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AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

AGREEMENT AND PLAN OF MERGER | Document Parties: CHOICEPOINT INC | Deuce Acquisition Inc | REED ELSEVIER GROUP PLC | Sullivan & Cromwell LLP You are currently viewing:
This Agreement and Plan of Merger involves

CHOICEPOINT INC | Deuce Acquisition Inc | REED ELSEVIER GROUP PLC | Sullivan & Cromwell LLP

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: New York     Date: 2/22/2008
Industry: Business Services     Law Firm: Wachtell Lipton;Sullivan Cromwell     Sector: Services

AGREEMENT AND PLAN OF MERGER, Parties: choicepoint inc , deuce acquisition inc , reed elsevier group plc , sullivan & cromwell llp
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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

 

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   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

 

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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

 

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9.13.

   Assignment    55

 

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

 

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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.

 

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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

 

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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.

 

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(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

 

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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

 

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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.

 

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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

 

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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.

 

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(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

 

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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.

 

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(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.

 

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(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

 

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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

 

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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

 

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(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,

 

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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

 

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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.

 

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(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

 

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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

 

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(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


 
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