(x) accelerate the time of payment or vesting or result in any
payment or funding (through a grantor trust or otherwise) of
compensation or benefits under, increase the amount payable or
result in any other material obligation pursuant to, any of the
Company Benefit Plans, or (y) limit or restrict the right of
the Company or, after the consummation of the transactions
contemplated hereby, Parent to merge, amend or terminate any of the
Company Benefit Plans. The data provided to Ernst & Young
for purposes of the Section 280G calculations for Derek Smith
and Douglas Curling is true and correct in all material
respects.
(vi) Neither the execution of
this Agreement, shareholder approval of this Agreement nor the
consummation of the transactions contemplated hereby will result in
payments under any of the Company Benefit Plans which would not be
deductible under Section 162(m) or Section 280G of the
Code. Section 5.1(h)(vi) of the Company Disclosure Letter
separately lists any Company Benefit Plans that provide for a
Section 4999 gross-up or cut back.
(vii) All Company Benefit
Plans that are “nonqualified deferred compensation
plans” (within the meaning of Section 409A of the Code)
have been maintained and administered in good faith compliance with
the requirements of Section 409A of the Code and any
regulations or other guidance issued thereunder. No Company Benefit
Plan provides for a Section 409A gross-up or
indemnity.
-18-
(viii) All Company Non-U.S.
Benefit Plans comply in all material respects with applicable Law.
The Company and its Subsidiaries have no material unfunded
liabilities with respect to any such Company Non-U.S. Benefit Plan.
As of the date of this Agreement, there are no pending or, to the
knowledge of the Company, threatened material claims (other than
routine claims for benefits) or litigation relating to Company
Non-U.S. Benefit Plans, and to the knowledge of the Company, there
are no circumstances that exist that could reasonably be expected
to be a basis for any such claims or litigation. All Company
Non-U.S. Benefit Plans are listed in Section 5.1(h)(viii) of
the Company Disclosure Letter.
(i) Compliance with Laws;
Licenses . The businesses of each of the Company and its
Subsidiaries have not been, and are not being, conducted in
violation of any federal, state, local or foreign law, statute or
ordinance, common law, or any rule, regulation, standard, judgment,
order, writ, injunction, decree, arbitration award, agency
requirement, license or permit of any Governmental Entity
(collectively, “ Laws ”), including all Laws
applicable to the use, storage, commercialization, protection and
distribution of the data contained in the information databases of
the Company and its Subsidiaries (the “ Company
Databases ”), except for violations that, individually or
in the aggregate, are not reasonably likely to have a Material
Adverse Effect or prevent, materially delay or materially impair
the consummation of the transactions contemplated by this
Agreement. The Company and its Subsidiaries have been and are
substantially in compliance with the terms of the Stipulated Final
Judgment and Order for Civil Penalties, Permanent Injunction, and
Other Equitable Relief consented to by the Company, the United
States Federal Trade Commission (the “ FTC ”)
and the United States of America on February 15, 2006. No
investigation or review by any Governmental Entity with respect to
the Company or any of its Subsidiaries is pending or, to the
knowledge of the Company, threatened, nor has any Governmental
Entity indicated an intention to conduct the same, except for such
investigations or reviews the outcome of which are not,
individually or in the aggregate, reasonably likely to have a
Material Adverse Effect or prevent, materially delay or materially
impair the consummation of the transactions contemplated by this
Agreement. To the knowledge of the Company, no material change is
required in the Company’s or any its Subsidiaries’
processes, properties or procedures in connection with any such
Laws, and the Company has not received any notice or communication
of any material noncompliance with any such Laws that has not been
cured as of the date of this Agreement. The Company and its
Subsidiaries each has obtained and is in compliance with all
permits, licenses, certifications, approvals, registrations,
consents, authorizations, franchises, variances, exemptions and
orders issued or granted by a Governmental Entity (“
Licenses ”) necessary to conduct its business as
presently conducted, except where the failure to so obtain or to be
in such compliance is not, individually or in the aggregate,
reasonably likely to result in a Material Adverse Effect or
prevent, materially delay or materially impair the consummation of
the transactions contemplated by this Agreement. Each customer of
the Company or any of its Subsidiaries that subscribes for or
licenses data contained in the Company Databases (i) states on
the face of such customer’s Contract with the
Company
-19-
or any of its Subsidiaries either such
customer’s appropriate use for such data or that such
customer’s use for such data will be lawful, and (ii) to
the knowledge of the Company, limits its use to those stated
purposes and takes appropriate measures to protect against the
misuse of such data.
(j) Material Contracts and
Government Contracts .
(i) As of the date of this
Agreement, neither the Company nor any of its Subsidiaries is a
party to or bound by:
(A) other than with respect
to any partnership that is wholly owned by the Company or any
wholly owned Subsidiary of the Company, any partnership, joint
venture or other similar agreement or arrangement relating to the
formation, creation, operation, management or control of any
partnership or joint venture material to the Company or any of its
Subsidiaries or in which the Company owns more than a 10% voting or
economic interest;
(B) any non-competition
Contract or any other Contract that (I) purports to limit in
any material respect either the type of business in which the
Company or its Subsidiaries (or, after the Effective Time, Parent
or its Subsidiaries) may engage or the manner or locations in which
any of them may so engage in any business or (II) could
require the disposition of any material assets or line of business
of the Company or its Subsidiaries (or, after the Effective Time,
Parent or its Subsidiaries), (III) is a Contract that involves
payment or receipt by the Company and its Subsidiaries of more than
$1 million over the initial term of such Contract or over a 12
month period, whichever is longer, and grants “most favored
nation” status that, following the Merger, would apply to
Parent and its Subsidiaries, including the Company and its
Subsidiaries, or (IV) prohibits or limits the right of the Company
or any of its Subsidiaries to make, sell or distribute any products
or services or use, transfer, license, distribute or enforce any of
their respective Intellectual Property rights;
(C) any Contract to which the
Company or any of its Subsidiaries is a party containing a
standstill or similar agreement pursuant to which one party has
agreed not to acquire assets or securities of the other party or
any of its Affiliates;
(D) any Contract between the
Company or any of its Subsidiaries and any director or officer of
the Company or any Person beneficially owning five percent or more
of the outstanding Shares;
(E) any Contract that
contains a put, call or similar right pursuant to which the Company
or any of its Subsidiaries could be required to purchase or sell,
as applicable, any equity interests of any Person or assets that
have a fair market value or purchase price of more than $250,000;
and
-20-
(F) any Contract that is not
terminable without liability within one year of the date hereof and
involves payment or receipt by the Company and its Subsidiaries of
more than $20 million over the entire term of such
Contract.
Each Contract described in
clauses (A) – (F) above and each Contract that is
filed or would be required to be filed as an exhibit to the
Company’s Annual Report on Form 10-K is referred to herein as
a “ Material Contract ”.
(ii) A complete copy of each
Material Contract has previously been made available to Parent and
each such Material Contract is a valid and binding agreement of the
Company or one of its Subsidiaries, as the case may be, and is in
full force and effect. There is no material default under any such
Contracts by the Company or its Subsidiaries and no event has
occurred that with the lapse of time or the giving of notice or
both would constitute a material default thereunder by the Company
or its Subsidiaries. There are no Material Contracts pursuant to
which consents or waivers are required prior to entering into this
Agreement or consummation of the transactions contemplated by this
Agreement.
(iii) (A) With respect to
each Government Contract (as hereinafter defined), except as is
not, individually or in the aggregate, reasonably
|