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Exhibit 2.1 AGREEMENT AND PLAN OF MERGER among VNU N.V., ISAAC ACQUISITION CORP. and IMS HEALTH INCORPORATED Dated as of July 10, 2005
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vi AGREEMENT AND PLAN OF MERGER, dated as of July 10, 2005 (this " Agreement "), among (i) VNU N.V., a limited liability company with corporate seat in Haarlem, the Netherlands (" Parent "), (ii) Isaac Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Holdings (" Merger Sub "), (iii) IMS Health Incorporated, a Delaware corporation (the " Company "), (iv) solely for purposes of Article II, Isaac Holding Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (" Holdings "), and (v) solely for purposes of Sections 6.1(b), 6.16(a) and 6.16(b), the foundation under Dutch Law Stichting tot Beheer van de Prioriteitsaandelen in VNU NV , holder of all issued and outstanding Priority Shares of Parent (the " Priority Foundation "). WHEREAS, the Board of Directors of the Company has (i) determined that it is in the best interests of the Company and the stockholders of the Company, and declared it advisable, to enter into this Agreement with Parent and Merger Sub providing for the merger (the " Merger ") of Merger Sub with and into the Company in accordance with the General Corporation Law of the State of Delaware (the " DGCL "), upon the terms and subject to the conditions set forth herein, (ii) approved this Agreement in accordance with the DGCL, upon the terms and conditions contained herein, and (iii) resolved to recommend adoption of this Agreement by the stockholders of the Company; and WHEREAS, each of the Supervisory and Executive Boards of Parent and the Board of Directors of the Priority Foundation has resolved to enter into, and the Board of Directors of each of Holdings and Merger Sub has approved and declared it advisable to enter into, this Agreement providing for the Merger in accordance with the DGCL, upon the terms and conditions contained herein; NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Parent, Merger Sub and the Company hereby agree as follows: SECTION 1.1 The Merger . Upon the terms and subject to the conditions of this Agreement and in accordance with the DGCL, at the Effective Time, Merger Sub shall be merged with and into the Company. As a result of the Merger, the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation of the Merger (the " Surviving Corporation "). SECTION 1.2 Closing; Effective Time. Subject to the provisions of Article VII, the closing of the Merger (the " Closing ") shall take place at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York, as soon as practicable, but in no event later than the second business day after the satisfaction or waiver of the conditions set forth in Article VII (excluding conditions that, by their terms, cannot be satisfied until the Closing, but the Closing shall be subject to the satisfaction or waiver of those conditions), or at such other place or at such other date as Parent and the Company may mutually agree. The date on which the Closing actually occurs is hereinafter referred to as the " Closing Date ". At the Closing, the parties hereto shall cause the Merger to be consummated by filing a certificate of merger (the " Certificate of Merger ") with the Secretary of State of the State of Delaware, in such form as required by, and executed in accordance with, the relevant provisions of the DGCL (the date and time of the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, or such later time as is specified in the Certificate of Merger and as is agreed to by the parties hereto, being the " Effective Time ") and shall make all other filings or recordings required under the DGCL in connection with the Merger. SECTION 1.3 Effects of the Merger. The Merger shall have the effects set forth in the applicable provisions of the DGCL. Without limiting the generality of the foregoing and subject thereto, at the Effective Time, all the property, rights, privileges, immunities, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation. SECTION 1.4 Certificate of Incorporation and By-Laws of the Surviving Corporation . (a) At the Effective Time, the restated certificate of incorporation of the Company shall be amended in the Merger to read in its entirety as set forth on Exhibit 1.4(a) hereto and as so amended shall be the restated certificate of incorporation of the Surviving Corporation until thereafter amended in accordance with its terms and applicable Law. (b) At the Effective Time, the amended and restated by-laws of the Company shall be amended and restated so as to read in their entirety as set forth on Exhibit 1.4(b) hereto and as so amended shall be the amended and restated by-laws of the Surviving Corporation until thereafter amended in accordance with their terms, the restated certificate of incorporation of the Surviving Corporation and applicable Law. SECTION 1.5 Directors and Officers of the Surviving Corporation. The Company shall cause the directors of the Company immediately prior to the Effective Time to submit their resignations to be effective as of the Effective Time. The Company shall cause the directors of Merger Sub immediately prior to the Effective Time to be the initial directors of the Surviving Corporation, each to hold office in accordance with the restated certificate of incorporation and by-laws of the Surviving Corporation. Prior to the Effective Time, Parent and Merger Sub shall take all necessary action to cause the election or appointment of the officers of the Company (other than those who Parent determines shall not remain as officers of the Surviving Corporation) immediately prior to the Effective Time as officers of the Surviving Corporation, which shall be effective as of the Effective Time. Such officers shall hold office with the Surviving Corporation, in each case until the earlier of his or her resignation or removal. SECTION 2.1 Conversion of Securities. At the Effective Time, in accordance with this Article II, by virtue of the Merger and without any action on the part of Parent, Holdings, Merger Sub, the Company or the holders of any of the following securities: (a) Each share of Common Stock, par value $0.01 per share, of the Company (the " Common Stock ," which defined term shall include, for all purposes of this Agreement other than this Section 2.1, the associated Preferred Stock purchase rights to the extent such rights are still outstanding), issued and outstanding immediately prior to the Effective Time (other than any shares of Common Stock to be canceled pursuant to Section 2.1(b) and any Dissenting Shares (as defined in Section 2.4(a)) (all such shares of Common Stock, the " Shares ") shall be canceled and each holder of Shares shall be entitled to receive from Holdings or Parent, as contemplated below, in the aggregate, in compensation for the cancellation of each Share and in exchange therefor, (i) $11.25 in cash, without interest (the " Cash Consideration "), plus (ii) 0.60415 (the " Exchange Ratio ") American Depository Shares of Parent (" Parent Depository Shares ", each Parent Depository Share representing one common share, par value €0.20 per share, of Parent (" Parent Common Shares ")), which Parent Depository Shares shall, for purposes of the Laws of the Netherlands, be paid for by the holder of the Share through the contribution described below (such Parent Depository Shares, and any cash to be paid in lieu of fractional Parent Depository Shares pursuant to Section 2.5(j), the " Stock Consideration " and, together with the Cash Consideration, the " Merger Consideration "). By virtue of the Merger and without any further action on the part of the holders of Shares, each holder of Shares shall be deemed to have subscribed under this Agreement for the Parent Common Shares underlying the Parent Depository Shares that are to be issued to such holder in accordance with this Article II. In accordance with the Law of the Netherlands, each holder of Shares shall be obligated to pay up the Parent Common Shares underlying the Parent 2 Depository Shares so issued to such holder in accordance with this Article II. This payment obligation on the part of the holders of Shares (which, solely for the purpose of satisfying this obligation to pay up the Parent Common Shares underlying the Parent Depository Shares, shall be equal to the par value of such Parent Common Shares) shall be fully satisfied and paid by contribution by transfer to Parent of such holder's right to receive compensation (which, solely for the purpose of satisfying this obligation to compensate the holders of Shares, shall also be equal to the par value of such Parent Common Shares) from Holdings for the cancellation of the Shares. It is understood that, if the Merger is consummated, the stockholders of the Company are entitled to receive the Parent Depository Shares representing Parent Common Shares directly from Parent or Holdings and that, if the Merger is consummated, such stockholders will thereupon become third party beneficiaries of this Agreement solely for this purpose. For the avoidance of doubt, (x) in no event shall the amount of the Merger Consideration to be received by each holder of Shares pursuant to this Article II be reduced by the obligation to pay up the Parent Common Shares underlying the Parent Depository Shares or the contribution to Parent of such holder's right to receive compensation and (y) Holdings shall be obligated to deliver the Merger Consideration to holders of Shares in accordance with, and subject to the terms of, this Article II; provided , however , that the obligations of Holdings to deliver the Stock Consideration or the Cash Consideration under this Article II may be assigned, in whole or in part, to Parent or any of Parent's wholly-owned direct or indirect subsidiaries ( provided that no such assignment shall relieve Holdings of its obligations hereunder). Parent shall fully and unconditionally cause Holdings (or its successor or assign) to comply with such obligation and Parent hereby unconditionally and irrevocably guarantees ( hoofdelijke aansprakelijkheid ) to the holders of Shares the due and punctual performance and payment by Holdings (and its successors and assigns) of its obligations under this Section 2.1. Parent hereby waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon Holdings and whenever a default occurs for any reason whatsoever in the performance by Holdings (or its successors or assigns) of any of its obligations under this Article II, Parent shall forthwith unconditionally perform and satisfy (or procure performance and satisfaction of) such obligations. The liability of Parent under this Section 2.1 shall not be released or diminished by any variation of the obligations of Holdings set forth in this Article II or any forbearance, neglect or delay in seeking performance of such obligations or any granting of time for such performance, in each case regardless of whether any notice of the same has been delivered to Parent. (b) Each Share held in the treasury of the Company or owned by Parent immediately prior to the Effective Time shall be canceled without any conversion thereof and no consideration shall be paid with respect thereto. (c) Each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into one share of common stock of the Surviving Corporation. (d) At any time prior to August 31, 2005, if the Board of Directors of the Company, in its good faith and reasonable judgment, requests that Parent agree to amend Section 2.1 of this Agreement to read substantially as set forth in Section 2.1(d) of the Parent Disclosure Schedule, Parent agrees promptly to enter into such amendment and the parties shall cooperate in good faith to effect conforming amendments to reflect the amendment set forth in Section 2.1(d) of the Parent Disclosure Schedule. For avoidance of doubt, any such request shall be conclusively deemed reasonable if the Tax costs that would be incurred by holders of Shares or Company Stock Options as a result of the Merger assuming Section 2.1 of this Agreement remains unchanged ( provided that such Tax costs shall be net of any indemnity or other compensation that Parent is willing to provide to the holders of Shares or Company Stock Options) would be higher than the Tax costs 3 that would be incurred by such holders as a result of the Merger assuming Section 2.1 of this Agreement were amended to read as set forth in Section 2.1(d) of the Parent Disclosure Schedule. SECTION 2.2 Certain Actions Related to Conversion of Securities . (a) Parent Depository Shares. The Parent Depository Shares issued in connection with the Merger shall be evidenced by one or more receipts (" Parent ADRs ") issued in accordance with a Deposit Agreement, in form and substance reasonably acceptable to the Company, to be entered into by Parent, The Bank of New York or another institution selected by Parent that is reasonably acceptable to the Company, as Depository (the " Depository "), and the owners and holders from time to time of Parent ADRs, as amended (the " Deposit Agreement "). As of the Effective Time, Parent shall pay for any Dutch capital taxes imposed in connection with the issuance or creation of the Parent Depository Shares to be issued in connection with the Merger and any Parent ADRs in connection therewith. (b) Adjustment of Merger Consideration. Notwithstanding anything in this Agreement to the contrary, if, between the date of this Agreement and the Effective Time, the issued and outstanding Shares or Parent Common Shares shall have been changed into a different number of shares or a different class by reason of any stock split or combination ( splitsing van aandelen, samenvoeging van (verschillende klassen van) aandelen), recapitalization ( omzetting reserves in aandelenkapitaal), stock dividend, reclassification, redenomination, adjustment of par value, exchange of shares or other similar transaction, or Parent changes the number of Parent Common Shares represented by a Parent Depository Share, the Cash Consideration, the Exchange Ratio, the Stock Consideration and any other dependent items, as the case may be, shall be appropriately adjusted to provide to the holders of the Common Stock the same economic effect as contemplated by this Agreement prior to such action and as so adjusted shall, from and after the date of such event, be the Cash Consideration, Exchange Ratio or Stock Consideration or other dependent item, as applicable, subject to further adjustment in accordance with this sentence. (c) No Further Rights. From and after the Effective Time, the shares of Common Stock shall no longer be outstanding and, subject to Section 2.4(a), no holder of shares of Common Stock shall have any rights with respect thereto except the right to receive Merger Consideration in respect of such Shares pursuant to this Article II and the right to receive dividends and other distributions pursuant to Section 2.5(h), in each case without interest and only upon compliance with the applicable provisions of this Article II. SECTION 2.3 Options; Restricted Stock . (a) At the Effective Time, each option to purchase Shares (each a " Company Stock Option ") granted under the Company Stock Plans outstanding immediately prior to the Effective Time, if unvested, shall become fully vested and exercisable and, whether vested or unvested, shall be converted into an option to acquire a number of Parent Depository Shares equal to the product (rounded down to the nearest whole number) of (i) the number of Shares subject to such Company Stock Option immediately prior to the Effective Time times (ii) the sum of (A) the Exchange Ratio and (B) the quotient of the Cash Consideration divided by the Average Closing Price (such sum, the " Adjusted Conversion Number "), at a price per Parent Depository Share (rounded up to the nearest whole cent) equal to the quotient of the exercise price per Share of such Company Stock Option divided by the Adjusted Conversion Number; provided , however , that the exercise price and the number of Parent Depository Shares purchasable pursuant to the Company Stock Options shall be determined in a manner consistent with the requirements of Section 409A of the Code; and provided , further , that in the case of any Company Stock Option to which Section 422 of the Code applies, the exercise price and the number of Parent Depository Shares purchasable pursuant to such Company Stock Option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the 4 requirements of Section 424(a) of the Code. Except as specifically provided in this Section 2.3(a), following the Effective Time, each Company Stock Option shall continue to be governed by the same terms and conditions as were applicable under such Company Stock Option immediately prior to the Effective Time. Parent shall take all actions necessary for the assumption of such Company Stock Options and, as soon as practicable after the Effective Time, Parent shall deliver to the holders of such Company Stock Options appropriate notices that such Company Stock Options have been assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.3(a)). (b) For purposes of this Agreement: (i) " Average Closing Price " means the average of the per share closing prices of Parent Common Shares as reported on Eurolist by Euronext Amsterdam for the ten (10) trading days ending on the second-to-last trading day prior to the Closing Date; (ii) " Company Stock Plans " means the plans set forth in Section 2.3(b) of the Company Disclosure Schedule; and (iii) any conversion of euros into U.S. dollars, or vice versa, that is required to give effect to the provisions of this Section 2.3 shall be done at the daily 10 a.m. dollar to Euro spot rate for each trading day as quoted by the Federal Reserve Bank of New York on its Internet site (http://www.ny.frb.org/markets/fxrates/tenAm.cfm) or as otherwise published by the Federal Reserve Bank of New York on the date on which such a calculation is required to be made. (c) Each issued and outstanding Share subject to vesting or other lapse or forfeiture restrictions pursuant to the Company Stock Plans (each a " Restricted Share "), and each award of restricted stock units held by a current or former employee, consultant or director of the Company or any of its subsidiaries (each, an " RSU Award "), outstanding immediately prior to the Effective Time shall vest and become free of such restrictions to the extent required by the terms and conditions thereof (and if not required by such terms and conditions, shall vest and become free of such restrictions on the Closing Date) and shall be treated in the same manner as all other Shares outstanding immediately prior to the Effective Time in accordance with Section 2.1(a). (d) Parent shall have available after the Effective Time the number of Parent Depository Shares required to satisfy upon exercise or settlement, as applicable, all Company Stock Options or RSU Awards outstanding immediately following the Effective Time in accordance with Section 2.3(a). Parent shall file with the U.S. Securities and Exchange Commission (the " SEC" ) a registration statement on an appropriate form or a post-effective amendment to a previously filed registration statement under the Securities Act prior to the Effective Time so that Parent shall have available from and after the Effective Time the number of Parent Depository Shares issuable upon the exercise or settlement, as applicable, of Company Stock Options or RSU Awards as provided in Section 2.3(a), and shall use reasonable best efforts to (i) cause such registration statement or post-effective amendment to become effective and comply, to the extent applicable, with state securities or "blue sky" laws with respect thereto, at the Effective Time, and (ii) maintain the current status of the prospectus contained therein, as well as comply with any applicable state securities or "blue sky" laws, for so long as those options remain outstanding. In addition, Parent shall use its reasonable best efforts to do all such things as are required under applicable Laws for the Parent Common Shares issuable upon exercise or settlement, as applicable, of Company Stock Options or RSU Awards to be admitted to listing and trading on Euronext Amsterdam and for the corresponding Parent Depository Shares to be admitted for listing and trading on the NYSE. (e) The Company shall take all such action as is necessary prior to the Effective Time to give effect to the foregoing provisions of this Section 2.3. SECTION 2.4 Dissenting Shares . (a) Shares of Common Stock that are issued and outstanding immediately prior to the Effective Time and which are held by holders who have not voted in favor of or consented to the 5 Merger and who have properly demanded and perfected their rights to be paid the fair value of such shares of Common Stock in accordance with Section 262 of the DGCL (the " Dissenting Shares ") shall not be canceled and the holder thereof shall not receive the Merger Consideration as compensation for such cancellation, and the holders thereof shall be entitled to only such rights as are granted by Section 262 of the DGCL; provided , however , that if any such stockholder of the Company shall fail to perfect or shall effectively waive, withdraw or lose such stockholder's rights under Section 262 of the DGCL, such stockholder's Shares in respect of which the stockholder would otherwise be entitled to receive fair value under Section 262 of the DGCL shall thereupon be deemed to have been canceled, at the Effective Time, and the holder thereof shall be entitled to receive the Merger Consideration (payable without any interest thereon) as compensation for such cancellation. (b) The Company shall give Parent (i) prompt notice of any notice received by the Company of intent to demand the fair value of any Shares, withdrawals of such notices and any other instruments or notices served pursuant to Section 262 of the DGCL and (ii) the opportunity to direct all negotiations and proceedings with respect to the exercise of appraisal rights under Section 262 of the DGCL. The Company shall not, except with the prior written consent of Parent or as otherwise required by an order, decree, ruling or injunction of a court of competent jurisdiction, make any payment or other commitment with respect to any such exercise of appraisal rights or offer to settle or settle any such rights. SECTION 2.5 Surrender of Shares . (a) Following the date of this Agreement and prior to the Effective Time, Parent shall select a bank or trust company reasonably acceptable to the Company to act as exchange agent in connection with the Merger (the " Exchange Agent ") for the purpose of exchanging certificates representing, immediately prior to the Effective Time, Shares (" Certificates "), or Shares represented, immediately prior to the Effective Time, by book-entry (" Book-Entry Shares "), in each case for the Merger Consideration (including cash payable in lieu of fractional interests in Parent Depository Shares in accordance with Section 2.5(j)). (b) Parent or Holdings shall deposit, or cause to be deposited, with the Exchange Agent, from time to time, (i) that number of Parent ADRs in any denominations as the Exchange Agent shall specify and (ii) cash, in each case as are issuable or payable, respectively, pursuant to this Article II in respect of Shares for which Certificates or Book-Entry Shares have been properly delivered to the Exchange Agent. (c) Promptly after the Effective Time, the Surviving Corporation shall cause to be mailed to each record holder, as of immediately prior to the Effective Time, of Shares, (i) a letter of transmittal (which shall reflect the payment structure set forth in Section 2.1(a) hereof and shall specify that delivery shall be effected, and risk of loss and title to the Certificates held by such holder representing such Shares shall pass, only upon proper delivery of the Certificates to the Exchange Agent or, in the case of Book-Entry Shares, upon adherence to the procedures set forth in the letter of transmittal) and (ii) instructions for use in effecting the surrender of the Certificates or, in the case of Book-Entry Shares, the surrender of Shares, for payment of the Merger Consideration therefor. The forms of such letter of transmittal and instructions for use shall be prepared by Parent and shall be approved by the Company (such approval not to be unreasonably withheld or delayed) prior to the Effective Time. (d) Each stockholder, upon surrender by such holder to the Exchange Agent of its Certificate or Book-Entry Shares, as applicable, together with the letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be required pursuant to such instructions, shall be entitled to receive in exchange therefor, (A) the number of whole Parent Depository Shares (evidenced by Parent ADRs) which such holder has the 6 right to receive pursuant to the terms hereof after properly surrendering Certificates or Book-Entry Shares, as applicable, and (B) a check in an amount of U.S. dollars (after giving effect to any required withholdings pursuant to Section 2.5(k)) equal to (x) the amount of cash (including the Cash Consideration and cash in lieu of fractional interests in Parent Depository Shares (to be paid pursuant to Section 2.5(j)) which such holder has the right to receive pursuant to the terms hereof after properly surrendering Certificates or Book-Entry Shares, as applicable, plus (y) any cash dividends or other distributions that such holder has the right to receive pursuant to Section 2.5(h). (e) No interest shall be paid or accrue for the benefit of holders of the Certificates or Book-Entry Shares on the Merger Consideration payable in respect of Shares. If payment or issuance of the Merger Consideration is to be made to a person other than the person in whose name the surrendered Certificate is registered, it shall be a condition of payment or issuance that the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and that the person requesting such payment or issuance shall have paid to the Exchange Agent any transfer and other taxes required by reason of the payment or issuance of the Merger Consideration to a person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of the Exchange Agent that such tax either has been paid or is not applicable. Until so surrendered, each Certificate or Book-Entry Share shall, after the Effective Time, represent for all purposes only the right to receive upon such surrender the Merger Consideration as contemplated by this Article II. (f) At the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of Shares that were outstanding prior to the Effective Time. After the Effective Time, Certificates or Book-Entry Shares presented to the Surviving Corporation for transfer shall be canceled and exchanged for the consideration provided for, and in accordance with the procedures set forth, in this Article II. (g) Any Parent Depository Shares to be issued and any cash to be paid in respect of Shares (including any cash in lieu of fractional interests in Parent Depository Shares to be paid pursuant to Section 2.5(j), plus any cash dividend or other distribution that a former holder of Shares has the right to receive pursuant to Section 2.5(h)) pursuant to this Article II, that remains unclaimed by any former holder of Shares nine months after the Effective Time shall be held by the Exchange Agent (or a successor agent appointed by Parent) or shall be delivered to Parent (or to the Depository upon the instruction of Parent and held by the Depository subject to the instruction of Parent in an account or accounts designated for this purpose). Neither Parent nor Holdings (including any successor or assign thereof) shall be liable to any former holder of Shares for any securities properly delivered or any amount properly paid by the Depository, the Exchange Agent or its nominee, as the case may be, to a public official pursuant to applicable abandoned property, escheat or similar Law. (h) No dividends or other distributions with respect to Parent Depository Shares issuable pursuant to this Article II shall be paid to the holder of any unsurrendered Certificates or Book-Entry Shares until those Certificates or Book-Entry Shares are surrendered as provided in this Article II. Upon surrender, there shall be issued or paid to the holder of whole Parent Depository Shares issued in exchange therefor, without interest, (i) at the time of surrender, the dividends or other distributions payable with respect to those whole Parent Depository Shares with a record date on or after the date of the Effective Time and a payment date on or prior to the date of this surrender and not previously paid and (ii) at the appropriate payment date, the dividends or other distributions payable with respect to those whole Parent Depository Shares with a record date on or after the date of the Effective Time but with a payment date subsequent to surrender. 7 (i) In the event that any Certificate shall have been lost, stolen or destroyed, upon the holder's compliance with the replacement requirements established by the Exchange Agent, including, if necessary, the posting by the holder of a bond in customary amount as indemnity against any claim that may be made against it with respect to the Certificate, the Exchange Agent shall deliver in exchange for the lost, stolen or destroyed Certificate the applicable Merger Consideration payable in respect of the Shares formerly represented by the Certificate pursuant to this Article II. (j) No fractional interests in Parent Depository Shares shall be issued pursuant to the Merger. Each holder, as of immediately prior to the Effective Time, of Shares otherwise entitled to receive a fractional interest in a Parent Depository Share pursuant to the terms of this Article II shall be entitled to receive, in accordance with the provisions of this Section 2.5(j), a cash payment (without interest) in lieu of that fractional interest in a Parent Depository Share determined by multiplying (i) the fractional interest to which such holder would otherwise be entitled by (ii) the closing price for a Parent Depository Share as reported on the NYSE on the first trading day following the date on which the Effective Time occurs. Any cash payment in lieu of a fractional interest shall be made in U.S. dollars. (k) Notwithstanding anything in this Agreement to the contrary, Parent, Holdings (including any successor or assign thereof) and the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any former holder of Shares pursuant to this Agreement any amounts as may be required to be deducted and withheld with respect to the making of this payment under the Code, or under any provision of state, local or foreign Tax Law. To the extent that amounts are so withheld and paid over to the appropriate Taxing authority, Parent, Holdings (including any successor or assign thereof) or the Exchange Agent shall be treated as though it withheld an appropriate amount of the type of consideration otherwise payable pursuant to this Agreement to any former holder of Shares, sold this consideration for an amount of cash equal to the fair market value of the consideration at the time of the deemed sale and paid these cash proceeds to the appropriate Taxing authority. (l) The Exchange Agent shall invest any cash deposited with the Exchange Agent by Parent or Holdings (or caused to be deposited by Parent or Holdings), as directed by Parent; provided that no such investment or losses thereon shall affect the Cash Consideration payable to holders of Shares entitled to receive such consideration or cash in lieu of fractional interests, as provided in Section 2.5(j), and Parent or Holdings shall promptly provide additional funds to the Exchange Agent for the benefit of holders, as of immediately prior to the Effective Time, of Shares entitled to receive such consideration in the amount of any such losses. Any interest or income produced by such investments shall be payable to the Surviving Corporation or Parent, as Parent directs. The Company hereby represents and warrants to Parent and Merger Sub that, except as set forth on the corresponding section of the Disclosure Schedule delivered by the Company to the Parent and Merger Sub concurrently with the execution of this Agreement (the " Company Disclosure Schedule ") or, other than with respect to the representations and warranties set forth in Section 3.8(b), to the extent the qualifying nature of such disclosure with respect to a specific representation and warranty is readily apparent on the face thereof, as set forth in the Company SEC Reports filed on or after January 1, 2005 and prior to the date of this Agreement (but excluding the disclosures in the "Factors That May 8 Affect Future Results" and "Forward-Looking Statements" sections of any such Company SEC Reports): SECTION 3.1 Organization and Qualification; Subsidiaries. The Company and each of its subsidiaries is duly organized, validly existing and in good standing (with respect to jurisdictions that recognize the concept of good standing) under the Laws of the jurisdiction of its organization and has all requisite corporate or similar power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, except where any such failure to be in good standing or to have such power or authority, individually or in the aggregate, (x) has not had, and would not reasonably be expected to have, a Company Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of the Company to consummate the Merger or the other transactions contemplated by this Agreement. The Company and each of its subsidiaries is duly qualified or licensed to do business, and is in good standing (with respect to jurisdictions that recognize the concept of good standing) in each jurisdiction where the character of its properties owned, leased or operated by it or the conduct of its business or the nature of its activities makes such qualification or licensing necessary, except for any such failure to be so qualified or licensed or in good standing which, individually or in the aggregate, (x) has not had, and would not reasonably be expected to have, a Company Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of the Company to consummate the Merger or the other transactions contemplated by this Agreement. " Company Material Adverse Effect " means any change, event, circumstance or effect, taken as a whole, that has been or would be materially adverse to the business, assets, properties, liabilities, financial condition or results of operations of the Company and its subsidiaries taken as a whole, other than any change, event, circumstance or effect resulting from (i) changes after the date hereof in general economic conditions, (ii) changes after the date hereof in any Laws or applicable accounting regulations or principles, (iii) actions taken by the Company or its subsidiaries as required by the provisions of this Agreement or (iv) the announcement or pendency of this Agreement or any of the transactions contemplated hereby; provided that the exceptions set forth in clauses (iii) and (iv) shall not apply with respect to (x) the representations and warranties set forth in Sections 3.4, 3.5 and 3.17, the absence of conflict or similar representations set forth in Sections 3.10(f) or with respect to the effects of any breach of such representations and warranties or (y) Sections 6.8 or 7.1. Section 3.1 of the Company Disclosure Schedule sets forth a complete list of the material subsidiaries that are owned directly or indirectly by the Company. Other than as set forth in Section 3.1 of the Company Disclosure Schedule and other than subsidiaries of the Company, the Company does not own, directly or indirectly, any capital stock or other equity interests in any other person having a fair market value in excess of $10,000,000. SECTION 3.2 Certificate of Incorporation and By-laws. The Company has heretofore furnished or otherwise made available to Parent a true, complete and correct copy of the restated certificate of incorporation (the " Certificate of Incorporation ") and the by-laws (the " By-Laws ") of the Company, in each case as currently in effect. The Certificate of Incorporation and By-Laws of the Company, as so made available, are in full force and effect and no other organizational documents are applicable to or binding upon the Company. The Company is not in violation of any provisions of its Certificate of Incorporation or By-Laws in any material respect. SECTION 3.3 Capitalization . (a) The authorized capital stock of the Company consists of (i) 800,000,000 shares of Common Stock, (ii) 10,000,000 shares of series common stock, par value $0.01 per share (the " Series Common Stock "), and (iii) 10,000,000 shares of preferred stock, par value $0.01 per share (the " Preferred Stock "). As of the close of business on June 30, 2005, (i) 225,772,045 shares of Common Stock were issued and outstanding, all of which were duly authorized, validly issued, fully paid and nonassessable and were issued free of preemptive rights, (ii) no shares of Series Common Stock were outstanding or reserved for issuance, and (iii) no shares of Preferred Stock were 9 outstanding, but of which 500,000 have been designated as "Series A Participating Preferred Stock" and reserved for issuance pursuant to the Rights Agreement, dated June 15, 1998, as amended, between the Company and First Chicago Trust Company of New York, as rights agent (the " Rights Agreement "). As of the close of business on June 30, 2005, (A) there are outstanding Company Stock Options to purchase 36,625,273 shares of Common Stock, and (B) each such Company Stock Option has the exercise price, is subject to the vesting schedule, has an exercise period, and is held by the holder set forth with respect thereto, as set forth in Section 3.3(a) of the Company Disclosure Schedule. As of the close of business on June 30, 2005, each Restricted Share and each RSU Award is subject to the vesting schedule and held by the holder set forth with respect thereto in Section 3.3(a) of the Company Disclosure Schedule. From the close of business on June 30, 2005 , to the date of this Agreement: (x) no shares of Company Common Stock or Preferred Stock (except for shares of Common Stock issued pursuant to the exercise of Company Stock Options) have been issued, (y) no Company Stock Options, Restricted Shares or RSU Awards have been issued; and (z) no change has been made to the exercise prices, vesting schedules or exercise periods set forth in Section 3.3(a) of the Company Disclosure Schedule (except for any such changes in exercise price, vesting schedule or exercise period required by the terms of the Company Plans in effect as of the date hereof which result from the termination, resignation or retirement of a Company Employee). Except as set forth above, there are no outstanding options, warrants, convertible securities or other rights of any kind which obligate the Company or any of its subsidiaries to issue or deliver any shares of capital stock or voting securities of the Company or any securities or obligations convertible or exchangeable into or exercisable for any shares of capital stock or voting securities of the Company. (b) Except as set forth in Section 3.3(b) of the Company Disclosure Schedule, there are no preemptive rights of any kind which obligate the Company or any of its subsidiaries to issue or deliver any shares of capital stock or voting securities of the Company or any securities or obligations convertible or exchangeable into or exercisable for, or giving any person a right to subscribe for or acquire from the Company or its subsidiaries, any shares of capital stock or voting securities of the Company. None of the Company or any of its subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible, exchangeable or exercisable for or into securities having the right to vote) with the stockholders of the Company or any subsidiary on any matter. (c) Except as set forth in Section 3.3(c) of the Company Disclosure Schedule, each of the outstanding shares of capital stock, other ownership interests and other voting securities of each of the Company's subsidiaries is duly authorized, validly issued, fully paid and nonassessable and all such shares, other ownership interests and voting securities are owned by the Company or another wholly-owned subsidiary of the Company, in each case, free and clear of all security interests, liens, claims, pledges, agreements, limitations in voting rights, charges or other encumbrances of any nature whatsoever (each a " Lien "). Except as set forth in Section 3.3(c) of the Company Disclosure Schedule, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, call, commitments or rights of any kind which obligate the Company or any of its subsidiaries to issue or deliver any shares of capital stock, other ownership interests or voting securities of any subsidiary of the Company or any securities or obligations convertible or exchangeable into or exercisable for, or giving any person a right to subscribe for or acquire from the Company or any of its subsidiaries, any shares of capital stock, other ownership interests or voting securities in any subsidiary of the Company. SECTION 3.4 Authority. The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by the 10 Company and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action and no other corporate proceedings by or on the part of the Company are necessary to authorize this Agreement, to perform its obligations hereunder or to consummate the transactions contemplated hereby (other than (i) adoption of this Agreement by the vote of the holders of a majority of the outstanding shares of Common Stock (the " Company Requisite Vote "), and (ii) the filing with the Secretary of State of the State of Delaware of the Certificate of Merger as required by the DGCL). This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding in equity or at Law). The Board of Directors of the Company has, by unanimous resolutions duly adopted at a meeting duly called and held, (A) approved this Agreement, and the other transactions contemplated hereby, (B) declared the advisability of this Agreement, and (C) recommended that the Company's stockholders vote in favor of the adoption of this Agreement at the Company Stockholders Meeting. A complete and correct copy of the resolutions referred to in the preceding sentence has been delivered to Parent on or prior to the date hereof . The only vote of the stockholders of the Company required to adopt this Agreement and approve the transactions contemplated hereby is the Company Requisite Vote. SECTION 3.5 No Conflict; Required Filings and Consents . (a) The execution, delivery and performance of this Agreement by the Company does not and will not: (i) conflict with or violate the Certificate of Incorporation or By-Laws of the Company; (ii) conflict with or violate the certificate of incorporation, by-laws or comparable constituent documents of any of the subsidiaries of the Company; (iii) assuming that all consents, approvals, authorizations, declarations and permits contemplated by clauses (i) through (ix) of subsection (b) below have been obtained, and all filings described in such clauses have been made, conflict with or violate any law, statute, rule, regulation (each a " Law ") or Order applicable to the Company or any of its subsidiaries or by which its or any of their respective properties are bound; or (iv) other than as set forth in Section 3.5(a) of the Company Disclosure Schedule, result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would become a default) or result in the loss of a benefit under, require any consent or approval under, or give rise to any right of termination, cancellation, amendment, acceleration or other alteration in the rights under, any note, bond, mortgage, indenture, contract, agreement, lease, license or other instrument or obligation (each a " Contract ") to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or its or any of their respective properties are bound, except, in the case of clauses (iii) and (iv) above, for any such conflict, violation, breach, default, acceleration, loss, right or other occurrence that, individually or in the aggregate, would not, and would not reasonably be expected to, (x) have a Company Material Adverse Effect or (y) prevent, materially delay or materially impede the ability of the Company to consummate the Merger or the other transactions contemplated by this Agreement. (b) The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby by the Company, do not and will not require any consent, approval, authorization, declaration or permit of, action by, filing with or notification to, any governmental or regulatory authority (including stock exchange), agency, court, commission, or other governmental body (each, a " Governmental Entity "), except for: (i) the applicable requirements of the Securities Act of 1933, as amended (the " Securities Act "), the Securities Exchange Act of 1934, as amended (the " Exchange Act "), and the rules and regulations 11 promulgated thereunder; (ii) the applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the " HSR Act "), and the rules and regulations promulgated thereunder; (iii) the applicable requirements of state securities and "blue sky" Laws; (iv) the applicable requirements of the New York Stock Exchange, Inc. (the " NYSE "); (v) the filing with the Secretary of State of the State of Delaware of the Certificate of Merger as required by the DGCL; (vi) the filing with the European Commission of a merger notification in accordance with Council Regulation (EC) 139/2004, the E.C. Merger Regulation (the " ECMR "); (vii) the applicable requirements of the competent authority of any member state of the European Union to which any of the transactions contemplated by this Agreement is referred pursuant to Article 9 of the ECMR; (viii) the applicable requirements of antitrust, competition or other similar Laws, rules, regulations and judicial doctrines of jurisdictions other than the United States and the European Union or its member states or of investment Laws relating to foreign ownership (collectively, " Foreign Antitrust Laws "); and (ix) any such consent, approval, authorization, declaration, permit, action, filing or notification the failure of which to make or obtain, individually or in the aggregate, would not, and would not reasonably be expected to, (x) have a Company Material Adverse Effect or (y) prevent, materially delay or materially impede the ability of the Company to consummate the Merger or the other transactions contemplated by this Agreement. SECTION 3.6 Compliance . (a) Neither the Company nor any of its subsidiaries is in violation of, or has violated, any Law or Order to which it is subject or by which its or any of their respective properties are bound, except for any such violation which, individually or in the aggregate, (x) would not, and would not reasonably be expected to, have a Company Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of the Company to consummate the Merger or the other transactions contemplated by this Agreement. The Company and its subsidiaries have all permits, licenses, authorizations, exemptions, orders, consents, approvals and franchises (" Licenses ") from Governmental Entities required to conduct their respective businesses as now being conducted and all such Licenses are valid and in full force and effect, except for any such Licenses the failure of which to have or to be in full force and effect, individually or in the aggregate, (x) has not had, and would not reasonably be expected to have, a Company Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of the Company to consummate the Merger or the other transactions contemplated by this Agreement. The Company is in compliance in all material respects with the applicable listing and other rules and regulations of the NYSE. (b) Without limiting the generality of the foregoing, except as disclosed on Section 3.6(b) of the Company Disclosure Schedule or as would not, and would not reasonably be expected to, have a Company Material Adverse Effect, the Company: (i) does not itself and does not permit or assist any third party to violate the rights of any person or entity with respect to confidential, personally identifiable or personal health information, including all rights (x) provided under applicable U.S., state and foreign Laws (including the Health Insurance Portability and Accountability Act of 1996, as amended), and (y) relating to the obtaining, storing, using or transmitting of confidential, personally identifiable or personal health information of any type (collectively, (x) and (y), " Privacy Rights "); (ii) complies with all governing industry standards and company policies respecting Privacy Rights; and (iii) takes all necessary and reasonable actions to protect the confidentiality, integrity and security of its software, databases, systems, networks and Internet sites and all information stored or contained therein or transmitted thereby from unauthorized or improper use. (c) Except as set forth in Section 3.6(c) of the Company Disclosure Schedule, none of the Company, any of its subsidiaries or any of their respective officers, directors or employees have performed (and none of them has any responsibility or material liability, directly or indirectly, by 12 aiding and abetting or otherwise, for) any reporting of prices or transactions or processing of claims or reimbursements in connection with any federal, state or foreign governmental healthcare program (including Medicaid and Medicare). SECTION 3.7 SEC Filings; Financial Statements . (a) The Company has filed or otherwise transmitted all forms, reports, statements, certifications and other documents (including all exhibits, amendments and supplements thereto) required to be filed by it with the SEC since January 1, 2002 (all forms, reports, statements, certificates and other documents filed by the Company with the SEC since January 1, 2002, whether or not required to be filed, collectively, the " Company SEC Reports "). Each of the Company SEC Reports complied with the applicable requirements of the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder on the date it was filed and, if applicable, on the date it was declared effective or mailed to stockholders. None of the Company SEC Reports, when filed or, if applicable, when declared effective or when mailed to stockholders, contained any untrue statement of a material fact or omitted to state a material fact required to be stated or incorporated by reference therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. There are no outstanding or unresolved comments from the SEC with respect to any of the Company SEC Reports. The Company has provided to Parent prior to the date hereof complete and correct copies of all correspondence between the Company or any person acting on behalf of the Company and the SEC since January 1, 2002. (b) Each of the consolidated financial statements of the Company and its subsidiaries (including the related notes and schedules) included in the Company SEC Reports have been prepared in accordance with U.S. generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto). Each of the condensed consolidated statements of financial condition of the Company and its subsidiaries included in the Company SEC Reports (including the related notes and schedules) fairly presents, in all material respects, the condensed consolidated financial position of the Company and its subsidiaries at the respective dates thereof and each of the related condensed consolidated statements of income and cash flows included in the Company SEC Reports (including any related notes and schedules) fairly presents, in all material respects, the net income and cash flows of the Company and its subsidiaries for the periods indicated (subject, in the case of unaudited statements, to normal period-end adjustments that will not be material in amount or effect) in each case in conformity with U.S. generally accepted accounting principles consistently applied during the periods involved except as may be noted therein. (c) The management of the Company has (i) designed and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known on a timely basis to the management of the Company (including those members of management who are responsible for the preparation of the Company's filings with the SEC and other public disclosure documents) by others within those entities, and (ii) disclosed, based on its most recent evaluation, to the Company's outside auditors and the audit committee of the Board of Directors of the Company (A) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect in any material respect the Company's ability to record, process, summarize and report financial data and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls over financial reporting. Copies of all reports to the Audit Committee of the Board of Directors of the Company, which contain all such disclosures made by management to the Company's auditors and the Audit Committee during 2002, 2003, 2004 and 2005 (through the date 13 hereof), have been continuously in the data room the Company has made available to Parent from no later than June 15, 2005 until the date hereof. (d) Since December 31, 2003 (or such later date, if the Company only became subject to the applicable provisions, rules and regulations subsequent to December 31, 2003), the principal executive officer and the principal financial officer of the Company have complied in all material respects with (i) the applicable provisions of the Sarbanes-Oxley Act of 2002 and the related rules and regulations promulgated under such Act (the " Sarbanes-Oxley Act ") and under the Exchange Act and (ii) the applicable listing and corporate governance rules and regulations of the NYSE. Without limiting the generality of the foregoing, the principal executive officer and the principal financial officer of the Company have made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with respect to each Company SEC Report filed by the Company. For purposes of the preceding sentence, "principal executive officer" and "principal financial officer" shall have the meanings given to such terms in the Sarbanes-Oxley Act. Except as permitted by the Exchange Act, including Sections 13(k)(2) and (3), since the enactment of the Sarbanes-Oxley Act, neither the Company nor any of its affiliates has directly or indirectly extended or maintained credit, arranged for the extension of credit, renewed an extension of credit or materially modified an extension of credit in the form of personal loans to any executive officer or director (or equivalent thereof) of the Company or any of its subsidiaries. SECTION 3.8 Absence of Certain Changes or Events . (a) From December 31, 2004, the Company and its subsidiaries have conducted their businesses, in all material respects, only in, and have not engaged in any material transaction other than in accordance with, the ordinary course of these businesses consistent with past practice. Except as set forth on Section 3.8(a) of the Company Disclosure Schedule, from December 31, 2004, there has not occurred any action which, if it had been taken after the date hereof, would have required the consent of Parent under Section 5.1 hereof. (b) From December 31, 2004, there has not been any Company Material Adverse Effect or any change, event, circumstance or effect that would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. SECTION 3.9 Absence of Litigation. There are no actions, suits, claims, hearings, proceedings, arbitrations, mediations, inquiries or investigations (whether civil, criminal, administrative or otherwise) pending or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries or any of the executive officers of the Company, except, in each case, for those that, individually or in the aggregate, (x) have not had, and would not reasonably be expected to have, a Company Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of the Company to consummate the Merger or the other transactions contemplated by this Agreement. Neither the Company nor any of its subsidiaries nor any of their respective properties is or are subject to any order, writ, judgment, injunction, settlement, decree or award, except for those that, individually or in the aggregate, (x) have not had, and would not reasonably be expected to have, a Company Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of the Company to consummate the Merger or the other transactions contemplated by this Agreement. To the knowledge of the Company (including for this purpose the members of the Audit Committee of the Board of Directors of the Company), there are no formal or informal governmental inquiries or investigations or internal investigations or material whistle-blower complaints pending or threatened, in each case regarding any accounting or disclosure practices of the Company or any of its subsidiaries, compliance by the Company or any of its subsidiaries with any Law or any malfeasance by any officer of the Company. 14 SECTION 3.10 Employee Benefit Plans . (a) Section 3.10(a) of the Company Disclosure Schedule contains a true and complete list of each material Company Plan. " Company Plan " means each " employee benefit plan " (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (" ERISA ")), and all written and material unwritten stock purchase, stock option, severance, employment, change-in-control, fringe benefit, collective bargaining, bonus, incentive, deferred compensation, employee loan and all other employee benefit plans, agreements, programs, policies or other arrangements (except for employment Contracts covering individuals whose annual salary rate does not or did not exceed $200,000), whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transaction contemplated by this Agreement or otherwise) under which (i) any current or former employee, director or consultant of the Company or its subsidiaries (the " Company Employees ") has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of its subsidiaries or (ii) the Company or any of its subsidiaries has any present or future liability. Notwithstanding the foregoing, solely for purposes of Sections 3.10(a) and (b), "Company Plans" (x) does not include any governmental plan or program requiring the mandatory payment of social insurance taxes or similar contributions to a governmental fund with respect to the wages of an employee, or any employee benefit program that is mandatory under applicable Law, and (y) only includes the Foreign Benefit Plans (as defined in Section 3.10(g)) that are pension defined benefit plans and that cover employees in Australia, Germany, the Netherlands, the United Kingdom and Japan. (b) With respect to each material Company Plan, the Company has provided, or made available, to Parent a current, accurate and complete copy (or, to the extent no such copy exists, an accurate description) thereof and, to the extent applicable: (i) any related trust agreement or other funding instrument; (ii) the most recent determination letter; (iii) any summary plan description and other material written communications (or a description of any material oral communications) by the Company or its subsidiaries to the Company Employees concerning the extent of the benefits provided under a Company Plan; and (iv) for the most recent year available (A) the Form 5500 and attached schedules, (B) audited financial statements and (C) actuarial valuation reports. (c) Except as, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Company Material Adverse Effect: (i) each Company Plan has been established and administered in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other applicable Laws; (ii) each Company Plan which is intended to be qualified within the meaning of Section 401(a) of the Code is so qualified and has received a favorable determination letter as to its qualification, and nothing has occurred, whether by action or failure to act, that could reasonably be expected to cause the loss of such qualification; (iii) with respect to a Company Plan that is an "employee pension benefit plan" within the meaning of Section 3(2) of ERISA, no event has occurred and no condition exists that would subject the Company or its subsidiaries, either directly or by reason of their affiliation with any member of their " Controlled Group " (defined as any organization which is a member of a controlled group of organizations within the meaning of Sections 414(b), (c), (m) or (o) of the Code) to any Tax, fine, Lien, penalty or other liability imposed by ERISA, the Code or other applicable Laws; (iv) no "reportable event" (as such term is defined in Section 4043 of the Code) that could reasonably be expected to result in liability to the Company or its subsidiaries, and no nonexempt "prohibited transaction" (as such term is defined in Section 4975 of the Code) that could reasonably be expected to result in liability to the Company or its subsidiaries or "accumulated funding deficiency" (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)) has occurred with respect to any Company Plan; 15 (v) except to the extent required by applicable Law or by this Agreement, there is no present intention that any Company Plan be amended, suspended or terminated, or otherwise modified to change benefits (or the levels thereof) under any Company Plan at any time within the 12 months immediately following the date hereof; and (vi) neither the Company nor any of its subsidiaries has incurred any current or projected liability in respect of post-employment or post-retirement health, medical or life insurance benefits for current, former or retired employees of the Company or any of its subsidiaries, except as required to avoid an excise Tax under Section 4980B of the Code or as otherwise required by any other applicable Law. (d) No Company Plan is a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) and neither the Company, any of its subsidiaries nor any member of their Controlled Group has at any time sponsored or contributed to, or has or had any liability or obligation in respect of, any multiemployer plan that would reasonably be expected to have a Company Material Adverse Effect. (e) Except as, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Company Material Adverse Effect, with respect to any Company Plan: (i) no actions, suits or claims (other than routine claims for benefits in the ordinary course) are pending or, to the knowledge of the Company, threatened; (ii) the Company has no knowledge of the existence of any facts or circumstances that could give rise to any such actions, suits or claims; (iii) since January 1, 2003, no written or oral communication has been received from the Pension Benefit Guaranty Corporation (the " PBGC ") in respect of any Company Plan subject to Title IV of ERISA concerning the funded status of any such plan or any transfer of assets and liabilities from any such plan in connection with the transactions contemplated herein; and (iv) no administrative investigation, audit or other administrative proceeding by the Department of Labor, the PBGC, the Internal Revenue Service or other Governmental Entity is pending, in progress or, to the knowledge of the Company, threatened (including any routine requests for information from the PBGC). (f) No Company Plan exists that, as a result of the execution of this Agreement, stockholder approval of this Agreement, or the consummation of the transactions contemplated by this Agreement (whether alone or in connection with any subsequent event(s)): (i) could result in severance pay or any increase in severance pay upon any termination of employment after the date of this Agreement; (ii) could 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 Plans; (iii) could limit or restrict the right of the Company to merge, amend or terminate any of the Company Plans; (iv) could cause the Company to record additional compensation expense on its income statement with respect to any outstanding stock option or other equity-based award; or (v) could result in payments under any of the Company Plans which would not be deductible under Section 280G of the Code. (g) Except as, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Company Material Adverse Effect, with respect to any Company Plan maintained outside the jurisdiction of the United States or covering any Company Employees residing or working outside of the United States (each, a " Foreign Benefit Plan "), (i) all Foreign Benefit Plans have been established, maintained and administered in compliance with their terms and all applicable Laws and Orders of any controlling Governmental Entity or instrumentality; (ii) all Foreign Benefit Plans that are required to be funded are fully funded in accordance with applicable Law, past practice and generally accepted accounting principles in the local jurisdiction and, with respect to all other Foreign Benefit Plans, adequate reserves therefor have been established on the accounting statements of the applicable Company or its applicable subsidiary to the extent so required; and (iii) no liability or obligation of the Company or its subsidiaries exists with respect to such Foreign Benefit Plans that has not been accrued in the consolidated financial statements of the Company included in the Company SEC Reports. 16 (h) Section 3.10(h) of the Company Disclosure Schedule sets forth a complete list of the rabbi trust funding obligations (the " Rabbi Trusts ") that will be incurred by the Company in connection with the transactions contemplated hereby, including (i) the Company Plan under which the rabbi trust funding obligation arises, (ii) the name of the individual on whose behalf the Rabbi Trust must be funded and (iii) the aggregate amount of the payment being placed into a Rabbi Trust with respect to each such individual within 15 days after the date hereof. True and complete copies of all Company Plans and other documents relating to any Rabbi Trust (including, for the avoidance of doubt, the trust documents themselves) in existence on the date hereof have been provided to Parent prior to the date hereof. SECTION 3.11 Labor and Employment Matters . (a) Except as, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Company Material Adverse Effect, the Company and each of its subsidiaries (i) is in compliance with all applicable Laws respecting employment, employment practices, labor, terms and conditions of employment and wages and hours (in each case, " Labor Laws ") with respect to Company Employees, and (ii) is not liable for any payment to any trust or other fund or to any Governmental Entity with respect to unemployment compensation benefits, social security or other benefits for Company Employees that has not been accrued in the consolidated financial statements of the Company included in the Company SEC Reports. (b) No labor organization or group of employees of the Company or any of its subsidiaries has made a pending demand for recognition or certification to the Company or any of its subsidiaries and, to the knowledge of the Company, there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or threatened in writing to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority. Except as, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Company Material Adverse Effect, there are no strikes, work stoppages, slowdowns, lockouts, material arbitrations or material grievances, or other material labor disputes pending or, to the knowledge of the Company, threatened in writing against or involving the Company or any of its subsidiaries. Section 3.11(b) of the Company Disclosure Schedule lists each collective bargaining agreement or similar agreement between the Company or any of its subsidiaries and any labor union or labor organization (including any works council). True and complete copies of all such collective bargaining agreements or similar agreements have been made available to Parent prior to the date hereof. With respect to the transactions contemplated by this Agreement, any notice required under any applicable Labor Law or collective bargaining agreement has been given, and all bargaining obligations with any employee representative have been, or prior to the Effective Time will be, satisfied. SECTION 3.12 Insurance. All material insurance policies of the Company and its subsidiaries are in full force and effect and provide insurance in such amounts and against such risks as the management of the Company reasonably has determined to be prudent in accordance with industry practices or as is required by Law. Neither the Company nor any of its subsidiaries is in material breach or default, and neither the Company nor any of its subsidiaries has taken any action or failed to take any action which, with notice or the lapse of time or both, would constitute such a breach or default, or permit termination or modification of any of the material insurance policies of the Company and its subsidiaries. True and complete copies of all such insurance policies have been made available to Parent prior to the date hereof. SECTION 3.13 Properties . (a) The Company or its applicable subsidiary has good, valid and marketable title to each parcel of real property owned by the Company or any of its subsidiaries, free and clear of all 17 Liens, other than Permitted Liens, to the extent necessary for the conduct of its business as currently conducted in all material respects. (b) The Company or its applicable subsidiary holds good and valid leasehold interests in the real property which is leased or subleased by the Company or any of its subsidiaries, free and clear of all Liens, other than Permitted Liens, to the extent necessary for the conduct of its business as currently conducted in all material respects. SECTION 3.14 Tax Matters. Except as, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Company Material Adverse Effect: (a) The Company and each of its subsidiaries has timely filed, or will timely file, with the appropriate taxing authorities all Tax Returns required to be filed by, or with respect to, it on or prior to the Closing Date in the manner provided by Law. Such Tax Returns were, and, in the case of Tax Returns to be filed, will be, complete and accurate in all material respects. (b) Except as set forth in Section 3.14(b) of the Company Disclosure Schedule, all Taxes due and payable (without regard to whether those Taxes have been assessed) by the Company or any of its subsidiaries have been paid or adequate reserves have been established for the satisfaction of those Taxes. (c) Except as set forth in Section 3.14(c) of the Company Disclosure Schedule, there are no outstanding agreements or waivers extending the statutory period of limitations applicable to any material federal, state, local or foreign income or other Tax Returns required to be filed by or with respect to the Company or any of its subsidiaries. (d) Except as set forth in Section 3.14(d) of the Company Disclosure Schedule, neither the Company nor any of its subsidiaries (i) is a party to any Tax sharing or similar agreement or any arrangement pursuant to which it or any of its subsidiaries has an obligation to indemnify any party (other than the Company or one of its subsidiaries) with respect to Taxes or (ii) is or has ever been a member of an affiliated group filing a consolidated return (other than a group the common parent of which is the Company) or is liable for Taxes of any Person as a transferee or successor, by Contract or otherwise. (e) Except as set forth in Section 3.14(e) of the Company Disclosure Schedule, no unresolved deficiency with respect to Taxes has been proposed or threatened in writing, asserted or assessed against the Company or any of its subsidiaries. (f) Except as set forth in Section 3.14(f) of the Company Disclosure Schedule, no material audit or examination or refund litigation with respect to any Tax Return is pending or threatened in writing as of the date of this Agreement. (g) Except as set forth in Section 3.14(g) of the Company Disclosure Schedule, neither the Company nor any subsidiary of the Company has constituted either a "distributing corporation" or a "controlled corporation" within the meaning of Section 355(a)(1)(A) of the Code. Neither the Company nor any subsidiary of the Company has been a party to any transaction that could give rise to a Tax liability pursuant to Section 355(e) of the Code. The Company is not and has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code and Parent is not required to withhold tax on the purchase of the Company by reason of Section 1445 of the Code. (h) Neither the Company nor any subsidiary of the Company is required to include amounts in income, or exclude items of deduction, in a taxable period beginning after the Closing Date (a " Post-Closing Tax Period ") as a result of a change in method of accounting. 18 (i) Neither the Company nor any subsidiary of the Company has engaged in any "reportable transactions" within the meaning of Treasury Regulation § 1.6011-4(b). (j) Except as set forth in Section 3.14(j) of the Company Disclosure Schedule, there are no material Liens for Taxes upon the assets of the Company or any of its subsidiaries, except for Liens for Taxes not yet due and payable or Liens for Taxes being contested in good faith through appropriate proceedings and for which adequate reserves have been maintained in accordance with U.S. generally accepted accounting principles. For purposes of this Agreement, " Taxes " shall mean any taxes of any kind, including those on or measured by or referred to as income, gross receipts, capital, sales, use, ad valorem , franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any Governmental Entity. For purposes of this Agreement, " Tax Return " means any return, report or statement required to be filed with any Governmental Entity with respect to Taxes, including any schedule or attachment thereto or amendment thereof. SECTION 3.15 Opinion of Financial Advisors. Each of UBS Investment Bank LLC and Gleacher Partners LLC (the " Company's Financial Advisors ") has delivered to the Board of Directors of the Company its oral opinion that, as of the date hereof, the Merger Consideration is fair, from a financial point of view, to the holders of Shares. SECTION 3.16 Brokers. No broker, finder or investment banker (other than the Company's Financial Advisors) is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by and on behalf of the Company or any of its subsidiaries. The Company has provided to Parent a complete and correct copy of all Contracts relating to the engagement with each of the Company's Financial Advisors. SECTION 3.17 Takeover Statutes; Rights Agreement . (a) No "fair price", "moratorium", "control share acquisition" or other similar antitakeover statute or regulation enacted under state or federal laws in the United States (with the exception of Section 203 of the DGCL) (" Takeover Statutes ") applicable to the Company is applicable to the Merger or the other transactions contemplated hereby. The action of the Board of Directors of the Company in approving this Agreement (and the transactions provided for herein) is sufficient to render inapplicable to this Agreement (and the transactions provided for herein) the restrictions on "business combinations" (as defined in Section 203 of the DGCL) as set forth in Section 203 of the DGCL. Complete and correct copies of the resolutions referred to above have been delivered to Parent on or prior to the date hereof. (b) The Company has amended the Rights Agreement to ensure that (i) neither a "Distribution Date" nor a "Stock Acquisition Date" (in each case as defined in the Rights Agreement) will occur, and none of Parent, Merger Sub or any of their "Affiliates" or "Associates" will be deemed to be an "Acquiring Person" (in each case as defined in the Rights Agreement), by reason of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby; and (ii) the Rights will expire immediately prior to the Effective Time(c) . Neither a "Distribution Date" nor a "Stock Acquisition Date" (in each case as defined in the Rights Agreement) has occurred under the Rights Agreement. SECTION 3.18 Intellectual Property . (a) The Company and its subsidiaries own or have a valid right to use all material patents, inventions, copyrights, copyrightable works, software, source code and related documentation, trademarks, service marks, domain names, trade dress and other source indicators, trade secrets, 19 confidential information, databases, tools, methodologies, lists (including customer lists) and all other intellectual property rights of any kind or nature, including all registrations or applications for registration thereto (collectively, " Intellectual Property "), as are necessary for the conduct of their businesses as currently conducted in all material respects, free of all Liens (except Permitted Liens). (b) Except as listed on Section 3.18(b) of the Company Disclosure Schedule or as, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Company Material Adverse Effect: (i) to the knowledge of the Company, the Company's and its subsidiaries' Intellectual Property does not infringe or otherwise violate the intellectual property rights of any third party and is not being infringed or violated by any third party; (ii) the Company and each of its subsidiaries make reasonable efforts to protect and maintain their Intellectual Property, and secure confidentiality and invention assignment agreements with all applicable current and former employees and contractors; and (iii) the Company is not a party to any actions, suits, claims, hearings, proceedings, arbitrations, mediations or investigations or any order, writ, judgment, injunction, settlement, decree or award, and, to the knowledge of the Company, none is threatened or imminent, that challenges or impairs the validity, enforceability, ownership, or right to use, sell or license their Intellectual Property. SECTION 3.19 Environmental Matters . (a) Except as, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Company Material Adverse Effect: (i) the Company and each of its subsidiaries comply, and at all prior times complied, with all applicable Environmental Laws, and possess and comply, and at all prior times possessed and complied, with all applicable Environmental Permits required under such Laws; (ii) there are no Materials of Environmental Concern at any property or facility currently or formerly owned, leased or operated by the Company or any of its subsidiaries, in a condition or under circumstances that would reasonably be expected to require notification, investigation or cleanup or to result in liability of the Company or any of its subsidiaries under any applicable Environmental Law; (iii) neither the Company nor any of its subsidiaries has received any written notification alleging that it is liable for, or any request for information pursuant to section 104(e) of the Comprehensive Environmental Response, Compensation and Liability Act, or similar state statute, concerning any release or threatened release of Materials of Environmental Concern at any location; (iv) neither the Company nor any of its subsidiaries has received any written claim, notice or complaint, or is or has been subject to any proceeding, relating to noncompliance with Environmental Laws or any other liabilities or obligations arising from Materials of Environmental Concern or pursuant to Environmental Laws, and no such matter has been threatened to the knowledge of the Company; (v) neither the Company nor any of its subsidiaries has released, disposed of, or arranged for the disposal of any Materials of Environmental Concern in a manner or to a location that would reasonably be expected to give rise to liability of the Company or any of its subsidiaries under any Environmental Law; and (vi) none of the execution of, or the consummation of the transactions contemplated by, this Agreement require any consent of, or notice to, any third party other than any Governmental Entity pursuant to any Environmental Law. (b) Except as, individually or in the aggregate, would not have, or would not reasonably be expected to have, a Company Material Adverse Effect, there is no material written report of any environmental, health or safety investigation, study, audit, test, review of other analysis conducted in relation to any operations or properties of the Company or any of its subsidiaries or any other operations or properties or facilities now or previously owned, leased or operated by the Company or its subsidiaries, in the possession of or under the control of the Company, which has not been made available to Parent. 20 (c) For purposes of this Agreement, the following terms shall have the meanings assigned below: (i) " Environmental Laws " shall mean all foreign, Federal, state, or local statutes, regulations, ordinances, codes, decrees, orders, judgments or requirements, including common law, relating to (A) protection, preservation or cleanup of the environment or natural resources, (B) Materials of Environmental Concern or (C) health or safety matters as they relate to any Materials of Environmental Concern. (ii) " Environmental Permits " shall mean all permits, licenses, registrations, and other authorizations required under applicable Environmental Laws. (iii) " Materials of Environmental Concern " shall mean any waste, pollutant, hazardous, acutely hazardous, toxic or deleterious substance, agent or material, including petroleum or any fraction thereof, petroleum products, urea-formaldehyde, radon, toxic mold, asbestos-containing materials and polychlorinated biphenyls or any substance identified as hazardous by or subject to regulation or liability under the federal Comprehensive Environmental Response, Compensation and Liability Act, the federal Resource Conservation and Recovery Act, the Federal Clean Water Act or any other similar or analogous Law or other provision having the force of Law. SECTION 3.20 No Undisclosed Liabilities. Neither the Company nor any of its subsidiaries has any liabilities of any nature (whether accrued, absolute, contingent or otherwise) that is required by U.S. generally accepted accounting principles to be recorded as a liability on a balance sheet of the Company or disclosed in the footnotes thereto, except: (i) as and to the extent set forth on the unaudited combined balance sheet of the Company and its subsidiaries as of March 31, 2005 contained in its quarterly report filed with the SEC on Form 10-Q for the quarter then ended; (ii) as incurred pursuant to the transactions contemplated by this Agreement; or (iii) as incurred after March 31, 2005 in the ordinary course of business consistent with past practice which, individually or in the aggregate, would not have, or would not reasonably be expected to have, a Company Material Adverse Effect. SECTION 3.21 Contracts . (a) Except as set forth in Section 3.21(a) of the Company Disclosure Schedule, as of the date of this Agreement, none of the Company or any of its subsidiaries is a party to or bound by any: (i) Contract required to be filed by the Company with the SEC pursuant to Item 601(b)(1), (2), (4) or (10) of Regulation S-K under the Securities Act or Item 1.01 of Form 8-K under the Exchange Act; (ii) Contract with respect to material partnerships, joint ventures, acquisitions or dispositions; (iii) Contract containing covenants of the Company or any of its subsidiaries purporting to limit in any material respect any material line of business, industry or geographical area in which the Company or its subsidiaries may operate or granting material exclusive rights to the counterparty thereto; (iv) Contract that, individually or in the aggregate with other Contracts, would or would reasonably be expected to prevent, materially delay or materially impede the Company's ability to timely consummate the Merger or the other transactions contemplated by this Agreement; (v) collective bargaining agreement or similar agreement (including agreements with Works Councils); (vi) Contract pursuant to which the Company or any of its subsidiaries has any Indebtedness in an amount in excess of $10,000,000 outstanding (other than intercompany Indebtedness between the Company and/or any of its wholly-owned subsidiaries); (vii) Contract that would be required to be disclosed under Item 404 of Regulation S-K of the SEC; or (viii) Contract specifically concerning Intellectual Property (except for (x) non-exclusive, commercially available, off-the-shelf software programs for which the Company pays an annual fee of less than $5,000,000, (y) Contracts with customers pursuant to which the customer and its subsidiaries pay less than $5,000,000 annually and (z) Contracts with data suppliers pursuant to which the Company and its subsidiaries pay fees of less than $2,000,000 annually) that is material 21 to the business of the Company and its subsidiaries, taken as a whole. Each such Contract described in clauses (i)-(viii) is referred to herein as a " Material Contract ". " Indebtedness " means: (A) indebtedness for borrowed money or for the deferred purchase price of property or services (but excluding trade payables and receivables in the ordinary course of business consistent with past practice), including indebtedness evidenced by a note, bond, debenture or similar instrument and any guarantees or keep-well obligations or other contingent obligations in respect thereof; (B) obligations to pay rent or other amounts under any lease of real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet under, with respect to the Company and its subsidiaries, U.S. generally accepted accounting principles and, with respect to Parent and its subsidiaries, Dutch generally accepted accounting principles; (C) obligations in respect of outstanding letters of credit, acceptances and similar obligations created for the account of such person; and (D) liabilities under interest rate cap agreements, interest rate swap agreements, foreign currency exchange agreements and other hedging agreements or arrangements. (b) Section 3.21(b) of the Company Disclosure Schedule sets forth a schedule, as of the date of this Agreement, of all Contracts with respect to partnerships, joint ventures, acquisitions or dispositions or any similar arrangement pursuant to which payments are required (contingently or otherwise) to be made by the Company or any of its subsidiaries from and after the date hereof pursuant to obligations under such Contracts to complete earn-out, deferred purchase price, purchase price adjustment or similar arrangements, together with any existing good faith estimates by the Company of the dollar value of any such obligations. (c) Each of the Material Contracts is valid and binding on the Company and each of its subsidiaries party thereto and, to the knowledge of the Company, each other party thereto and is in full force and effect, except for such failures to be valid and binding or to be in full force and effect that, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Company Material Adverse Effect. There is no default under any Material Contract either by the Company or any of its subsidiaries party thereto or, to the knowledge of the Company, by any other party thereto, and no event has occurred that with notice or lapse of time or both would constitute a default thereunder by the Company or any of its subsidiaries party thereto or, to the knowledge of the Company, any other party thereto, in each case except as, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Company Material Adverse Effect. Complete and correct copies of each Material Contract (including any exhibits, annexes, attachments, supplements, amendments or modifications thereto, whether or not such exhibits, annexes, attachments, supplements, amendments or modifications have been filed with the SEC) have been delivered or made available to Parent prior to the date hereof. SECTION 3.22 Continuity of Business. Section 3.22 of the Company Disclosure Schedule sets forth (i) the 20 largest clients (measured by revenue generated) of the Company and its subsidiaries, taken as a whole, for the fiscal year ended December 31, 2004, and (ii) the 20 largest clients (measured by revenue generated) of the Company and its subsidiaries, taken as a whole, for the three months ended March 31, 2005. No client of the Company or any of its subsidiaries identified pursuant to the preceding sentence has advised the Company or any subsidiary orally (to the knowledge of the Company) or in writing that it (x) is terminating or considering terminating substantially all its business handled by the Company and its subsidiaries or (y) is planning to materially reduce its aggregate future spending with the Company and its subsidiaries. 22 Parent and Merger Sub hereby, jointly and severally, represent and warrant to the Company that, except as set forth on the corresponding section of the Disclosure Schedule delivered by Parent and Merger Sub to the Company concurrently with the execution of this Agreement (the " Parent Disclosure Schedule ") or, other than with respect to the representations and warranties set forth in Section 4.8(b), to the extent the qualifying nature of such disclosure with respect to a specific representation and warranty is readily apparent on the face thereof, as set forth in the English language version of Parent's 2004 Annual Report (the " Annual Report ") (but excluding the disclosures in the "Risk Factors" section of the Annual Report): SECTION 4.1 Organization and Qualification; Subsidiaries. Parent and each of its subsidiaries, including Merger Sub, is duly organized, validly existing and in good standing (with respect to jurisdictions that recognize the concept of good standing) under the Laws of the jurisdiction of its organization and has all requisite corporate or similar power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, except where any such failure to be in good standing or to have such power or authority, individually or in the aggregate, (x) has not had, and would not reasonably be expected to have, a Parent Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of Parent or Merger Sub to consummate the Merger or the other transactions contemplated by this Agreement. Parent and each of its subsidiaries is duly qualified or licensed to do business, and is in good standing (with respect to jurisdictions that recognize the concept of good standing) in each jurisdiction where the character of its properties owned, leased or operated by it or the conduct of its business or the nature or its activities makes such qualification or licensing necessary, except for any such failure to be so qualified or licensed or in good standing which, individually or in the aggregate, (x) has not had, and would not reasonably be expected to have, a Parent Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of Parent or Merger Sub to consummate the Merger or the other transactions contemplated by this Agreement. " Parent Material Adverse Effect " means any change, event, circumstance or effect, taken as a whole, that has been or would be materially adverse to the business, assets, properties, liabilities, financial condition or results of operations of Parent and its subsidiaries taken as a whole, other than any change, event, circumstance or effect resulting from (i) changes after the date hereof in general economic conditions, (ii) changes after the date hereof in any Laws or applicable accounting regulations or principles, (iii) actions taken by Parent or its subsidiaries as required by the provisions of this Agreement or (iv) the announcement or pendency of this Agreement or any of the transactions contemplated hereby; provided that the exceptions set forth in clauses (iii) and (iv) shall not apply with respect to (x) the representations and warranties set forth in Sections 4.4, 4.5 and 4.17, the absence of conflict or similar representations set forth in Sections 4.10(f) or with respect to the effects of any breach of such representations and warranties or (y) Sections 6.8 or 7.1. Section 4.1 of the Parent Disclosure Schedule sets forth a complete list of the material subsidiaries that are owned directly or indirectly by Parent. Other than as set forth in Section 4.1 of the Parent Disclosure Schedule and other than subsidiaries of Parent, Parent does not own, directly or indirectly, any capital stock or other equity interests in any other person having a fair market value in excess of $10,000,000. SECTION 4.2 Articles of Association; Other Constituent Documents. Parent has heretofore furnished or otherwise made available to the Company a true, complete and correct copy of its articles of association (the " Articles of Association" ), the charters of the Supervisory and Executive Boards of Parent and any committees thereof, the certificate of incorporation and by-laws of Holdings and Merger Sub and the articles of association of the Priority Foundation, in each case as currently in effect. The Articles of Association, the charters of the Supervisory and Executive Boards of Parent and 23 any committees thereof, the certificate of incorporation and by-laws of Holdings and Merger Sub and the articles of association of the Priority Foundation, as so made available, are in full force and effect and no other organizational documents are applicable to or binding upon Parent, Holdings, Merger Sub or the Priority Foundation. Parent is not in violation of any provisions of its Articles of Association in any material respect. Neither Holdings nor Merger Sub is in violation of any provisions of its certificate of incorporation or by-laws in any material respect. The Priority Foundation is not in violation of any provisions of its articles of association in any material respect. SECTION 4.3 Capitalization . (a) The authorized capital stock of Parent consists of (i) 500 priority shares, par value €8 per share (the " Priority Shares "), (ii) 550,000,000 Parent Common Shares; (iii) 150,000 7% preference shares, par value €8 per share (the " Parent 7% Preferred Stock "), (iv) 8,900,500 preferred A-shares, par value €8 per share (the " Parent Series A Stock ") and (v) 25,000,000 preference B-shares, par value €0.20 per share, such preference B-shares being subdivided into 10 series of 2,500,000 preference B-shares, designated series A up to and including J (the " Parent Series B Stock "). As of the close of business on May 3, 2005, 2005, (A) 500 Priority Shares were issued and outstanding, (B) 256,846,187 Parent Common Shares were issued and outstanding, (C) 150,000 shares of Parent 7% Preferred Stock were issued and outstanding, (D) no shares of Parent Series A Stock were issued and outstanding and (E) 7,200,000 shares of Parent Series B Stock were issued and outstanding, all of which were duly authorized, validly issued and fully paid up. As of the close of business on May 3, 2005, there were outstanding options to purchase 17,252,113 Parent Common Shares. From the close of business on May 3, 2005 to the date of this Agreement, no Parent Common Shares and no options to purchase Parent Common Shares have been issued (except for Parent Common Shares issued pursuant to the exercise of outstanding options). All of the outstanding Priority Shares, Parent Common Shares and shares of Parent 7% Preferred Stock and Parent Series B Stock are, and all of the Parent Common Shares and Parent Depository Shares to be issued pursuant to the Merger will be, when issued, duly authorized and validly issued and fully paid up and the Parent Common Shares and Parent Depository Shares to be issued pursuant to the Merger (or under Company Stock Options outstanding at the Effective Time that become exercisable for Parent Depository Shares in accordance with Section 2.3(a)) will be issued free from all Liens (other than any restrictions imposed by applicable securities Law). Except as set forth above, there are no outstanding options, warrants, convertible securities or other rights of any kind which obligate Parent or any of its subsidiaries to issue or deliver any shares of capital stock or voting securities of Parent or any securities or obligations convertible or exchangeable into or exercisable for any shares of capital stock or voting securities of Parent. (b) Except as set forth in Section 4.3(b) of the Parent Disclosure Schedule or as attributed by the Articles of Association to the existing holders of Priority Shares, Parent Common Shares and shares of Parent 7% Preferred Stock, Parent Series A Stock and Parent Series B Stock, there are no preemptive rights of any kind which obligate Parent or any of its subsidiaries to issue or deliver any shares of capital stock or voting securities of Parent or any securities or obligations convertible or exchangeable into or exercisable for, or giving any person a right to subscribe for or acquire from Parent or its subsidiaries, any shares of capital stock or voting securities of Parent. None of Parent or any of its subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible, exchangeable or exercisable for or into securities having the right to vote) with the stockholders of Parent or any subsidiary on any matter. (c) Each of the outstanding shares of capital stock, other ownership interests and other voting securities of each of Parent's subsidiaries is duly authorized, validly issued, fully paid and nonassessable and all such shares, other ownership interests and voting securities are owned by Parent or another wholly-owned subsidiary of Parent, in each case, free and clear of all Liens. 24 There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, call, commitments or rights of any kind which obligate Parent or any of its subsidiaries to issue or deliver any shares of capital stock, other ownership interests or voting securities of any subsidiary of Parent or any securities or obligations convertible or exchangeable into or exercisable for, or giving any person a right to subscribe for or acquire from Parent or any of its subsidiaries, any shares of capital stock, other ownership interests or voting securities in any subsidiary of Parent. SECTION 4.4 Authority. Each of Parent, Holdings, Merger Sub and the Priority Foundation has all necessary corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by each of Parent, Holdings, Merger Sub and the Priority Foundation and the consummation by each of Parent, Holdings, Merger Sub and the Priority Foundation of the Merger and the other transactions contemplated hereby have been duly and validly authorized by all necessary action by each of the Supervisory and Executive Boards of Parent, the Priority Foundation and the Board of Directors of each of Holdings and Merger Sub, and no other corporate proceedings by or on the part of Parent, Holdings, Merger Sub or the Priority Foundation are necessary to authorize this Agreement, to perform their respective obligations hereunder, or to consummate the transactions contemplated hereby (other than (i) adoption by Parent's stockholders of a valid resolution or resolutions in relation to the transactions contemplated by this Agreement, including valid adoption or approval, as the case may be, of the decisions to (A) enter into this Agreement pursuant to Section 2:107a Dutch Civil Code, (B) delegate the authority to issue Parent Common Shares to the Executive Board of Parent up to a maximum sufficient to effect the Merger and any related matters pursuant to this Agreement, (C) if the Priority Foundation is liquidated or dissolved in accordance with Section 6.16(a), amend the Articles of Association as referred to in Section 6.16(a) of this Agreement, (D) amend Parent's remuneration policy pursuant to Section 2:135 paragraph 1 Dutch Civil Code and approve the amendment of Parent's option and share plans pursuant to Section 2:135 paragraph 4 Dutch Civil Code in order to give effect to the transactions contemplated by this Agreement and (E) appoint members of the Executive and Supervisory Boards as contemplated by Section 6.16(a) of this Agreement, with each of the decisions under clauses (A) through (E) being conditional upon the valid adoption of the other decisions set out therein, by the vote of a majority in voting power present in person or by proxy at the Parent Stockholders Meeting and entitled to vote on the matter (such vote, the " Parent Requisite Vote "), (ii) the adoption of this Agreement by Holdings as the sole stockholder of Merger Sub (which adoption shall occur immediately after the execution and delivery of this Agreement) and (iii) the filing with the Secretary of State of the State of Delaware of the Certificate of Merger as required by the DGCL). This Agreement has been duly and validly executed and delivered by Parent, Merger Sub and the Priority Foundation and, assuming due authorization, execution and delivery hereof by the Company, constitutes a legal, valid and binding obligation of each of Parent, Holdings, Merger Sub and the Priority Foundation enforceable against each of Parent, Holdings, Merger Sub and the Priority Foundation in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding in equity or at Law). The only vote of the stockholders of Parent required to approve the transactions contemplated by this Agreement is the Parent Requisite Vote. SECTION 4.5 No Conflict; Required Filings and Consents . (a) The execution, delivery and performance of this Agreement by Parent and Merger Sub, do not and will not: (i) conflict with or violate the Articles of Association or the certificate of incorporation or by-laws of Merger Sub; (ii) conflict with or violate the memorandum or articles of association, certificate of incorporation, by-laws or comparable constituent documents of any of the subsidiaries of Parent; (iii) assuming that all consents, approvals, authorizations, declarations and 25 permits contemplated by clauses (i) through (x) of subsection (b) below have been obtained, and all filings described in such clauses have been made, conflict with or violate any Law or Order applicable to Parent or any of its subsidiaries or by which its or any of their respective properties are bound; or (iv) other than as set forth in Section 4.5 of the Parent Disclosure Schedule, result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would become a default) or result in the loss of a benefit under, require any consent or approval under, or give rise to any right of termination, cancellation, amendment, acceleration or other alteration in the rights under, any Contracts to which Parent or any of its subsidiaries is a party or by which Parent or any of its subsidiaries or its or any of their respective properties are bound, except, in the case of clauses (iii) and (iv) above, for any such conflict, violation, breach, default, acceleration, loss, right or other occurrence that, individually or in the aggregate, would not, and would not reasonably be expected to, (x) have a Parent Material Adverse Effect or (y) prevent, materially delay or materially impede the ability of Parent or Merger Sub to consummate the Merger or the other transactions contemplated by this Agreement. (b) The execution, delivery and performance of this Agreement by each of Parent and Merger Sub and the consummation of the transactions contemplated hereby by each of Parent and Merger Sub do not and will not require any consent, approval, authorization, declaration or permit of, action by, filing with or notification to, any Governmental Entity, except for: (i) the applicable requirements of the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder; (ii) the applicable requirements of the Securities Transactions (Supervision) Act 1995 ( Wet toezicht effectenverkeer 1995 ), the Listing and Issuing Rules ( Fondsenreglement ) (and any successor regulation thereof), the Works Council Act ( Wet op de ondernemingsraden ), the Trade Register Act ( Handelsregisterwet 1996 ), the Decree on Rules relating to Mergers of the Social and Economic Council ( SER-besluit Fusiegedragsregels 2000 )and the rules and regulations promulgated thereunder; (iii) the applicable requirements of the HSR Act and the rules and regulations promulgated thereunder; (iv) the applicable requirements of state securities and "blue sky" Laws; (v) the applicable requirements of Euronext Amsterdam N.V. (" Euronext Amsterdam "), the Authority for the Financial Market ( Autoriteit Financiële Markten ) (the " AFM ") and the NYSE; (vi) the filing with the Secretary of State of the State of Delaware of the Certificate of Merger as required by the DGCL; (vii) the filing with the European Commission of a merger notification in accordance with the ECMR; (viii) the applicable requirements of the competent authority of any member state of the European Union to which any of the transactions contemplated by this Agreement is referred pursuant to Article 9 of the ECMR, (ix) the applicable requirements of Foreign Antitrust Laws; and (x) any such consent, approval, authorization, declaration, permit action, filing or notification the failure of which to make or obtain, individually or in the aggregate, would not, and would not reasonably be expected to, (x) have a Parent Material Adverse Effect or (y) prevent, materially delay or materially impede the ability of Parent or Merger Sub to consummate the Merger or the other transactions contemplated by this Agreement. SECTION 4.6 Compliance . (a) Neither Parent nor any of its subsidiaries is in violation of, or has violated, any Law or Order to which it is subject or by which its or any of their respective properties are bound, except for any such violation which, individually or in the aggregate, (x) would not, and would not reasonably be expected to, have a Parent Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of Parent or Merger Sub to consummate the Merger or the other transactions contemplated by this Agreement. Parent and its subsidiaries have all Licenses from Governmental Entities required to conduct their respective businesses as now being conducted and all such Licenses are valid and in full force and effect, except for any such Licenses the failure of which to have or to be in full force and effect, individually or in the aggregate, (x) has not had, and would not reasonably be expected to have, a 26 Parent Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of Parent or Merger Sub to consummate the Merger or the other transactions contemplated by this Agreement. Parent is in compliance in all material respects with the applicable listing and other rules and regulations of Euronext Amsterdam and, as of the Closing, will be in compliance in all material respects with the applicable listing and other rules and regulations of the NYSE. (b) Without limiting the generality of the foregoing, except as disclosed on Section 4.6(b) of the Parent Disclosure Schedule or as would not, and would not reasonably be expected to, have a Parent Material Adverse Effect, Parent: (i) does not itself and does not permit or assist any third party to violate the rights of any person or entity with respect to confidential, personally identifiable or personal health information, including all Privacy Rights; (ii) complies with all governing industry standards and company policies respecting Privacy Rights; and (iii) takes all necessary and reasonable actions to protect the confidentiality, integrity and security of its software, databases, systems, networks and Internet sites and all information stored or contained therein or transmitted thereby from unauthorized or improper use. SECTION 4.7 Financial Statements; Annual Report . (a) Section 4.7 of the Parent Disclosure Schedule contains true and complete copies of (i) the audited consolidated balance sheet as of December 31, 2004, 2003 and 2002, (ii) the related audited consolidated statements of earnings and cash flows for the three year period ended December 31, 2004 and (iii) the related audited consolidated statements of changes in shareholders equity for the two year period ended December 31, 2004 (collectively, the " Parent Financial Statements "). On the date of its publication, the Annual Report did not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading. (b) Each of the Parent Financial Statements has been prepared in accordance with accounting principles generally accepted in the Netherlands (" Dutch generally accepted accounting principles ") applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto). Each of the Parent Financial Statements (including the related notes and schedules) give a true and fair view, in all material respects, of Parent and its subsidiaries at the respective dates thereof and of the results of Parent and its subsidiaries for the periods covered thereby, in each case in conformity with Dutch generally accepted accounting principles consistently applied during the periods involved except as may be noted therein. (c) The consolidated balance sheet and related consolidated statements of earnings, changes in shareholders equity and cash flows for the six months ended June 30, 2005 and June 30, 2004, the year ended December 31, 2004 and for all periods subsequent to June 30, 2005 (and any corresponding prior periods) and prior to the Effective Time will have been prepared in accordance with accounting principles generally accepted under International Financial Reporting Standards (" IFRS ") applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto). Each such financial statement (including the related notes and schedules) will give a true and fair view, in all material respects , of and its subsidiaries at the respective dates thereof and of the results of Parent and its subsidiaries for the periods covered thereby (subject, in the case of unaudited statements, to normal period-end adjustments that will not be material in amount or effect) in each case in conformity with IFRS consistently applied during the periods involved except as may be noted therein. 27 SECTION 4.8 Absence of Certain Changes or Events . (a) From December 31, 2004, Parent and its subsidiaries have conducted their businesses, in all material respects, only in, and have not engaged in any material transaction other than in accordance with, the ordinary course of these businesses consistent with past practice. Except as set forth on Section 4.8(a) of the Parent Disclosure Schedule, from December 31, 2004, there has not occurred any action which, if it had been taken after the date hereof, would have required the consent of the Company under Section 5.2 hereof. (b) From December 31, 2004, there has not been any Parent Material Adverse Effect or any change, event, circumstance or effect that would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. SECTION 4.9 Absence of Litigation. There are no actions, suits, claims, hearings, proceedings, arbitrations, mediations, inquiries or investigations (whether civil, criminal, administrative or otherwise) pending or, to the knowledge of Parent, threatened against Parent or any of its subsidiaries or any of the executive officers of Parent, except, in each case, for those that, individually or in the aggregate, (x) have not had, and would not reasonably be expected to have, a Parent Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of Parent or Merger Sub to consummate the Merger or the other transactions contemplated by this Agreement. Neither Parent nor any of its subsidiaries nor any of their respective properties is or are subject to any order, writ, judgment, injunction, settlement, decree or award, except for those that, individually or in the aggregate, (x) have not had, and would not reasonably be expected to have, a Parent Material Adverse Effect and (y) would not reasonably be expected to prevent, materially delay or materially impede the ability of Parent or Merger Sub to consummate the Merger or the other transactions contemplated by this Agreement. To the knowledge of Parent (including for this purpose the members of the Audit Committee of the Supervisory Board of Parent), there are no formal or informal governmental inquiries or investigations or internal investigations or material whistle-blower complaints pending or threatened, in each case regarding any accounting or disclosure practices of Parent or any of its subsidiaries, compliance by Parent or any of its subsidiaries with any Law or any malfeasance by any officer of Parent. SECTION 4.10 Employee Benefit Plans. (a) Section 4.10(a) of the Parent Disclosure Schedule contains a true and complete list of each material Parent Plan. " Parent Plan " means each " employee benefit plan " (within the meaning of Section 3(3) of ERISA), and all written and material unwritten stock purchase, stock option, severance, employment, change-in-control, fringe benefit, collective bargaining, bonus, incentive, deferred compensation, employee loan and all other employee benefit plans, agreements, programs, policies or other arrangements (except for severance, employment and change-in-control agreements or similar agreements (the " Parent Employment Agreements ")), whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transaction contemplated by this Agreement or otherwise) under which (i) any current or former employee, director or consultant of Parent or its subsidiaries (the " Parent Employees ") has any present or future right to benefits and which are contributed to, sponsored by or maintained by Parent or any of its subsidiaries or (ii) Parent or any of its subsidiaries has any present or future liability. Notwithstanding the foregoing, solely for purposes of Sections 4.10(a) and (b), "Parent Plans" (x) does not include any governmental plan or program requiring the mandatory payment of social insurance taxes or similar contributions to a governmental fund with respect to the wages of an employee, or any employee benefit program that is mandatory under applicable Law, and (y) only includes the Parent Foreign Benefit Plans (as defined in Section 4.10(g)) that are pension defined benefit plans and that cover employees in the 28 |
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