**Exhibit99.1**

 

**EXECUTIONCOPY**

 

**AGREEMENT AND PLAN OF MERGER**

 

**by and among**

 

**IHS INC.,**

 

**PROJECT LINCOLN SUB I, INC.,**

 

**GLOBAL INSIGHT, INC.,**

 

**JOSEPH E. KASPUTYS,**

 

**and**

 

**MICHAEL R. KARGULA**

 

**Dated as of September 18, 2008**

 

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**TABLE CONTENTS**

 
| ** **                                                 | ** **                                                                                 | **Pages**  |
|------------------------------------------------------------|--------------------------------------------------------------------------------------------|------------|
| ** **                                                 | ** **                                                                                 | ** ** |
| ARTICLE I  THE MERGER AND THE SUBSEQUENT MERGER            | 2                                                                                          |
| 1.1                                                        | The Merger                                                                                 | 2          |
| 1.2                                                        | Closing of  the Merger                                                                     | 2          |
| 1.3                                                        | Effective  Time                                                                            | 3          |
| 1.4                                                        | Effects of  the Merger                                                                     | 3          |
| 1.5                                                        | Organizational  Documents of the Surviving Corporation                                     | 3          |
| 1.6                                                        | Directors  and Officers of the Surviving Corporation                                       | 3          |
| 1.7                                                        | Subsequent  Merger                                                                         | 4          |
| ARTICLE II  CONVERSION OF SECURITIES                       | 4                                                                                          |
| 2.1                                                        | Merger  Consideration                                                                      | 4          |
| 2.2                                                        | Conversion  of Shares                                                                      | 5          |
| 2.3                                                        | Fractional  Shares                                                                         | 6          |
| 2.4                                                        | Escrow  Account                                                                            | 7          |
| 2.5                                                        | Reclassification  of Parent Securities                                                     | 7          |
| 2.6                                                        | Options                                                                                    | 7          |
| 2.7                                                        | Exchange  Procedures                                                                       | 7          |
| 2.8                                                        | No Liability                                                                               | 8          |
| 2.9                                                        | Lost  Certificates                                                                         | 8          |
| 2.10                                                       | Withholding  Rights                                                                        | 8          |
| 2.11                                                       | Transfer  Books                                                                            | 8          |
| 2.12                                                       | Appraisal  Rights                                                                          | 8          |
| 2.13                                                       | Net Working  Capital Adjustment; Cash Adjustment; Deferred Subscription Revenue Adjustment | 9          |
| 2.14                                                       | Tax  Adjustment                                                                            | 13         |
| 2.15                                                       | Earn Out  Adjustment                                                                       | 13         |
| 2.16                                                       | Election for  a Taxable Transaction                                                        | 14         |
| ARTICLE III  REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 14                                                                                         |
| 3.1                                                        | Organization  and Qualification; Subsidiaries                                              | 14         |
| 3.2                                                        | Capitalization  of the Company and its Subsidiaries                                        | 15         |
| 3.3                                                        | Authority  Relative to this Agreement; Consents and Approvals                              | 16         |
| 3.4                                                        | Financial  Information                                                                     | 17         |
| 3.5                                                        | Absence of  Undisclosed Liabilities                                                        | 17         |
| 3.6                                                        | Compliance  with Laws; Permits                                                             | 17         |
| 3.7                                                        | Noncontravention                                                                           | 17         |
| 3.8                                                        | Litigation                                                                                 | 18         |
| 3.9                                                        | Material  Contracts                                                                        | 18         |
| 3.10                                                       | Customer  Relationships                                                                    | 20         |
| 3.11                                                       | Intellectual  Property                                                                     | 20         |
| 3.12                                                       | Property                                                                                   | 21         |
| 3.13                                                       | Environmental  Matters                                                                     | 22         |
| 3.14                                                       | Taxes                                                                                      | 22         |

 

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| 3.15                                                                | Insurance                                                         | 23 |
|---------------------------------------------------------------------|-------------------------------------------------------------------|----|
| 3.16                                                                | Employees;  Employee Benefits                                     | 23 |
| 3.17                                                                | Absence of  Certain Changes or Events                             | 26 |
| 3.18                                                                | No Broker                                                         | 27 |
| 3.19                                                                | Certain  Payments                                                 | 27 |
| 3.20                                                                | Relationships  with Related Persons                               | 27 |
| 3.21                                                                | Accounts  Receivable                                              | 27 |
| 3.22                                                                | No  Additional Representations or Warranties                      | 27 |
| ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB | 28                                                                |
| 4.1                                                                 | Organization                                                      | 28 |
| 4.2                                                                 | Authority                                                         | 28 |
| 4.3                                                                 | Noncontravention                                                  | 28 |
| 4.4                                                                 | Litigation                                                        | 29 |
| 4.5                                                                 | Cash  Consideration                                               | 29 |
| 4.6                                                                 | No Broker                                                         | 29 |
| 4.7                                                                 | Parent  Common Stock                                              | 29 |
| 4.8                                                                 | Taxes                                                             | 29 |
| 4.9                                                                 | Filings with  the SEC                                             | 29 |
| 4.10                                                                | Interim  Operations of Merger Sub and Subco                       | 30 |
| 4.11                                                                | No  Additional Representations or Warranties                      | 30 |
| ARTICLE V  COVENANTS RELATED TO CONDUCT OF BUSINESS                 | 31                                                                |
| 5.1                                                                 | Conduct of  Business of the Company                               | 31 |
| 5.2                                                                 | Access to  Information of the Company and its Subsidiaries        | 33 |
| 5.3                                                                 | Tax-Free  Reorganization Treatment                                | 33 |
| ARTICLE VI  ADDITIONAL AGREEMENTS                                   | 34                                                                |
| 6.1                                                                 | Reasonable  Best Efforts                                          | 34 |
| 6.2                                                                 | Acquisition  Proposals                                            | 36 |
| 6.3                                                                 | Public  Announcements                                             | 36 |
| 6.4                                                                 | Notification  of Certain Matters                                  | 36 |
| 6.5                                                                 | Fees and  Expenses                                                | 37 |
| 6.6                                                                 | Parent  Common Stock; Registration Rights; NYSE Listing           | 37 |
| 6.7                                                                 | Employee  Benefits Matters                                        | 39 |
| 6.8                                                                 | Directors’  and Officers’ Indemnification               | 40 |
| 6.9                                                                 | Transfer  Taxes                                                   | 40 |
| 6.10                                                                | Supplemental  Disclosure                                          | 41 |
| ARTICLE VII  CONDITIONS TO CONSUMMATION OF THE MERGER               | 41                                                                |
| 7.1                                                                 | Conditions  to Each Party’s Obligations to Effect the Merger | 41 |
| 7.2                                                                 | Conditions  to the Obligations of Parent and Merger Sub           | 41 |
| 7.3                                                                 | Conditions  to the Obligations of the Company                     | 42 |
| ARTICLE VIII  TERMINATION; AMENDMENT; WAIVER                        | 43                                                                |
| 8.1                                                                 | Termination  by Mutual Agreement                                  | 43 |
| 8.2                                                                 | Termination  by Either Parent or the Company                      | 43 |
| 8.3                                                                 | Termination  by the Company                                       | 44 |
| 8.4                                                                 | Termination  by Parent                                            | 44 |
| 8.5                                                                 | Effect of  Termination and Abandonment                            | 44 |

 

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| 8.6                                   | Amendment                     | 44 |
|---------------------------------------|-------------------------------|----|
| 8.7                                   | Extension;  Waiver            | 44 |
| ARTICLE IX  SURVIVAL; INDEMNIFICATION | 45                            |
| 9.1                                   | Survival                      | 45 |
| 9.2                                   | Indemnification               | 45 |
| 9.3                                   | Procedures                    | 46 |
| 9.4                                   | Exclusive  Remedy             | 47 |
| 9.5                                   | No Punitive  Damages          | 47 |
| 9.6                                   | Calculation  of Damages       | 47 |
| ARTICLE X  MISCELLANEOUS              | 48                            |
| 10.1                                  | Entire  Agreement; Assignment | 48 |
| 10.2                                  | Notices                       | 48 |
| 10.3                                  | Governing  Law                | 49 |
| 10.4                                  | Descriptive  Headings         | 49 |
| 10.5                                  | Parties in  Interest          | 49 |
| 10.6                                  | Severability                  | 49 |
| 10.7                                  | Counterparts                  | 50 |
| 10.8                                  | Interpretation                | 50 |
| 10.9                                  | Definitions                   | 50 |

 

Exhibit A– Form of Escrow Agreement

Exhibit B– Form of Non-Compete and Non-Solicitation Agreement

Exhibit C– Form of Employment Arrangement

 

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**AGREEMENT AND PLAN OF MERGER**

 

THIS AGREEMENT AND PLAN OF MERGER (this “**Agreement**”), dated as of September 18, 2008, is by andamong IHS INC., a Delaware corporation (“**Parent**”),PROJECT LINCOLN SUB I, INC., a Delaware corporation and a direct wholly-ownedsubsidiary of Parent (“**Merger****Sub**”), GLOBAL INSIGHT, INC., a Delawarecorporation (the “**Company**”), JOSEPHE. KASPUTYS and MICHAEL R. KARGULA (together with Joseph E. Kasputys, the “**Principal Stockholders**”). Certaincapitalized and non-capitalized terms used herein are defined in **Section 10.9**.

 

**RECITALS**

 

WHEREAS, the Boards of Directors of the Company, Parent and Merger Subeach have approved this Agreement and the transactions contemplated hereby,including the Merger, and declared the Merger advisable, fair to, and in thebest interests of, their respective stockholders, and the Board of Managers ofSubco has approved the Subsequent Merger, and declared the Subsequent Mergeradvisable, fair to, and in the best interest of its members;

 

WHEREAS, pursuant to the Merger and subject to the terms and conditionsof this Agreement, all of the issued and outstanding shares of Company CommonStock shall be converted into the right to receive cash or a combination ofcash and shares of Parent Common Stock as set forth in this Agreement;

 

WHEREAS, as an inducement to Parent and Merger Sub to enter into thisAgreement, the Principal Stockholders (owning a majority of the shares ofCompany Common Stock) have concurrently herewith entered into a voting agreement(the “**Voting Agreement**”) pursuantto which, among other things, the Principal Stockholders have agreed to voteall shares of capital stock of the Company owned by them in favor of approvaland adoption of this Agreement and the Merger;

 

WHEREAS, for United States federal income Tax purposes, the Merger andthe Subsequent Merger, taken together, are intended to qualify as areorganization within the meaning of Section 368(a) of the Code andthis Agreement is hereby adopted as a plan of reorganization for purposes of Section 368of the Code; and

 

WHEREAS, the Company, Parent, Merger Sub and the Principal Stockholdersdesire to make certain representations, warranties, covenants and agreements inconnection with the Merger as set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the respectiverepresentations, warranties, covenants and agreements set forth below, andintending to be legally bound hereby, the parties agree as follows:

 

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**ARTICLE I**

 

**THE MERGER AND THE SUBSEQUENT MERGER**

 

1.1           The Merger. Upon the terms andsubject to the conditions of this Agreement and in accordance with the DelawareGeneral Corporation Law (the “**DGCL**”),Merger Sub shall be merged with and into the Company at the Effective Time (the“**Merger**”). Following the Merger,the Company shall continue as the surviving entity (the “**Surviving Corporation**”) and the separatecorporate existence of Merger Sub shall cease.

 

1.2           Closing of the Merger.

 

(a)           Unless thisAgreement shall have been terminated and the transactions herein contemplatedshall have been abandoned pursuant to the terms and conditions of **Article VIII**, the closing of theMerger (the “**Closing**”) shall takeplace at 8:00 a.m. on a date to be specified by the parties (the “**Closing Date**”), which shall be no laterthan the third Business Day after satisfaction or waiver of the conditions setforth in **Article VII** (otherthan those conditions that by their nature are to be satisfied at the Closing,but subject to the satisfaction or waiver of those conditions), at the officesof Nixon Peabody LLP, 100 Summer Street, Boston, Massachusetts 02110, or atsuch other time, date or place as agreed to in writing by the parties hereto.

 

(b)           At the Closing,Parent shall deliver or shall cause to be delivered:

 

(i)         toeach of the Principal Stockholders, (x) a certificate or certificatesrepresenting the shares of Parent Common Stock to be issued to such PrincipalStockholder pursuant to **Article II**or evidence of the deposit of such uncertificated shares of Parent Common Stockinto an account established in the name of such Principal Stockholder withParent’s transfer agent, and (y) the amount of cash, by wire transfer ofimmediately available funds to an account designated in writing at least three (3) BusinessDays prior to the Closing Date, to be paid to such Principal Stockholderpursuant to **Article II** inconnection with their holdings of Company Common Stock and Options, less theapplicable portion of the Initial Escrow Amount;

 

(ii)        toeach of the holders of Company Common Stock set forth on **Schedule 1.2**, the amount of cash, by wiretransfer of immediately available funds to an account designated in writing atleast three (3) Business Days prior to the Closing Date, to be paid tosuch holder of Company Common Stock pursuant to **Article II** in connection with their holdings of CompanyCommon Stock and Options;

 

(iii)       tothe Escrow Agent, the Initial Escrow Amount in accordance with **Section 2.4**, and to each of the EscrowAgent and the Principal Stockholders, a counterpart of the Escrow Agreementduly executed by Parent; and

 

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(iv)       tothe Company, such other documents required to be delivered at Closing pursuantto this Agreement.

 

(c)           At the Closing, theCompany shall deliver or shall cause to be delivered:

 

(i)         toParent, the Certificates representing shares of Company Common Stock owned bythe Principal Stockholders and the holders of Company Common Stock set forth in**Section 1.2**of the CompanyDisclosure Schedule;

 

(ii)        tothe Escrow Agent and Parent, a counterpart of the Escrow Agreement dulyexecuted by each of the Principal Stockholders;

 

(iii)       toParent, with respect to the Principal Stockholders and the holders of CompanyCommon Stock set forth in **Section 1.2**ofthe Company Disclosure Schedule (to the extent that such persons hold Options),the acknowledgments described in the last sentence of **Section 2.6**; and

 

(iv)       toParent, such other documents required to be delivered at Closing pursuant tothis Agreement.

 

1.3           Effective Time.  Subject to the provisions of this Agreement,Parent, Merger Sub and the Company shall cause the Merger to be consummated byfiling a Certificate of Merger (the “**Certificateof Merger**”) with the Secretary of State of the State of Delaware insuch form as required by, and executed in accordance with, the relevantprovisions of the DGCL on the Closing Date. The Merger shall become effectiveupon such filing or at such time thereafter as is provided in the Certificateof Merger (the date and time the Merger becomes effective being the “**Effective Time**”).

 

1.4           Effects of the Merger.  The Merger shall have the effects set forth inthe DGCL. Without limiting the generality of the foregoing, and subjectthereto, at the Effective Time, all of the properties, rights, privileges,powers and franchises of the Company and Merger Sub shall vest in the SurvivingCorporation, and all debts, liabilities and duties of the Company and MergerSub shall become the debts, liabilities and duties of the SurvivingCorporation.

 

1.5           Organizational Documents of theSurviving Corporation.  The Company’scertificate of incorporation, as in effect immediately prior to the EffectiveTime, shall be the certificate of incorporation of the Surviving Corporationuntil thereafter changed or amended as provided therein or by applicable Law. TheCompany’s bylaws, as in effect immediately prior to the Effective Time, shallbe the bylaws of the Surviving Corporation until thereafter changed or amendedas provided therein or by applicable Law.

 

1.6           Directors and Officers of theSurviving Corporation.

 

(a)           The directors ofMerger Sub immediately prior to the Effective Time shall be the initialdirectors of the Surviving Corporation at and after the Effective Time andshall hold office

 

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until theirsuccessors are duly elected or appointed or until their earlier death,resignation or removal.

 

(b)           The officers of theMerger Sub immediately prior to the Effective Time shall be the initialofficers of the Surviving Corporation at and after the Effective Time and shallhold office until their successors are duly elected or appointed or until theirearlier death, resignation or removal.

 

1.7           Subsequent Merger.

 

(a)           Immediately afterthe Effective Time, Parent shall cause the Surviving Corporation to merge withand into Project Lincoln Sub II LLC, a newly organized direct, wholly-ownedDelaware limited liability company subsidiary of Parent (“**Subco**”) and the separate corporateexistence of the Surviving Corporation shall thereupon cease (the “**Subsequent Merger**”).

 

(b)           With respect to anytime following the Subsequent Merger, references herein to the SurvivingCorporation shall refer to Subco as the surviving company in the SubsequentMerger.

 

**ARTICLE II**

 

**CONVERSION OF SECURITIES**

 

2.1           Merger Consideration.

 

(a)           The aggregatenotional value to be paid pursuant to this Agreement following the conclusionof the post-Closing “true up” procedures described in **Section 2.13** (the “**Final Aggregate Notional Value**”) shall be (i) $200million, (ii) (x) plus the amount, if any, by which Closing Cashexceeds Closing Indebtedness or (y) minus the amount, if any, by whichClosing Indebtedness exceeds Closing Cash, (iii) (x) plus the amount,if any, by which Closing Working Capital exceeds $10,400,000 or (y) minusthe amount, if any, by which $10,400,000 exceeds Closing Working Capital, and (iv) minusfifteen percent (15%) of the Closing Deferred Subscription Revenue.

 

(b)           The aggregatenotional value to be paid upon the surrender of Certificates at or followingthe Closing (the “**Closing Aggregate NotionalValue**”) shall be based upon estimated adjustments, determined inaccordance with **Section 2.13**,such that the Closing Aggregate Notional Value shall be (i) $200 million, (ii) (x) plusthe amount, if any, by which Estimated Closing Cash exceeds Estimated ClosingIndebtedness or (y) minus the amount, if any, by which Estimated ClosingIndebtedness exceeds Estimated Closing Cash, (iii) (x) plus theamount, if any, by which Estimated Closing Working Capital exceeds $10,400,000or (y) minus the amount, if any, by which $10,400,000 exceeds EstimatedClosing Working Capital, and (iv) minus fifteen percent (15%) of theEstimated Closing Deferred Subscription Revenue.

 

(c)           The “**Closing Aggregate Cash Consideration,**” asmay be adjusted pursuant to **Section 2.14**,****is an amount of cash equal to sixtypercent (60%) of the Closing Aggregate Notional Value.

 

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(d)           The “**Closing Aggregate Stock Consideration,**” asmay be adjusted pursuant to **Section 2.14,**is a number of shares of Parent Common Stock equal to (i) forty percent(40%) of the Closing Aggregate Notional Value divided by (ii) the ParentCommon Stock Value.

 

(e)           The **“Parent Common Stock Value”**shall mean theaverage closing price of the Parent Common Stock on the New York Stock Exchange(“**NYSE**”), as reported in the *Wall Street Journal*, for the 10consecutive trading days ending on the third trading day prior to the ClosingDate; provided, however, (i) if such average closing priceis greater than $65.50, the term Parent Common Stock Value shall mean $65.50,and (ii) if such average closing price is less than $60.50, the termParent Common Stock Value shall mean $60.50. The Parent Common Stock Valueshall be calculated to the nearest one one-hundredth of a cent.

 

(f)            The “**Aggregate Actual Value**” means the sum of (i) theClosing Aggregate Cash Consideration and (ii) the product of (x) theClosing Aggregate Stock Consideration and (y) the Parent Common StockValue calculated without regard to the proviso in **Section 2.1(e)**.

 

(g)           The “**Closing Per Share Merger Consideration**”equals the amount (calculated to the nearest one one-hundredth of one cent)determined by dividing (i) the sum of (x) the Aggregate Actual Valueplus (y) the product of (A) the aggregate number of shares of CompanyCommon Stock subject to Options (assuming acceleration of the vesting of all ofthe Options), multiplied by (B) the weighted average exercise price of the Options,by (ii) the sum of (x) the number of shares of Company Common Stockoutstanding as of the Effective Time plus (y) the aggregate number ofshares of Company Common Stock subject to Options (assuming acceleration of thevesting of all of the Options).

 

2.2           Conversion of Shares.  At the Effective Time, by virtue of the Mergerand without any action on the part of Parent, Merger Sub or the Company or anyholders of shares of Company Common Stock:

 

(a)           Conversion ofMerger Sub Common Stock.  Each share ofMerger Sub common stock, par value $0.01 per share (“**Merger Sub Common Stock**”), that is issued and outstandingimmediately prior to the Effective Time shall be converted into one validlyissued, fully paid and nonassessable share of common stock, par value $0.01 pershare, of the Surviving Corporation, and the shares of the SurvivingCorporation into which the shares of Merger Sub Common Stock are so convertedshall be the only shares of the Surviving Corporation that are issued andoutstanding immediately after the Effective Time. Following the Effective Time,each certificate evidencing ownership of shares of Merger Sub Common Stockshall evidence ownership of such shares of the Surviving Corporation.

 

(b)           Cancellation ofCertain Company Common Stock.  Eachshare of Company Common Stock that is owned by the Company as treasury stock,if any, and all shares of Company Common Stock that are owned by Parent, MergerSub or any other direct or indirect wholly-owned Subsidiary of Parent or anySubsidiary of the Company, immediately prior to the Effective Time shall becanceled and shall cease to exist, and no consideration shall be delivered inexchange therefor.

 

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(c)           Company CommonStock.  Each share of Company CommonStock issued and outstanding immediately prior to the Effective Time (otherthan shares to be cancelled pursuant to **Section 2.2(b) **andDissenting Shares) shall be converted into the right to receive:

 

(i)         inthe case of Company Common Stock held by holders other than the PrincipalStockholders, an amount of cash equal to the Closing Per Share MergerConsideration; and

 

(ii)        inthe case of Company Common Stock held by the Principal Stockholders, acombination of cash and shares of Parent Common Stock equal in value to theClosing Per Share Merger Consideration, where (x) the number of shares ofParent Common Stock to be issued equals (A) the Closing Aggregate StockConsideration divided by (B) the number of shares of Company Common Stockheld by the Principal Stockholders immediately prior to the Effective Time and (y) theamount of cash equals the difference between (A) the Closing Per ShareMerger Consideration and (B) the product of the Parent Common Stock Valuecalculated without regard to the proviso in **Section 2.1(e) **andthe number of shares determined pursuant to clause (x) of this **Section 2.2(c)(ii)**; as well as theTrue Up Per Share Merger Consideration, if any, in accordance with **Section 2.13** and the Earn OutAdjustment Amount, if any, in accordance with **Section 2.15**.The number of shares of Parent Common Stock to be issued shall be calculated tothe nearest one ten-thousandth of a share.

 

(d)           All shares ofCompany Common Stock, when so converted, shall no longer be outstanding andshall automatically be cancelled and retired and shall cease to exist, and eachholder of a Certificate representing any such shares of Company Common Stockshall cease to have any rights with respect thereto, except (i) in thecase of the holders of Company Common Stock other than the PrincipalStockholders, the right to receive the Closing Per Share Merger Considerationtherefor upon the surrender of such Certificate at the Closing or in accordancewith **Section 2.7**, withoutinterest and (ii) in the case of the Principal Stockholders, the right toreceive the consideration described in **Section 2.2(c)(ii) **aswell as the True Up Per Share Merger Consideration, if any, in accordance with **Section 2.13** and the Earn OutAdjustment Amount, if any, in accordance with **Section 2.15**.

 

2.3           Fractional Shares.  No certificates or scrip representingfractional shares of Parent Common Stock shall be issued to the PrincipalStockholders, and such Principal Stockholders shall not be entitled to anyvoting rights, rights to receive any dividends or distributions or other rightsas a stockholder of Parent with respect to any fractional shares of ParentCommon Stock that would have otherwise been issued to such PrincipalStockholders. In lieu of any fractional shares of Parent Common Stock thatwould have otherwise been issued, each Principal Stockholder that would havebeen entitled to receive a fractional share of Parent Common Stock (afteraggregating all fractional shares of Parent Common Stock that would be receivedby such Principal Stockholder) shall, upon surrender of such person’sCertificates at the Closing, receive a cash payment equal to the Parent CommonStock Value multiplied by such fraction.

 

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2.4           Escrow Account. At the Closing, an amount of cash equal to ten percent (10%) of theAggregate Actual Value (the “**Initial****Escrow Amount**”) shall be deliveredby Parent or the Surviving Corporation to the Escrow Agent, in lieu ofdelivering such amounts to the Principal Stockholders, for deposit into aseparate account (the **“Escrow Account”**)in accordance with the terms of the Escrow Agreement.

 

2.5           Reclassification of Parent Securities.  If, at any time during the period between thedate of this Agreement and the Effective Time (or any later time at whichshares of Parent Common Stock are to be issued pursuant to this Agreement), anychange in the outstanding shares of capital stock of Parent shall occur as aresult of any reclassification, recapitalization, stock split (including areverse stock split) or combination, exchange or readjustment of shares, or anystock dividend or stock distribution with a record date during such period, theprovisions of this **Article II**shall be equitably adjusted.

 

2.6           Options.  Atthe Effective Time, each then-outstanding option to purchase shares of CompanyCommon Stock (collectively, the “**Options**”)under the Company’s 2001 Stock Option Plan (Amended and Restated as of March 1,2004) (the “**Company Option Plan**”),including unvested Options, shall be cancelled and the Option holder shall havethe right to receive (i) in the case of an Option having a per shareexercise price less than the Closing Per Share Merger Consideration, an amount(subject to any applicable withholding tax) in cash equal to the product of (A) thenumber of shares of Company Common Stock subject to such Option immediatelyprior to the Effective Time and (B) the amount by which the Closing PerShare Merger Consideration exceeds the per share exercise price of such Option;or (ii) in the case of an Option having a per share exercise price equalto or greater than the Closing Per Share Merger Consideration, no payment ofcash or issuance of other securities in respect thereof.  The cancellation of an Option as provided inthe immediately preceding sentence shall be deemed a release of any and allrights the holder thereof had or may have had in respect of such Option.  Subject to the prior receipt of anacknowledgment of the release described in the immediately preceding sentencesigned by such holders of Options, amounts to be paid pursuant to this **Section 2.6** shall be paid to thePrincipal Stockholders and the holders of Company Common Stock set forth in **Section 1.2** of the Company DisclosureSchedule at the Closing and to other holders of Options within three (3) BusinessDays following the Closing Date.

 

2.7           Exchange Procedures.  As soon as reasonably practicable after theEffective Time (and in any event within three (3) Business Days after theEffective Time), the Surviving Corporation shall use reasonable best efforts tomail to each holder of a certificate or certificates which immediately prior tothe Effective Time represented outstanding shares of Company Common Stock (the “**Certificates**”), other than the PrincipalStockholders and the Company stockholders listed on **Schedule 1.2**, (i) a letter of transmittal which shallspecify that delivery shall be effective, and risk of loss and title to theCertificates shall pass, only upon delivery of the Certificates to theSurviving Corporation, and which letter shall be in customary form and havesuch other provisions as Parent may reasonably specify, including with respectto title, and (ii) instructions for effecting the surrender of suchCertificates in exchange for such holder’s Closing Per Share MergerConsideration.  Upon surrender of aCertificate to the Surviving Corporation together with such letter oftransmittal, duly executed and completed in accordance with the instructionsthereto, and such other documents as may reasonably be required by theSurviving Corporation, the holder of such Certificate shall be entitled toreceive in exchange therefor the 

 

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Closing Per Share MergerConsideration multiplied by the number of shares of Company Common Stockrepresented by such Certificate.  In theevent of a transfer of ownership of Company Common Stock which is notregistered in the transfer records of the Company, the Closing Per Share MergerConsideration to which such holder is entitled pursuant to **Section 2.2**, may be delivered withrespect to such shares to such a transferee if the Certificate representingsuch shares is presented to the Surviving Corporation, accompanied by alldocuments required to evidence and effect such transfer and to evidence thatany applicable stock transfer Taxes have been paid.

 

2.8           No Liability. None of Parent, Merger Sub, the Company or the Surviving Corporationshall be liable to any Person in respect of any merger consideration delivered,in good faith, to a public official pursuant to any applicable abandonedproperty, escheat or similar Law.

 

2.9           Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, upon themaking of an affidavit of that fact by the Person claiming such Certificate tobe lost, stolen or destroyed, the Surviving Corporation shall deliver inexchange for such lost, stolen or destroyed Certificate pursuant to thisAgreement the merger consideration with respect to the shares of Company CommonStock formerly represented by such Certificate.

 

2.10         Withholding Rights. Each of the Surviving Corporation and Parent shall be entitled to deductand withhold from the merger consideration otherwise payable pursuant to thisAgreement to any holder of shares of Company Common Stock such amounts as it isrequired to deduct and withhold with respect to the making of such paymentunder the Code and the rules and regulations promulgated thereunder, orany provision of a Tax Law.  To theextent that amounts are so withheld by the Surviving Corporation or Parent, asthe case may be, such withheld amounts shall be treated for all purposes ofthis Agreement as having been paid to the holder of the shares of CompanyCommon Stock in respect to which such deduction and withholding was made by theSurviving Corporation or Parent, as the case may be.

 

2.11         Transfer Books. The transfer books of the Company shall be closed immediately upon theEffective Time and there shall be no further registration of transfers ofshares of Company Common Stock thereafter on the records of the Company.  On or after the Effective Time, anyCertificates presented to Parent or the Surviving Corporation for any reasonshall be converted into the applicable Closing Per Share Merger Considerationwith respect to the shares of Company Common Stock formerly representedthereby.

 

2.12         Appraisal Rights. Notwithstanding anything in this Agreement to the contrary, shares ofCompany Common Stock that are issued and outstanding immediately prior to theEffective Time and which are held by stockholders who properly exerciseappraisal rights, if any, with respect thereto in accordance with Section 262of the DGCL (the “**Dissenting Shares**”)shall not be converted into or be exchangeable for the right to receive theClosing Per Share Merger Consideration and holders thereof (“**Dissenting Stockholders**”) shall be entitledto receive only the appraised value of such shares in accordance with Section 262of the DGCL, unless and until such holders shall have failed to perfect orshall have effectively withdrawn or lost their rights to appraisal under theDGCL.  If any Dissenting Stockholdersshall have failed to perfect or shall have effectively withdrawn or lost suchright, such holder’s shares of Company Common Stock shall thereupon beconverted into and become exchangeable for the right to receive, as of the 

 

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Effective Time, theapplicable Closing Per Share Merger Consideration without any interest thereon.  The Company shall give Parent (i) promptnotice of any written demands for appraisal of any shares, attemptedwithdrawals of such demands and any other instruments served pursuant to Section 262of the DGCL and received by the Company relating to a stockholder’s rights ofappraisal, if applicable, and (ii) the opportunity to participate in allnegotiations and proceedings with respect to demands for appraisal under theDGCL.  Neither the Company nor theSurviving Corporation shall, except with the prior written consent of Parent,voluntarily make any payment with respect to, or settle or offer to settle, anysuch demand for payment.

 

2.13         Net WorkingCapital Adjustment; Cash Adjustment; Deferred Subscription Revenue Adjustment.

 

(a)        Estimated Amounts.  No later than the three (3) BusinessDays prior to the scheduled Closing Date, the Company shall deliver to Parent astatement setting forth (i) the Company’s estimate of Closing Cash (“**Estimated Closing Cash**”), (ii) theCompany’s estimate of Closing Indebtedness (“**EstimatedClosing Indebtedness**”), (iii) the Company’s estimate of ClosingWorking Capital (“**Estimated Closing WorkingCapital**”), and (iv) the Company’s estimate of Closing DeferredSubscription Revenue (“**Estimated ClosingDeferred Subscription Revenue**”). The estimated amounts referred to in this **Section 2.13(a) **shall be prepared in good faith andshall be determined as if such amounts were the actual amounts of Closing Cash,Closing Indebtedness, Closing Working Capital and Closing Deferred SubscriptionRevenue, respectively (which amounts, both estimated and actual, shall bedetermined in accordance with U.S. generally accepted accounting principles, asapplicable, and in a manner consistent with the Company’s accountingprinciples, methodologies and practices used to prepare the Company’sconsolidated audited balance sheet for the year ended December 31, 2007(the “**Year End Balance Sheet**”) andthe Interim Balance Sheet).

 

(b)        Definitions.

 

(i)     “**Closing Cash**” means the amount of cash andcash equivalents, excluding restricted cash other than restricted cash from theTaubenstrasse lease expiring January 31, 2009, held by the Company as ofthe close of business on the Closing Date.

 

(ii)   “**ClosingDeferred Subscription Revenue**” means the Company’s deferredsubscription revenue, including both subscription related and consultingrelated deferred revenue, as of the close of business on the Closing Date.

 

(iii)  “**CompanyFinancial Advisor**” means Signal Hill Capital Group LLC.

 

(iv)  “**ClosingIndebtedness**” means any Indebtedness for borrowed money (and accruedinterest thereon) as of the close of business on the Closing Date, settlementof interest rate swaps to be settled as of or after the Closing Date, andamounts owed to the Company Financial Advisor, the Company’s legal counsel andany other amounts owed for the 

 

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Company’s transactionrelated expenses in connection with the Merger at or following the ClosingDate.

 

(v)   “**ClosingWorking Capital**” means the difference, as of the close of businesson the Closing Date, between (x) the current assets of the Company,including billed accounts receivable, unbilled accounts receivable, prepaidexpenses and other current assets of the Company, but excluding Closing Cashand restricted cash, and (y) the current liabilities of the Company,including accounts payable, accrued liabilities, the employer portion of anyTax or Tax withholding due in connection with the exercise of any Optionspursuant to **Section 2.6**, customerdeposits and other current liabilities of the Company, but excluding ClosingIndebtedness and Closing Deferred Subscription Revenue.  For the avoidance of doubt, for purposes ofcalculating Closing Working Capital, current assets shall not include anydeferred acquisition financing costs or any portion of the deferred tax asset,and current liabilities shall include accruals for all current liabilities ofthe Company through the Closing Date, including tax and bonus accruals, and thecurrent income Tax impact from the Company’s payment of bonuses immediatelyprior to Closing will not be included in the calculation of Closing WorkingCapital.

 

(c)        Closing Amounts.  Within thirty (30) days after the ClosingDate, Parent shall deliver to the Principal Stockholders a statement settingforth Parent’s calculation of each of Closing Cash, Closing Indebtedness,Closing Working Capital and Closing Deferred Subscription Revenue (the “**Closing Date Schedule**”).

 

(d)        Review.  The Principal Stockholders shall have thirty(30) days following the date of delivery of the Closing Date Schedule to notifyParent in writing of any objection (the “**ObjectionNotice**”) they may have to Closing Cash, Closing Indebtedness,Closing Working Capital and/or Closing Deferred Subscription Revenue as setforth and calculated on the Closing Date Schedule or the Principal Stockholdersmay give Parent written notice prior to the expiration of such thirty (30) dayperiod that they agree with the Closing Date Schedule.  The Objection Notice must specify inreasonable detail the dollar amount of any objection, the basis therefor andthe proposed corrections.  Parent shallprovide the Principal Stockholders copies of all backup and work papers inconnection with the calculation of Closing Cash, Closing Indebtedness, ClosingWorking Capital and Closing Deferred Subscription Revenue as well as access toany books and records of the Company reasonably requested by the PrincipalStockholders in connection with the Principal Stockholders’ review of theClosing Date Schedule.

 

(e)        Deemed Acceptance.  Any determination set forth in the ClosingDate Schedule that is not specifically objected to in the Objection Noticeshall be deemed acceptable and shall be final and binding upon the parties.

 

(f)         No Disagreement.  If the Principal Stockholders are not givenwritten notice of Parent’s disagreement with the Objection Notice within ten (10) daysafter the receipt thereof, or if Parent has given the Principal Stockholderswritten notice that it agrees with the Objection Notice prior to the expirationof such ten (10) day period, Closing Cash, Closing Indebtedness, 

 

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Closing Working Capital andClosing Deferred Subscription Revenue as adjusted by the Objection Notice shallbe deemed acceptable and shall be final and binding upon the parties.

 

(g)        Review by Accountant.  If the Principal Stockholders provide Parentwith an Objection Notice and Parent disagrees with the Objection Notice, Parentshall give the Principal Stockholders written notice, within ten (10) daysof receipt of the Objection Notice, of any disagreement with the ObjectionNotice.  Any determination set forth inthe Objection Notice that is not specifically objected to in Parent’s writtennotice of disagreement shall be deemed acceptable and shall be final andbinding upon the parties.  If Parent hasgiven notice of its disagreement with the Objection Notice, and Parent and thePrincipal Stockholders are unable to resolve the disagreement within ten (10) daysof receipt of Parent’s notice of disagreement, the determination of ClosingCash, Closing Indebtedness, Closing Work Capital and/or Closing DeferredSubscription Revenue, as applicable, shall be determined by an independentpublic accounting firm mutually agreed to by the Principal Stockholders andParent (“**Independent Accountant**”).  Parent and the Principal Stockholders shallprovide the Independent Accountant with their respective determinations ofClosing Cash, Closing Indebtedness, Closing Working Capital and ClosingDeferred Subscription Revenue, as applicable. The Independent Accountant shall be instructed to render its decision inaccordance with the terms of this Agreement and shall consider only those itemsor amounts that are the subject of disagreement between the parties and issuesdirectly affected by such items.  TheIndependent Accountant shall deliver to Parent and the Principal Stockholdersas promptly as practicable, but in no event later than sixty (60) days afterthe Independent Accountant is engaged, a written report setting forth itsresolution and, if applicable, its calculation of the disputed items oramounts, which shall be final and binding on the parties.  In no event shall the Independent Accountant’sdetermination result in (i) Closing Cash that is less than that set forthin the Closing Date Schedule or greater than that set forth in the ObjectionNotice, (ii) Closing Indebtedness that is greater than that set forth inthe Closing Date Schedule or less than that set forth in the Objection Notice, (iii) ClosingWorking Capital that is less than that set forth in the Closing Date Scheduleor greater than that set forth in the Objection Notice, or (iv) ClosingDeferred Subscription Revenue that is greater than that set forth in theClosing Date Schedule or less than that set forth in the Objection Notice.  The parties shall promptly comply with allreasonable requests by the Independent Accountant for information, books,records and similar items.  The fees andexpenses relating to such review and report from the Independent Accountantshall be allocated between the Principal Stockholders, on the one hand, andParent, on the other hand, in inverse proportion to the resolution of thedisagreements by the Independent Accountant such that the party or partieswhose determination of Closing Cash, Closing Indebtedness, Closing WorkingCapital and/or Closing Deferred Subscription Revenue (as applicable) as firstsubmitted to the Independent Accountant is closer to the Independent Accountant’sdetermination of Closing Cash, Closing Indebtedness, Closing Working Capitaland/or Closing Deferred Subscription Revenue (as applicable) pays a smallerpercentage of such fees and expenses (such smaller percentage of fees andexpenses derived from dividing (x) the absolute value of the differencebetween the Independent Accountant’s determination of the amount in questionand the closer amount submitted, by (y) the absolute value of thedifference between the amounts submitted to the Independent Accountant by thetwo parties).

 

(h)        Adjustment Payment.  Within three (3) Business Days after thelast of Closing Cash, Closing Indebtedness, Closing Working Capital and ClosingDeferred Subscription 

 

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Revenue becomes final andbinding on the parties pursuant to **Sections2.13(e)**,**2.13(f) **or**2.13(g)**, as applicable, (i) Parentshall pay to the Principal Stockholders, as described in **Section 2.13(i)**, an amount equal inthe aggregate to the amount, if any, by which the Final Aggregate NotionalValue exceeds the Closing Aggregate Notional Value, or (ii) Parent shallreceive, as described in **Section 2.13(j)**,an amount equal to the amount, if any, by which the Closing Aggregate NotionalValue exceeds the Final Aggregate Notional Value (the amount of the paymentpursuant to clause (i) or clause (ii) of this **Section 2.13(h) **being referred toas the “**Adjustment Payment**”), ineither case, together with interest on the Adjustment Payment at the ratedesignated by the Escrow Agent as its prime rate in effect on the Closing Datefor the period from and including the Closing Date to, but excluding, the dateof such payment.

 

(i)         Adjustment Payment to the PrincipalStockholders.  In the event that anAdjustment Payment is to be paid to the Principal Stockholders pursuant to **Section 2.13(h)(i)**, each PrincipalStockholder shall receive, for each share of Company Common Stock owned by suchPrincipal Stockholder immediately prior to the Effective Time, a combination ofcash and Parent Common Stock (the “**True UpPer Share Merger Consideration**”), such amount to consist of (x) anumber of shares of Parent Common Stock equal to (A) forty percent (40%)of the Adjustment Payment divided by (B) the average closing price of theParent Common Stock on the NYSE, as reported in the *Wall Street Journal*, for the ten (10) consecutivetrading days ending on the third trading day prior to the scheduled date ofpayment pursuant to **Section 2.13(h) **(the“**Parent True Up Common Stock Value**”;provided, however, (i) if such average closing price isgreater than $65.50, the term Parent True Up Common Stock Value shall mean$65.50 and (ii) if such average closing price is less than $60.50, theterm Parent True Up Common Stock Value shall mean $60.50) divided by (C) thenumber of shares of Company Common Stock held by the Principal Stockholdersimmediately prior to the Effective Time and (y) an amount of cash equal to(A) sixty percent (60%) of the Adjustment Payment divided by (B) thenumber of shares of Company Common Stock held by the Principal Stockholdersimmediately prior to the Effective Time. In addition, the interest payable on the Adjustment Payment shall bepaid in cash to the Principal Stockholders on a pro rata basis in proportion tothe number of shares of Company Common Stock held by them immediately prior tothe Effective Time.  Cash amounts shallbe paid by wire transfer of immediately available funds to accounts designatedin writing by the Principal Stockholders and cash shall be paid in lieu offractional shares in a manner consistent with **Section 2.3**but applying the Parent True Up Common Stock Value.  An amount of cash equal to ten percent (10%)of the Adjustment Payment otherwise payable to the Principal Stockholders shallbe deposited into the Escrow Account (such amount, together with the InitialEscrow Amount, the “**Escrow Amount**”).  Notwithstanding anything contained herein tothe contrary, if Tax Counsel to the Company reasonably determines that theconclusion set forth in the Tax Opinion delivered at the Closing pursuant tothis Agreement would reasonably be expected to be adversely affected by theform of any such Adjustment Payment pursuant to **Section 2.13(i) **as a result of the Merger and theSubsequent Merger, taken together, potentially failing to satisfy the “continuityof interest” requirement under Treasury Regulation Section 1.368-1(e), theParent Common Stock portion of the Adjustment Payment shall be increased, andthe cash portion of the Adjustment Payment shall be correspondingly reduced(such reduction to be by an amount equal to the product of (i) the ParentTrue Up Common Stock Value and (ii) the number of shares of Parent CommonStock to be added to the Parent Common Stock portion of the AdjustmentPayment), to the minimum extent necessary so as not to adversely affect theconclusion set forth in such Tax Opinion.

 

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(j)         Adjustment Payment to Parent.  In the event that an Adjustment Payment(together with interest thereon) is to be paid to Parent pursuant to **Section 2.13(h)(ii)**, the parties shallexecute a joint instruction to the Escrow Agent for the Escrow Agent to paysuch amount to Parent out of the Escrow Account in accordance with the terms ofthe Escrow Agreement.

 

2.14         Tax Adjustment. Notwithstanding anything contained herein to the contrary, if the TaxOpinion to be delivered to the Company referred to in **Section 7.3(g) **cannot be rendered(as reasonably determined by Tax Counsel to the Company) as a result of theMerger and the Subsequent Merger, taken together, potentially failing tosatisfy the “continuity of interest” requirement under Treasury Regulation Section 1.368-1(e),the Closing Aggregate Stock Consideration shall be increased, and the ClosingAggregate Cash Consideration shall be correspondingly reduced (such reductionto be by an amount equal to the product of (i) the Parent Common StockValue, and (ii) the number of shares of Parent Common Stock to be added tothe Closing Aggregate Stock Consideration), to the minimum extent necessary toenable the Tax Opinion to be rendered.

 

2.15         Earn OutAdjustment.

 

(a)        Within three (3) Business Days ofpayment by Parent or the Surviving Corporation or any of their respectiveAffiliates of the earn out amount pursuant to the agreement for the sale andpurchase of the entire issued share capital of Supplier Business Limited, datedNovember 2, 2007, by and between Edmund Paul Chew and Global InsightLimited (the “**Supplier Business Earn Out**”)(i) Parent shall pay to the Principal Stockholders, as described in **Section 2.15(b)**, an amount equal inthe aggregate to the amount, if any, by which the Supplier Business Earn Out isless than £500,000, or (ii) Parent shall receive, as described in **Section 2.15(c)**, an amount equal tothe amount, if any, by which the Supplier Business Earn Out is greater than£500,000; provided, however, that in no event shall the amountParent receives pursuant to this **Section 2.15(a)(ii) **exceed$668,442 (the amount of the payment pursuant to clause (i) or clause (ii) ofthis **Section 2.15(a)**, whichis to be made in U.S. dollars at the exchange rate reported in the *Wall Street Journal* on the day followingthe date of payment of the Supplier Business Earn Out, being referred to as the“**Earn Out Adjustment Amount**”).

 

(b)        Earn Out Adjustment Amount Paid toPrincipal Stockholders.  In the eventthat the Earn Out Adjustment Amount is to be paid to the Principal Stockholderspursuant to **Section 2.15(a)(i)**,each Principal Stockholder shall receive, on a pro rata basis in proportion tothe number of shares of Company Common Stock held by them immediately prior tothe Effective Time, a combination of cash and Parent Common Stock, such amountto consist of (x) a number of shares of Parent Common Stock equal to (A) fortypercent (40%) of the Earn Out Adjustment Amount divided by (B) the averageclosing price of the Parent Common Stock on the NYSE, as reported in the *Wall Street Journal*, for the ten (10) consecutivetrading days ending on the third trading day prior to the scheduled date ofpayment (the “**Parent Earn Out Common StockValue**”) and (y) an amount of cash equal to sixty percent (60%)of the Earn Out Adjustment Amount.  Cashamounts shall be paid by wire transfer of immediately available funds toaccounts designated in writing by the Principal Stockholders and cash shall bepaid in lieu of fractional shares in a manner consistent with **Section 2.3** but applying the ParentEarn Out Common Stock Value. Notwithstanding anything contained herein to the contrary, if TaxCounsel to the Company reasonably determines that the conclusion set forth inthe Tax Opinion delivered at the 

 

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Closing pursuant to thisAgreement would reasonably be expected to be adversely affected by the form ofany such Earn Out Adjustment Amount pursuant to **Section 2.15(b) **as a result of the Merger and theSubsequent Merger, taken together, potentially failing to satisfy the “continuityof interest” requirement under Treasury Regulation Section 1.368-1(e), theParent Common Stock portion of the Earn Out Adjustment Amount shall beincreased, and the cash portion of the Earn Out Adjustment Payment shall becorrespondingly reduced (such reduction to be by an amount equal to the productof (i) the Parent Earn Out Common Stock Value and (ii) the number ofshares of Parent Common Stock to be added to the Parent Common Stock portion ofthe Earn Out Adjustment Payment), to the minimum extent necessary so as not toadversely affect the conclusion set forth in such Tax Opinion.

 

(c)        Earn Out Adjustment Amount Paid toParent.  In the event that the EarnOut Adjustment Amount is to be paid to Parent pursuant to **Section 2.15(a)(ii)**, the parties shallexecute a joint instruction to the Escrow Agent for the Escrow Agent to paysuch amount to Parent out of the Escrow Account in accordance with the terms ofthe Escrow Agreement.

 

2.16         Election for a Taxable Transaction.  No later than two (2) Business Daysprior to the scheduled Closing Date, the Principal Stockholders may elect, intheir sole discretion, to waive any actions, covenants and conditions requiredunder this Agreement that are intended to have the Merger and the SubsequentMerger, taken together, qualify as a reorganization within the meaning of Section 368(a)of the Code.  Without limiting thegenerality of the foregoing, as a result of such an election, the closingcondition set forth in **Section 7.3(g) **shallbe deemed waived by the Company, the adjustments described in the last sentenceof **Section 2.13(i)**, in **Section 2.14**, and in the last sentenceof **Section 2.15(b) **shallnot be given effect, and the covenant set forth in **Section 5.3**shall be deemed waived by the Company.

 

**ARTICLE III**

** **

**REPRESENTATIONSAND WARRANTIES OF THE COMPANY**

 

Except as set forth in thedisclosure schedule delivered on the date hereof by the Company to Parent (the “**Company Disclosure Schedule**”) (it beingunderstood that any disclosure set forth with respect to any particular sectionof the Company Disclosure Schedule shall be deemed to be disclosed in referenceto all other applicable sections of this **Article III**where the relevance of such information to such other sections is reasonablyapparent on its face), the Company hereby represents and warrants to Parent, asof the date hereof and as of the Closing Date, as follows:

 

3.1           Organizationand Qualification; Subsidiaries.

 

(a)        The Company is a corporation dulyorganized, validly existing and in good standing under the Laws of the State ofDelaware and each of its Subsidiaries is a corporation duly organized, validlyexisting and (to the extent applicable) in good standing under the Laws of thejurisdiction of its incorporation, except where failure to be in good standingwould not reasonably be expected to have, individually or in the aggregate, aCompany Material Adverse Effect.  TheCompany and each of its Subsidiaries has all requisite power and authority toown, lease and operate its properties and to carry on its businesses as now conducted,except where 

 

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failure to have such powerand authority would not reasonably be expected to have, individually or in theaggregate, a Company Material Adverse Effect.

 

(b)**        Section 3.1(b) **of the CompanyDisclosure Schedule sets forth a list of all Subsidiaries of the Company.

 

(c)        Each of the Company and its Subsidiariesis duly qualified or licensed and in good standing to do business in eachjurisdiction in which the property owned, leased or operated by it or thenature of the business conducted by it makes such qualification or licensingnecessary, except where failure to be so qualified or licensed and in goodstanding would not reasonably be expected to have, individually or in theaggregate, a Company Material Adverse Effect.

 

(d)        The Company has heretofore madeavailable to Parent accurate and complete copies of the certificate ofincorporation and bylaws of the Company and each of its Subsidiaries (or theapplicable organizational documents for such Subsidiaries) as currently in effect.

 

3.2           Capitalizationof the Company and its Subsidiaries.

 

(a)        The authorized capital stock of theCompany consists of 112,500,000 shares of Company Common Stock.  As of September 17, 2008, (i) 52,652,675shares of Company Common Stock are issued and outstanding, all of which arevalidly issued, fully paid and non-assessable, (ii) no shares of CompanyCommon Stock are held in the treasury of the Company, (iii) no shares ofCompany Common Stock are held by any Subsidiary, (iv) 17,334,100 shares ofCompany Common Stock are reserved for issuance upon conversion of Company’soutstanding 7% convertible demand notes (the “**ConvertibleNotes**”), all of which are held by the Principal Stockholders andwill be converted immediately prior to the Effective Time and (v) 10,212,181shares of Company Common Stock are reserved for issuance pursuant tooutstanding employee stock options pursuant to the Company Option Plan.  Except as set forth in this **Section 3.2(a) **and except for theCompany Stockholder’s Agreement, there are no options, warrants, convertible orexchangeable securities, unissued capital stock of the Company or anySubsidiary or other agreements obligating the Company or any Subsidiary toissue or sell any shares of capital stock of, or other equity interests in, theCompany or any Subsidiary, and there are no bonds, debentures, notes or otherindebtedness having the right to vote on matters submitted to the Company’sstockholders.  All shares of CompanyCommon Stock reserved for issuance under the Company Option Plan or theConvertible Notes, upon issuance on the terms and conditions specified in theinstruments pursuant to which they are issuable, will be validly issued, fullypaid and nonassessable.  Except as set forthin **Section 3.2(a) **of theCompany Disclosure Schedule, there are no outstanding contractual obligationsof the Company or any Subsidiary to repurchase, redeem or otherwise acquire anyshares of Company Common Stock or any capital stock of any Subsidiary.  Each outstanding share of capital stock ormembership interest of each Subsidiary is duly authorized, validly issued,fully paid and nonassessable, (to the extent such terms are applicable) andeach such share or interest is owned by the Company or another Subsidiary freeand clear of all Liens other than Permitted Liens.  The authorized, issued and outstanding sharesof capital stock or membership interests of each of the Company’s Subsidiariesand its jurisdiction of incorporation or organization is set forth in **Section 3.2(a) **of the CompanyDisclosure Schedule.

 

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(b)        A true and complete list of recordholders of the issued and outstanding Company Common Stock as of the datehereof, including the number of shares of Company Common Stock owned by eachholder, is set forth in **Section 3.2(b) **ofthe Company Disclosure Schedule**.**

 

(c)**        Section 3.2(c) **of the CompanyDisclosure Schedule sets forth a true and complete list, by Option holder, ofoutstanding Options as of the date hereof including the number of Optionsgranted, the date of grant and the applicable exercise price.  The Company Option Plan authorizes thecancellation of Options at the Effective Time as provided in **Section 2.6**.

 

(d)        There are no agreements of stockholders,voting trusts or other agreements to which the Company or any of itsSubsidiaries is a party or to which it is bound relating to the voting of anyshares of Company Common Stock (other than the Voting Agreement).

 

(e)**        Section 3.2(e) **of the CompanyDisclosure Schedule sets forth the equity interests held by the Company inentities other than Subsidiaries.

 

3.3           AuthorityRelative to this Agreement; Consents and Approvals.

 

(a)        Subject to the Company Requisite Vote,the Company has all necessary corporate power and authority to execute anddeliver this Agreement and to consummate the transactions contemplatedhereby.  No other corporate proceedingson the part of the Company are necessary to authorize this Agreement or toconsummate the transactions contemplated hereby (other than, in respect of theMerger and this Agreement, the Company Requisite Vote).  This Agreement has been duly and validlyexecuted and delivered by the Company and, assuming due authorization,execution and delivery by Parent and Merger Sub, constitutes a valid, legal andbinding agreement of the Company, enforceable against the Company in accordancewith its terms, except that such enforcement may be subject to any bankruptcy,insolvency or reorganization Laws, now or hereafter in effect, affecting theenforceability of creditors’ rights generally and by general equitableprinciples which may limit the right to obtain equitable remedies (regardlessof whether such enforceability is considered in a proceeding in equity or Law).

 

(b)        The Board of Directors of the Company(the “**Company Board**”) has duly andvalidly authorized the execution and delivery of this Agreement and approvedthe consummation of the transactions contemplated hereby, and taken all actionsrequired to be taken by the Company Board for the consummation of thetransactions contemplated hereby, including the Merger, and has resolved (i) thatthis Agreement and the transactions contemplated hereby, including the Merger,taken together, are advisable and fair to, and in the best interests of, the Companyand its stockholders, and (ii) to recommend that the stockholders of theCompany approve the Merger and approve and adopt this Agreement.  The Company Board has directed that thisAgreement be submitted to the stockholders of the Company for their approval.  The affirmative approval of the holders of amajority of the outstanding shares of Company Common Stock (the “**Company Requisite Vote**”) is the only voteof the holders of any class or series of Company capital stock necessary toadopt this Agreement and approve the transactions contemplated hereby,including the Merger.  The VotingAgreement has been executed by holders of the requisite number of shares ofCompany Common Stock necessary to effect the Company Requisite Vote.

 

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(c)           Exceptas set forth in **Section 3.3(c) **ofthe Company Disclosure Schedule and except for the filing and recordation ofthe Certificate of Merger as required by DGCL and filings required under theHSR Act, no filing with or notice to, and no permit, authorization, consent orapproval of, any court or tribunal or administrative, governmental orregulatory body, agency or authority (a “**GovernmentalEntity**”) is necessary for the execution and delivery by the Companyof this Agreement or the consummation by the Company of the transactionscontemplated hereby.

 

3.4           FinancialInformation.  Attached hereto as **Section 3.4**of the Company DisclosureSchedule are the consolidated audited balance sheets and related statements ofoperations, stockholders’ equity and cash flow of the Company and itsSubsidiaries for the fiscal years ended December 31, 2005, December 31,2006 and December 31, 2007 and the consolidated unaudited interim balancesheet (the “**Interim Balance Sheet**”)and related statements of operations, stockholders’ equity and cash flow of theCompany and its Subsidiaries for the six month period ended June 30, 2008(collectively, the “**Financial Statements**”).The Financial Statements (i) were prepared in accordance with U.S.generally accepted accounting principles applied on a consistent basisthroughout the periods indicated (except as may be indicated in the notesthereto) and (ii) fairly present, in all material respects, theconsolidated financial position, results of operations and cash flows of theCompany and its consolidated Subsidiaries as at the respective dates thereofand for the respective periods indicated therein, except as otherwise notedtherein (subject, in the case of unaudited statements, to normal and recurringyear-end adjustments).

 

3.5           Absence ofUndisclosed Liabilities.  Except asset forth in **Section 3.5** ofthe Company Disclosure Schedule, the Company does not have any materialliabilities or obligations of any nature (whether known or unknown, absolute,accrued, contingent or otherwise, and whether due or to become due) that arerequired to be set forth on a balance sheet prepared in accordance with U.S.generally accepted accounting principles (or in the notes thereto), except for:(a) liabilities or obligations disclosed, reflected or reserved against inthe Financial Statements, including the notes thereto; and (b) currentliabilities incurred in the ordinary course of business since the date of theInterim Balance Sheet.

 

3.6           Compliance withLaws; Permits.  Except as set forthin **Section 3.6** of the CompanyDisclosure Schedule, since January 1, 2005, the operation of the businessof the Company and its Subsidiaries has been conducted in all material respectsin accordance with all applicable laws, ordinances, regulations, codes, orders,judgments, injunctions, awards, decrees and other requirements of anyGovernmental Entity (collectively, “**Laws**”).The Company and its Subsidiaries have not received any written notice by anyGovernmental Entity of any charge that the Company or a Subsidiary violated anyapplicable Law in any material respect. The Company and its Subsidiaries haveall material permits, licenses, franchises and other governmentalauthorizations (collectively, the “**MaterialPermits**”) necessary for the conduct of their business and suchMaterial Permits are valid and in full force and effect.

 

3.7           Noncontravention. Except as set forth in **Section 3.7** of the Company DisclosureSchedule, the execution and delivery of this Agreement does not, and theperformance of this Agreement by the Company and the consummation of thetransactions contemplated hereby will not: (i) violate the Certificate ofIncorporation or Bylaws of the Company or the certificate of incorporation,bylaws or other organizational document of any of the Company’s Subsidiaries; 

 

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(ii) violate,conflict with, constitute (or with notice or lapse of time or both wouldconstitute) a default or require consent from a third party under any contract,instrument or other agreement to which the Company or its Subsidiaries is aparty or by or to which any of them or any of their respective assets orproperties is bound or subject; (iii) result in the creation or impositionof any Lien upon any property of the Company or its Subsidiaries; or (iv) violateany Law binding upon or applicable to the Company or its Subsidiaries or uponthe properties, assets or business of the Company or its Subsidiaries, exceptwith respect to clauses (ii), (iii) and (iv), for any such conflicts,violations, breaches, defaults or other occurrences which would not reasonablybe expected to have, individually or in the aggregate, a Company MaterialAdverse Effect. In addition, **Section 3.7**of the Company Disclosure Schedule contains a list of consentsrequired under contracts with third parties; provided, however,that the parties agree that no representation or warranty is made as to theaccuracy or completeness of such list other than the representations andwarranties made in the first sentence of this **Section 3.7.**

 

3.8           Litigation.  Except as set forth in **Section 3.8** of the Company DisclosureSchedule, as of the date hereof, there are no actions, suits, proceedings orinvestigations at law or in equity before or by any court or Governmental Entityor any written claims (“**Proceedings**”)pending or, to the Knowledge of the Company, threatened against the Company orits Subsidiaries. There are no judgments, orders, decrees, stipulations orinjunctions outstanding against the Company or any Subsidiary. There are noProceedings pending in which the Company or its Subsidiaries is a plaintiff. Exceptas set forth in **Section 3.8**of the Company Disclosure Schedule, the Company and its Subsidiaries have notengaged in or been party to any Proceedings within the eighteen (18) monthperiod prior to the date hereof.

 

3.9           Material Contracts.

 

(a)           Subsections(i) through (xv) of **Section 3.9(a) **ofthe Company Disclosure Schedule contain a list of the following types ofcontracts and agreements to which the Company or any Subsidiary is a party asof the date hereof (such contracts, agreements and arrangements as are requiredto be set forth in **Section 3.9**of the Company Disclosure Schedule being the “**MaterialContracts**”):

 

(i)         each contract and agreement which (A) generatedconsulting revenue in excess of $200,000 during the period from July 1,2007 through June 30, 2008, (B) is a customer subscription agreementin which the contract value as of June 30, 2008 exceeds $200,000, or (C) isa data supply contract in which the Company or its Subsidiaries expensed$100,000 or more during the period July 1, 2007 through June 30,2008;

 

(ii)        all material broker, dealer, manufacturer’srepresentative, franchise, sales promotion, marketing, and advertisingcontracts and agreements to which the Company or any Subsidiary is a party;

 

(iii)       all contracts (excluding contracts foremployment) involving the payment of royalties or other amounts calculatedbased upon the revenues or income of the Company or any Subsidiary or income or

 

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revenues related to any product of the Company or any Subsidiary towhich the Company or any Subsidiary is a party;

 

(iv)       all contracts and agreements evidencingindebtedness for borrowed money;

 

(v)        all contracts and agreements that limit, orpurport to limit, the ability of the Company or any Subsidiary to compete inany line of business or with any person or entity or in any geographic area orduring any period of time;

 

(vi)       all contracts or arrangements that result in anyperson or entity holding a power of attorney from the Company or any Subsidiarythat relates to the Company, any Subsidiary or their respective businesses,except for powers of attorney made in the ordinary course of business outsidethe U.S.;

 

(vii)      employment agreements or employee contracts,other than those relating to non-U.S. employees earning an annual salary lessthan one hundred fifty thousand dollars ($150,000), offer letters relating toU.S. employees and confidentiality, proprietary rights and non-competitionagreements entered into with employees;

 

(viii)     consulting agreements, other than those for whichannual consulting fees are less than $100,000;

 

(ix)       deferred compensation agreements;

 

(x)        material office leases with annual leasepayments greater than $600,000 exclusive of operating costs;

 

(xi)       all inbound software licenses other thanstandard form inbound software licenses granting rights to use commerciallyavailable software;

 

(xii)      mortgage, pledge, security agreement, deed oftrust, financing statement or other document granting a material Lien, otherthan Permitted Liens;

 

(xiii)     guarantees of indebtedness, liabilities orobligations of persons other than the Company or the Company’s Subsidiaries;

 

(xiv)     agreements, contracts, or arrangements pursuant towhich the Company or any of its Subsidiaries has entered into a joint venture,other than with respect to product development, teaming and similar agreements,and marketing agreements, in each case made in the ordinary course of business;and

 

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(xv)      all other contracts and agreements, whether ornot made in the ordinary course of business, the absence of which wouldreasonably be expected to have, individually or in the aggregate, a CompanyMaterial Adverse Effect.

 

(b)           Exceptas disclosed in **Section 3.9(b) **ofthe Company Disclosure Schedule (i) each Material Contract is a legal,valid and binding agreement (or in the case of Material Contracts described in **Section 3.9(a)(i)**, were legal, validand binding until such time as each such contract expired in accordance withits terms), and none of the Material Contracts is in default by its terms orhas been canceled by the other party; (ii) to the Company’s Knowledge, noother party is in breach or violation of, or default under, any MaterialContract; and (iii) the Company and the Subsidiaries are not in receipt ofany claim of default under any such agreement. The Company has furnished ormade available to Parent true and complete copies of all Material Contracts,including any amendments thereto.

 

(c)           SinceMay 7, 2001, the Company and its Subsidiaries have not been suspended ordebarred from bidding on contracts or subcontracts for or with any GovernmentalEntity and no suspension or debarment actions have been commenced or, theKnowledge of the Company, threatened against the Company or its Subsidiaries orany of their respective officers. To the Knowledge of the Company, there is novalid basis, nor specific circumstances which with the passage of time couldbecome a valid basis, for the Company’s or its Subsidiaries’ suspension ordebarment from bidding on contracts or subcontracts for or with anyGovernmental Entity. The Company and its Subsidiaries have conducted theiroperations in compliance in all material respects with the requirements of allLaws pertaining to all governmental contracts and bids for governmentalcontracts. The Company and its Subsidiaries do not have in effect and are notrequired to have in effect any security clearances in connection with theoperation of its business. The Company and its Subsidiaries do not now have,and since May 7, 2001 have not had, any classified contracts with the U.S.Government.

 

3.10         Customer Relationships. **Section 3.10**of the Company Disclosure Schedule sets forth a true, complete and correct listof the twenty (20) largest customers of the Company (based upon revenuesrecognized for the year ended December 31, 2007). Except as set forth on **Section 3.10**of the Company DisclosureSchedule, no such customer has given the Company written notice of thetermination or any material change in the terms of its business relationshipwith the Company.

 

3.11         Intellectual Property.

 

(a)           Exceptas set forth in **Section 3.11(a) **ofthe Company Disclosure Schedule (i) the conduct of the business of theCompany and the Subsidiaries as currently conducted, with respect to theirowned Intellectual Property, does not infringe upon or misappropriate theIntellectual Property rights of any third party, and no claim has been assertedto the Company in writing that the conduct of the business of the Company andits Subsidiaries as currently conducted infringes upon or may infringe upon ormisappropriates the Intellectual Property rights of any third party; (ii) withrespect to each item of material Intellectual Property owned by the Company ora Subsidiary (“**Company Owned IntellectualProperty**”), the Company or a Subsidiary is the owner of the entireright, title and interest in and to such Company Owned Intellectual Propertyand is entitled to use such Company Owned Intellectual Property in the 

 

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continuedoperation of its respective business; (iii) with respect to each item ofmaterial Intellectual Property licensed to the Company or a Subsidiary (“**Company Licensed Intellectual Property**”),the Company or a Subsidiary has the right to use such Company LicensedIntellectual Property in the continued operation of its respective business inaccordance with the terms of the license agreement governing such CompanyLicensed Intellectual Property and such use is and has been in all materialrespects in accordance therewith; (iv) with respect to each item ofmaterial Intellectual Property that is currently used in the operation of thebusiness of the Company or its Subsidiaries that is not Company OwnedIntellectual Property or Company Licensed Intellectual Property, the Company ora Subsidiary has the right to use such Intellectual Property in the continuedoperation of its respective business in accordance with past practice and suchuse does not violate in any material respect the rights of the owner thereof; (v) tothe Knowledge of the Company, the Company Owned Intellectual Property is validand enforceable, and has not been adjudged invalid or unenforceable in whole orin part; (vi) each license of the Company Licensed Intellectual Propertyis valid and enforceable, to the Knowledge of the Company is binding on allparties to such license, and is in full force and effect; (vii) to theKnowledge of the Company, no party to any license of the Company LicensedIntellectual Property is in breach thereof or default thereunder; and (viii) neitherthe execution of this Agreement nor the consummation the Merger shall adverselyaffect any of the Company’s rights with respect to the Company OwnedIntellectual Property or the Company Licensed Intellectual Property.

 

(b)**           Section 3.11(b) **ofthe Company Disclosure Schedule sets forth a complete list of all registeredtrademarks.

 

(c)           TheCompany and its Subsidiaries have taken reasonable steps to protect the CompanyOwned Intellectual Property and the Company Licensed Intellectual Property bycontract. Since May 7, 2001, the Company and its Subsidiaries have generallyrequired each of their U.S. employees to execute an agreement as a condition toemployment that provides that the Company or its Subsidiaries has ownership ofall works of authorship and inventions made by their employees in the course oftheir employment.

 

(d)           Nosource code for any computer software has been delivered, licensed or madeavailable to any escrow agent or other Person who is not an employee of theCompany or its Subsidiaries.

 

3.12         Property.

 

(a)           TheCompany or its Subsidiaries owns and has good title to all of its tangibleassets reflected as owned on the Interim Balance Sheet, except for assets thathave been sold or disposed of in the ordinary course since the date of theInterim Balance Sheet, and all tangible assets acquired since such date, ineach case free and clear of all Liens except for Permitted Liens. The assets ofthe Company and its Subsidiaries are in good condition and in a good state ofmaintenance and repair, reasonable wear and tear excepted. The rights, propertyand assets of the Company and its Subsidiaries include all rights, propertiesand other assets necessary for the conduct of the business of the Company andits Subsidiaries as conducted on the date hereof.

 

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(b)           TheCompany and its Subsidiaries do not own, and since May 7, 2001 have notowned, any real property. **Section 3.12(b) **ofthe Company Disclosure Schedule lists all real property leased to the Companyor its Subsidiaries (“**Leased Properties**”).The Leased Properties are adequate, sufficient and suitable for their presentuses and purposes. None of the Leased Properties is in need of maintenance andrepairs that are material in nature or cost. The Company and its Subsidiariesdo not owe brokerage or commissions or tenant improvement costs with respect toany of the Leased Properties. Neither the whole nor any portion of the LeasedProperties is subject to any decree or order of a Governmental Entity to besold or condemned, expropriated or otherwise taken by any Governmental Entityor other Person with or without payment of compensation therefor, nor to theKnowledge of the Company has any such condemnation, expropriation or takingbeen proposed. The Company and its Subsidiaries have no liability (whetheractual, contingent or prospective) or obligation in respect of any realproperty, whether freehold, commonhold, leasehold, licensed or occupied, underan informal or undocumented arrangement in any part of the world other than inrelation to the Leased Properties.

 

3.13         Environmental Matters. Except as described in **Section 3.13**of the Company DisclosureSchedule or as would not reasonably be expected to have, individually or in theaggregate, a Company Material Adverse Effect, (a) the Company is incompliance with all applicable Environmental Laws; (b) none of theproperties currently or to the Knowledge of the Company formerly owned, leasedor operated by the Company (including, without limitation, soils and surfaceand ground waters) are contaminated with any Hazardous Substance as a result ofthe Company’s operations; (c) the Company has not received any writtennotice that it is liable for any contamination by Hazardous Substances at anysite containing Hazardous Substances generated, transported, stored, treated ordisposed by the Company; (d) the Company is in compliance with allpermits, licenses and other authorizations required under any Environmental Law(“**Environmental Permits**”), and (e) tothe Knowledge of the Company, all past non-compliance with Environmental Lawsor Environmental Permits has been resolved without any pending, ongoing orfuture obligation, costs or liability.

 

3.14         Taxes.  Except as set forth in **Section 3.14** of the Company DisclosureSchedule:

 

(a)           Eachof the Company and its Subsidiaries has filed all Tax Returns required to befiled by it, and such Tax Returns are true, correct and complete in allmaterial respects. Each of the Company and its Subsidiaries has paid any andall Taxes shown on such Tax Returns as being due and payable.

 

(b)           SinceJanuary 1, 2004, neither the Company nor any of its Subsidiaries has everbeen part of a U.S. federal consolidated Tax Return, other than a consolidatedTax return of which the Company is the common parent.

 

(c)           Neitherthe Company nor any of its Subsidiaries is a party to any agreement providingfor the allocation, indemnification or sharing of Taxes other than suchagreements entered into in the ordinary course of business.

 

(d)           Theprovision for Taxes on the Interim Balance Sheet is sufficient for the paymentof all Taxes of the Company and its Subsidiaries which are or may becomepayable in any 

 

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jurisdictionin respect of the period ending on the date thereof. There is no legalproceeding and no assessment, reassessment or request for information inprogress, pending or, to the Knowledge of the Company, threatened against oraffecting the Company or its Subsidiaries in respect of Taxes nor are anyissues under discussion with any taxing authority relating to any matters whichcould result in claims for additional Taxes. There are no Tax Liens upon theassets of the Company or its Subsidiaries other than Permitted Liens.

 

(e)           Thereare no agreements, waivers or other arrangements providing for an extension oftime with respect to any assessment or reassessment of Tax, the filing of anyTax Return or the payment of any Tax by the Company or its Subsidiaries.

 

(f)            TheCompany and its Subsidiaries have withheld from each payment made by each ofthem the amount of all Taxes and other deductions required under any applicableTax Legislation to be withheld therefrom and have paid all such amountswithheld to the relevant taxing or other authority within the time prescribedunder any applicable Tax Legislation.

 

(g)           Eachof the Company and its Subsidiaries which carries out business within theEuropean Union is registered for the purposes of VAT in any Member State of theEuropean Union to the extent that such registration is required by Law.

 

3.15         Insurance.  **Section 3.15**of the Company Disclosure Schedule contains a list of all material policies offire, extended coverage, liability and other forms of insurance held by theCompany or its Subsidiaries as of the date hereof. All such policies are infull force and effect, all premiums due with respect to such policies have beenpaid and, to the Knowledge of the Company, no notice of cancellation ortermination, or reduction of coverage or intention to cancel, terminate orreduce coverage, has been received with respect to any policy for suchinsurance. **Section 3.15** ofthe Company Disclosure Schedule also lists any life insurance policies of whichthe Company or its Subsidiaries is a beneficiary. True and complete copies ofall such policies as in effect on the date hereof have been made available toParent.

 

3.16         Employees; EmployeeBenefits.

 

(a)**           Section 3.16(a) **ofthe Company Disclosure Schedule sets forth a true and complete list of allemployees of the Company and its Subsidiaries (“**Company Employees**”), including name, title, date of hire,current base salary and bonus amount paid for 2007 performance and indicatingany employees on disability or other permitted leaves of absence.

 

(b)           TheCompany and its Subsidiaries are not a party to, or bound by, any collectivebargaining agreement covering their employees. Except as set forth in **Section 3.16(b) **of the CompanyDisclosure Schedule, no employee of the Company or its Subsidiaries isrepresented by any labor organization, trade union or work council. The Companyand its Subsidiaries are in compliance in all material respects with all Lawsrespecting employment and employment practices, terms and conditions ofemployment and wages and hours, and there is no labor strike, dispute,slowdown, stoppage or organizational effort pending or, to the Knowledgeof the Company, threatened against or involving the Company, its Subsidiariesor the Company Employees and no such activities involving the Company, itsSubsidiaries or the Company Employees have taken place within the precedingthree (3) years. There are no claims of any 

 

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nature pendingor, to the Knowledge of the Company, threatened between the Company or itsSubsidiaries, on the one hand, and any of the present or former employeesthereof.

 

(c)**           Section 3.16(c) **ofthe Company Disclosure Schedule sets forth a true and complete list of allEmployee Benefit Plans covering the Company Employees maintained, sponsored orcontributed to by the Company or its Subsidiaries, to which the Company or itsSubsidiaries is obligated to contribute or with respect to which the Company orits Subsidiaries has any liability or potential liability, whether direct orindirect. “**Employee Benefit Plans**”means any incentive compensation plans, deferred compensation plans, severanceplans, change-in-control agreement, bonus plans, executive compensation plans,pension plans or retirement plans, employee profit sharing plans, employeestock purchase plans, group life insurance, medical, hospitalization,insurance, key man insurance, welfare plans, and any other plans providingbenefits to employees or former employees of the Company or its Subsidiaries,except for any non-material benefits in any non-U.S. Employee Benefit Plans,and except for any Employee Benefit Plans that are required by Law.

 

(d)           Eachof the Company and its Subsidiaries is not and has not been treated as a singleemployer or controlled group member with any Person (other than the Company orthe Subsidiaries) pursuant to Section 414 of the Code or Section 4001of the Employee Retirement Income Security Act of 1974, as amended.

 

(e)           Exceptas set forth in **Section 3.16(e) **ofthe Company Disclosure Schedule, with respect to each of the Employee BenefitPlans:

 

(i)         all required or discretionary (in accordancewith historical practices) payments, premiums, contributions, reimbursements oraccruals have been made or properly accrued on the Interim Balance Sheet to theextent required by applicable accounting rules;

 

(ii)        to the extent required by applicable accountingrules, there is no unfunded liability which is not reflected or is in excess ofamounts reflected for such liability on the Year End Balance Sheet; none of theEmployee Benefit Plans providing benefits to employees or former employees ofthe Company or its Subsidiaries is a defined benefit plan;

 

(iii)       there have been no violations of any applicableLaws with respect thereto and the Company and its Subsidiaries and, to theKnowledge of the Company, in the UK the trustees of any Employee Benefit Plan,have performed and complied in all material respects with all of theirobligations with respect thereto, and the operation of each of the EmployeeBenefit Plans has, at all times, in form, operation and substance complied inall material respects with its terms;

 

(iv)       there are no actions, suits, proceedings,hearings or investigations pending (other than routine claims for benefits)and, to the Knowledge of the Company, no such actions, suits, proceedings,hearings or investigations are threatened;

 

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(v)        no Employee Benefit Plan provides health,medical or life insurance benefits with respect to current or former employeesof the Company or its Subsidiaries beyond their retirement or other terminationof service other than (A) coverage mandated by applicable Law or (B) benefitsthe full cost of which is borne by the current or former employee (or his orher beneficiary);

 

(vi)       to the Knowledge of the Company, no representationsor communications, oral or written, with respect to participation, eligibilityfor benefits, vesting, benefit accrual, or coverage under the Employee BenefitPlans have been made to any participant or beneficiary thereof other than thosewhich are in accordance with the terms and provisions of such Employee BenefitPlans;

 

(vii)      no Employee Benefit Plan which provides medical,dental, health or long term disability benefits is self insured;

 

(viii)     none of the Employee Benefit Plans are intended toqualify as a “voluntary employee benefit association” under Section 501(c)(9) ofthe Code; and

 

(ix)       except as expressly provided in this Agreement,neither the execution and delivery of this Agreement nor the consummation ofany or all of the transactions contemplated by this Agreement, including theMerger, will (A) entitle any current or former officer, director oremployee of the Company or its Subsidiaries to severance pay or any otherpayment or other rights, or (B) accelerate the time of payment or vestingor increase the amount of any compensation due to any such Person. Withoutlimiting the generality of the foregoing, no amount paid or payable by theCompany or its Subsidiaries in connection with the transactions contemplatedhereby (either solely as a result thereof or as a result of such transactionsin conjunction with any other event) will be an “excess parachute payment”within the meaning of Section 280G of the Code.

 

(f)            Therehas been no “**mass layoff**” or “**plant closing**” as defined by the Worker Adjustmentand Retraining Notification Act, as amended, or any similar or equivalent stateor foreign Law in respect of the Company or its Subsidiaries within the ninety(90) days prior to the date hereof.

 

(g)           TheCompany and each of its Subsidiaries has not given notice of redundancies tothe United Kingdom Secretary of State nor has any of them been under anyobligation to do so within the 180 days prior to the date hereof.

 

(h)           TheCompany and each of its Subsidiaries has not been a party to a relevant transfer(as defined in the Transfer of Undertakings (Protection of Employment)Regulations 2006) or failed to comply with an obligation under thoseregulations within twelve (12) months prior to the date hereof.

 

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(i)            Inrelation to any Employee Benefit Plan that it is subject to the laws of ajurisdiction outside the United States (a “**Non-USEmployee Benefit Plan**”), each such Non-US Employee Benefit Plan hasbeen funded in accordance with applicable laws; neither is any such Non-USEmployee Benefit Plan nor the Company or any of its Subsidiaries required orhas been required to contribute to or has incurred any liability in relation toany change in benefits, the termination of accrual, the closure to new membership,the withdrawal from a multi-employer plan or the termination of any such Non-USEmployee Benefit Plan.

 

(j)            Exceptas set forth in **Section 3.16(j) **ofthe Company Disclosure Schedule, the Company and its Subsidiaries have, in allmaterial respects, properly classified for all Tax purposes and all purposesunder the Employee Retirement Income Security Act of 1974, as amended, allemployees, consultants and independent contractors, and have made all Taxfilings and withheld and paid all Taxes required to have been filed, withheldor paid in connection with the services provided by such Persons to the Companyor its Subsidiaries.

 

(k)**           Section 3.16(k) **ofthe Company Disclosure Schedule lists all U.S. employees of the Company or itsSubsidiaries, and all non-U.S. executives earning an annual salary of more than$150,000, whose employment has been involuntarily terminated or who receivednotice of involuntary termination of their employment during the six-monthperiod prior to the date hereof and who have not signed a release agreementwith the Company as of the date hereof.

 

3.17         Absence of CertainChanges or Events.  Since December 31,2007, except as set forth in **Section 3.17**of the Company Disclosure Schedule, or as expressly contemplated by this Agreement:

 

(a)           theCompany and the Subsidiaries have conducted their businesses only in theordinary course and in a manner consistent with past practice;

 

(b)           therehas not been any Company Material Adverse Effect;

 

(c)           therehas not been any declaration or payment of any dividend or any otherdistributions of any kind to any stockholders of the Company (other thanpayments to the Principal Stockholders of principal and interest on theConvertible Notes), or any direct or indirect redemption, retirement, purchaseor other acquisition of any shares of capital stock or other equity interests(other than the exercise of Options), or any split, combination orreclassification of any shares of capital stock;

 

(d)           therehas not been any acceleration of the billing of customers or the collection oftheir accounts receivable or any delay in payment of accounts payable oraccrued expenses or the deferment of expenses;

 

(e)           therehas not been any incurrence of indebtedness for borrowed money (other thanborrowings under the Company’s $5 million revolving line of credit with Citizen’sBank)****or for the deferred purchaseof property by the Company or its Subsidiaries;

 

(f)            therehas not been (i) any write-down in the value of any assets, or write-offas uncollectible of any notes or accounts receivable, except for write-downsand write-offs in the ordinary course of business and consistent with pastpractice, none of which are material to the

 

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Company or itsSubsidiaries, taken as a whole, or (ii) any revaluation of any of theassets of the Company or its Subsidiaries;

 

(g)           there has not been anypayment, discharge or satisfaction of any claims, liabilities or obligationsother than in the ordinary course of business; and

 

(h)           there has not been anychange in any method of accounting or accounting practice.

 

3.18         No Broker.** **Exceptfor the Company Financial Advisor, neither the Company nor any of itsSubsidiaries has employed any investment banker, broker or finder in connectionwith this Agreement or the transactions contemplated hereby who might beentitled to any fee or any commission in connection with or upon consummationof the Merger.

 

3.19         Certain Payments.  Neither the Company nor any director,officer, employee or, to the Knowledge of the Company, agent of the Companyacting for or on behalf of the Company, has directly or indirectly made anyunlawful contribution, gift, bribe, rebate, payoff, influence payment, kickbackor other payment to any Person, regardless of form, in violation of the ForeignCorrupt Practices Act or any similar Law (i) to obtain favorable treatmentin securing business, (ii) to pay for favorable treatment for businesssecured, or (iii) to obtain special concessions, or for specialconcessions already obtained, or in respect of the Company or any Affiliate ofthe Company.

 

3.20         Relationships withRelated Persons.  Except pursuant tosuch person’s pro rata interest as a holder of shares of Company Common Stockor such person’s status as an employee of the Company, no officer, director, orAffiliate of the Company (other than Affiliates controlled by the Company) (a) hasany direct or indirect interest in any material asset used in the business ofthe Company or its Subsidiaries; (b) is indebted to the Company or itsSubsidiaries (other than expense advances in the ordinary course of business);or (c) is a party to any contract, transaction or business dealinginvolving the Company or its Subsidiaries.

 

3.21         Accounts Receivable.  The accounts receivable of the Company andits Subsidiaries reflected on the Interim Balance Sheet, and the accountsreceivable of the Company and its Subsidiaries that have arisen since the dateof the Interim Balance Sheet, have arisen in the ordinary course of businessand represent valid obligations to the Company or its Subsidiaries.

 

3.22         No AdditionalRepresentations or Warranties. Except for the representations and warranties expressly set forth inthis **Article III**, the Companyand its Subsidiaries have not made any express or implied representations andwarranties, statutory or otherwise, of any nature, including with respect toany express or implied representation or warranty as to the merchantability,quality, quantity, suitability or fitness for any particular purpose of theassets of the Company and its Subsidiaries. It is understood that any cost estimate, projection or other prediction,any data, any financial information or presentations provided by the Company orany of its representatives, other than as part of this **Article III**, are not and shall not bedeemed to be or to include representations or warranties of the Company or itsSubsidiaries.  No person has beenauthorized by the Company to make any representation or warranty relating tothe Company or its Subsidiaries and, if made, such representation or warrantymay not be relied upon as having been made or authorized by the Company.

 

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**ARTICLE IVREPRESENTATIONS AND WARRANTIESOF PARENT AND MERGER SUB**

 

Parent andMerger Sub hereby represent and warrant to the Company and the PrincipalStockholders, as of the date hereof and as of the Closing Date, as follows:

 

4.1           Organization.

 

(a)        Parentis a corporation duly organized, validly existing and in good standing underthe Laws of the State of Delaware, Merger Sub is a corporation duly organized,validly existing and in good standing under the Laws of the State of Delawareand Subco is a limited liability company duly organized, validly existing andin good standing under the Laws of the State of Delaware.

 

(b)           Parent directly ownsall of the common stock of Merger Sub and all of the membership interest inSubco.

 

4.2           Authority.

 

(a)        Eachof Parent and Merger Sub has all necessary power and authority to execute anddeliver this Agreement and the Escrow Agreement and to consummate thetransactions contemplated hereby and thereby. No other proceedings on the part of Parent or Merger Sub are necessaryto authorize this Agreement or the Escrow Agreement or to consummate thetransactions contemplated hereby and thereby. Each of this Agreement and the Escrow Agreement has been, or prior tothe Effective Time will be, duly and validly executed and delivered by each ofParent and Merger Sub, as applicable, and assuming due authorization, executionand delivery by the other parties hereto and thereto, constitutes or prior tothe Effective Time will constitute a valid, legal and binding agreement of eachof Parent and Merger Sub, as applicable, enforceable against each of Parent andMerger Sub in accordance with their respective terms, except that suchenforcement may be subject to any bankruptcy, insolvency, or reorganizationLaws, now or hereafter in effect, affecting the enforceability of creditors’rights generally and by general equitable principles which may limit the rightto obtain equitable remedies (regardless of whether such enforceability isconsidered in a proceeding in equity or law).

 

(b)           The Board of Directorsof Parent, the Board of Directors of Merger Sub and Parent as the solestockholder of Merger Sub have duly and validly authorized the execution anddelivery of this Agreement and the Escrow Agreement and the consummation of thetransactions contemplated hereby and thereby, and taken all actions required tobe taken by such Board of Directors and Parent as the sole stockholder ofMerger Sub for the consummation of the transactions contemplated hereby andthereby.

 

4.3           Noncontravention.  The execution and delivery of this Agreementand the Escrow Agreement does not, and the performance of this Agreement andthe Escrow Agreement by Parent and Merger Sub and the consumption of thetransactions contemplated hereby and thereby will not: (i) violate theCertificate of Incorporation or Bylaws of Parent or Merger Sub; 

 

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(ii) violate,conflict with, constitute (or with notice or lapse of time or both wouldconstitute) a default under any contract, instrument or other agreement to whichParent or any of its Subsidiaries is a party or by or to which either of themor either of their respective assets or properties is bound or subject; (iii) resultin the creation or imposition of any Lien upon any property of Parent or any ofits Subsidiaries; or (iv) violate any Law binding upon or applicable toParent or any of its Subsidiaries or upon the properties, assets or business ofParent or its Subsidiaries, except with respect to clauses (ii), (iii) and(iv), for any such conflicts, violations, breaches, defaults or otheroccurrences which would not reasonably be expected to have, individually or inthe aggregate, a Parent Material Adverse Effect.

 

4.4           Litigation.  There is no proceeding pending against or, tothe Knowledge of Parent, threatened against, Parent or any of its Subsidiariesthat would reasonably be expected to have, individually or in the aggregate, aParent Material Adverse Effect.  NeitherParent nor any of its Subsidiaries is subject to any Order against Parent orany of its Subsidiaries or naming Parent or any of its Subsidiaries as a partythat would reasonably be expected to have, individually or in the aggregate, aParent Material Adverse Effect.

 

4.5           Cash Consideration.** **Parentand Merger Sub collectively have cash on hand or available through existingcredit facilities in an aggregate amount sufficient to enable Parent and MergerSub to pay in full the cash portion of the Final Aggregate Notional Value andto pay all fees and expenses of Parent and Merger Sub with respect to theMerger.

 

4.6           No Broker.  Except for Morgan Stanley, no broker, finder,agent or similar intermediary has acted for or on behalf of Parent inconnection with this Agreement or the transactions contemplated hereby, and,except for Morgan Stanley, no broker, finder, agent or similar intermediary isentitled to any broker’s, finder’s, agent’s or similar fee or other commissionin connection therewith based on any agreement, arrangement or understandingwith Parent or any action taken by or on behalf of Parent.

 

4.7           Parent Common Stock.  Parent warrants to the PrincipalStockholders, as of the date hereof and as of the Closing Date, that the ParentCommon Stock to be issued to the Principal Stockholders pursuant to thisAgreement, when issued and delivered, will be validly issued, fully paid andnonassessable and free and clear of any Liens, preemptive rights or rights offirst refusal.  Subject to the accuracyof the Principal Stockholders’ warranties in **Section 6.6(a)**,the Parent Common Stock, when issued and delivered, will be issued anddelivered in compliance with all applicable securities laws and governmentalregulations.

 

4.8           Taxes.  Subco (and any predecessors thereto) hasqualified as, and been treated as, an entity disregarded as separate from itsowner for United States federal and state income tax purposes at all timessince the date of its formation on September 16, 2008.

 

4.9           Filings with the SEC.

 

(a)        Parenthas filed all reports, schedules, forms, statements and other documents(including exhibits and other information incorporated therein) with theSecurities and Exchange 

 

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Commission (“**SEC**”) required to be filed by Parent since December 1,2006 (such documents, together with any documents filed during such period byParent with the SEC on a voluntary basis on Current Reports on Form 8-K,the “**Parent SEC Reports**”).  Parent SEC Reports have been filed pursuantto the Exchange Act in a manner that would permit Parent to use a short formRegistration Statement on Form S-3.

 

(b)           As of their respectivefiling dates, the Parent SEC Reports complied in all material respects with, tothe extent in effect at the time of filing, the requirements of the SecuritiesAct, Exchange Act and the Sarbanes-Oxley Act of 2002 (including the rules andregulations promulgated thereunder) applicable to such Parent SEC Reports, and,except to the extent that information contained in any Parent SEC Report hasbeen revised, amended, supplemented or superseded by a later-filed Parent SECReport, none of the Parent SEC Reports, when filed, contained any untruestatement of a material fact or omitted to state any material fact required tobe stated therein or necessary in order to make the statements therein, inlight of the circumstances under which they were made, not misleading, whichindividually or in the aggregate would require an amendment, supplement orcorrective filing to such Parent SEC Reports.

 

(c)           Each of Parentfinancial statements (including the related notes) included in Parent SECReports complied at the time they were filed as to form in all materialrespects with the applicable accounting requirements and the published rules andregulations of the SEC with respect thereto in effect at the time of filing, havebeen prepared in accordance with U.S. generally accepted accounting principles(except, in the case of unaudited financial statements, as permitted by the rules andregulations of the SEC) applied on a consistent basis during the periodsinvolved (except as may be indicated in the notes thereto) and fairlypresented, in all material respects, the consolidated financial position ofParent and its consolidated Subsidiaries as of the dates thereof and theconsolidated results of their operations and cash flows for the periods thenended except as otherwise noted therein (subject, in the case of any unauditedinterim financial statements included therein, to normal year-end auditadjustments).

 

4.10         Interim Operations ofMerger Sub and Subco.  Each of MergerSub and Subco was formed solely for the purpose of engaging in the transactionscontemplated by this Agreement.  Each ofMerger Sub and Subco (i) has not conducted, and will not prior to theEffective Time conduct, any business and (ii) has no, and prior to theEffective Time will have no, assets or liabilities, except in either case, inconnection with the transactions contemplated by this Agreement.  As of the Effective Time (i) all of theoutstanding shares of Merger Sub Common Stock will be owned directly by Parentand (ii) all of the outstanding membership interests of Subco will beowned directly by Parent.

 

4.11         No AdditionalRepresentations or Warranties. Except for the representations and warranties expressly set forth inthis **Article IV**, Parent andits Subsidiaries have not made any express or implied representations andwarranties, statutory or otherwise, of any nature, including with respect toany express or implied representation or warranty as to the merchantability,quality, quantity, suitability or fitness for any particular purpose of theassets of Parent and its Subsidiaries. It is understood that any cost estimate, projection or other prediction,any data, any financial information or presentations provided by Parent or anyof its representatives, other than as part of this **Article IV**, are not and shall not be deemed to be or to 

 

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includerepresentations or warranties of Parent or its Subsidiaries.  No person has been authorized by Parent tomake any representation or warranty relating to Parent or its Subsidiaries and,if made, such representation or warranty may not be relied upon as having beenmade or authorized by Parent.

 

**ARTICLE VCOVENANTS RELATED TO CONDUCT OF BUSINESS**

 

5.1           Conduct of Businessof the Company.  Except as set forthon **Section 5.1**of the CompanyDisclosure Schedule or except as contemplated by this Agreement, during theperiod from the date hereof to the Effective Time, the Company shall, and shallcause each of its Subsidiaries to, conduct its operations in the ordinarycourse of business consistent with past practice.  Without limiting the generality of theforegoing, prior to the Effective Time, neither the Company nor any of itsSubsidiaries shall, without the prior written consent of Parent, which consentshall not be unreasonably withheld:

 

(a)           amend its certificateof incorporation or bylaws (or other similar organizational or governinginstruments);

 

(b)           authorize for issuance,issue, sell, deliver or agree or commit to issue, sell or deliver (whetherthrough the issuance or granting of options, warrants, commitments,subscriptions, rights to purchase or otherwise) any shares of capital stock ofany class or any other securities convertible into or exchangeable for anyshares of capital stock or any equity equivalents (including any options orstock appreciation rights), except for the issuance or sale of stock pursuantto outstanding Options and the issuance or sale of stock pursuant to theconversion of the Convertible Notes;

 

(c)           (i)  split,combine or reclassify any shares of its capital stock; (ii) declare, setaside or pay any dividend or other distribution (whether in cash, stock orproperty or any combination thereof) in respect of its capital stock, exceptthat a direct or indirect wholly-owned Subsidiary may declare and pay adividend or make an advance to its parent or the Company; (iii) make anyother actual, constructive or deemed distribution in respect of any shares ofits capital stock or otherwise make any payments to any stockholders in theircapacity as such; or (iv) redeem, repurchase or otherwise acquire any ofits securities or any securities of any of its Subsidiaries;

 

(d)           adopt a plan ofcomplete or partial liquidation, dissolution, merger, consolidation,restructuring, recapitalization or other reorganization of the Company or anyof its Subsidiaries (other than the Merger);

 

(e)           alter through merger,liquidation, reorganization, restructuring or in any other fashion thecorporate structure or ownership of any Subsidiary;

 

(f)            (i) incur orassume any long-term or short-term debt or issue any debt securities, exceptfor borrowing in the ordinary course of business consistent with past practiceunder the Company’s existing credit facilities; (ii) assume, guarantee,endorse or otherwise become liable or responsible (whether directly,contingently or otherwise) for the obligations of any other Person, except forobligations of the Company’s Subsidiaries incurred in the ordinary course of 

 

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business; (iii) makeany loans, advances or capital contributions to, or investments in, any otherPerson; (iv) pledge or otherwise encumber shares of capital stock of theCompany or its Subsidiaries; (v) mortgage or pledge any of its assets,tangible or intangible, or create or suffer to exist any Lien thereupon, otherthan Permitted Liens; or (vi) manage working capital other than in theordinary course of business;

 

(g)           (i) except as maybe required by applicable Law or as contemplated by this Agreement, enter into,adopt, amend or terminate (partially or completely) any Employee Benefit Plan,(including the repricing of any Options or the voluntary acceleration ofvesting of any Options), stock appreciation right, restricted stock,performance unit, stock or other equity equivalent or stock purchase agreementfor the benefit or welfare of any director, officer or employee in any manner; (ii) exceptas required under existing agreements, increase in any manner the compensationor fringe benefits of any director, officer or executive employee or pay anybenefit not required by any plan and arrangement as in effect as of the datehereof, except for increases in the ordinary course of business and consistentwith past practice in salaries or wages of employees of the Company or anySubsidiary who are not directors or officers of the Company; or (iii) hire,promote or change the classification or status in respect of any executiveemployee or officer;

 

(h)           (i) acquire, sell,lease or dispose of any assets outside the ordinary course of businessconsistent with past practice and which assets in the aggregate are material tothe Company or any of its Subsidiaries; (ii) enter into any commitment ortransaction outside the ordinary course of business consistent with pastpractice; or (iii) grant any exclusive rights or enter into any materialcontracts for a period of longer than one year with respect to any of theproducts and services of the Company or any of its Subsidiaries;

 

(i)            other than in theordinary course of business and consistent with past practice, (i) modify,amend or terminate any Material Contract to which the Company or any of itsSubsidiaries is a party or by which any of them or any of their respective propertiesor assets may be bound; (ii) waive, release or assign any rights or claimsunder any of such contracts; or (iii) enter into any contract providingfor payment by the Company or any of its Subsidiaries of an amount in excess of$200,000;

 

(j)            except as may berequired as a result of a change in applicable Law or in U.S. generallyaccepted accounting principles, change any of the accounting principles orpractices used by it;

 

(k)           acquire (by merger,consolidation or acquisition of stock or assets) any corporation, partnershipor other business organization or division thereof or any equity interesttherein;

 

(l)            pay, discharge orsatisfy any material claims, liabilities or obligations (absolute, accrued,asserted or unasserted, contingent or otherwise),  other than the payment, discharge orsatisfaction of any such claims, liabilities or obligations in the ordinarycourse of business consistent with past practice, or of claims, liabilities orobligations reflected or reserved against in the Interim Balance Sheet of theCompany and its Subsidiaries in amounts materially in accordance with theamounts reflected or reserved against in the Interim Balance Sheet;

 

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(m)          (i) settle orcommence any action, suit, claim, litigation or other proceeding or (ii) enterinto any consent, decree, injunction or other similar restraint or form ofequitable relief in settlement of any action, suit, claim, litigation or otherproceeding;

 

(n)           make any capitalexpenditures other than capital expenditures (i) not in excess of $100,000individually or $500,000 in the aggregate (in each case, other than capitalexpenditures referred to in clause (ii) of this **Section 5.1(n)**) and (ii) for the build out of theCompany’s Lexington, Massachusetts and Gurgaon, India offices, the build out ofboth locations not to exceed $250,000 in the aggregate; or

 

(o)           take, propose to take,agree in writing or otherwise to take or omit to take, any of the actionsdescribed in **Sections 5.1(a)**through**5.1(n)**.

 

5.2           Access toInformation of the Company and its Subsidiaries.

 

(a)        Betweenthe date hereof and the Effective Time, to the extent permitted by applicableLaw, the Company shall give Parent and its authorized representatives(including counsel, financial advisors and auditors) reasonable access duringregular business hours to the members of the Company’s operating committee, whoare listed in **Section 5.2(a) **ofthe Company Disclosure Schedule, and others as reasonably requested but subjectto the advance approval of the Company, not to be unreasonably withheld, and tothe Company’s and its Subsidiaries’ offices and other facilities and to allbooks and records of the Company and its Subsidiaries, shall permit Parent tomake such inspections during regular business hours as Parent may reasonablyrequire and shall cause the Company’s officers and those of its Subsidiaries tofurnish Parent with such financial and operating data and other information inrespect of the business, properties and personnel of the Company and itsSubsidiaries as Parent may from time to time reasonably request.

 

(b)        Priorto the Effective Time, Parent shall hold and shall cause its authorizedrepresentatives to hold in confidence all confidential documents andinformation concerning the Company and its Subsidiaries furnished to Parent inconnection with the transactions contemplated by this Agreement, pursuant tothe terms of that certain confidentiality agreement entered into between theCompany and Parent, dated July 25, 2008 (the “**Confidentiality Agreement**”).

 

5.3           Tax-FreeReorganization Treatment.

 

(a)        Theparties to this Agreement intend that the Merger and the Subsequent Merger,taken together, will qualify as a reorganization under Section 368(a) ofthe Code, and neither the Company nor Parent shall, nor shall they permit anyof their respective Subsidiaries to, take or cause to be taken any action(including agreeing to any transaction or entering into any agreement (otherthan as expressly provided for in this Agreement) and including changing thebusiness form of Subco from a limited liability company directly owned byParent), that could reasonably be expected to result in the Merger and theSubsequent Merger, taken together, failing to qualify as a reorganization withinthe meaning of Section 368(a) of the Code.  Parent and the Company shall use theirreasonable best efforts, and shall cause their respective Subsidiaries to useall reasonable best efforts, to cause the Merger and the Subsequent Merger, 

 

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takentogether, to qualify as a reorganization within the meaning of Section 368(a) ofthe Code, including providing reasonable and customary representations,covenants and certificates requested under **Section 7.3(g) **ofthis Agreement.

 

(b)           Each of the Company andParent shall report the Merger and the Subsequent Merger, taken together,  as a reorganization within the meaning of Section 368(a) ofthe Code on its United States federal income tax return, unless otherwiserequired pursuant to a “determination” within the meaning of Section 1313(a) ofthe Code.

 

**ARTICLE VIADDITIONAL AGREEMENTS**

 

6.1           Reasonable BestEfforts.

 

(a)        Eachof Parent and the Company shall (i) submit their respective PremergerNotification and Report Form in compliance with the HSR Act and the rules andregulations promulgated thereunder with respect to the transactionscontemplated by this Agreement as promptly as practicable after the date ofthis Agreement; (ii) use reasonable best efforts to promptly respond toany oral or written request for information or documents or any other questionsfrom the Federal Trade Commission or Department of Justice during the initial30-day HSR Act waiting period; (iii) use reasonable best efforts tosubstantially comply with a Request for Additional Information and Documentsissued pursuant to the HSR Act and the rules and regulations promulgatedthereunder; and (iv) act in good faith and cooperate with the other partyin connection with any filing or submission to the Federal Trade Commission,Department of Justice or any other Governmental Entity with respect to anyfiling or submission addressing or resolving any investigation or inquiry ofthe Federal Trade Commission, Department of Justice or any other GovernmentalEntity under the Antitrust Laws with respect to the transactions contemplatedby this Agreement.  To the extent notprohibited by the HSR Act or any other applicable Laws, each party to thisAgreement shall use all reasonable best efforts to furnish to each other partyall information required for any application, filing or submission to be made by the other party pursuant to the HSRAct in connection with the transactions contemplated by this Agreement.  Each party to this Agreement shall give eachother party reasonable prior notice of any communications or meetings with, orany intention to enter into, any proposed understanding, undertaking, order oragreement with the Federal Trade Commission, Department of Justice or any otherGovernmental Entity.  None of the partiesto this Agreement, or the parties’ counsel, shall independently participate inany meeting or engage in any substantive conversation with the Federal TradeCommission, Department of Justice or any other Governmental Entity with respectto any formal or informal investigation of, or inquiry into, the transactionscontemplated by this Agreement, without giving the other parties prior noticeof the meeting or conversation and, unless prohibited by the Federal TradeCommission, Department of Justice or any other Governmental Entity, theopportunity to attend and participate in any meeting or substantiveconversation.  The parties to thisAgreement shall consult and cooperate with one another in connection with theneed for and preparation of any analyses, presentations, memoranda, briefs,arguments, opinions, proposals, and/or any other communications made orsubmitted by or on behalf of any party to this Agreement with respect to anyformal or informal investigation of, or inquiry into, or in connection with anyproceedings instituted by the Federal Trade Commission, 

 

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Department ofJustice or any other Governmental Entity relating to the transactionscontemplated by this Agreement.

 

(b)           Each of Parent, theCompany, Merger Sub and the Principal Stockholders shall use its reasonablebest efforts to take such action as may be required to cause the expiration ofthe waiting period under the HSR Act or other Antitrust Laws with respect to thetransactions contemplated by this Agreement as promptly as possible after theexecution of this Agreement.  In doingso, and expressly subject to **Section 6.1(d) **herein,each of Parent, the Company, Merger Sub and the Principal Stockholders shalluse its reasonable best efforts to resolve any objections as may be asserted bythe Federal Trade Commission, Department of Justice or any other GovernmentalEntity with respect to the transactions contemplated by this Agreement underthe HSR Act, the Sherman Antitrust Act of 1890, as amended, the Clayton Act of1914, as amended, the Federal Trade Commission Act, as amended, and any otherUnited States federal or state or foreign competition, antitrust or other lawthat is designed to prohibit, restrict or regulate actions having the purposeor effect of monopolization or restraint of trade (collectively, “**Antitrust Laws**”).  In connection therewith and subject to **Section 6.1(d)**, if any administrativeor judicial action or proceeding is instituted (or threatened to be instituted)challenging all or part of the transactions contemplated by this Agreement asinconsistent with or violative of any Antitrust Law, each of Parent, theCompany, Merger Sub and the Principal Stockholders shall (by negotiation,litigation or otherwise) cooperate and use reasonable best efforts tovigorously contest and resist any such action or proceeding, including anyadministrative or judicial action, and to have vacated, lifted, reversed oroverturned any decree, judgment, injunction or other order whether temporary,preliminary or permanent, that is in effect and that prohibits, prevents,delays or restricts consummation of the transactions contemplated by thisAgreement, including by vigorously pursuing all available administrative andjudicial appeals, unless, by mutual agreement, Parent, the Company, Merger Suband the Principal Stockholders decide that litigation is not in theirrespective best interests.  Notwithstanding the foregoing or any other provision of this Agreement,nothing in this **Section 6.1**shall limit the right of a party to this Agreement to terminate this Agreementpursuant to **Article VIII**,with the express understanding that the parties to this Agreement seeking suchtermination have until that time complied in all material respects with theirobligations under this **Section 6.1**.

 

(c)           Subject to **Section 6.1(d)**, each of the parties tothis Agreement agrees to use its reasonable best efforts to take, or cause tobe taken, all actions, and to do, or cause to be done, and to assist andcooperate with the other parties to this Agreement in so doing, all thingsnecessary, sufficient, proper or advisable to consummate, in the mostexpeditious manner practicable, the transactions contemplated by thisAgreement, including (i) the obtaining of all necessary actions ornonactions, waivers, consents, licenses, permits, authorizations, orders andapprovals from the Federal Trade Commission, Department of Justice or any otherGovernmental Entities and the making of all other necessary registrations andfilings (including filings with Governmental Entities, if any), (ii) theexecution and delivery of any additional instruments reasonably necessary toconsummate the transactions contemplated by, and to fully carry out thepurposes of, this Agreement, and (iii) the providing of all suchinformation concerning such party, its Subsidiaries, its Affiliates and itsSubsidiaries’ and Affiliates’ officers, directors, managers, employees andpartners as may be reasonably requested in connection with any of the mattersset forth in **Section 6.1(a)**,**Section 6.1(b) **or this **Section 6.1(c)**.

 

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(d)           Notwithstandinganything to the contrary in this **Section 6.1**,neither Parent, nor Merger Sub shall be required in order to resolve anyobjections asserted under the Antitrust Laws by the Federal Trade Commission,Department of Justice or any other Governmental Entity with respect to thetransactions contemplated by this Agreement to divest any of its businesses or assets,or any of the Surviving Corporation’s businesses or assets if the Merger wereto occur, or take or agree to take any other material action or agree to anymaterial limitation or restriction; and, further, the Company shall not berequired to agree to any such restriction or requirement unless suchrestriction or requirement is binding on the Company only in event that theClosing occurs.

 

6.2           AcquisitionProposals.  The Company shall not,directly or indirectly, through any stockholder, officer, director, employee,representative or agent of the Company (i) solicit or encourage (includingby way of furnishing information) the submission of any Acquisition Proposal, (ii) participatein any discussions or negotiations regarding, or take any other action tofacilitate any inquiries or the making of any proposal that constitutes or mayreasonably be expected to lead to, any Acquisition Proposal, (iii) engagein discussions with any Person with respect to any Acquisition Proposal, (iv) approve,endorse or recommend any Acquisition Proposal, or (v) enter into anyletter or intent or similar document or any contract, agreement or commitmentcontemplating or otherwise relating to any Acquisition Proposal.  The Company shall inform Parent of thedetails of any inquiry which the Company reasonably believes constitutes orcould lead to any Acquisition Proposal.

 

6.3           Public Announcements.  Prior to the Effective Time, unless otherwisepermitted by this Agreement, Parent and the Company shall consult with eachother before issuing any press release or otherwise making any public statementor making any other public (or non-confidential) disclosure (whether or not inresponse to an inquiry) regarding the terms of this Agreement and thetransactions contemplated hereby, and neither shall issue any such pressrelease or make any such statement or disclosure without the prior approval ofthe other (which approval shall not be unreasonably withheld), except as may berequired by Law, including applicable SEC or NYSE requirements.  After the Effective Time, the PrincipalStockholders shall not issue any press release or otherwise make any publicstatement or other public (or non confidential) disclosure (whether or not inresponse to an inquiry, except as required by Law) regarding the terms of thisAgreement and the transactions contemplated hereby without the prior writtenapproval of Parent.

 

6.4           Notification ofCertain Matters.  At all times priorto the Effective Time or the termination of this Agreement pursuant to **Article VIII**, the Company shall giveprompt written notice to Parent and Merger Sub, and Parent and Merger Sub shallgive prompt notice to the Company, of (i) the occurrence or nonoccurrenceof any event the occurrence or nonoccurrence of which would be likely to causeany representation or warranty made by it which is contained in this Agreementto be untrue or inaccurate in any material respect at or prior to the EffectiveTime, (ii) any material failure of the Company, Parent or Merger Sub, asthe case may be, to comply with or satisfy any covenant, condition or agreementto be complied with or satisfied by it hereunder, or (iii) any writtennotice from any third party alleging that the consent of such third party is ormay be required in connection with the transactions contemplated by thisAgreement; provided, however, that the delivery of any noticepursuant to this **Section 6.4**shall not cure such

 

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breach ornon-compliance or limit or otherwise affect the rights, obligations or remediesavailable hereunder to the party receiving such notice.

 

6.5                                 Feesand Expenses.  Subject to **Section 8.5**, if the Merger is notconsummated, all Transaction Expenses incurred by the Company in connectionwith this Agreement and the transactions contemplated hereby shall be paid bythe Company and shall not be the obligations of Parent or Merger Sub.  If the Merger is consummated, all TransactionExpenses incurred by the Company in connection with this Agreement and thetransactions contemplated hereby shall be paid by the Company (or otherwisetaken into account) as set forth in **Section 2.13**.  All Transaction Expenses incurred by Parentor Merger Sub in connection with this Agreement and the transactionscontemplated hereby shall be paid by Parent or Merger Sub, as appropriate.  All Transaction Expenses incurred by thePrincipal Stockholders for their own account, if any, shall be paid by thePrincipal Stockholders.  As used in thisAgreement, “**Transaction Expenses**”includes all out-of-pocket expenses (including all fees and expenses ofcounsel, accountants, investment bankers, experts and consultants to a partyhereto and its affiliates) incurred by a party or on its behalf in connectionwith, or related to, the authorization, preparation, negotiation, execution andperformance of this Agreement and the transactions contemplated hereby,including the solicitation of stockholder approvals and all other mattersrelated to the transactions contemplated hereby.

 

6.6                                 ParentCommon Stock; Registration Rights; NYSE Listing.

 

(a)                        ThePrincipal Stockholders represent and warrant to Parent that each of thefollowing statements is true and accurate in all respects as of the date hereofand as of the Closing Date:

 

(i)                                The Parent Common Stockto be acquired by the Principal Stockholders pursuant to this Agreement isbeing acquired for their own account for investment only, and not with a viewto, or for sale in connection with, any distribution of such Parent CommonStock or any part thereof in any transaction that would be in violation of thesecurities laws of the United States of America, any state of the United Statesor any foreign jurisdiction.  ThePrincipal Stockholders understand that such Parent Common Stock has not beenregistered under the Securities Act of 1933, as amended (the “**Securities Act**”), and are “restrictedsecurities” within the meaning of Rule 144 under the Securities Act; andthat the Parent Common Stock cannot be sold, transferred or otherwise disposedof except in compliance with the Securities Act and applicable state andforeign securities laws, as then in effect. There shall be a legend on the certificates representing all of theParent Common Stock to the following effect:

 

THE SECURITIESREPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIESACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THEUNITED STATES OR ANY FOREIGN JURISDICTION. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSEDOF IN THE ABSENCE ON AN 

 

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EFFECTIVEREGISTRATION STATEMENT UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TOTHE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED;

 

(ii)                             The Principal Stockholdersunderstand that the Parent Common Stock will not be registered at the time ofits issuance under the Securities Act for the reason that the issuance of theParent Common Stock provided for in this Agreement is exempt pursuant to Section 4(2) ofthe Securities Act and that the reliance of Parent on such exemption ispredicated in part on the Principal Stockholders’ representations set forthherein.

 

(iii)                          The Principal Stockholdersare “Accredited Investors” within the meaning of Rule 501**of Regulation D under the Securities Act,as presently in effect.

 

(iv)                         Immediately prior to thetransactions contemplated hereby, the Principal Stockholders and any Personsthat, directly or indirectly through one or more intermediaries, control, arecontrolled by or are under common control with the Principal Stockholders,collectively owned no Parent Common Stock.

 

(b)                       Fromthe Closing Date until the date that is one (1) year following the ClosingDate with respect to ten percent (10%) of the Parent Common Stock to beacquired by the Principal Stockholders pursuant to this Agreement, two (2) yearsfollowing the Closing Date with respect to fifty percent (50%) of the ParentCommon Stock to be acquired by the Principal Stockholders pursuant to thisAgreement and three (3) years following the Closing Date with respect toforty percent (40%) of the Parent Common Stock to be acquired by the PrincipalStockholders pursuant to this Agreement, the Principal Stockholders shall not,directly or indirectly, without the prior written consent of Parent, offer,sell, contract to sell, transfer, pledge, grant any option to purchase, makeany short sale or otherwise dispose of (each such transaction, a “**Transfer**”), any of the Parent Common Stock;provided, however, that nothing in this **Section 6.6(b) **shall prevent orrestrict the Principal Stockholders from Transferring Parent Common Stock inconnection with a sale of Parent approved by the board of directors of Parent(whether by merger, consolidation, tender offer, exchange offer, sale of sharesof capital stock, other business combination transaction, sale of all orsubstantially all of the assets or otherwise). The foregoing restrictions are expressly agreed to preclude the PrincipalStockholders from engaging in any hedging or other transaction which isdesigned to or which reasonably could be expected to lead to or result in asale or disposition of any shares of Parent Common Stock even if such shareswould be disposed of by someone other than the Principal Stockholders.  Such prohibited hedging or other transactionswould include, without limitation, any short sale or any purchase, sale orgrant of any right (including, without limitation, any put or call option) withrespect to any of the Parent Common Stock or with respect to any security thatincludes, relates to, or derives any significant part of its value from ParentCommon Stock.

 

(c)                                  Subjectto **Section 6.6(b)**, if, at anytime during the period commencing on the six month anniversary of the ClosingDate and ending three years after such six month anniversary 

 

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(the “**Registration Period**”), Joseph E. Kasputysis unable to obtain an opinion of counsel reasonably acceptable to Joseph E.Kasputys and Parent opining that all of the shares of Parent Common Stock thatJoseph E. Kasputys then desires to sell pursuant to Rule 144 under theSecurities Act may then be sold pursuant to Rule 144 (subject to themanner of sale and volume limitations of Rule 144), (i) Parent shallpromptly file with the SEC a “shelf” registration statement with respect to theresale from time to time of the shares of Parent Common Stock issued to JosephE. Kasputys in the Merger, and (ii) Parent and Joseph E. Kasputys shallpromptly enter into a registration rights agreement on customary termsproviding for the maintenance of the effectiveness of the shelf registrationstatement for the remainder of the Registration Period.

 

(d)                                 Parentshall use its reasonable best efforts to cause the shares of Parent CommonStock to be issued in the Merger to be approved for listing on the NYSE,subject to notice of issuance, prior to the Closing Date.

 

6.7                                 EmployeeBenefits Matters.

 

(a)                        Fora period of at least twelve (12) months beginning on the Closing Date, Parentshall, or shall cause the Surviving Corporation to, provide those persons who,immediately prior to the Merger, were employees of the Company or itsSubsidiaries who remain employed by the Surviving Corporation or any of itsSubsidiaries following the Closing Date (“**ContinuingEmployees**”) with base pay and bonus opportunity that is at leastequal to the base pay and bonus opportunity provided to such ContinuingEmployees by the Company or its Subsidiaries immediately prior to the ClosingDate.  In addition, for the twelve (12)month period immediately following the Closing Date, Parent shall, or shallcause the Surviving Corporation to provide Continuing Employees with employeebenefit plans and policies that are no less favorable in the aggregate than theEmployee Benefits Plans in effect immediately prior to the Closing Date.  Parent shall cause Continuing Employees toreceive credit for purposes of eligibility to participate and vesting (but,except as required by applicable Law, not for any pension plan for any matter)under any employee benefit plan, program or arrangement in which theyparticipate established or maintained by Parent or any of its Subsidiaries forservice accrued or deemed accrued prior to the Merger with the Company or itsSubsidiaries; provided, however, that such crediting of serviceshall not operate to duplicate any benefit. In addition, with respect to any medical, dental, pharmaceutical and/orvision benefit plan of Parent or its Subsidiaries in which Continuing Employeesmay participate following the Effective Time (a “**New Plan**”), Parent shall cause all pre-existing conditionexclusion and actively-at-work requirements to be waived for such employees andtheir covered dependents (provided, however, that such waivershall not apply to any pre-existing condition that excluded any such employeeor dependent prior to the Merger from the corresponding arrangement maintainedby the Company or its Subsidiaries) and shall provide that any covered expensesincurred on or before the Closing Date by a Continuing Employee or a ContinuingEmployee’s covered dependents shall be taken into account for purposes ofsatisfying applicable deductible, coinsurance and maximum out-of-pocketprovisions under the relevant New Plan after the Closing Date to the sameextent as such expenses are taken into account for the benefit of similarlysituated employees of Parent and its Subsidiaries.  Notwithstanding the foregoing, nothingcontained in this **Section 6.7(a) **willlimit the right of Parent or the Surviving Corporation to terminate or suspendthe employment of any Continuing Employee after the Closing.

 

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(b)                                 Inaddition to honoring any severance and/or notice obligations pursuant toapplicable Law, Parent shall cause the Surviving Corporation to provideseverance arrangements as set forth in **Section 6.7(b) **ofthe Company Disclosure Schedule for employees of the Company or itsSubsidiaries severed during the twelve (12) month period immediately followingthe Closing Date.

 

6.8                                 Directors’and Officers’ Indemnification.

 

(a)                                  Fora period of six (6) years after the Effective Time, each of Parent and theSurviving Corporation shall, jointly and severally, indemnify and hold harmlessall past and present officers and directors of the Company for acts oromissions occurring at or prior to the Effective Time, excluding acts oromissions occurring in connection with the transactions contemplated herein andexcluding any matter covered by **Section 9.2(a) **evenif the coverage of **Section 9.2(a) **haslapsed, to the fullest extent (x) permitted by the DGCL or (y) providedunder the certificate of incorporation and bylaws of the Company in effect onthe date hereof (and shall also advance expenses as incurred in defense of anyaction, suit or proceeding to the fullest extent permitted under the DGCL; provided,that the Person to whom expenses are advanced provides an undertaking to repaysuch advances if it is ultimately determined that such Person is not entitledto indemnification); provided, that such indemnification shall besubject to any limitation imposed from time to time under the DGCL.

 

(b)                                 This**Section 6.8** shall survive theconsummation of the Merger, is intended to benefit the Company, the SurvivingCorporation and each indemnified party, shall be binding on all successors andassigns of the Surviving Corporation and Parent, and shall be enforceable bythe indemnified parties.  The provisionsof this **Section 6.8** areintended to be for the benefit of, and will be enforceable by, each indemnifiedparty, his or her heirs, and his or her representatives and are in addition to,and not in substitution for, any other rights to indemnification orcontribution that any such Person may have by Law, charter, statute, bylaw,contract or otherwise.

 

(c)                                  Thelosing party shall pay all expenses, including reasonable attorneys’ fees, thatmay be incurred by the persons referred to in this **Section 6.8** in connection with their enforcement of theirrights provided in this **Section 6.8**.

 

(d)                                 Inthe event Parent or the Surviving Corporation or any of their respectivesuccessors or assigns (i) consolidates with or merges into any otherPerson and shall not be the continuing or surviving corporation or entity ofsuch consolidation or merger or (ii) transfers all or substantially all ofits properties and assets to any Person, then, and in each such case, properprovision shall be made so that the successors and assigns of Parent or theSurviving Corporation, as the case may be, shall expressly assume and succeedto the obligations set forth in this **Section 6.8**.

 

6.9                                 TransferTaxes.  Parent shall be responsiblefor the timely payment of, and shall indemnify and hold harmless theCompany’s stockholders from and against, all Transfer Taxes, if any, arisingout of or in connection with the transactions contemplated by thisAgreement.  Parent shall prepare and fileall necessary documentation and Tax Returns with respect to such TransferTaxes; provided, however, that the Principal Stockholdersshall cooperate with Parent 

 

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and take anyaction reasonably requested by Parent which does not causethe Principal Stockholders to incur any cost or inconvenience in order tominimize such Transfer Taxes.

 

6.10                           SupplementalDisclosure.  The Company shall havethe right from time to time, but no later than three (3) Business Daysprior to the Closing Date, to supplement any Section of the CompanyDisclosure Schedule with respect to any matter that arises or becomes known bythe Company after the date hereof and that would have been required orpermitted to be set forth or described in the Company Disclosure Schedule hadsuch matter existed or been known to the Company as of the date of thisAgreement.  The Company’s representationsand warranties in **Article III**ofthis Agreement shall be deemed to include such supplemental disclosure as ofthe date of this Agreement and thereafter, including the Closing Date; provided,however, that any matters reflected in one or more of any suchsupplemental disclosures may be considered for purposes of determining whetherthe condition contained in **Section 7.2(h) **hasbeen satisfied.  Notwithstanding theforegoing or any provision of this Agreement to the contrary, no informationincluded in any supplemental disclosure as to which the Company had Knowledgeas of the date of this Agreement or that seeks to correct any error or omissionto the Company Disclosure Schedule relating to the period on or prior to thedate of this Agreement shall be considered to have been disclosed for purposesof determining whether Parent may seek indemnification under **Section 9.2(a) **and the CompanyDisclosure Schedule shall not be deemed to include or reflect any suchsupplemental disclosure.

 

**ARTICLE VII**

** **

**CONDITIONS TO CONSUMMATION OF THE MERGER**

 

7.1                                 Conditionsto Each Party’s Obligations to Effect the Merger.  The respective obligations of Parent, MergerSub and the Company to consummate the transactions contemplated by thisAgreement are subject to the satisfaction at or prior to the Effective Time ofeach of the following conditions:

 

(a)                                  ThisAgreement shall have been approved and adopted by the Company Requisite Vote.

 

(b)                                 Anywaiting periods applicable to the Merger under the HSR Act shall have expiredor early termination thereof shall have been granted.

 

(c)                                  Thereshall not be in effect any Law of any Governmental Entity of competentjurisdiction restraining, enjoining or otherwise preventing consummation of thetransactions contemplated by this Agreement.

 

7.2                                 Conditionsto the Obligations of Parent and Merger Sub.  The respective obligations of Parent andMerger Sub to consummate the transactions contemplated by this Agreement aresubject to the satisfaction at or prior to the Effective Time of each of thefollowing additional conditions, any or all of which may be waived in whole orpart by Parent and Merger Sub, as the case may be, to the extent permitted byapplicable Law:

 

(a)                        Eachof the representations and warranties of the Company contained herein, shall betrue and correct in all material respects, in each case, when made and on andas of the Closing 

 

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Date as thoughmade on and as of the Closing Date (except for representations and warrantiesmade as of a specified date, which shall be true and correct in all materialrespects, as the case may be, as of the specified date), except where any suchfailure to be true and correct would not reasonably be expected to result in aCompany Material Adverse Effect.

 

(b)                                 TheCompany shall have performed or complied in all material respects with allagreements and conditions contained herein required to be performed or compliedwith by it prior to or at the time of the Closing.

 

(c)                                  TheCompany shall have delivered to Parent (i) a certificate, dated the dateof the Closing, signed by an officer of the Company, certifying as to thesatisfaction of the conditions specified in **Sections7.2(a) **and **7.2(b)**,****and (ii) a certificate of goodstanding for the Company in the State of Delaware and of its Subsidiaries(where applicable) in their jurisdiction of incorporation, dated as of a datereasonably close to the Closing Date.

 

(d)                                 Parentshall have received counterparts to the Escrow Agreement executed by thePrincipal Shareholders and the Escrow Agent.

 

(e)                                  TheCompany shall have obtained, or caused to be obtained, each consent describedon **Schedule 7.2(e)**.

 

(f)                                    TheCompany shall have delivered to Parent a non-compete and non-solicitationagreement substantially in the form of **Exhibit B**executed by each of the Principal Stockholders.

 

(g)                                 JosephE. Kasputys shall have entered into an employment arrangement with the Companyor Parent substantially in the form of **Exhibit C**.

 

(h)                                 Thereshall not have been a Company Material Adverse Effect.

 

(i)                                     Thenumber of shares of Company Common Stock held by Dissenting Stockholders shallnot comprise more than 1% of the total outstanding shares of Company CommonStock.

 

(j)                                     Apay off letter with respect to the Company’s loans from Citizens Bank and arelease with respect to the Company’s loan from Joseph E. Kasputys shall havebeen received by the Company, each in form and substance reasonably acceptableto Parent.

 

7.3                                 Conditionsto the Obligations of the Company. The obligations of the Company to consummate the transactionscontemplated by this Agreement are subject to the satisfaction at or prior tothe Effective Time of each of the following conditions, any or all of which maybe waived in whole or in part by the Company to the extent permitted byapplicable law:

 

(a)                        Eachof the representations and warranties of Parent and Merger Sub containedherein, shall, be true and correct in all material respects, in each case, whenmade and on and as of the Closing Date as though made on and as of the ClosingDate (except for representations and warranties made as of a specified date,which need be true and correct as of the specified date), except where any suchfailure to be true and correct would not reasonably be expected to result in aParent Material Adverse Effect.

 

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(b)                                 Parentshall have performed or complied in all material respects with all agreementsand conditions contained herein required to be performed or complied with by itprior to or at the time of the Closing.

 

(c)                                  Parentshall have delivered to the Company a certificate, dated the date of theClosing, signed by an officer of Parent, certifying as to the satisfaction ofthe conditions specified in **Sections 7.3(a) **and**7.3(b)**.

 

(d)                                 ThePrincipal Stockholders shall have received counterparts to the Escrow Agreementexecuted by Parent and the Escrow Agent.

 

(e)                                  Parentor the Company shall have entered into an employment arrangement with Joseph E.Kasputys substantially in the form of **Exhibit C**.

 

(f)                                    Thereshall not have been a Parent Material Adverse Effect.

 

(g)                                 TheCompany shall have received a tax opinion of its Tax Counsel, dated as of theClosing Date, substantially to the effect that, on the basis of facts,representations and assumptions set forth in such opinion, the Merger and theSubsequent Merger, taken together, will be treated as a reorganization withinthe meaning of Section 368(a) of the Code and each of Parent and theCompany will be treated as a party to the reorganization within the meaning of Section 368(b) ofthe Code (the “**Tax Opinion**”).  The Company’s Tax Counsel shall be entitledto rely upon representation letters from each of the Company, Parent, MergerSub, Subco and others, in each case, in form and substance reasonablysatisfactory to such Tax Counsel.  Eachsuch representation letter shall be dated as of the date of the Tax Opinion.

 

**ARTICLE VIII**

** **

**TERMINATION; AMENDMENT; WAIVER**

 

8.1                                 Terminationby Mutual Agreement.  This Agreementmay be terminated and the Merger may be abandoned at any time prior to theEffective Time, whether before or after the approval of the Merger by theCompany Requisite Vote referred to in **Section 7.1(a)**,by mutual written consent of the Company and Parent by action of theirrespective Boards of Directors.

 

8.2                                 Terminationby Either Parent or the Company. This Agreement may be terminated and the Merger may be abandoned at anytime prior to the Effective Time by action of the Board of Directors of eitherParent or the Company if:

 

(a)                        theMerger shall not have been consummated by November 30, 2008 (the “**Outside Date**”); provided, however,that if on the Outside Date all conditions to consummation of the transactionscontemplated hereby set forth in **Article VII**are satisfied (other than those that by their terms are to be satisfied at theClosing) other than as set forth in **Section 7.1(b)**,then the Outside Date shall automatically be extended for an additional thirty(30) days following the Outside Date, and such date shall for all purposes ofthis Agreement be referred to as the Outside Date; or

 

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(b)                                 anyaction, proceeding or Law restraining, enjoining or otherwise prohibitingconsummation of the Merger shall become final and non-appealable (whetherbefore or after the approval of the Merger by the Company Requisite Vote); provided,however, that the right to terminate this Agreement pursuant to this **Section 8.2** shall not be available toany party that has breached in any material respect its obligations under thisAgreement in any manner that shall have proximately contributed to theoccurrence of the failure of the Merger to be consummated.

 

8.3                                 Terminationby the Company.  This Agreement maybe terminated and the Merger may be abandoned at any time prior to theEffective Time by action of the Company Board if there is a breach by Parent orMerger Sub of any representation, warranty, covenant or agreement contained inthis Agreement that cannot be cured and would cause a condition set forth in **Section 7.3(a) **or **7.3(b) **to be incapable of beingsatisfied as of the Outside Date.

 

8.4                                 Terminationby Parent.  This Agreement may beterminated and the Merger may be abandoned at any time prior to the EffectiveTime by Parent if there is a breach by the Company or the PrincipalStockholders of any representation, warranty, covenant or agreement containedin this Agreement that cannot be cured and would cause a condition set forth in**Section 7.2(a) **or **7.2(b) **to be incapable of beingsatisfied as of the Outside Date.

 

8.5                                 Effectof Termination and Abandonment.  Inthe event of termination of this Agreement and the abandonment of the Mergerpursuant to this **Article VIII,**this Agreement (other than **Sections 8.5, 5.2(b) **and**6.5**, and **Article IX**) shall become void and ofno effect with no liability on the part of any party hereto (or of any of itsstockholders, directors, officers, managers, employees, agents, legal andfinancial advisors, or other representatives); provided, however,that except as otherwise provided herein, no such termination shall relieve anyparty hereto of any liability or damages resulting from any fraud or willfulbreach of this Agreement.

 

8.6                                 Amendment.  This Agreement may be amended by action takenby the Company, Parent, Merger Sub and the Principal Stockholders at any timebefore or after approval of the Merger by the Company Requisite Vote but, afterany such approval, no amendment shall be made which changes the amount or formof the Final Aggregate Notional Value. This Agreement may not be amended except by an instrument in writingsigned on behalf of the parties hereto.

 

8.7                                 Extension;Waiver.  At any time prior to theEffective Time, each party hereto (for these purposes, Parent and Merger Subshall together be deemed one party and the Company and the PrincipalStockholders shall together be deemed the other party) may (i) extend thetime for the performance of any of the obligations or other acts of the otherparty, (ii) waive any inaccuracies in the representations and warrantiesof the other party contained herein or in any document, certificate or writingdelivered pursuant hereto, or (iii) waive compliance by the other partywith any of the agreements or conditions contained herein.  Any agreement on the part of either partyhereto to any such extension or waiver shall be valid only if set forth in aninstrument in writing signed on behalf of such party.  The failure of any party hereto to assert anyof its rights hereunder shall not constitute a waiver of such rights.

 

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**ARTICLE IX**

** **

**SURVIVAL; INDEMNIFICATION**

 

9.1                                 Survival.  The representations and warranties of theparties hereto contained in this Agreement shall survive the Closing untileighteen (18) months after the Closing Date. Notwithstanding the preceding sentence, any breach of a representationor warranty in respect of which indemnity may be sought under this Agreementshall survive the time at which it would otherwise terminate pursuant to thepreceding sentence, if written notice of the inaccuracy or breach thereofgiving rise to such right of indemnity shall have been given to the partyagainst whom such indemnity may be sought prior to such time.  All covenants and agreements contained inthis Agreement which are to have effect or be performed after the Closing shallsurvive the Closing in accordance with their terms.

 

9.2                                 Indemnification.

 

(a)                        Fromand after the Effective Time, Parent and its Affiliates and, withoutduplication, the Surviving Corporation and each Subsidiary of the SurvivingCorporation, together with their respective directors, managers, members,officers, stockholders, employees, agents, representatives successors andassigns, but not including any Person who received or was entitled to receivemerger consideration pursuant to **Section 2.2(c) **orpayment pursuant to **Section 2.6**,(collectively, the “**Parent Indemnitees**”),shall be entitled to joint and several indemnification from the Principal Stockholdersagainst (and to be held harmless from) any and all damage, loss, liability,fines, penalties and expense (including reasonable expenses of investigationand reasonable attorneys’ fees and expenses in connection with any action, suitor proceeding whether involving a third party claim or a claim solely among theparties hereto) (“**Damages**”)incurred or suffered by a Parent Indemnitee arising out of any (A) breachof representation or warranty made by the Company or the Principal Stockholderspursuant to this Agreement, (B) breach of covenant or agreement to beperformed by the Company on or prior to the Closing Date pursuant to thisAgreement, (C) claims by any stockholder or holder of Options of theCompany relating to the transactions contemplated by this Agreement, includingappraisal claims of any Dissenting Stockholders and any claims by anystockholders or holders of Options for breach of fiduciary or similar dutiesand for any claim for consideration due or to become due in connection with theMerger in addition to any consideration paid or to be paid pursuant to thisAgreement, or (D) cancellation of Options; provided that (otherthan in cases of fraud, intentional breach, or breach of a representation orwarranty under **Sections 3.2**,**3.3(a) **or **3.14**) (i) no claim under clause (A) of this **Section 9.2(a) **for breach ofrepresentation or warranty shall be payable unless the aggregate amount ofDamages with respect to all such claims exceeds $500,000**,** and thereafter only to the extent theaggregate amount of Damages relating to such claims exceeds $500,000 and theaggregate amount of Damages with regard to any individual claim exceeds$10,000, and (ii) the maximum liability for all claims under clause (A) ofthis **Section 9.2(a) **forbreach of representation or warranty shall not exceed the Escrow Amount, andshall be payable solely from the Escrow Account.  For cases of fraud, intentional breach, orbreach of representation or warranty under **Sections3.2**, **3.3(a) **or **3.14**, the maximum liability (without duplication)shall not exceed the aggregate amount of cash paid by Parent to stockholdersand holders of Options and the value, as such value may change from time totime (determined pursuant to the next sentence), of the aggregate number ofshares of Parent Common 

 

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Stock issuedby Parent in the Merger (in each case, other than in connection with the EarnOut Adjustment Amount, if any).  Forpurposes of determining the maximum liability as of the date on which suchliability is agreed to by the parties or determined by a final andnon-appealable judgment of a court of competent jurisdiction, the value of theshares of Parent Common Stock as of such date means the average closing priceof the Parent Common Stock on the NYSE, as reported in the Wall Street Journal,for the ten (10) consecutive trading days ending on the third trading dayprior to such date.  For the avoidance ofdoubt, the Principal Stockholders shall not have any right of contribution,right of indemnity or other right or remedy against the Surviving Corporationor its Subsidiaries in connection with the indemnification of ParentIndemnitees by the Principal Stockholders pursuant to this **Section 9.2(a)**.

 

(b)                                 Fromand after the Effective Time, Parent hereby indemnifies each stockholder of theCompany and each holder of Options who has received merger considerationpursuant to **Section 2.2(c) **orpayment pursuant to **Section 2.6**(collectively, the “**Stockholder Indemnitees**”)against and agrees to hold each of them harmless from any and all Damagesincurred or suffered by such Stockholder Indemnitees arising out of any (A) breachof representation or warranty made by Parent or Merger Sub pursuant to thisAgreement or (B) breach of covenant or agreement to be performed by Parentor Merger Sub on or prior to the Closing Date pursuant to this Agreement, providedthat, with respect to indemnification by Parent for any claim under this **Section 9.2(b) **(other than incases of fraud or intentional breach), (i) no claim under clause (A) ofthis **Section 9.2(b) **forbreach of representation or warranty shall be payable unless the aggregateamount of Damages with respect to all such claims exceeds $500,000, andthereafter only to the extent the aggregate amount of Damages relating to suchclaims exceeds $500,000 and the aggregate amount of Damages with regard to anyindividual claim exceeds $10,000, and (ii) the maximum liability for allclaims under clause (A) of this **Section 9.2(b) **forbreach of representation or warranty shall not exceed an amount equal to theEscrow Amount.  Any right to make anyclaims under this **Section 9.2(b) **shallbe exercised, solely by the Principal Stockholders on behalf of any StockholderIndemnitee.

 

9.3                                 Procedures.

 

(a)                                  Theparty seeking indemnification under this **Article IX**(the “**Indemnified Party**”) agreesto give prompt written notice to the party against whom indemnity is sought(the “**Indemnifying Party**”) of theassertion of any claim or the commencement of any suit, action or proceeding (“**Claim**”) in respect of which indemnity maybe sought under **Section 9.2**.  The failure to so notify the IndemnifyingParty shall not relieve the Indemnifying Party of its obligations hereunder,except to the extent such failure shall have materially and adverselyprejudiced the Indemnifying Party.

 

(b)                                 TheIndemnifying Party shall be entitled to participate in the defense of any Claimasserted by any third party (“**Third PartyClaim**”) and, subject to the limitations set forth in this **Article IX**, shall be entitled tocontrol and appoint lead counsel for such defense, in each case at its expense.

 

(c)                                  Ifthe Indemnifying Party shall assume the control of the defense of any ThirdParty Claim in accordance with the provisions of this **Section 9.3**, (i) the IndemnifyingParty shall obtain the prior written consent of the Indemnified Party (whichshall not be unreasonably

 

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withheld)before entering into any settlement of such Third Party Claim unless suchsettlement includes an unconditional release of such Indemnified Party fromliability arising out of such Third Party Claim, provides solely for monetaryrelief to be satisfied by the Indemnifying Party and would not reasonably beexpected to have an adverse effect on the Indemnified Party and (ii) theIndemnified Party shall be entitled to participate in the defense of any ThirdParty Claim and to employ separate counsel of its choice for such purpose.  The fees and expenses of such separatecounsel shall be borne by the Indemnified Party; provided that if theIndemnified Party would be entitled to indemnification hereunder, theIndemnifying Party shall pay the fees and expenses of such separate counsel (i) incurredby the Indemnified Party prior to the date the Indemnifying Party assumescontrol of the defense of the Third Party Claim or (ii) if representationof both the Indemnifying Party and the Indemnified Party by the same counselwould create a conflict of interest.

 

(d)           Each party shallcooperate, and cause their respective Affiliates to cooperate, in the defenseor prosecution of any Third Party Claim and shall furnish or cause to befurnished such records, information and testimony, and attend such conferences,discovery proceedings, hearings, trials or appeals, as may be reasonablyrequested in connection therewith.

 

9.4           Exclusive Remedy.  The parties hereby agree that no party shallhave any liability, and no party shall make any claim, for any Damages or othermatter, under, relating to or arising out of this Agreement, whether based oncontract, tort, strict liability, other Laws or otherwise, except as providedin this **Article IX**.

 

9.5           No Punitive Damages.  Notwithstanding anything in this Agreement tothe contrary, no party shall be liable for punitive damages, whether based oncontract, tort, strict liability, other law or otherwise and whether or notarising from the other party’s sole, joint or concurrent negligence, strictliability or other fault.

 

9.6           Calculation ofDamages.

 

(a)           The Parties shall havea duty to mitigate any Damages in connection with this Agreement.

 

(b)           The amount of anyDamages incurred by the Indemnified Party shall be reduced by the amount of anyTax benefit to the Indemnified Party arising from the recognition of Damages.

 

(c)           The amount of anyDamages incurred by the Indemnified Party shall be reduced by the amount of anyinsurance benefit to the Indemnified Party arising from such Damages.

 

(d)           Any liability forindemnification under this Agreement shall be determined without duplication ofrecovery by reason of the state of facts giving rise to such liabilityconstituting a breach of more than one (1) representation, warranty,covenant or agreement.

 

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**ARTICLEXMISCELLANEOUS**

 

10.1         Entire Agreement;Assignment.

 

(a)           This Agreement, theVoting Agreement, the Escrow Agreement and the other agreements referenced inthis Agreement constitute the entire agreement between the parties hereto inrespect of the subject matter hereof and supersede all other prior agreementsand understandings, both written and oral, between the parties in respect ofthe subject matter hereof, other than the Confidentiality Agreement (whichshall remain in effect until the Effective Time).

 

(b)           Neither this Agreementnor any of the rights, interests or obligations hereunder shall be assigned byoperation of law (including by merger or consolidation) or otherwise prior tothe Effective Time.  Any assignment inviolation of the preceding sentence shall be void.  Subject to the preceding sentence, thisAgreement will be binding upon, inure to the benefit of, and be enforceable by,the parties and their respective successors and assigns.

 

10.2         Notices.  All notices and other communications given ormade pursuant to this Agreement shall be in writing and shall be deemed to havebeen duly given or made if delivered personally or sent by overnight courier tothe parties at the following addresses:

 

if to MergerSub, the Surviving Corporation or

Parent, to:

 

IHS Inc.

1350 Avenue ofthe Americas, Suite 840

New York, NY10019

Attention:Stephen Green

 

with a copyto:

 

Nixon PeabodyLLP

100 SummerStreet

Boston, MA02110

Attention:Richard M. Stein

 

if to theCompany prior to the Effective Time, to:

 

Global Insight, Inc.

1000 WinterStreet

Suite 4300

Waltham,Massachusetts 02451

Attention:General Counsel

 

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with a copyto:

 

Skadden, Arps,Slate, Meagher & Flom LLP

1440 New YorkAvenue, N.W.

Washington,D.C. 20005

Attention:Marc S. Gerber

 

if to thePrincipal Stockholders, to:

 

Joseph E.Kasputys

Michael R.Kargula

c/o Skadden,Arps, Slate, Meagher & Flom LLP

1440 New YorkAvenue, N.W.

Washington,D.C. 20005

Attention:Marc S. Gerber

 

or to suchother address as the Person to whom notice is given may have previouslyfurnished to the other in writing in the manner set forth above.

 

10.3         Governing Law.  This Agreement shall be governed by andconstrued in accordance with the Laws of the State of Delaware, without givingeffect to the choice of law principles thereof. Each of the parties to this Agreement irrevocably and unconditionallyconsents to submit to the nonexclusive jurisdiction of the courts of the Stateof Delaware or, if it can acquire jurisdiction, of the United States DistrictCourt of the State of Delaware for any actions, suits or proceedings arisingout of or relating to this Agreement and the transactions contemplated herebyand further agrees that service of any process for any action, suit orproceeding may be brought against such party in any such court.  Each of the parties to this Agreementirrevocably and unconditionally waives any objection to the laying of venue ofany action, suit or proceeding arising out of this Agreement or thetransactions contemplated hereby, in such courts and irrevocably andunconditionally waives and agrees not to plead or claim in any such court thatany such action, suit or proceeding brought in any such court has been broughtin an inconvenient forum.

 

10.4         Descriptive Headings.  The descriptive headings herein and in theSchedules hereto are inserted for convenience of reference only and are notintended to be part of or to affect the meaning or interpretation of thisAgreement.

 

10.5         Parties in Interest.  This Agreement shall be binding upon andinure solely to the benefit of each party hereto and its successors andpermitted assigns, and, except as provided in **Article IX**,nothing in this Agreement, express or implied, is intended to or shall conferupon any other Person any rights, benefits or remedies of any nature whatsoeverunder or by reason of this Agreement, other than the Persons intended tobenefit from the provisions of **Section 6.8**(Directors’ and Officers’ Indemnification), who shall have the right to enforcesuch provisions directly.

 

10.6         Severability.  The provisions of this Agreement shall bedeemed severable and the invalidity or unenforceability of any provision shallnot affect the validity or enforceability of the

 

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otherprovisions hereof.  If any provision ofthis Agreement, or the application thereof to any Person or any circumstance,is invalid or unenforceable, (a) a suitable and equitable provision shallbe substituted therefor in order to carry out, so far as may be valid andenforceable, the intent and purpose of such invalid or unenforceable provisionand (b) the remainder of this Agreement and the application of suchprovision to other Persons or circumstances shall not be affected by suchinvalidity or unenforceability, nor shall such invalidity or unenforceabilityaffect the validity or enforceability of such provision, or the applicationthereof, in any other jurisdiction.

 

10.7         Counterparts.  This Agreement may be executed in two or morecounterparts, all of which shall be considered one and the same agreement andshall become effective when one or more counterparts have been signed by eachof the parties and delivered to the other parties.

 

10.8         Interpretation.

 

(a)           The words “hereof,” “herein,”“herewith” and words of similar import shall, unless otherwise stated, beconstrued to refer to this Agreement as a whole and not to any particularprovision of this Agreement, and article, paragraph, exhibit, and sectionreferences are to the articles, paragraphs, exhibits, and sections of thisAgreement unless otherwise specified. Whenever the words “include,” “includes,” or “including” are used inthis Agreement, they shall be deemed to be followed by the words “withoutlimitation.”  All terms defined in thisAgreement shall have the defined meanings contained herein when used in anycertificate or other document made or delivered pursuant hereto unless otherwisedefined therein.  The definitionscontained in this Agreement are applicable to the singular as well as theplural forms of such terms and to the masculine as well as to the feminine andneuter genders of such terms.  Anyagreement, instrument, or statute defined or referred to herein or in anyagreement or instrument that is referred to herein means such agreement,instrument, or statute as from time to time, amended, qualified orsupplemented, including (in the case of agreements and instruments) by waiveror consent and (in the case of statutes) by succession of comparable successorstatutes, and all attachments thereto and instruments incorporatedtherein.  References to a Person are alsoto its permitted successors and assigns.

 

(b)           The phrases “the dateof this Agreement,” “the date hereof,” and terms of similar import, unless thecontext otherwise requires, shall be deemed to refer to September 18,2008.

 

(c)           The parties haveparticipated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question ofintent or interpretation arises, this Agreement shall be construed as ifdrafted jointly by the parties and no presumption or burden of proof shallarise favoring or disfavoring any party by virtue of the authorship of anyprovisions of this Agreement.

 

10.9         Definitions.  As used herein,

 

“**Acquisition Proposal**” means an inquiry,offer or proposal regarding any of the following (other than the transactionscontemplated by this Agreement) involving the Company or any of its materialSubsidiaries: (i) any merger, consolidation, share exchange,recapitalization, business combination or other similar transaction; (ii) anysale, lease, exchange, mortgage,

 

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pledge,transfer or other disposition of all or substantially all the assets of theCompany and its Subsidiaries, taken as a whole, in a single transaction orseries of related transactions; (iii) any tender offer or exchange offerfor twenty percent (20%) or more of the outstanding shares of Company CommonStock; or (iv) any public announcement of a proposal, plan or intention todo any of the foregoing or any agreement to engage in any of the foregoing.

 

“**Adjustment Payment**” shall have the meaningset forth in **Section 2.13(h)**.

 

“**Affiliate**” means with reference to anyPerson, another Person controlled by, under the control of or under commoncontrol with, that Person.

 

“**Aggregate Actual Value**” shall have themeaning set forth in **Section 2.1(f)**.

 

“**Agreement**”****shall have the meaning set forth in the Preamble.

 

“**Antitrust Laws**” shall have the meaning setforth in **Section 6.1(b)**.

 

“**Business Day**” means a day other than aSaturday, Sunday or other day on which commercial banks in Denver, Colorado orBoston, Massachusetts are authorized or required by Law to close.

 

“**Certificate of Merger**” shall have themeaning set forth in **Section 1.3**.

 

“**Certificates**” shall have the meaning setforth in **Section 2.7.**

 

“**Claim**” shall have the meaning set forth in **Section 9.3(a)**.

 

“**Closing**” shall have the meaning set forthin **Section 1.2(a)**.

 

“**Closing Aggregate Cash Consideration**” shallhave the meaning set forth in **Section 2.1(c)**.

 

“**Closing Aggregate Notional Value**” shallhave the meaning set forth in **Section 2.1(b)**.

 

“**Closing Aggregate Stock Consideration**”shall have the meaning set forth in **Section 2.1(d)**.

 

“**Closing Cash**”****shall have the meaning set forth in**Section 2.13(b)(i)**.

 

“**Closing Date**” shall have the meaning setforth in **Section 1.2(a)**.

 

“**Closing Date Schedule**” shall have themeaning set forth in **Section 2.13(c)**.

 

“**Closing Deferred Subscription Revenue**”****shall have the meaning set forth in **Section 2.14(b)(ii)**.

 

“**Closing Indebtedness**”****shall have the meaning set forth in **Section 2.13(b)(iv)**.

 

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“**Closing Per Share Merger Consideration**”shall have the meaning set forth in **Section 2.1(g)**.

 

“**Closing Working Capital Amount**” shall havethe meaning set forth in **Section 2.13(b)(v)**.

 

“**Code**” means the United States InternalRevenue Code of 1986, as amended.

 

“**Company Board**” shall have the meaning setforth in **Section 3.3(b)**.

 

“**Company Common Stock**” means the Company’sCommon Stock, par value $0.01 per share.

 

“**Company Disclosure Schedule**” shall have themeaning set forth in the preamble to **Article III**.

 

“**Company Employees**” shall have the meaningset forth in **Section 3.16(a)**.

 

“**Company Financial Advisor**” shall have themeaning set forth in **Section 2.13(b)(iii)**.

 

**“CompanyLicensed Intellectual Property**” shall have the meaningset forth in **Section 3.11**.

 

“**Company Material Adverse Effect**” means anychange, circumstance or effect that, individually or in the aggregate with allother changes, circumstances and effects, is or would reasonably be likely (i) tobe materially adverse to the assets, properties, liabilities, financialcondition or results of operations of the Company and its Subsidiaries, takenas a whole, or (ii) to prevent, materially delay or materially impair theability of the Company to perform its obligations under this Agreement or toconsummate the transactions contemplated by this Agreement; provided, however,a Company Material Adverse Affect shall not include any such changes or effectsresulting directly or indirectly from: (i) changes in general economicconditions or securities or financial markets in general; (ii) generalchanges in the industries in which the Company and its Subsidiaries operate; (iii) anychanges in Laws applicable to the Company or any of its Subsidiaries or any oftheir respective properties or assets or interpretations thereof by anyGovernmental Entity; (iv) the announcement or the existence of, orcompliance with, this Agreement and the transactions contemplated hereby(including without limitation the impact thereof on relationships withcustomers or employees); and (v) changes in GAAP, or the interpretationthereof; except, in the case of the foregoing clause (ii), to the extent suchchanges or developments referred to therein would reasonably be expected tohave a materially disproportionate impact on the Company and its Subsidiaries,taken as a whole, relative to other participants in industries in which theCompany and its Subsidiaries operate.

 

“**Continuing Employees**” shall have themeaning set forth in **Section 6.7(a)**.

 

“**Convertible Notes**” shall have the meaningset forth in **Section 3.2(a)**.

 

“**Company Option Plan**” shall have the meaningset forth in **Section 2.6**.

 

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“**Company Owned Intellectual Property**” shallhave the meaning set forth in **Section 3.11**.

 

“**Company Requisite Vote”**shall have themeaning set forth in **Section 3.3(b)**.

 

“**Confidentiality Agreement**”****shall have the meaning set forth in **Section 5.2(b)**.

 

“**Damages**” shall have the meaning set forthin **Section 9.2(a)**.

 

**“DGCL”**shall have the meaning set forth in **Section 1.1**.

 

“**Dissenting Shares**” shall have the meaningset forth in **Section 2.12**.

 

“**Dissenting Stockholders**” shall have themeaning set forth in **Section 2.12**.

 

“**Earn Out Adjustment Amount**” shall have themeaning set forth in **Section 2.15(a)**.

 

“**Effective Time**” shall have the meaning setforth in **Section 1.3**.

 

“**Employee Benefit Plans**” shall have themeaning set forth in **Section 3.18(c)**.

 

“**Environmental Law**” means any and allapplicable international, federal, state, municipal, or local Laws, relating toor imposing liability for standards of conduct concerning protection of humanhealth or environment.

 

“**Environmental Permits**” shall have themeaning set forth in **Section 3.13**.

 

“**Escrow Account**”****shall have the meaning set forth in **Section 2.4**.

 

“**Escrow Agent**”****means the party****engagedby Parent and the Company at the Closing for the purpose of administering theEscrow Agreement and the Escrow Account.

 

“**Escrow Agreement**” means an escrow agreementin the form attached hereto as **Exhibit A**among Parent, the Principal Stockholders and the Escrow Agent.

 

“**Escrow Amount**” shall have the meaning setforth in **Section 2.13(i)**.

 

“**Estimated Closing Cash**”****shall have the meaning set forth in **Section 2.13(a)**.

 

“**Estimated Closing Deferred Subscription Revenue**”****shall have the meaning set forth in **Section 2.13(a)**.

 

“**Estimated Closing Indebtedness**”****shall have the meaning set forth in **Section 2.13(a)**.

 

“**Estimated Closing Working Capital**”****shall have the meaning set forth in **Section 2.13(a)**.

 

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“**EU Companies**” shall have the meaning setforth in **Section 3.14(vii)**.

 

“**Final Aggregate Notional Value**” shall havethe meaning sect forth in **Section 2.1(a)**.

 

“**Financial Statements**” shall have themeaning set forth in **Section 3.4**.

 

“**Governmental Entity**” shall have the meaningset forth in **Section 3.3(c)**.

 

“**Hazardous Substance**” means any substancewhich is: (i) defined as a hazardous substance, hazardous material,hazardous waste, pollutant or contamination under any Environmental Law, (ii) apetroleum hydrocarbon, including crude oil or any fraction thereof, or (iii) ahazardous, toxic, corrosive, flammable, explosive, infectious, radioactive,carcinogenic, or reproductive toxicant.

 

“**HSR Act**” means the Hart-Scott-RodinoAntitrust Improvements Act of 1976, as amended.

 

“**Indebtedness**” of any person means anyliability of any Person (i) for borrowed money or the deferred purchaseprice of property or services (other than trade payables incurred in theordinary course of business), (ii) under any reimbursement obligationrelating to a letter of credit, banker’s acceptance or note purchase facility, (iii) evidencedby a bond, note, debenture or similar instrument (including a purchase moneyobligation), or (iv) payment obligations under any interest rateprotection agreements and similar agreements constituting liability under U.S.generally accepted accounting principles.

 

“**Indemnified Party**”****shall have the meaning set forth in **Section 9.3(a)**.

 

“**Indemnifying Party**” shall have the meaningset forth in **Section 9.3(a)**.

 

“**Independent Accountant**” shall have themeaning set forth in **Section 2.13(g)**.

 

“**Initial****EscrowAmount**” shall have the meaning set forth in **Section 2.4**.

 

“**Intellectual Property**” means (i) UnitedStates, non-United States, and international patents, patent applications andstatutory invention registrations, (ii) trademarks, service marks, tradedress, logos, trade names, corporate names and other source identifiers, andregistrations and applications for registration thereof, (iii) copyrightableworks, copyrights, and registrations and applications for registration thereof,and (iv) confidential and proprietary information, including trade secretsand know-how.

 

“**Interim Balance Sheet**” shall have themeaning set forth in **Section 3.4**.

 

“**IRS**” shall have the meaning set forth in **Section 3.16(e)(vii)**.

 

“**Knowledge**” or the phrase “to the knowledgeof” or words of similar intent or effect, in this Agreement means the actualknowledge of: (i) for the Company, the Principal

 

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Stockholdersand those persons set forth in **Section 5.2(a) **ofthe Company Disclosure Schedule, and (ii) for Parent, Stephen Green,Richard Walker and Michael Sullivan.

 

“**Laws**” shall have the meaning set forth in **Section 3.6**.

 

“**Leased Properties**” shall have the meaningset forth in **Section 3.12**.

 

“**Lien**” means, in respect of any asset(including any security) any mortgage, lien, pledge, charge, security interest,or encumbrance of any kind in respect of such asset.

 

“**Material Contracts**” shall have the meaningset forth in **Section 3.9(a)**.

 

“**Material Permits**” shall have the meaningset forth in **Section 3.6**.

 

“**Merger**”****shallhave the meaning set forth in **Section 1.1**.

 

“**Merger Sub**”****shall have the meaning set forth in the Preamble.

 

“**Merger Sub Common Stock**” shall have themeaning set forth in **Section 2.2(a)**.

 

“**New Plan**” shall have the meaning set forthin **Section 6.7(a)**.

 

“**Non-US Employee Benefit Plan**” shall havethe meaning set forth in **Section 3.16(i)**.

 

“**NYSE**” shall have the meaning set forth in **Section 2.2(c)(ii)**.

 

“**Objection Notice**” shall have the meaningset forth in **Section 2.13(d)**.

 

“**Options**” shall have the meaning set forthin **Section 2.6**.

 

“**Outside Date**”****shall have the meaning set forth in **Section 8.2(a)**.

 

“**Parent**” shall have the meaning set forth inthe Preamble.

 

**“ParentCommon Stock**” means Parent’s Class A CommonStock, par value $0.01 per share.

 

“**Parent Common Stock Value**” shall have themeaning set forth in **Section 2.1(e)**.

 

“**Parent Earn Out Common Stock Value**” shallhave the meaning set forth in **Section 2.15(b)**.

 

“**Parent Indemnitees**” shall have the meaningset forth in **Section 9.2(a)**.

 

“**Parent Material Adverse Effect**” means anychange, circumstance or effect that, individually or in the aggregate with allother changes, circumstances and effects, is or would reasonably be likely (i) tobe materially adverse to the assets, properties, liabilities,

 

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financialcondition or results of operations of Parent and its Subsidiaries, taken as awhole, or (ii) to prevent, materially delay or materially impair theability of Parent to perform its obligations under this Agreement or toconsummate the transactions contemplated by this Agreement; provided, however,a Parent Material Adverse Affect shall not include any such changes or effectsresulting directly or indirectly from: (i) changes in general economicconditions or securities or financial markets in general; (ii) generalchanges in the industries in which Parent and its Subsidiaries operate; (iii) anychanges in Laws applicable to Parent or any of its Subsidiaries or any of theirrespective properties or assets or interpretations thereof by any GovernmentalEntity; (iv) the announcement or the existence of, or compliance with,this Agreement and the transactions contemplated hereby (including withoutlimitation the impact thereof on relationships with customers or employees);and (v) changes in GAAP, or the interpretation thereof; except, in thecase of the foregoing clause (ii), to the extent such changes or developmentsreferred to therein would reasonably be expected to have a materiallydisproportionate impact on Parent and its Subsidiaries, taken as a whole,relative to other participants in industries in which Parent and itsSubsidiaries operate.

 

“**Parent Payment**” shall have the meaning setforth in **Section 2.15(a)**.

 

“**Parent SEC Reports**” shall have the meaningset forth in **Section 4.10(a)**.

 

“**Parent True Up Common Stock Value**” shallhave the meaning set forth in **Section 2.13(i)**.

 

“**Parent SEC Reports**” shall have the meaningset forth in **Section 4.9(a)**.

 

“**Permitted Liens**” means (i) statutoryLiens not yet delinquent; (ii) Liens or imperfections of title theexistence of which would not reasonably be expected to materially detract fromthe value or impair the use of the asset or property in question; (iii) Liensfor Taxes or other liabilities not yet due or which are being contested in goodfaith; (iv) Liens in favor of Parent and Merger Sub arising out of, underor in connection with this Agreement; (v) Liens reflected on the InterimBalance Sheet; or (vi) with respect to real property, (A) easements,rights of way and other similar restrictions which would be shown by a currenttitle report, (B) conditions that may be shown by a current survey, titlereport or physical inspection, (C) zoning, building and other similarrestrictions imposed by applicable Law, and (D) any Lien affecting solelythe interest of the landlord under any lease for a Leased Property and not theinterest of the tenant thereunder.

 

“**Person**” means an individual, corporation,limited liability company, partnership, association, trust, unincorporatedorganization, other entity or group (as defined in the Securities Exchange Actof 1934, as amended).

 

“**Principal Stockholders**” means Joseph E.Kasputys and Michael R. Kargula.

 

“**Proceedings**” shall have the meaning setforth in **Section 3.8**.

 

“**Registration Period**” shall have the meaningset forth in **Section 6.6(c)**.

 

“**SEC**” shall have the meaning set forth in **Section 4.10(a)**.

 

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“**Securities Act**” shall have the meaning setforth in **Section 6.6(a)(i)**.

 

“**Stockholder Indemnitees**” shall have themeaning set forth in **Section 9.2(c)**.

 

“**Subco**” shall have the meaning set forth in **Section 1.7.**

 

“**Subsequent Merger**” shall have the meaningset forth in **Section 1.7**.

 

“**Subsidiary**” means, in respect of anyPerson, any corporation, partnership or other entity or organization, whetherincorporated or unincorporated, of which (i) such other Person or anyother Subsidiary of such Person is a general or limited partner or (ii) anysecurities or other interests having by their terms ordinary voting power toparticipate in the election of the board of directors or others performingsimilar functions in respect of such corporation or other organization isdirectly or indirectly owned or controlled by such Person or by any one or moreof its Subsidiaries, or by such Person and one or more of its Subsidiaries.

 

“**Supplier Business Earn Out**” shall have themeaning set forth in **Section 2.15(a)**.

 

“**Surviving Corporation**” shall have themeaning set forth in **Section 1.1**.

 

“**Tax**” or “**Taxes**”means all taxes, charges, fees, imposts, levies or other assessments, includingall net income, gross receipts, capital, sales, use, ad valorem, value added,transfer, franchise, profits, inventory, capital stock, license, withholding,payroll, employment, social security, unemployment, excise, severance, stamp,occupation, property, and estimated taxes, customs duties, fees, assessmentsand charges of any kind whatsoever, together with any interest and anypenalties, fines, additions to tax or additional amounts imposed by any taxingauthority (domestic or foreign) and shall include any transferee liability inrespect of taxes, any liability in respect of taxes imposed by contract, taxsharing agreement, tax indemnity agreement or any similar agreement.

 

“**Tax Counsel**” means Skadden, Arps, Slate,Meagher & Flom LLP.

 

“**Tax Opinion**” shall have the meaning setforth in **Section 7.3(g)**.

 

“**Third Party Claim**” shall have the meaningset forth in **Section 9.3(b)**.

 

“**Transaction Expenses**” shall have themeaning set forth in **Section 6.5**.

 

“**Transfer**” shall have the meaning set forthin **Section 6.6(b)**.

 

“**Transfer Taxes**” means any and all transferTaxes (excluding Taxes measured in whole or in part by net income), includingsales, use, excise, stock, stamp, documentary, filing, recording, permit,license, authorization and similar Taxes, fees, duties, levies, customs,tariffs, imposts, assessments, obligations and charges.

 

“**True Up Per Share Merger Consideration**”shall have the meaning set forth in **Section 2.13(i)**.

 

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**“VAT”**means the value added tax provided for in Directive 2006/112/EC and chargedunder the provisions of any national legislation implementing that directive orDirective 77/388/EEC together with legislation supplemental thereto.

 

“**Voting Agreement**” shall have the meaningset forth in the Recitals.

 

“**Year End Balance Sheet**” shall have themeaning set forth in **Section 2.13(a)**.

 

[THE REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESSWHEREOF, each of the parties has caused this Agreement to be duly executed onits behalf as of the date first above written.

 

 
|   | IHS INC.                     |
|--------|------------------------------|
|   |                         |
|   |                         |
|   | By:                          |   |
|   | Name:                        |
|   | Title:                       |
|   |                         |
|   |                         |
|   | PROJECT  LINCOLN SUB I, INC. |
|   |                         |
|   |                         |
|   | By:                          |   |
|   | Name:                        |
|   | Title:                       |
|   |                         |
|   |                         |
|   | GLOBAL  INSIGHT, INC.        |
|   |                         |
|   |                         |
|   | By:                          | /S/ Joseph  E. Kasputys |
|   |                         |
|   | Name:                        | Joseph E.  Kasputys |
|   | Title:                       | Chairman,  President and Chief Executive |
|   |                         | Officer |
|   |                         |
|   |                         |
|   |                         | /S/ Joseph  E. Kasputys |
|   | Joseph E.  Kasputys          |
|   |                         |
|   |                         |
|   |                         | /S/ Michael  R. Kargula |
|   | Michael R.  Kargula          |
|        |                              |  |  |

 

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[SignaturePage to the Agreement and Plan of Merger]

 

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