10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2004
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to        .

Commission File No.  1-14371

INFORMATION HOLDINGS INC.

(Exact name of Registrant as specified in its charter)

Delaware	06-1518007
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
2777 Summer Street, Suite 602 Stamford, Connecticut	06905
(Address of principal executive offices)	(Zip Code)
(203) 961-9106
(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

ýYes oNo

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

ýYes oNo

As of August 3, 2004, there were 20,922,714 shares of the Company’s common stock, par value $0.01 per share, outstanding.

INFORMATION HOLDINGS INC.

Form 10-Q for the Quarter Ended June 30, 2004

Table of Contents

PART I.    FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Consolidated Balance Sheets
	As of June 30, 2004 (Unaudited) and December 31, 2003
	Consolidated Statements of Operations (Unaudited) for the
	Three Months Ended June 30, 2004 and 2003 and
	Six Months Ended June 30, 2004 and 2003
	Consolidated Statements of Cash Flows (Unaudited) for the
	Six Months Ended June 30, 2004 and 2003
	Notes to Consolidated Financial Statements (Unaudited)
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Item 4.	Controls and Procedures
PART II.    OTHER INFORMATION
Item 1.	Legal Proceedings
Item 4.	Submission of Matters to a Vote of Security Holders
Item 6.	Exhibits and Reports on Form 8-K
	Signature

INFORMATION HOLDINGS INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	June 30, 2004			December 31, 2003
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	41,765		$	39,693
Short-term investments	8,875			12,271
Restricted cash	—			3,000
Accounts receivable (net of allowance for doubtful accounts of $538 and $693, respectively)	39,434			37,650
Prepaid expenses and other current assets	3,699			5,669
Income taxes receivable	1,638			11,899
Deferred income taxes	2,001			2,001
Total current assets	97,412			112,183
Investments	97,219			83,207
Property and equipment, net	3,864			4,281
Identified intangible assets, net	67,078			70,248
Goodwill	99,431			100,871
Other assets	5,150			3,880
TOTAL	$	370,154		$	374,670
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	32,154		$	32,073
Accrued expenses	12,746			18,124
Deferred revenue	24,546			25,753
Total current liabilities	69,446			75,950
Long-term deferred income taxes	14,957			16,307
Total liabilities	84,403			92,257
STOCKHOLDERS’ EQUITY:
Preferred stock, $.01 par value; 1,000,000 shares authorized; none issued	$	—		$	—
Common stock, $.01 par value; authorized 50,000,000 shares; issued 21,924,273 and 21,882,604 shares, respectively; outstanding 20,917,073 and 20,875,404 shares, respectively	219			219
Additional paid-in capital	248,844			247,964
Retained earnings	42,456			38,304
Treasury stock, at cost, 1,007,200 shares, in both periods	(14,723		)	(14,723		)
Accumulated other comprehensive income	8,955			10,649
Total stockholders’ equity	285,751			282,413
TOTAL	$	370,154		$	374,670

See notes to unaudited consolidated financial statements.

1

INFORMATION HOLDINGS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

	Three Months Ended June 30,					Six Months Ended June 30,
	2004			2003		2004			2003
Revenues:
Product	$	12,961		$	11,845	$	28,159		$	23,906
Service	10,119			7,910		19,521			15,506
Total revenues	23,080			19,755		47,680			39,412
Cost of sales:
Product	3,173			3,067		6,402			6,063
Service	3,755			3,320		7,037			6,692
Total cost of sales	6,928			6,387		13,439			12,755
Gross profit	16,152			13,368		34,241			26,657
Operating expenses:
Selling, general and administrative	9,983			9,183		21,023			18,040
Depreciation and amortization	3,000			2,645		6,037			5,354
Total operating expenses	12,983			11,828		27,060			23,394
Income from operations	3,169			1,540		7,181			3,263
Other income (expense):
Interest income, net	735			676		1,575			808
Costs associated with pending merger	(590		)	—		(590		)	—
Early termination of credit agreement	—			—		—			(575		)
Other income, net	15			—		318			—
Income from continuing operations before income taxes	3,329			2,216		8,484			3,496
Provision for income taxes	1,152			833		2,971			1,230
Income from continuing operations	2,177			1,383		5,513			2,266
(Loss) income from discontinued operations, net of income taxes	(1,256		)	29,389		(1,361		)	29,600
Net income	$	921		$	30,772	$	4,152		$	31,866
Net income (loss) per basic common share:
Continuing operations	$	0.10		$	0.07	$	0.26		$	0.11
Discontinued operations	(0.06		)	1.39		(0.07		)	1.39
Net income	$	0.04		$	1.45	$	0.20		$	1.50
Net income (loss) per diluted common share:
Continuing operations	$	0.10		$	0.07	$	0.26		$	0.11
Discontinued operations	(0.06		)	1.39		(0.06		)	1.39
Net income	$	0.04		$	1.45	$	0.20		$	1.49
Weighted number of common shares outstanding:
Basic	20,901			21,167		20,893			21,302
Diluted	21,066			21,198		21,027			21,330

See notes to unaudited consolidated financial statements.

2

INFORMATION HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (in thousands)

	Six Months Ended June 30,
	2004			2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	4,152		$	31,866
Gain on sale of assets of discontinued operations	—			(30,332		)
Loss from discontinued operations	1,361			732
Income from continuing operations	5,513			2,266
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	1,981			1,954
Amortization of other intangible assets	4,056			3,400
Gain on sale of assets	(418		)	—
Change in deferred income taxes	(1,532		)	(773		)
Termination of credit facility	—			494
Net amortization of premiums on investments available for sale	1,236			—
Other	(763		)	108
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable, net	(1,972		)	3,301
Decrease in prepaid and other current assets	1,230			1,497
Decrease in accounts payable and accrued expenses	(5,471		)	(1,533		)
Income tax benefit from stock options exercised	99			99
Net change in income taxes payable (receivable)	11,081			(2,533		)
Decrease in deferred revenue	(1,409		)	(1,197		)
Net change in other assets and liabilities	38			(193		)
Net Cash Provided by Continuing Operations	13,669			6,890
Net Cash Provided by Discontinued Operations	—			1,801
Net Cash Provided by Operating Activities	13,669			8,691
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of discontinued operations, net of transaction costs	(798		)	91,969
Purchases of property and equipment	(1,150		)	(860		)
Purchases of other investments held to maturity	—			(6,742		)
Purchases of investments available for sale	(61,314		)	(23,642		)
Proceeds from sales and maturities of investments available for sale	49,462			—
Net proceeds on sale of assets	515			—
Amounts received from (deposited in) escrow funds	3,000			(3,000		)
Capitalized software development cost	(1,647		)	(493		)
Capitalized internal-use software	(189		)	(304		)
Net Cash (Used in) Provided by Continuing Operations	(12,121		)	56,928
Net Cash Used in Discontinued Operations	—			(827		)
Net Cash (Used in) Provided by Investing Activities	(12,121		)	56,101
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock issued from stock options exercised	781			642
Purchase of common stock for treasury	—			(9,496		)
Principal payments on capital leases	(63		)	(71		)
Net Cash Provided by Continuing Operations	718			(8,925		)
Net Cash Used in Discontinued Operations	—			(106		)
Net Cash Provided by Financing Activities	718			(9,031		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(194		)	165
NET INCREASE IN CASH AND EQUIVALENTS	2,072			55,926
CASH AND EQUIVALENTS, BEGINNING OF PERIOD	39,693			53,910
CASH AND EQUIVALENTS, END OF PERIOD	$	41,765		$	109,836

See notes to unaudited consolidated financial statements.

3

INFORMATION HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

A.THE COMPANY

Information Holdings Inc. (IHI or the Company) is a leading provider of intellectual property and regulatory information products, software and services to professional end-users.  IHI’s data businesses, which include MicroPatent, Master Data Center (MDC) and IDRAC, provide a broad array of databases, information products and complementary services for intellectual property and regulatory professionals.  IHI’s software segment includes Liquent, a leading provider of life science regulatory intelligence and publishing solutions.

B.THE THOMSON MERGER AGREEMENT

On June 28, 2004, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with The Thomson Corporation (Thomson), a global leader in providing integrated information solutions to business and professional customers whose common shares are traded on the Toronto Stock Exchange (TSX:TOC) and the New York Stock Exchange (NYSE:TOC).  The provisions of the Merger Agreement are complicated and not easily summarized.  Readers should review the definitive proxy statement and proxy statement supplement (the Proxy Statement) filed with the SEC on July 27, 2004 and August 6, 2004, respectively which contains additional information about the merger and includes a copy of the Merger Agreement.

Under the terms of the Merger Agreement, a Thomson subsidiary will acquire all of the outstanding common stock of Information Holdings Inc. at a price of $28.00 per share in cash, representing an aggregate cost of approximately $441 million, net of cash and investments held by IHI, as of the date of the Merger Agreement.  Consummation of the transaction is subject to various conditions, including approval by IHI’s stockholders and regulatory approvals.  The Company will hold a special meeting of its stockholders to consider and vote on proposals to approve the merger and related matters on August 31, 2004 (the Special Meeting).  At the time the merger becomes effective, each share of the Company’s common stock will be converted into the right to receive $28.00 in cash. Options to acquire shares under the Company’s 1998 Stock Option Plan will become fully vested and be converted into the right to receive the excess of $28.00 per share over the applicable stock option exercise price.  Fees associated with the transaction and incurred for the three and six months ended June 30, 2004 approximated $0.6 million.  IHI expects to incur additional expenses related to this transaction totaling between approximately $5 million and $6 million, which include:  investment banking, legal and accounting fees, certain fees related to the filing, printing and mailing of the related Proxy Statement, and other fees and expenses associated with the transaction.

The Company has agreed that from the date of the signing of the Merger Agreement, until the closing date of the merger, it will cause each of its subsidiaries to carry on business in the ordinary course, and use commercially reasonable efforts to preserve intact its respective current business organizations, to keep its assets in good working condition, to maintain the confidential nature of and legal protections applicable to material intellectual property rights, to keep available the services its respective current executive officers and key employees and to maintain good working relationships with persons having a material business relationship with the Company.  The Company has also agreed to certain restrictions during this period related to items including, among other things: changes in capital structure, dividends, changes in organizational documents, acquisitions and dispositions, material agreements, employee benefits

4

and compensation, accounting and tax practices, and capital expenditures.  These items are discussed in greater detail in the Proxy Statement.

The Proxy Statement includes a description of the termination provisions included in the Merger Agreement.  Pursuant to the Merger Agreement, the Company must pay to Thomson an amount equal to $20 million if the Merger Agreement is terminated under the circumstances set forth in the Merger Agreement and the Proxy Statement.  As described in the proxy statement supplement, under the terms of the proposed settlement of the purported class action lawsuit described in Note K - Subsequent Event, the termination fee payable to Thomson will be reduced from $20 million to $18.5 million.

C.BASIS OF PRESENTATION

The consolidated balance sheet of the Company at December 31, 2003 has been derived from IHI’s Annual Report on Form 10-K for the year then ended.  All other consolidated financial statements contained herein have been prepared by IHI and are unaudited.  These consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2003 and the notes thereto contained in IHI’s Annual Report on Form 10-K.

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.  However, in the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the consolidated financial position of IHI as of June 30, 2004, and the consolidated results of operations and cash flows for the periods presented herein.  Operating results for the three and six months ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ended December 31, 2004.

The consolidated financial statements include the accounts of IHI and its wholly owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.

During 2003, the Company sold substantially all of the assets and certain liabilities of its wholly owned subsidiaries Transcender LLC and CRC Press and Subsidiaries (See Note F – Discontinued Operations).  Accordingly, for financial statement purposes, the assets, liabilities, results of operations and cash flows of these components have been segregated from those of continuing operations and are presented in the Company’s consolidated financial statements as discontinued operations for all periods presented herein.

5

D.ACCOUNTING FOR STOCK-BASED COMPENSATION

Under the terms of the Merger Agreement, the Company is not permitted to grant future stock options between the date of the Merger Agreement and the effective date of the merger without Thomson’s consent.  Prior to the date of the Merger Agreement, the Company granted stock options for a fixed number of shares to employees and non-employee directors with an exercise price equal to the fair value of the shares at the date of grant.  The Company accounts for its stock option grants under the provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, which utilizes the intrinsic value method.  Since stock options were granted by the Company with exercise prices equal to the market price of the underlying stock at the date of grant, no compensation expense has been recognized in the Company’s Consolidated Statements of Operations.

Had compensation cost for the Company’s stock option plan been recognized based upon the estimated fair value of the options at the dates of grant consistent with the requirements of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure, the Company’s net income and earnings per share would have been the pro forma amounts indicated below:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except per share data):	2004			2003			2004			2003
Net income as reported	$	921		$	30,772		$	4,152		$	31,866
Deduct: Total stock-based compensation expense determined under fair value based method for all awards, net of related tax effects	(287		)	(506		)	(907		)	(1,394		)
Pro forma net income	$	634		$	30,266		$	3,245		$	30,472
Earnings per common share:
Basic – as reported	$	0.04		$	1.45		$	0.20		$	1.50
Basic – pro forma	$	0.03		$	1.43		$	0.16		$	1.43
Diluted – as reported	$	0.04		$	1.45		$	0.20		$	1.49
Diluted – pro forma	$	0.03		$	1.43		$	0.15		$	1.43

The effects on pro forma net income and earnings per share of expensing the estimated fair value of stock options are not necessarily representative of the effects on reported net income for future years due to such factors as the vesting period of the stock options and the potential for issuance of additional stock options in future years.  For purposes of pro forma disclosure, the estimated fair value of options granted is amortized to expense over the option vesting period.

The Company estimates the fair value of each option grant on the date of grant using the Black-Scholes option-pricing model (the Black-Scholes Model) using certain assumptions.  These assumptions are evaluated and revised, as necessary, to reflect market conditions and the Company’s experience.  The Black-Scholes Model was developed for use in estimating the value of traded options that have no vesting restrictions and are fully transferable.  Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the estimate, in management’s opinion, the existing Black-Scholes Model may not provide a reliable measure of the fair value of the Company’s employee stock options.

6

E.ACQUISITION

On December 1, 2003, the Company acquired the issued share capital of CDC Solutions Limited (CDC), a private company based in the United Kingdom for cash consideration of approximately $26,287,000 (Cash Consideration).  CDC is a leading provider of life science regulatory intelligence and publishing solutions.  The Cash Consideration includes approximately $22,126,000 of initial consideration, approximately $3,836,000 currently held in escrow for estimated guaranteed earnouts as defined and calculated in accordance with the underlying Share Purchase Agreement (SPA), and approximately $325,000 of closing costs associated with the transaction.

In the first quarter of 2004 the Company received a valuation of the fair value of the identified intangible assets and their estimated useful lives which range from four to ten years.  The purchase price of CDC was accordingly adjusted to reflect acquired identified intangible assets of $4,810,000, and the related deferred tax liability recorded as a result of the gross up of acquired intangible assets was adjusted to $1,443,000 based on the valuation.  In addition, during the first six months of 2004 certain other adjustments to the purchase price were recorded to increase net tangible assets acquired to $12,000.  Accordingly, non-deductible goodwill was adjusted to $22,908,000.

In accordance with the Company’s plan to integrate the CDC business with its Liquent business, the Company accrued as of the acquisition date approximately $765,000 of costs at CDC related to severance and for the remaining lease costs related to abandoned property.  As of June 30, 2004, the Company paid $398,000 of severance and $94,000 of lease costs against the liability.  For the year ended December 31, 2003, severance and integration costs of $749,000 had been charged to expense at Liquent related to the CDC integration.  The remaining liability at December 31, 2003 related to these costs was $606,000.  During the first quarter of 2004, Liquent charged additional severance costs related to the CDC integration of approximately $108,000 to Selling, general and administrative expense.  The Company paid $256,000 of severance costs and $155,000 of lease costs during the first six months of 2004.  The balance of the severance costs are expected to be paid by the third quarter of 2004 and the lease costs over the life of the lease, which terminates in October 2005.

In addition to guaranteed future consideration of approximately $3,836,000, which has been paid into escrow, the sellers were entitled to additional consideration dependent on the revenue of CDC for the year ended December 31, 2003.  Based on calculations outlined in the SPA, the Company accrued additional consideration as of December 31, 2003 of approximately $1,147,000, which was paid during the second quarter of 2004.

The Company has a further liability to the sellers for Earnout Consideration (as defined in the SPA) which is to be calculated by March 31, 2007 based on formulas related to revenues and EBITDA (earnings before interest, taxes, depreciation and amortization) of the combined Liquent-CDC business for the three-year period ending December 31, 2006 (the Earnout Period).  Amounts due for the Earnout Consideration, if any, will be paid during the second quarter of 2007, unless the provisions related to a change in control discussed below come into effect.  Earnout Consideration will become due if the combined business has greater than 10% annual compound revenue growth during the Earnout Period, or if EBITDA exceeds $15,000,000 for either the year ending December 31, 2006 or on average for the three years of the Earnout Period.  The Earnout Consideration is subject to a maximum of £10,000,000 and could be as low as zero.  The Company currently believes that Earnout Consideration could reasonably range from $6 million to $10 million.

7

In the event of a sale of all or substantially all of the share capital of the Company or the combined Liquent-CDC business during the Earnout Period, the sellers have the right, but not an obligation, to elect a payout of the Earnout Consideration.  The payout of the Earnout Consideration in the event of a sale varies depending on the year of such sale and the operating performance of the combined business through the date of sale.  The range of payout is zero to £5,000,000 if a sale occurs in 2004, zero to £7,500,000 if a sale occurs in 2005 and zero to  £10,000,000 if a sale occurs in 2006.

The CDC acquisition has been accounted for using the purchase method of accounting and, accordingly, the results of its operations have been included in the Company’s results of operations from its date of acquisition.

The following unaudited pro forma information presents the results of operations of the Company as if the 2003 acquisition of CDC had taken place on January 1, 2003:

(In thousands, except per share data)	Three Months Ended June 30, 2003		Six Months Ended June 30, 2003
Revenues	$	22,659	$	45,023
Net income	$	523	$	520
Basic income per common share	$	0.02	$	0.02
Diluted income per common share	$	0.02	$	0.02

These pro forma results of operations have been prepared for comparative purposes only and do not purport to be indicative of the operating results that would have occurred had the acquisition been consummated as of the above date, nor are they necessarily indicative of future operating results.

F.DISCONTINUED OPERATIONS

On December 22, 2003, the Company entered into an Asset Purchase Agreement to sell substantially all of the assets and certain liabilities of Transcender LLC (Transcender) to Self Test Software, Inc., a subsidiary of Kaplan, Inc. (the Transcender Buyer).  The transaction was completed on December 31, 2003.  The Company received net proceeds of $9.2 million, representing the cash consideration for the assets sold less deal related expenses.  During the first six months of 2004, the Company recorded a loss on sale of $1.4 million, net of income tax benefits, within discontinued operations primarily related to charges for abandoned real estate lease commitments and severance costs related to employees terminated in 2004.  Prior to sale, Transcender was included as part of the software segment (See Note I – Segment Information).

Pursuant to an Interim Transition Services Agreement (the TSA) between the Company and the Transcender Buyer, the Company acted as a service provider to the Transcender Buyer for the period from December 31, 2003 to May 31, 2004 (the Transition Period).  The TSA required the Company to retain all employees of Transcender through March 31, 2004 and certain employees through May 31, 2004.  The Transcender Buyer reimbursed the Company in full for all employee costs and incidental expenses during the Transition Period.  The Company was responsible to pay severance costs to any employee that was not offered employment or did not accept employment with the Transcender Buyer (the Terminated Employees).  During the first six months of 2004, the Company accrued and paid severance and related costs of approximately $0.3 million to the Terminated Employees; which costs resulted in a charge in discontinued operations of

8

approximately $0.2 million, net of income tax benefits.  The Company does not expect to incur any additional severance and related costs associated with the Terminated Employees subsequent to June 30, 2004.  The Transcender Buyer also reimbursed the Company in full for all real estate costs through March 31, 2004 and for a portion of real estate costs from April 1, 2004 through May 31, 2004.  Effective May 31, 2004 (the Abandonment Date), the Company abandoned office and warehouse space associated with its former Transcender operations (the Transcender Space).  As of the Abandonment Date, the Company accrued approximately $1.7 million representing future lease commitments, net of estimated sublease income of $1.0 million associated with the Transcender Space.  The Company recorded a charge of $1.1 million, net of income tax benefits, in discontinued operations during the second quarter of 2004 related to the abandoned properties.The Company paid approximately $0.1 million of lease costs during the second quarter of 2004.  The remaining lease commitment is expected to be paid over the life of the lease, which expires in March 2008.  The Company is actively seeking to sublet the Transcender Space, but there is no assurance that the Company will be able to sublet the space.  Accordingly, the Company may incur an additional charge to discontinued operations related to the remaining lease commitment in the future.

On February 27, 2003, the Company entered into a definitive purchase agreement (the Purchase Agreement) to sell substantially all of the assets and certain liabilities of its wholly owned subsidiaries CRC Press LLC (CRC Press), CRC Press (U.K.) LLC and Parthenon Publishing Group, Inc. (together, CRC), to CRC Press I LLC and Routledge No. 2 Limited, both wholly owned subsidiaries of Taylor & Francis Group plc.  The transaction was completed on April 8, 2003.  The Company received net proceeds of approximately $90 million, representing the cash consideration for the assets sold less deal related expenses and an adjustment made based on the closing balance sheet of CRC in accordance with the Purchase Agreement.  On April 8, 2004 the Company received $3.0 million of proceeds previously held in escrow related to representations and warranties contained in the Purchase Agreement.  CRC comprised the entirety of the Company’s former scientific and technology information (STI) segment.  Subsequent to the date of sale, the Company no longer has operations in the STI segment (See Note I – Segment Information).

Summary operating results for the discontinued operations follow:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2004			2003			2004			2003
Revenues	$	—		$	2,342		$	—		$	15,698
Loss from discontinued operations before income taxes	—			(1,477		)	—			(1,098		)
Benefit from income taxes on discontinued operations	—			(534		)	—			(366		)
(Loss) gain on sale of discontinued operations, net of income taxes	(1,256		)	30,332			(1,361		)	30,332
(Loss) income from discontinued operations, net of income taxes	$	(1,256	)	$	29,389		$	(1,361	)	$	29,600

9

G.EARNINGS (LOSS) PER SHARE

The following table sets forth the denominators used in computing basic and diluted earnings (loss) per common share for the periods indicated:

	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands)	2004	2003	2004	2003
Weighted average common shares outstanding:
Basic	20,901	21,167	20,893	21,302
Net effect of dilutive stock options –based on the treasury stock method	165	31	134	28
Diluted	21,066	21,198	21,027	21,330

For the three months ended June 30, 2004 and 2003, 401,748 and 998,239 stock options, respectively, were excluded from the computation of diluted earnings per common share due to their antidilutive effect.  For the six months ended June 30, 2004 and 2003, 410,748 and 1,011,239 stock options, respectively, were excluded from the computation of diluted earnings per common share due to their antidilutive effect.

H.COMMITMENTS AND CONTINGENCIES

Legal Proceedings

On December 5, 2002, Venturetek, L.P., Richard Elkin, Antoine Bernheim, Stacy Bernheim and Genstar, Ltd., derivatively as shareholders of Rand Publishing Co., Inc. (Rand) and individually, on their own behalf (the Plaintiffs) filed a complaint in the Supreme Court of the State of New York against the Company (the IHI Action) alleging that the Company’s predecessor fraudulently acquired assets or businesses that were corporate opportunities of Rand and that such acquisitions constituted a “conversion”.  The Plaintiffs sought a constructive trust over all of the Company’s shares and options and damages of approximately $750 million.  Additionally, the Company’s President and Chief Executive Officer, Mason P. Slaine, and Michael E. Danziger, a member of the Board of Directors, were named as defendants in a related action entitled Venturetek, L.P., et al. v. Rand Publishing Co., Inc., et al., filed in the Supreme Court of the State of New York (the Rand Action). Similar to the IHI Action, the Plaintiffs in the Rand Action alleged that certain acquisitions of assets and businesses by the Company constituted corporate opportunities usurped from Rand and that Messrs. Slaine and Danziger breached their fiduciary duties in connection therewith. The Plaintiffs in the Rand action sought a constructive trust over Messrs. Slaine’s and Danziger’s shares of the Company and damages alleged to be in excess of $150 million.  In February 2003, the Company moved to dismiss the complaint in its entirety on the grounds that it failed to state a claim as a matter of law and that it was barred by the applicable statutes of limitations.  In a written Memorandum Decision dated April 21, 2004, the Court granted the Company’s motion and dismissed the complaint in its entirety.  By Notice of Appeal filed May 13, 2004, the Plaintiffs appealed the trial court’s dismissal of the action to the Supreme Court, Appellate Division, First Department.  The Company believes that the complaint in its entirety is without merit and it intends to vigorously contest the claims.

In addition, from time to time the Company is a party to other legal and administrative proceedings, claims, and litigation arising in the ordinary course of its business. While the outcome of these matters is currently not determinable, management does not expect that the

10

ultimate costs to resolve these matters either singularly or in aggregate will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows (See Note K – Subsequent Event).

Merger Commitments

In connection with the termination provisions of the Merger Agreement, the Company could be required to pay Thomson a termination fee equal to $20 million under certain conditions as described in the Merger Agreement and as described in the Proxy Statement.  As described in the proxy statement supplement, under the terms of the proposed settlement of the purported class action lawsuit described in Note K - Subsequent Event, the termination fee payable to Thomson will be reduced from $20 million to $18.5 million.  In addition, the Company has an engagement letter with Morgan Stanley & Company that provides for the payment of a transaction fee equal to 1% of the transaction value upon completion of the merger.  The transaction value, estimated at $441 million as of the date of the Merger Agreement, is defined as the gross proceeds to the stockholders, less the amount of cash and marketable securities held by the Company at the closing date.

Lease Commitments

The Company primarily leases office space, and office and computer equipment, for its primary domestic operating units based principally in the following states:  Connecticut, Michigan, Pennsylvania and Virginia.  The Company also leases office space for its primary foreign operating units based principally in France and England. The leases generally provide for the lessee to pay taxes, maintenance, insurance and certain other operating costs of the leased property, and certain leases include escalation clauses.

During the second quarter of 2004, the Company’s MicroPatent and Liquent units entered into new office leases for its operations in California and in Pennsylvania.  The new leases are replacements of expiring leases previously existing at December 31, 2003 and will expire in 2007 and in 2015, respectively.  Also during the second quarter of 2004, the Company abandoned office and warehouse space associated with its Transcender Space.  Future lease obligations associated with the Transcender Space are reflected below, net of estimated sublease income (See Note F – Discontinued Operations).

Future annual minimum lease payments including estimated escalation amounts under noncancelable operating leases as of June 30, 2004 are as follows (in thousands):

Year ending December 31,
2004 (remaining six months)	$	1,664
2005	2,662
2006	1,624
2007	1,371
2008	910
Thereafter	3,470
Total minimum lease payments	$	11,701

11

I.SEGMENT INFORMATION

Operating segments are defined as components of an enterprise for which separate financial information is available and regularly reviewed by the Company’s senior management.  The Company evaluates performance based on EBITDA of the respective business units.

The Company has two reportable segments contributing to its results from continuing operations: data and software.  The data segment, which includes MicroPatent, MDC and IDRAC, provides a broad array of databases, information products and complementary services for intellectual property and regulatory professionals.  The software segment is comprised solely of Liquent, a leading provider of life science regulatory intelligence and publishing solutions.  Other includes unallocated corporate items, which primarily consists of corporate expenses and interest income earned on the Company’s taxable fixed income portfolio program.  Corporate assets consist principally of cash, cash equivalents and investments.

The following tables set forth the information for the Company’s reportable segments of continuing operations for the periods indicated (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
REVENUES FROM EXTERNAL CUSTOMERS:
Data	$	16,042		$	14,394		$	31,594		$	28,209
Software (1)	7,038			5,354			16,086			11,196
Other	—			7			—			7
	$	23,080		$	19,755		$	47,680		$	39,412
EBITDA:
Data	$	6,869		$	5,609		$	13,648		$	11,160
Software (1)	565			42			2,652			383
Other	(1,765		)	(1,417		)	(3,204		)	(3,416		)
	$	5,669		$	4,234		$	13,096		$	8,127
INCOME (LOSS) FROM OPERATIONS:
Data	$	4,593		$	3,524		$	8,670		$	6,993
Software (1)	(246		)	(558		)	1,011			(860		)
Other	(1,178		)	(1,426		)	(2,500		)	(2,870		)
	$	3,169		$	1,540		$	7,181		$	3,263

(1)Results include operations of CDC from the date of the acquisition December 1, 2003 only (See Note E - Acquisition).

The Company evaluates the performance of its segments based primarily on revenues and EBITDA. The Company believes that EBITDA is the most useful measure of business unit earnings because it more closely approximates the cash generating ability of each business compared to income (loss) from operations.  Income (loss) from operations includes charges for depreciation and amortization, the majority of which relate to amortization of intangible assets.  The Company generally does not incur capital expenditures to replace intangible assets within existing operations.

12

A reconciliation of EBITDA to income from continuing operations is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
EBITDA	$	5,669		$	4,234		$	13,096		$	8,127
Depreciation and amortization (1)	(3,075		)	(2,694		)	(6,187		)	(5,439		)
Interest income, net	735			676			1,575			808
Income from continuing operations before income taxes	3,329			2,216			8,484			3,496
Provision for income taxes	1,152			833			2,971			1,230
Income from continuing operations	$	2,177		$	1,383		$	5,513		$	2,266

(1)Depreciation and amortization includes $75,000 and $49,000 of amortization of capitalized software, classified as Cost of sales for the three months ended June 30, 2004 and 2003, respectively.  For the six months ended June 30, 2004 and 2003, respectively, depreciation and amortization includes $150,000 and $85,000 of amortization of capitalized software classified as Cost of sales.

J.COMPREHENSIVE INCOME (LOSS)

Comprehensive income is comprised of net income and other comprehensive income (loss).  Accumulated other comprehensive income includes foreign currency translation adjustments and unrealized gains and losses, net of the related tax effect, on available-for-sale securities and on derivative instruments designated and qualifying as cash flow hedges.  The following table is a reconciliation of the Company’s net income to comprehensive income  (loss):

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2004			2003			2004			2003
Net income	$	921		$	30,772		$	4,152		$	31,866
Other comprehensive income:
Change in net unrealized gains and losses on available-for-sale investments	(1,812		)	—			(1,600		)	—
Change in net unrealized gains and losses on cash flow hedges	212			—			(166		)	—
Reclass adjustment for net (losses) gains realized in net income	(41		)	—			165			—
Foreign currency translation adjustments	(444		)	(223		)	(701		)	(409		)
Estimated tax benefit	622			—			608			—
Net change in other comprehensive (loss) income	(1,463		)	(223		)	(1,694		)	(409		)
Comprehensive (loss) income	$	(542	)	$	30,549		$	2,458		$	31,457

13

K.SUBSEQUENT EVENT

On July 1, 2004, an action was filed as a purported class action in the Court of Chancery of the State of Delaware in and for New Castle County (Myszkowski v. Information Holdings Inc. et al., C.A. No. 537-N) against IHI, its directors and Thomson (the Class Action).  The complaint alleges, among other things, that approval of the merger by the Company’s directors amounted to a breach of fiduciary duty, that the $28.00 cash consideration per share to be received by the Company’s stockholders in the merger does not represent the true value of IHI and that there were relationships among Thomson, Warburg Pincus LLC, a New York limited liability company that manages Warburg, Pincus Ventures L.P., and some of the Company’s directors that created conflicts of interest preventing these directors from acting in the best interest of the Company’s stockholders.  The complaint asks for an injunction against the merger and damages as well as awarding the plaintiffs the costs and disbursements of this Class Action, including attorneys’ and experts’ fees.  The plaintiff and the defendants have negotiated a settlement to dismiss the action with prejudice, subject to (i) the drafting and execution of the settlement documents and the other agreements necessary to effectuate the terms of the proposed settlement; (ii) the completion by the plaintiff and his counsel of appropriate confirmatory discovery in the action sufficient to satisfy the plaintiff’s counsel that the proposed settlement is fair and reasonable; (iii) final court approval of the settlement and dismissal of the action with prejudice and without awarding costs to any party, except as agreed by the parties; and (iv) consummation of the merger, provided, that this condition (iv) shall be deemed to have been satisfied if the merger is not consummated due to (a) the merger not receiving the requisite vote of holders of outstanding shares of IHI common stock or (b) circumstances that give rise to the right of Thomson to receive from IHI a termination fee pursuant to the terms of the Merger Agreement.  As part of the settlement, IHI has agreed to provide the additional disclosure set forth in the proxy statement supplement and to pay fees and expenses of the plaintiff’s counsel in the amount of $280,000.  Additionally, Thomson agreed to reduce from $20 million to $18.5 million the termination fee to which it is entitled if the Merger Agreement is terminated under certain circumstances as described in the Merger Agreement and the Proxy Statement.  IHI and the other defendants continue to deny all of the allegations of wrongdoing contained in the complaint. The settlement is not, and should not be construed as, an admission of wrongdoing or liability by any defendant.

14

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis presents a review of Information Holdings Inc. (IHI or the Company) for the three and six months ended June 30, 2004 and 2003.  This review should be read in conjunction with the consolidated financial statements and notes presented herein as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s 2003 Annual Report on Form 10-K.

Certain statements in this report contain forward-looking statements, including, without limitation, statements relating to the Company’s plans, strategies, objectives, expectations, and intentions that are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  Actual results of the Company could differ materially from those anticipated in these forward-looking statements as a result of certain risks and uncertainties.  Readers are cautioned not to place undue reliance on the forward-looking statements and that forward-looking statements contained in this Form 10-Q should be read in conjunction with the Company’s disclosures within this Item 2 and under the heading Item 1.  Business – Risk Factors contained in the Company’s 2003 Annual Report on Form 10-K.  The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise.

Proposed Merger with Thomson

On June 28, 2004, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with The Thomson Corporation (Thomson), a global leader in providing integrated information solutions to business and professional customers.  Under the terms of the Merger Agreement, a Thomson subsidiary will acquire all of the outstanding common stock of Information Holdings Inc. at a price of $28.00 per share in cash, representing an aggregate cost of approximately $441 million, net of cash and investments held by IHI, as of the date of the Merger Agreement.  Consummation of the transaction is subject to various conditions, including approval by IHI’s stockholders and standard regulatory approvals.  The Company will hold a special meeting of its stockholders to consider and vote on proposals to approve the merger and related matters on August 31, 2004 (the Special Meeting).  At the time the merger becomes effective, each share of the Company’s common stock will be converted into the right to receive $28.00 in cash. Options to acquire shares under the Company’s 1998 stock option plan will become fully vested and be converted into the right to receive the excess of $28.00 per share over the applicable stock option exercise price.  Fees associated with the transaction and incurred for the three and six months ended June 30, 2004 approximated $0.6 million.  IHI expects to incur additional expenses related to this transaction totaling between approximately $5 million and $6 million, which include:  investment banking, legal and accounting fees; certain fees related to the filing, printing and mailing of the related Proxy Statement; and other fees and expenses associated with the transaction.

The Company has agreed that from the date of the signing of the Merger Agreement, until the closing date of the merger, it will cause each of its subsidiaries to carry on business in the ordinary course, and use commercially reasonable efforts to preserve intact its respective current business organizations, to keep its assets in good working condition, to maintain the confidential nature of and legal protections applicable to material intellectual property rights, to keep available the services its respective current executive officers and key employees and to maintain good working relationships with persons having a material business relationship with the Company.  The Company has also agreed to certain restrictions during this period related to items including, among other things:  changes in capital structure, dividends, changes in organizational documents, acquisitions and dispositions, material agreements, employee benefits and compensation, accounting and tax practices, and capital expenditures.

15

Overview

The discussions that follow do not take into account the potential impact of the Company’s proposed merger with Thomson announced on June 28, 2004, except for costs associated with the planned merger which are reflected in the Company’s results for the three and six months ended June 30, 2004.

Impact of Acquisitions and Divestitures

A key component of the Company’s historical growth has been to pursue acquisitions where opportunities exist to internally grow the acquired companies’ revenues and increase profitability through operating efficiencies.  Since beginning operations in January 1997, the Company has completed 15 substantial acquisitions, including seven in the data segment, two in the software segment and six in the former scientific and technology information and IT learning segments, as well as some minor acquisitions that are not otherwise disclosed herein.

The Company has two reportable segments contributing to its results from continuing operations: data and software.  The data segment, which includes MicroPatent, Master Data Center (MDC) and IDRAC, provides a broad array of databases, information products and complementary services for intellectual property and regulatory professionals.  The software segment is comprised solely of Liquent, a leading provider of life science regulatory intelligence and publishing solutions.  Other includes unallocated corporate items, which primarily consists of corporate expenses and interest income earned on the Company’s taxable fixed income portfolio program (the Investment Program).  Corporate assets consist principally of cash and cash equivalents and investments.

On February 27, 2003, the Company entered into a definitive purchase agreement (the Purchase Agreement) to sell substantially all of the assets and certain liabilities of CRC Press and its subsidiaries (CRC) to CRC Press I LLC and Routledge No. 2 Limited, both wholly owned subsidiaries of Taylor & Francis Group plc.  The transaction was completed on April 8, 2003.

On December 1, 2003, the Company acquired the issued share capital of CDC Solutions Limited (CDC) for cash consideration of approximately $26.3 million.  CDC is a leading provider of life science regulatory intelligence and publishing solutions that is being integrated with the Company’s Liquent business.  The results of operations of the acquired business has been included in the Consolidated Statement of Operations from the date of acquisition.  Since CDC has been combined with Liquent, CDC operations are included in the software segment for reporting purposes.

On December 22, 2003, the Company sold its Transcender LLC (Transcender) business to a subsidiary of Kaplan, Inc. (Kaplan).  Under the terms of the Asset Purchase Agreement , Kaplan acquired substantially all of the assets and assumed certain operating liabilities.  The transaction had an effective date of December 31, 2003.

In accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, all assets, liabilities, results of operations and cash flows of Transcender and CRC have been segregated from those of continuing operations and are presented in the Company’s financial statements as discontinued operations.  Additionally, the Company’s financial statements have been reclassified to reflect Transcender and CRC as discontinued operations for all prior periods presented herein.

Critical Accounting Policies

The discussion and analysis of the Company’s financial condition and results of operations are based on the Company’s consolidated financial statements.  The preparation of these financial statements in conformity with accounting principles generally accepted in the United States requires management to

16

make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  These estimates include, but are not limited to, revenue recognition, bad debt allowances, income taxes, and the valuation of goodwill and other identified intangible assets.  The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

The Company’s critical accounting policies are disclosed in the Company’s 2003 Annual Report on Form 10-K.  There have been no material changes to these policies during the first six months of fiscal 2004.

Consolidated Results of Operations

Three Months Ended June 30, 2004 Compared to Three Months Ended June 30, 2003

Summary

Total revenues increased $3.3 million, or 17%, to $23.1 million from $19.8 million.  Revenues increased by $1.6 million, or 11%, in the data segment and $1.7 million, or 32%, in the software segment.  During the quarter ended June 30, 2004, the Company derived approximately 56.2% of its revenues from product sales and approximately 43.8% from its service revenues.

Product revenues, which are derived from software license agreements, database subscriptions, and the sale of patent searching, retrieval and analysis products, increased $1.1 million, or 9%, to $13.0 million from $11.8 million.  Overall, new and existing customers increased demand for the Company’s products in 2004.  MicroPatent experienced increased volume of core subscription product sales and in file history transactional revenues, while IDRAC experienced an increase in database subscriptions.  Product revenues also increased as the result of the acquisition of CDC in December 2003.  Service revenues, which include fees for software maintenance, consulting and training, as well as from patent annuity and trademark renewal payment services, increased $2.2 million, or 28%, to $10.1 million from $7.9 million.  The increase was primarily attributable to the growth of the service business as a result of the acquisition of CDC.  Service revenues also increased at MDC primarily as the result of volume increases in intellectual property management services, due to increased sales of existing services to new customers, in addition to increased average pricing.

Total cost of sales increased $0.5 million, or 8%, to $6.9 million from $6.4 million.  Gross profit margins increased to 70.0% in the second quarter of 2004, from 67.7% for the corresponding period in 2003.  The improvement in gross profits was due to a shift in sales mix towards higher margin products at MicroPatent and a favorable impact on foreign exchange at IDRAC, as well as cost efficiencies as a result of the successful integration of the Company’s Liquent and CDC business units.

Selling, general and administrative expenses (SG&A) increased by $0.8 million, or 9%, to $10.0 million from $9.2 million due primarily to operating expenses related to CDC.  Depreciation and amortization increased by $0.4 million, or 13%, to $3.0 million from $2.6 million due primarily to amortization of intangible assets associated with the acquisition of CDC and the impact of foreign exchange fluctuations on amortization of intangible assets in the Company’s IDRAC unit during the second quarter of 2004.

17

Based on the factors above, income from operations increased $1.6 million, or 106%, to $3.2 million from $1.5 million.

During the second quarter of 2004, the Company recorded $0.6 million of non-operating expenses directly related to legal and accounting services associated with the recently announced merger with Thomson.

Net interest income remained constant at $0.7 million in the periods.  Interest income increased by approximately $0.2 million in 2004 due primarily to increased interest income resulting from higher yields earned in the Company’s Investment Program initiated in August 2003, coupled with interest earned on the invested cash proceeds received from the sale of Transcender.  This increase was offset by foreign exchange losses of $0.2 million related to interest earned on a corporate loan with IDRAC.

Based on the factors above, income from continuing operations before income taxes increased by $1.1 million to $3.3 million from $2.2 million.

The provision for income taxes as a percentage of pre-tax income was approximately 35% in the second quarter of 2004, compared to approximately 38% for the corresponding period in 2003.  The effective tax rate differs from statutory rates primarily as a result of state, local and foreign income taxes and permanent items.  The decrease in the tax rate is due to the favorable impact of permanent book-tax differences, which increased in dollar amount due to the CDC acquisition, partially offset by the increase in pre-tax income.

Based on the factors above, income from continuing operations increased by $0.8 million to $2.2 million, or $0.10 per diluted common share, in the second quarter of 2004 from $1.4 million, or $0.07 per diluted common share, in the second quarter of 2003.

(Loss) income from discontinued operations approximated $(1.3) million, or $(0.06) per diluted common share, in the second quarter of 2004, compared to $29.4 million, or $1.39 per diluted common share, in the second quarter of 2003.  Loss from discontinued operations in the second quarter of 2004 is related to charges for remaining abandoned real estate obligations and severance following the disposition of Transcender.  Income from discontinued operations in the second quarter of 2003 is related to a gain on the disposition of the assets of CRC.  The gain totaled $30.3 million, net of income taxes associated with the transaction of $15.9 million.

The Company evaluates the performance of its segments based primarily on revenues and EBITDA (earnings before interest, taxes, depreciation and amortization).  The Company believes that EBITDA is the most useful measure of business unit earnings because it more closely approximates the cash generating ability of each business compared to income (loss) from operations.  Income (loss) from operations includes charges for depreciation and amortization, the majority of which relate to amortization of intangible assets.  The Company generally does not incur capital expenditures to replace intangible assets within existing operations.  A reconciliation of segment EBITDA to income (loss) from continuing operations before income taxes is presented after the discussion of operating results.

Segment Review

Data

Total revenues increased $1.6 million, or 11%, to $16.0 million from $14.4 million.  During the quarter ended June 30, 2004, the data segment derived approximately 72.1% of its revenues from product sales and approximately 27.9% from service revenues.  Product revenues increased $0.9 million, or 8%, to $11.6 million from $10.7 million.  The strongest areas of product revenue growth included:  revenues

18

from patent information subscriptions, as a result of strong growth in core subscriptions and an increase in transactional revenues related to file histories at MicroPatent; and database subscriptions at IDRAC.  The primary growth driver in each area was increased volume.  MicroPatent volume growth relates primarily to sales of PatentWeb and Aureka products to new customers, as well as file history sales to both new and existing customers.  IDRAC volume growth relates primarily to increased sales of existing products and services to new customers, as well as a favorable foreign exchange impact due to strengthening of the Euro versus the U.S. dollar.  Service revenues increased $0.8 million, or 20%, to $4.5 million from $3.7 million.  Data segment service revenues, which are derived solely from MDC, increased primarily as the result of volume increases in intellectual property management services due to increased sales of existing services to new customers, in addition to increased average pricing.

Total segment cost of sales increased $0.4 million, or 10%, to $4.7 million from $4.3 million.  Total segment gross profit margins increased to 70.8% in the second quarter of 2004, from 70.4% for the corresponding period in 2003.  Gross product profit margins increased to 74.2% from 72.8%, while gross service profit margins decreased to 62.1% from 63.5%.   The increase in gross product profit margins is due primarily to higher gross profits at MicroPatent resulting from increased web based transactions which have relatively fixed costs, while the decrease in gross service profit margins is attributable to the increased production and customer service-related compensation expense at MDC.  The Company expects gross service profits at MDC to improve during the last half of 2004 as a result of projected increases in revenues and relatively stable costs.

Income from operations increased $1.1 million, or 30%, to $4.6 million from $3.5 million.  Income from operations increased due primarily to the revenue increases noted above, partially offset by the impact of foreign exchange fluctuations on amortization of intangible assets at IDRAC and an increase in compensation for management, production and customer service-related employees at MDC, based on volume growth.

EBITDA increased $1.3 million, or 22%, to $6.9 million from $5.6 million.  EBITDA margins approximated 43% in the second quarter of 2004, compared to 39% for the corresponding period in 2003.  The most significant factors in the increase were the growth in segment revenues, partially offset by increased compensation expense.

Software

Revenues increased $1.7 million, or 31%, to $7.0 million from $5.4 million.  All revenues in the segment relate to Liquent.  During the quarter ended June 30, 2004, Liquent derived approximately 80.2% of its revenues from service revenues and approximately 19.8% from product sales.  Service revenues increased $1.5 million, or 35%, to $5.6 million from $4.2 million.  The increase is mainly attributable to increased volume in maintenance revenues as a result of the acquisition of CDC, coupled with volume growth related to sales of core software products to existing customers of Liquent and CDC.  Product revenues increased $0.2 million, or 20%, to $1.4 million from $1.2 million due to revenues associated with the acquisition of CDC.  Software product revenues were below expected levels due to delayed license deals.  A significant number of transactions expected to be closed in the second quarter of 2004 remain in the sales pipeline for completion in the second half of 2004.  In addition, the Company expects to generate increased license sales from its new InSight product line during the last half of 2004.

Total segment cost of sales increased $0.1 million, or 6%, to $2.2 million from $2.1 million.  Total segment gross profits increased to 68.0% during the second quarter of 2004, from 60.3% for the corresponding period in 2003.  Gross service profit margins increased to 63.5% from 53.1%, while gross product profit margins increased to 86.3% from 86.0%.  Total software segment gross profits increased

19

primarily as a result of cost reduction initiatives and efficiencies resulting from the successful integration of the Company’s Liquent and CDC business units.

Loss from operations in this segment decreased $0.3 million to $0.2 million from $0.6 million.  The decrease is due primarily to revenue increases as a result of the acquisition of CDC, partially offset by:  a full quarter of costs associated with CDC in the second quarter of 2004; the impact of below expected overall software revenues due to delayed license deals; and the impact of additional amortization of CDC intangible assets.

EBITDA in this segment increased $0.5 million to $0.6 million from $0.1 million.  EBITDA margins approximated 8% in the second quarter of 2004, compared to 1% in the second quarter of 2003.  The most significant factors in the increase were increased revenues and cost efficiencies resulting from the integration of CDC.

Other

Losses from other operations decreased by $0.2 million, to $1.2 million in second quarter of 2004 from $1.4 million in second quarter of 2003, due primarily to decreased legal expense and corporate bonuses.

During the second quarter of 2004, the Company recorded $0.6 million of non-operating expenses directly related to legal and accounting services associated with the recently announced merger with Thomson.

Six Months Ended June 30, 2004 Compared to Six Months Ended June 30, 2003

Summary

Total revenues increased $8.3 million, or 21%, to $47.7 million from $39.4 million.  Revenues increased by $3.4 million, or 12%, in the data segment and $4.9 million, or 44%, in the software segment.  During the first six months of 2004, the Company derived approximately 59.1% of its revenues from product sales and approximately 40.9% from service revenues.

Product revenues increased $4.3 million, or 18%, to $28.2 million from $23.9 million.  Overall, new and existing customers increased demand for the Company’s products in 2004.  MicroPatent experienced increased volume of core subscription product sales and in file history transactional revenues, while IDRAC experienced an increase in database subscriptions.   Product revenues also increased as the result of the acquisition of CDC in December 2003.  Service revenues increased $4.0 million, or 26%, to $19.5 million from $15.5 million.  The increase was primarily attributable to the growth of the service business as a result of the acquisition of CDC.  Service revenues also increased at MDC primarily as the result of volume increases in intellectual property management services, due to increased sales of existing services to new customers, in addition to increased average pricing.

Total cost of sales increased $0.7 million, or 5%, to $13.4 million from $12.8 million.  Gross profit margins increased to 71.8% in the first six months of 2004, from 67.6% in the corresponding period of 2003.  The improvement in gross profits was due to a shift in sales mix towards higher margin products at MicroPatent, as well as cost efficiencies as a result of the successful integration of the Company’s Liquent and CDC business units.

SG&A increased by $3.0 million, or 17%, to $21.0 million from $18.0 million due primarily to operating expenses related to CDC.  Depreciation and amortization increased by $0.7 million, or 13%, to $6.0 million from $5.4 million due primarily to amortization of intangible assets associated with the

20

acquisition of CDC and the impact of foreign exchange fluctuations on amortization of intangible assets in the Company’s IDRAC unit during the first six months of 2004.

Based on the factors above, income from operations increased $3.9 million, or 120%, to $7.2 million from $3.3 million.

During the first six months of 2004, the Company recorded $0.6 million of non-operating expenses directly related to legal and accounting services associated with the recently announced merger with Thomson.  The merger expenses were partially offset by a $0.4 million gain on sale of patents at MicroPatent recorded in 2004.  During the first six months of 2003, the Company charged approximately $0.6 million to non-operating expenses associated with the early termination of a credit agreement.  The early termination costs included approximately $0.5 million for the write-off of unamortized fees, representing a non-cash charge.

Net interest income increased by $0.8 million, or 95%, to $1.6 million from $0.8 million.  Interest income increased by approximately $1.0 million in 2004 due primarily to increased interest income resulting from higher yields earned in the Company’s Investment Program initiated in August 2003, coupled with interest earned on the invested cash proceeds received from the sales of CRC and Transcender.  Interest income includes realized gains on the sale of bonds equal to approximately $0.2 million in the first six months of 2004.  This increase was partially offset by foreign exchange losses of $0.2 million related to interest earned on a corporate loan with IDRAC.

Based on the factors above, income from continuing operations before income taxes increased by $5.0 million to $8.5 million from $3.5 million.

The provision for income taxes as a percentage of pre-tax income remained relatively stable at approximately 35% in the first six months of 2004 and 2003.  The effective tax rate differs from statutory rates primarily as a result of state, local and foreign income taxes and permanent items.  The tax rate remained relatively constant due to the favorable impact of permanent book-tax differences, which increased in dollar amount as a result of the CDC acquisition, offset by the increase in pre-tax income.

Based on the factors above, income from continuing operations increased by $3.2 million to $5.5 million, or $0.26 per diluted common share, in the first six months of 2004 from $2.3 million, or $0.11 per diluted common share, in the first six months of 2003.

(Loss) income from discontinued operations approximated $(1.4) million, or $(0.06) per diluted common share, in the first six months of 2004, compared to $29.6 million, or $1.39 per diluted common share, in the first six months of 2003.  Loss from discontinued operations in the first six months of 2004 is related to charges for remaining abandoned real estate obligations and severance following the disposition of Transcender.  Income from discontinued operations in the first six months of 2003 is related to a gain on the disposition of the assets of CRC.  The gain totaled $30.3 million, net of income taxes associated with the transaction of $15.9 million.

A reconciliation of segment EBITDA to income (loss) from continuing operations before income taxes is presented after the discussion of operating results.

21

Segment Review

Data

Total revenues increased $3.4 million, or 12%, to $31.6 million from $28.2 million.  During the first six months of 2004, the data segment derived approximately 73.0% of its revenues from product sales and approximately 27.0% from service revenues.  Product revenues increased $2.0 million, or 10%, to $23.1 million from $21.0 million.  The strongest areas of product revenue growth included:  revenues from patent information subscriptions, as a result of strong growth in core subscriptions and an increase in transactional revenues related to file histories at MicroPatent; and database subscriptions at IDRAC.  The primary growth driver in each area was increased volume.  MicroPatent volume growth relates primarily to sales of PatentWeb and Aureka products to new customers, as well as file history sales to both new and existing customers.  IDRAC volume growth relates primarily to increased sales of existing products and services to new customers, as well as a favorable foreign exchange impact due to strengthening of the Euro versus the U.S. dollar.  Service revenues increased $1.3 million, or 19%, to $8.5 million from $7.2 million.  Data segment service revenues, which are derived solely from MDC, increased primarily as the result of volume increases in intellectual property management services due to increased sales of existing services to new customers, in addition to increased average pricing.

Total segment cost of sales increased $0.8 million, or 10%, to $9.2 million from $8.3 million.  Total segment gross profit margins increased to 71.0% in the first six months of 2004, from 70.5% for the corresponding period in 2003.  Gross product profit margins increased to 74.6% from 73.0%, while gross service profit margins decreased to 61.2% from 63.0%.   The increase in gross product profit margins is due primarily to higher gross profits at MicroPatent resulting from increased web based transactions which have relatively fixed costs, while the decrease in gross service profit margins is attributable to the increased production and customer service-related compensation expense at MDC.  The Company expects gross service profits at MDC to improve during the last half of 2004 as a result of projected increases in revenues and relatively stable costs.

Income from operations increased $1.7 million, or 24%, to $8.7 million from $7.0 million.  Income from operations increased due primarily to the revenue increases noted above, partially offset by: increased compensation in information technology-related areas at MicroPatent; the impact of foreign exchange fluctuations on amortization of intangible assets at IDRAC; and an increase in compensation for management, production and customer service-related employees at MDC, based on volume growth.

During the first six months of 2004, MicroPatent recorded a gain of $0.4 million, net of associated deal costs of $0.2 million, related to the sale of patents.

EBITDA increased $2.5 million, or 22%, to $13.6 million from $11.2 million.  EBITDA margins approximated 43% in the first six months of 2004, compared to 40% in the first six months of 2003.  The most significant factors in the increase were the growth in segment revenues, partially offset by increased compensation expense.

Software

Revenues increased $4.9 million, or 44%, to $16.1 million from $11.2 million.  All revenues in the segment relate to Liquent.  During the first six months of 2004, Liquent derived approximately 68.4% of its revenues from service revenues and approximately 31.6% from product sales.  Service revenues increased $2.7 million, or 32%, to $11.0 million from $8.3 million.  The increase is mainly attributable to increased volume in maintenance revenues as a result of the acquisition of CDC, coupled with volume growth related to sales of core software products to existing customers of Liquent and CDC.  Product revenues increased $2.2 million, or 77%, to $5.1 million from $2.9 million, due primarily to

22

revenues associated with the acquisition of CDC.  Software product revenues for the first six months of 2004 were below expected levels due to delayed license deals.  A significant number of transactions expected to be closed in the second quarter of 2004 remain in the sales pipeline for completion in the second half of 2004.  In addition, the Company expects to generate increased license sales from its new InSight product line during the last half of 2004.

Total segment cost of sales decreased $0.1 million, or 3%, to $4.3 million from $4.4 million.  Total segment gross margins increased 73.4% in the first six months of 2004, from 60.4% for the corresponding period in 2003.  Gross service margins increased to 66.1% from 51.5%, while gross product margins increased to 89.2% from 86.3%.   Total software segment gross margins increased primarily as a result of cost reduction initiatives and efficiencies resulting from the successful integration of the Company’s Liquent and CDC business units.

Income (loss) from operations in this segment increased $1.9 million to $1.0 million from $(0.9) million.  Income from operations increased at Liquent due primarily to the revenue increases resulting from the December 2003 acquisition of CDC, partially offset by:  a full six months of costs associated with CDC in 2004; the impact of below expected overall software revenues due to delayed license deals; and the impact of additional amortization of CDC intangible assets.

EBITDA in this segment increased $2.3 million to $2.7 million from $0.4 million.  EBITDA margins approximated 16% in the first six months of 2004, compared to 3% in the first six months of 2003.  The most significant factors in the increase were increased revenues and cost efficiencies resulting from the integration of CDC.

Other

Losses from other operations decreased by $0.4 million, to $2.5 million in the first six months of 2004 from $2.9 million in the first six months of 2003.  Losses from other operations decreased primarily as a result of decreased patent licensing activities in the Company’s LPS unit.

During the first six months of 2004, the Company recorded $0.6 million of non-operating expenses directly related to legal and accounting services associated with the recently announced merger with Thomson.  During the first six months of 2003, the Company charged approximately $0.6 million to non-operating expenses associated with the early termination of a credit agreement.  The early termination costs included approximately $0.5 million for the write-off of unamortized fees, representing a non-cash charge.

23

A reconciliation of segment EBITDA to income (loss) from continuing operations before income taxes follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2004			2003			2004			2003
Data segment
EBITDA	$	6,869		$	5,609		$	13,648		$	11,160
Amortization of capitalized software	—			(4		)	(1		)	(9		)
Depreciation and amortization	(2,273		)	(2,090		)	(4,560		)	(4,176		)
Interest income, net	48			66			90			119
Income from continuing operations before income taxes	$	4,644		$	3,581		$	9,177		$	7,094
Software segment
EBITDA	$	565		$	42		$	2,652		$	383
Amortization of capitalized software	(75		)	(45		)	(149		)	(76		)
Depreciation and amortization	(724		)	(546		)	(1,468		)	(1,149		)
Interest income (expense), net	1			(3		)	6			(7		)
(Loss) income from continuing operations before income taxes	$	(233	)	$	(552	)	$	1,041		$	(849	)
Other
EBITDA	$	(1,765	)	$	(1,417	)	$	(3,204	)	$	(3,416	)
Depreciation and amortization	(3		)	(9		)	(9		)	(29		)
Interest income, net	686			613			1,479			696
Loss from continuing operations before income taxes	$	(1,082	)	$	(813	)	$	(1,734	)	$	(2,749	)
Total
EBITDA	$	5,669		$	4,234		$	13,096		$	8,127
Amortization of capitalized software	(75		)	(49		)	(150		)	(85		)
Depreciation and amortization	(3,000		)	(2,645		)	(6,037		)	(5,354		)
Interest income, net	735			676			1,575			808
Income from continuing operations before income taxes	$	3,329		$	2,216		$	8,484		$	3,496

24

Liquidity and Capital Resources

The Thomson Merger Agreement

On June 28, 2004, the Company entered into a Merger Agreement with Thomson, a global leader in providing integrated information solutions to business and professional customers.  Under the terms of the Merger Agreement, a Thomson subsidiary will acquire all of the outstanding common stock of Information Holdings Inc. at a price of $28.00 per share in cash, representing  an aggregate cost of approximately $441 million, net of cash and investments held by IHI, as of the date of the Merger Agreement.  Consummation of the transaction is subject to various conditions, including approval by IHI’s stockholders and standard regulatory approvals.  Fees associated with the transaction and incurred for the three and six months ended June 30, 2004 approximated $0.6 million.  IHI expects to incur additional expenses related to this transaction totaling between approximately $5 million and $6 million, which include:  investment banking, legal and accounting fees, certain fees related to the filing, printing and mailing of the related Proxy Statement, and other fees and expenses associated with the transaction.  A significant amount of these costs will be incurred whether or not the merger is completed.

The Company has agreed to certain restrictions during the period between the signing of the Merger Agreement and the completion of the merger related to items including, among other things: changes in capital structure, dividends, changes in organizational documents, acquisitions and dispositions, material agreements, employee benefits and compensation, accounting and tax practices, and capital expenditures.   These restrictions may limit the Company’s ability to engage in certain transactions and to fund certain projects it may have otherwise engaged in.  Additionally, the Company must pay to Thomson an amount equal to $20 million if the Merger Agreement is terminated under circumstances set forth in the Merger Agreement and as described in the Proxy Statement.  As described in the proxy statement supplement, under the terms of the proposed settlement of the purported class action lawsuit described in Note K - Subsequent Event, the termination fee payable to Thomson will be reduced from $20 million to $18.5 million.  Any payment of any such termination fee would materially reduce the Company’s cash and working capital.

During the period between the signing of the Merger Agreement and the completion of the merger, the Company has certain restrictions on the use of its cash, as discussed in Note B – The Thomson Merger Agreement.  The primary provision related to cash and investments requires the Company to reinvest proceeds from investments that mature into short-term (less than 30-day) U.S. dollar deposits.

Transcender Sale

On December 31, 2003, the Company completed the sale of its Transcender business unit.  The Company received net proceeds of $9.2 million representing the cash consideration for the assets sold less deal related expenses.  The Company estimates that the majority of the remaining $1.8 million in deal related costs will be paid ratably in subsequent periods through March 2008.

In connection with the sale of the assets of Transcender, the Company entered into an Interim Transition Services Agreement (the TSA) with the purchaser that required the Company to retain all employees of Transcender through March 31, 2004 and certain employees through May 31, 2004.  The purchaser reimbursed the Company in full for all employee costs and incidental expenses during the TSA period.  The Company was responsible to pay severance costs to any employee that was not offered employment or did not accept employment with the purchaser (the Terminated Employees).  During the first six months of 2004, the Company paid severance and related costs of approximately $0.3 million to the Terminated Employees.  The Company does not expect to incur any additional severance and related costs associated with the Terminated Employees subsequent to June 30, 2004.  The purchaser also

25

reimbursed the Company in full for all real estate costs through March 31, 2004 and for a portion of real estate costs from April 1, 2004 through May 31, 2004.  Effective May 31, 2004, the Company abandoned office and warehouse space associated with its former Transcender operations (the Transcender Space).  As of June 30, 2004, the Company has accrued approximately $1.6 million representing remaining future lease commitments, net of estimated sublease income associated with the Transcender Space.  The remaining lease commitment is expected to be paid over the life of the lease  which expires in March 2008.  The Company is actively seeking to sublet the Transcender Space, but there is no assurance that the Company will be able to sublet the space.  Accordingly, the Company may incur an additional charge to discontinued operations related to the remaining lease commitment in the future.

CRC Sale

On April 8, 2003, the Company completed the sale of CRC and received net proceeds of approximately $90 million, representing the cash consideration for the assets sold less deal related expenses and an adjustment made based on the closing balance sheet of CRC in accordance with the underlying Purchase Agreement. On April 8, 2004, the Company received $3.0 million of proceeds previously held in escrow related to certain representations and warranties contained in the Purchase Agreement.  All proceeds previously held in escrow were classified as Restricted cash in the Consolidated Balance Sheets.  The Company estimates that approximately $0.4 million in deal related costs will be paid ratably in subsequent periods through December 2005.

MicroPatent Patent Sale

Under the terms of a Patent Purchase Agreement dated March 23, 2004 (the Patent Agreement), the Company’s MicroPatent unit sold its right, title and interest in certain patents (the Patents) to Rose Blush Software LLC (the Patent Buyer) for cash consideration of approximately $0.6 million.  Additionally, under the terms of the Patent Agreement, the Company sold all rights to collect royalties under the Patents to the Patent Buyer.  Closing costs associated with the transaction totaled approximately $0.2 million.  The Company recognized a pre-tax gain on sale of approximately $0.4 million during the first quarter of 2004.

The proceeds from the above noted sales, net of income taxes associated with the transactions, have been invested in accordance with the Company’s Investment Program, which the Company entered into in August 2003 to increase investment returns on cash not immediately needed in operations.  The Investment Program portfolio consists of U.S. denominated taxable fixed income securities with maximum effective maturities of three years.

CDC Acquisition

On December 1, 2003, the Company acquired the issued share capital of CDC for cash consideration of approximately $26.3 million, including approximately $3.8 million currently held in escrow for estimated guaranteed earnouts as defined and calculated in accordance with the underlying Share Purchase Agreement (SPA).  The Company expects to pay additional closing costs associated with the transaction of approximately $0.4 million subsequent to June 30, 2004.

Under the terms of the SPA, the sellers are entitled to potential future consideration dependent on future operating results.  In addition to guaranteed future consideration of approximately $3.8 million, which has been paid into escrow, the Company had recorded additional consideration related to the revenue of CDC for the year ended December 31, 2003 of approximately $1.1 million, which was paid during the second quarter of 2004.  The Company has a further liability to the sellers based on the combined future operating results of Liquent and CDC for the three year period ending December 31, 2006 (the Earnout Consideration).  The specific provisions of each contingency are detailed in Note E - Acquisition.  The Company currently believes that the Earnout Consideration could reasonably range from $6 million to

26

$10 million.  Amounts due for Earnout Consideration, if any, will be paid during the second quarter of 2007 unless the provisions related to a change in control as outlined in Note E – Acquisition come into effect.

All payments associated with the transaction are expected to be paid from cash on hand or from operating cash flow from existing businesses.

Six Months Ended June 30, 2004 Cash Flows

Cash and cash equivalents, including short-term investments, totaled $50.6 million at June 30, 2004 compared to $52.0 million at December 31, 2003.  During the first half of 2004, the Company received a federal income tax refund of approximately $10.8 million as a result of the sale of Transcender and $3.0 million for amounts previously held in escrow related to the sale of CRC.  The aforementioned funds have been invested in accordance with the Company’s Investment Program.  At June 30, 2004, the Company’s Investment Program also included $97.2 million of long-term investments, comprised of U.S. government notes, collateralized mortgage obligations, and corporate notes and bonds.  Maturities of the Company’s long-term investments range from one to three years.  Excluding cash, cash equivalents and short-term investments, the Company’s continuing operations had working capital deficits at June 30, 2004 and at December 31, 2003.  The Company receives patent annuity payments and subscription payments in advance and, therefore, the Company’s existing operations are expected to maintain very low or negative working capital balances, excluding cash, cash equivalents and short-term investments.  Included in current liabilities at June 30, 2004, are obligations related to patent annuity payments of approximately $30.9 million and deferred revenue of approximately $24.5 million.  The Company’s cash position remains strong with currently over $145 million in cash, cash equivalents and investments, and no debt.  These funds will be used for cash requirements of the Company’s existing operations for the foreseeable future including all contractual obligations as they become due.  The Company currently does not have any agreements, arrangements or understandings with respect to any prospective material acquisitions.  Pending such uses, the Company will continue to manage the funds in accordance with IHI’s Investment Program and the terms of the Merger Agreement.

Cash generated from operating activities of continuing operations was $13.7 million for the six months ended June 30, 2004, derived from income of $5.5 million plus non-cash charges of $4.6 million and a decrease in net operating assets of $3.6 million during the period.  The decrease in net operating assets relates primarily to a decrease in income taxes receivable, resulting from a federal income tax refund of approximately $10.8 million received during March 2004.  Estimated income tax payments made during 2003 were refunded to the Company in 2004 as a result of tax losses realized from the sale of Transcender in December 2003.  The decrease in net operating assets was partially offset by an increase in accounts receivable.  The most significant receivables increases were at MDC, due to timing of customer cash receipts, and at Liquent, due to the timing of maintenance renewals and 2004 license sales.  These increases in accounts receivable were partially offset by significant collections at MicroPatent and IDRAC.  In addition, accrued expenses decreased at Liquent based on the payment of integration and deal related costs associated with the acquisition of CDC, a business acquired in December 2003.  Accrued expenses also decreased at MDC, primarily related to the timing of patent annuity payments.

Cash used in investing activities from continuing operations was $12.1 million for the six months ended June 30, 2004 due primarily to an increase in investment purchases, net of sales and maturities, of $11.8 million and additional transaction costs of $1.1 million paid in the first six months of 2004 related to the dispositions of CRC and Transcender.  These uses of cash were partially offset by the receipt of $3.0 million of proceeds previously held in escrow related to the sale of CRC, net proceeds received by the Company of $0.5 million resulting from the Patent Sale and $0.3 million of additional proceeds received

27

on the sale of Transcender as a result of a post-closing adjustment.  Capital expenditures, including capitalized software costs, approximated $3.0 million in the first half of 2004.  Excluding acquisitions of businesses, the Company’s existing operations are not capital intensive.

Cash provided by financing activities from continuing operations was $0.7 million for the six months ended June 30, 2004, primarily the result of net cash proceeds received from the issuance of common stock from stock option exercises.  As of June 30, 2004, approximately $35 million remains authorized for future common stock repurchases pursuant to the Company’s share buyback program.  During the period between the signing of the Merger Agreement and the completion of the merger, the Company is prohibited from repurchasing shares.

The effect of exchange rates on cash and cash equivalents totaled $(0.2) million.  Exchange rates were impacted by foreign currency translation of local currency to the U.S. dollar of balances recorded within the Company’s European subsidiaries IDRAC and Liquent.

Future Noncancelable Minimum Lease Payments

Future annual minimum lease payments including estimated escalation amounts under noncancelable operating leases as of June 30, 2004 are as follows (in thousands):

Year ending December 31,
2004 (remaining six months)	$	1,664
2005	2,662
2006	1,624
2007	1,371
2008	910
Thereafter	3,470
Total minimum lease payments	$	11,701

Based on past performance and current expectations, the Company believes that available cash and cash equivalents, together with funds generated from operations and amounts included in its Investment Program will be sufficient to fund the cash requirements of its existing operations for the foreseeable future including all contractual obligations as they become due. Other than normal operating expenses, cash requirements for the balance of 2004 are expected to consist primarily of capital expenditures related to enhancements to the Company’s production capacity and information systems and the relocation of its Liquent unit.  Future operating requirements and capital needs may be subject to economic conditions and other factors, many of which are beyond the Company’s control.

During the period between the signing of the Merger Agreement and the completion of the merger, the Company has certain restrictions on the use of its cash, as discussed in Note B – The Thomson Merger Agreement.  Among these restrictions is the requirement to obtain the consent of Thomson for acquisitions and for capital expenditures on an individual basis in excess of $250,000 or in an aggregate amount in excess of $1.5 million per quarter.  The Company believes that it can fund its normal capital requirements within the prescribed limits.

Seasonality and Quarterly Results

The Company does not believe its businesses have significant seasonality.  However, new product launches and the timing of license sales may affect quarterly results.  Accordingly, results for any quarter are not necessarily indicative of the results that may be achieved for the full year.

28

Item 3.Quantitative and Qualitative Disclosure About Market Risk

Interest Rate Risk - The primary objective of the Company’s investment activities is to preserve the principal while at the same time maximizing yields without significantly increasing the risk.  To achieve this objective, the Company maintains its portfolio of cash equivalents and investments in a variety of securities, including U.S. government notes, collateralized mortgage obligations, and corporate notes and bonds.  As of June 30, 2004, approximately 8% of the Company’s portfolio matures in one year or less, with the remainder maturing in less than three years.   The Company does not use derivative financial instruments in its investment portfolio.  Investments are placed with high credit quality issuers and, by policy, the Company limits the amount of credit exposure to any one issuer.  The Company does not hold securities for trading purposes.

At any time, a sharp rise in interest rates could have a material adverse impact on the fair value of the Company’s investment portfolio.  Conversely, declines in interest rates could have a material favorable impact on interest earnings from the Company’s investment portfolio.  As of June 30, 2004, the aggregate fair value of available-for-sale securities yielding unrealized losses amounted to approximately $101,704,000.  As of June 30, 2004, all such securities have been in unrealized loss positions for periods of less than four months.  Due to the short-term nature of unrealized loss positions, no unrealized losses are considered to be other than temporary.  The Company does not currently hedge interest rate exposures.

Foreign Currency Exchange Rate Risk -The financial statements of the Company’s foreign subsidiaries are translated from the local currency into U.S. dollars.  Assets and liabilities are translated using exchange rates in effect at the balance sheet date, except certain accounts of subsidiaries whose functional currency is the U.S. dollar, and translation adjustments are accumulated in a separate component of stockholders’ equity.  Revenue and expenses are translated at average monthly exchange rates, and translation adjustments are charged and credited to income.  As such, the Company’s operating results are affected by fluctuations in the value of the U.S. dollar compared to the British pound and the Euro.  During the quarters ended June 30, 2004 and 2003, the Company’s operating results include net foreign exchange gains of $88,000 and $72,000, respectively.  During the six months ended June 30, 2004 and 2003, the Company’s operating results include net foreign exchange losses of $3,000 and $5,000, respectively.

A subsidiary of the Company routinely enters into forward contracts to acquire various international currencies in an effort to hedge foreign currency transaction exposures of its operations.  Such forward contracts have been designated as hedges for future annual patent payments to related international regulatory agencies.  At June 30, 2004, the subsidiary of the Company had entered into forward contracts to acquire various international currencies, all having maturities of less than seven months, aggregating approximately $29,384,000.  Net realized gains relating to forward contracts for the three and six months ended June 30, 2004 were $102,000 and $123,000, respectively.  Net realized gains and losses relating to forward contracts were immaterial for the three and six months ended June 30, 2003.

The Company has only limited involvement with derivative financial instruments and does not use them for trading purposes.

Item 4.Controls and Procedures

As of June 30, 2004, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended.  Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s current disclosure controls and procedures were effective as of June 30, 2004.  There have been no significant changes in the Company’s internal controls over financial reporting during the most recent quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

29

PART II. OTHER INFORMATION

Item 1.Legal Proceedings

On April 21, 2004 The Supreme Court of the State of New York dismissed a complaint brought by Venturetek, L.P. Richard Elkin, Antoine Bernheim, Stacy Bernheim and Genstar, Ltd., derivately as shareholders of Rand Publishing Co., Inc., and individually, on their own behalf (the Plaintiffs) against the Company.  By Notice of Appeal filed May 13, 2004, the Plaintiffs appealed the trial court’s dismissal of the action to the Supreme Court, Appellate Division, First Department. See Note H – Commitments and Contingencies, which is hereby incorporated by reference.

On July 1, 2004, an action was filed as a purported class action in the Court of Chancery of the State of Delaware in and for New Castle County (Myszkowski v. Information Holdings Inc. et al., C.A. No. 537-N) against IHI, its directors and Thomson.  The plaintiff and the defendants have negotiated a settlement to dismiss the action with prejudice, subject to (i) the drafting and execution of the settlement documents and the other agreements necessary to effectuate the terms of the proposed settlement; (ii) the completion by the plaintiff and his counsel of appropriate confirmatory discovery in the action sufficient to satisfy the plaintiff’s counsel that the proposed settlement is fair and reasonable; (iii) final court approval of the settlement and dismissal of the action with prejudice and without awarding costs to any party, except as agreed by the parties; and (iv) consummation of the merger, provided, that this condition (iv) shall be deemed to have been satisfied if the merger is not consummated due to (a) the merger not receiving the requisite vote of holders of outstanding shares of IHI common stock or (b) circumstances that give rise to the right of Thomson to receive from IHI a termination fee pursuant to the terms of the Merger Agreement.  As part of the settlement, IHI has agreed to provide the additional disclosure set forth in the proxy statement supplement and to pay fees and expenses of the plaintiff’s counsel in the amount of $280,000.  Additionally, Thomson agreed to reduce from $20 million to $18.5 million the termination fee to which it is entitled if the Merger Agreement is terminated under certain circumstances as described in the Merger Agreement and the Proxy Statement.  IHI and the other defendants continue to deny all of the allegations of wrongdoing contained in the complaint. The settlement is not, and should not be construed as, an admission of wrongdoing or liability by any defendant.  See Note K – Subsequent Event, which is hereby incorporated by reference.

In addition, from time to time the Company is a party to other legal and administrative proceedings, claims, and litigation arising in the ordinary course of its business.  While the outcome of these matters is currently not determinable, management does not expect that the ultimate costs to resolve these matters either singularly or in aggregate will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

30

Item 4.Submission of Matters to a Vote of Security Holders

At the Company’s Annual Meeting of Stockholders on April 20, 2004 a total of 19,986,591 shares, or 95% of outstanding shares, were represented and entitled to vote.

(a)The following members were elected to the Board of Directors:

	Total Vote For Each Director	Total Vote Withheld From Each Director
Michael E. Danziger	19,012,814	973,777
David R. Haas	19,014,484	972,107
Keith B. Jarrett	19,058,247	928,344
Sidney Lapidus	18,953,940	1,032,651
Martin D. Payson	19,014,484	972,107
Mason P. Slaine	19,043,831	942,760
John L. Vogelstein	19,006,421	980,170

(b)The following proposal was approved:

Ratification of Ernst & Young LLP as the independent auditors for the Company for the 2004 fiscal year.

Affirmative Votes	19,915,233
Negative Votes	71,258
Abstain	100

31

Item 6.Exhibits and Reports on Form 8-K

(a)Exhibits

No.	Description
2.4	Agreement and Plan of Merger, dated as of June 28, 2004, by and among Information Holdings Inc., The Thomson Corporation and Thyme Corporation (Incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed on June 29, 2004)
10.11	Voting and Proxy Agreement, dated as of June 28, 2004, by and between The Thomson Corporation and each other person and entity listed on the signature pages thereto
10.12	Release, dated as of June 28, 2004, by and between Michael Danziger and The Thomson Corporation
10.13	Amendment to Employment Agreement, dated as of June 28, 2004, between Information Holdings Inc. and Mason P. Slaine
10.14	Amendment to Employment Agreement, dated as of July 22, 2004, between Information Holdings Inc. and Jay Nadler
10.15	Amendment to Employment Agreement, dated as of July 22, 2004, between MicroPatent LLC and Daniel Videtto
10.16	Retention Bonus Agreement, dated as of April 20, 2004, between Information Holdings Inc. and Vincent A. Chippari
10.17	Retention Bonus Agreement, dated as of April 20, 2004, between Information Holdings Inc. and Jay Nadler
10.18	Retention Bonus Agreement, dated as of April 20, 2004, between Information Holdings Inc. and Daniel Videtto
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)Reports on Form 8-K

On April 22, 2004, the Company furnished a Current Report on Form 8-K announcing the preliminary financial results of the Company for the quarter ended March 31, 2004.  In accordance with Item 12 of Form 8-K, the Form 8-K and the press release attached as an exhibit thereto were furnished and not “filed” with the SEC.

On May 21, 2004, the Company filed a Current Report on Form 8-K announcing that it had issued a press release responding to market rumors (the Press Release). The Press Release was attached thereto as an exhibit and was incorporated therein by reference.

On June 29, 2004, the Company filed a Current Report on Form 8-K announcing that it entered into an Agreement and Plan of Merger, dated as of June 28, 2004 (the Agreement), with The Thomson Corporation, an Ontario, Canada corporation (Thomson). Under the terms of the Agreement, a Thomson subsidiary will acquire all of the outstanding common stock of Information Holdings Inc. at a price of $28.00 per share in cash, for an aggregate cost of approximately $441 million, net of cash and investments currently held by the Company. The Agreement and the press release announcing the transaction were attached thereto as exhibits and were incorporated therein by reference.

32

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	INFORMATION HOLDINGS INC.
Date:  August 9, 2004	By:			/s/ Vincent A. Chippari
		Vincent A. Chippari
		Executive Vice President and Chief Financial Officer
			Signing on behalf of the registrant and
			as principal financial and accounting officer

33

EX-10.11

Exhibit 10.11

VOTING AND PROXY AGREEMENT

VOTING AND PROXY AGREEMENT, dated as of June 28, 2004 (this “Agreement”) among The Thomson Corporation, a Delaware corporation (“Parent”), and each other person and entity listed on the signature pages hereof (each, a “Stockholder”).

RECITALS

WHEREAS, as of the date hereof, each Stockholder owns beneficially the number of shares of common stock, $0.01 par value (the “Common Stock”), of Information Holdings Inc., a Delaware corporation (the “Company”), set forth opposite such Stockholder’s name on Schedule I hereto (all such shares owned and which may hereafter be acquired by such Stockholder during the Term (as hereinafter defined), whether upon the exercise of options or by means of purchase, dividend, distribution or otherwise, being referred to herein as the “Shares”);

WHEREAS, Parent, Thyme Corporation, a Delaware corporation and a subsidiary of Parent (“Merger Sub”), and the Company have entered into an Agreement and Plan of Merger dated as of the date hereof (as it may be amended or supplemented from time to time, the “Merger Agreement”) which provides, upon the terms and subject to the conditions set forth therein, for the merger of Merger Sub with and into the Company (the “Merger”); and

WHEREAS, as a condition to the willingness of Parent and Merger Sub to enter into the Merger Agreement and in furtherance of the acquisition of the Company by Parent, Parent and Merger Sub have required that the Stockholders agree, and in order to induce Parent and Merger Sub to enter into the Merger Agreement, each Stockholder has agreed, severally and not jointly, to enter into this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and agreements contained herein, the parties hereto agree as follows:

ARTICLE I.

TRANSFER AND VOTING OF SHARES

1.1.Voting Agreement.  Each Stockholder hereby agrees that from the date hereof until the termination of this Agreement pursuant to Section 5.13 hereof (the “Term”), at any meeting of the stockholders of the Company, however called, and in any action by written consent of the stockholders of the Company, such Stockholder shall vote the Shares (A) in favor of the Merger, the Merger Agreement (as amended from time to time) and the transactions contemplated by the Merger Agreement and any actions required in furtherance thereof and (B) against any Takeover Proposal and any action, proposal, transaction or agreement that would result in a breach in any respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement or of such Stockholder under this Agreement, and (C) against any other action or proposal involving the Company or any of its Subsidiaries that is intended, or could reasonably be expected, to prevent, impede, interfere with, delay, postpone, frustrate, nullify or adversely affect any provision of the Merger Agreement, this Agreement or any other agreement relating to the transactions contemplated by the Merger Agreement, the Merger or any other transaction contemplated by the Merger

Agreement or this Agreement.  Any such vote shall be cast or consent shall be given in accordance with such procedures relating thereto so as to ensure that it is duly counted for purposes of determining that a quorum is present and for purposes of recording the results of such vote or consent.  Each Stockholder agrees not to enter into any agreement or commitment the effect of which would not be in accordance or inconsistent with the provisions and agreements contained in this Agreement.

1.2.Proxy.

(a)Each Stockholder, by this Agreement, with respect to its Shares, does hereby constitute and appoint Parent, or any nominee of Parent, with full power of substitution, at any time during the Term, as its true and lawful attorney and proxy (its “Proxy”), for and in its name, place and stead, to vote, or cause to be voted, each of such Shares as its Proxy, at every annual, special or other meeting, including any adjournments or postponements thereof, of the stockholders of the Company for the purpose of considering any matter referred to in Section 1.1 (including the right to sign its name (as stockholder) to any consent, certificate or other document relating to the Company that the law of the State of Delaware may permit or require).

(b)THIS POWER OF ATTORNEY IS IRREVOCABLE, IS GRANTED IN CONSIDERATION OF PARENT AND MERGER SUB ENTERING INTO THE MERGER AGREEMENT AND IS COUPLED WITH AN INTEREST SUFFICIENT IN LAW TO SUPPORT AN IRREVOCABLE POWER.  This appointment shall revoke all prior powers of attorney and proxies appointed by any Stockholder at any time with respect to the Shares and no subsequent powers of attorney or proxies will be appointed by such Stockholder, or be effective, with respect thereto during the term of this Agreement.  Except as otherwise provided for herein, each Stockholder hereby (A) ratifies and confirms all that the proxies appointed hereunder may lawfully do or cause to be done by virtue hereof and (B) affirms that such irrevocable proxy is executed and intended to be irrevocable in accordance with the provisions of Section 212(e) of the DGCL.

ARTICLE II.

REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

Each Stockholder, severally and not jointly, hereby represents and warrants to Parent as follows:

2.1.Due Organization and Authorization.  If such Stockholder is a corporation or partnership, (A) it is duly organized, validly existing and in good standing under the laws of its organization or formation and has all requisite power to execute and deliver this Agreement, to appoint Parent as its Proxy, to consummate the transactions contemplated hereby and to carry out its obligations hereunder and (B) the execution and delivery of this Agreement, the appointment of Parent as such Stockholder’s Proxy and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of such Stockholder.  This Agreement has been duly executed and delivered by or on behalf of such Stockholder and, assuming its due authorization, execution and delivery by Parent, constitutes a

2

legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms.

2.2.No Conflicts, Required Filings and Consents.

(a)The execution and delivery of this Agreement by such Stockholder does not, and the performance of such Agreement by such Stockholder will not, (A) conflict with, contravene or violate any law, regulation, court order, judgment or decree applicable to such Stockholder or by which such Stockholder or any of such Stockholder’s property is bound or affected, (B) in the case of any partnership or corporation, violate or conflict with its organizational documents or (C) require any consent under or result in any violation or breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, cancellation or acceleration of, or result in the creation of a lien or Encumbrance (as hereinafter defined) on any of the property or assets of such Stockholder, including the Shares, pursuant to any contract, instrument, permit, license, franchise or understanding to which such Stockholder is a party or by which such Stockholder or such Stockholder’s property is bound or affected, except for any conflicts, violations, breaches or defaults, terminations, cancellations or rights of terminations or cancellation, which, assuming the exercise of any rights of termination or cancellation, for any such breaches, defaults or other occurrences that would not prevent or delay the performance by such Stockholder of its obligations under this Agreement.

(b)The execution and delivery of this Agreement by such Stockholder does not, and the performance of this Agreement by such Stockholder will not, require any waiver, consent, approval or authorization of any Governmental Entity, except for (A) any information filings required, if any, under Sections 13 and 16 of the Exchange Act and (B) termination of any waiting period applicable under any Antitrust Law.

2.3.Title to Shares.  Each Stockholder is the sole, record and beneficial owner of its Shares, free and clear of any pledge, lien, security interest, mortgage, charge, claim, equity, option, proxy, voting restriction, right of first refusal, limitation on disposition, adverse claim of ownership or use or encumbrance of any kind (“Encumbrances”), except as may arise pursuant to this Agreement.  Each Stockholder has sole right and power to vote or to dispose its Shares, without any limitations, qualifications or restrictions except for restrictions on transfer under the Securities Act.  The shares listed on Schedule I constitute all of the Shares of each Stockholder and, except as set forth in Schedule I, such Stockholder does not own or hold (beneficially or of record) (A) any additional shares, or any options to purchase or right to acquire any additional shares, of capital stock or other securities issued by the Company, or any interest therein, or (B) any voting rights with respect to any shares of capital stock or other securities of the Company.   The Shares do not constitute community property or otherwise need spousal approval in order for this Agreement to be a legal, valid and binding obligation of such Stockholder.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF PARENT

Parent represents and warrants to each Stockholder as follows:

3

3.1.Due Organization and Authorization.  Parent is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation.  Parent has all requisite corporate power to execute and deliver this Agreement, to consummate the transactions contemplated hereby and to carry out its obligations hereunder.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Parent.  This Agreement has been duly executed and delivered by Parent and, assuming its due authorization, execution and delivery by each Stockholder, constitutes a legal, valid and binding obligation of Parent, enforceable against Parent in accordance with its terms.

ARTICLE IV.

COVENANTS OF STOCKHOLDERS

4.1.Non-Solicitation.  Each Stockholder covenants and agrees that in its capacity as a stockholder of the Company, it shall direct and use reasonable efforts to cause its partners, officers, directors, representatives and agents (“Representatives”) to immediately cease any discussions or negotiations with any Third Party that may be ongoing with respect to a Takeover Proposal.  Each Stockholder covenants and agrees that in its capacity as a stockholder of the Company it shall not, nor shall it permit or authorize any of its Representatives to, directly or indirectly, (A) solicit, initiate or encourage any inquiries or the making of any proposal which constitutes, or may reasonably be expected to lead to, any Takeover Proposal or (B) participate in any discussions or negotiations regarding any Takeover Proposal.

4.2.Notice.  Each Stockholder will promptly advise Parent orally or in writing of any request for information or of any Takeover Proposal received by such Stockholder (in its capacity as a stockholder of the Company) and the material terms and conditions of such request or Takeover Proposal, provided, however, that any notification by the Board of Directors of the Company (the “Board”) to Parent pursuant to the Merger Agreement regarding the same request for information or Takeover Proposal shall satisfy the Stockholders’ obligations under this Section 4.2.

4.3.No Disposition or Encumbrance of Shares and Options.  Each Stockholder hereby covenants and agrees that, during the Term, it shall not, and shall not offer or agree to, sell, transfer, tender, assign, hypothecate or otherwise dispose of, or create or permit to exist any Encumbrance on, the Shares owned by such Stockholder during the Term.

4.4.Waiver of Appraisal Rights.  Each Stockholder hereby waives any rights of appraisal or rights to dissent from the Merger under Section 262 of the DGCL.

4.5.Further Assurances.  Each Stockholder shall perform such further acts and execute such further documents and instruments as may reasonably be required to vest in Parent the power to carry out and give effect to the provisions of this Agreement.  Each Stockholder shall not, nor shall such Stockholder act in concert with any Person to, make or in any manner participate in, directly or indirectly, a “solicitation” of “proxies” (as such terms are used in the Exchange Act) or powers of attorney or similar rights to vote, or seek to advise or influence any Person with respect to the voting of, the Shares or any other shares of capital stock of the Company in connection with any vote or other action on any matter, other than to recommend

4

that stockholders of the Company vote in favor of the Merger and the Merger Agreement and otherwise as expressly provided by Section 1 of this Agreement.  Other than as provided by Section 1 of this Agreement, each Stockholder shall not, nor shall such Stockholder act in concert with any Person to, (A) deposit the Shares in a voting trust or subject any of the Shares to any contract, agreement, option, arrangement or understanding with any Person with respect to the voting of such Shares or (B) grant any proxy or power of attorney with respect to the Shares.   Each Stockholder shall not issue any press release or make any other public statement with respect to the Merger Agreement or this Agreement or the Merger or any other transaction contemplated by the Merger Agreement, without the prior written consent of Parent, except as may be required by any applicable law.  Each Stockholder hereby gives any consents or waivers that are reasonably required for the consummation of the Merger under the terms of any agreement to which such Stockholder is a party or pursuant to any rights such Stockholder may have in its capacity as a stockholder of the Company.  Such Stockholder hereby permits the Company to publish and disclose in the Proxy Statement such Stockholder’s identity and ownership of the Shares and the nature of such Stockholder’s commitments, arrangements and understandings under this Agreement.

4.6.Release.  Notwithstanding anything to the contrary in Section 6.8 of the Merger Agreement, each Stockholder on behalf of himself or itself and his or its successors, assigns and Affiliates, with respect to each and every Claim that such Stockholder (or any of such Persons) may have had prior to, or may at or following the Effective Time have, against any of the Releasees (A) effective as of the Effective Time, irrevocably, unconditionally and completely releases, acquits and forever discharges each of the Releasees from any such Claim, and irrevocably, unconditionally and completely waives and relinquishes such Claim and (B) effective as of the date hereof, covenants not to sue or make any kind of demand or provide any kind of notice or undertaking with respect to any such Claim.  “Releasees” means (A) Parent; (B) the Company; (C) each Subsidiary of the Company, (D) each Affiliate of Parent and, after the Effective Time, of the Company; and (E) the successors, assigns and past, present and future directors, officers, agents, attorneys and representatives of the respective entities identified or otherwise referred to in clauses (A) through (D) of this definition.  “Claim” means any dispute, claim, suit, right, damages, judgments, expenses, affirmative defenses, actions and causes of action of every kind and nature, in law, equity or otherwise, that relates to the matters set forth on Schedule II, whether brought pursuant to common law, statute, agreement, any insurance policy held by the Company or any of its Subsidiaries, the Certificate of Incorporation, Bylaws or similar organizational documents of the Company or any of its Subsidiaries, the DGCL or otherwise.  Each Stockholder acknowledges that the releases set forth in this Section 4.6 have provided a material inducement to Parent’s willingness to enter into the Merger Agreement and without such releases Parent would not have been willing to enter into the Merger Agreement, which agreement provides to the Stockholders substantially benefit and accordingly each Stockholder willingly grants this release in consideration therefor and for other good and valuable consideration, receipt of which is hereby acknowledged.

5

ARTICLE V.

MISCELLANEOUS

5.1.Definitions.  All capitalized terms used but not otherwise defined in this Agreement have the meanings assigned to such terms in the Merger Agreement.

5.2.Non-Survival of Representations, Warranties and Agreements.  Upon termination of this Agreement, as further set forth in Section 5.13 hereof, all representations, warranties and agreements made by the parties to this Agreement shall terminate; provided, that the provision set forth in Section 4.6 shall survive termination upon the Effective Time and the provisions of this Article V hereof shall survive any termination of this Agreement.

5.3.Expenses.  Except as otherwise provided herein, all costs and expenses incurred in connection with the transactions contemplated by this Agreement shall be paid by the party incurring such costs and expenses.

5.4.Notices.  All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made (A) as of the date delivered or sent by facsimile if delivered personally or by facsimile, confirmation received, (B) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service and (C) on the third Business Day after deposit in the U.S. mail, if mailed by registered or certified mail (postage prepaid, return receipt requested), in each case to the parties at the following addresses (or at such other address for a party as shall be specified by like notice, except that notices of changes of address shall be effective upon receipt):

If to a Stockholder, at the address or facsimile number of such Stockholder set forth on Schedule I, with a copy (which shall not constitute notice) to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY  10019

Attention:  Steven J. Gartner, Esq.

Facsimile No.:  (212) 728-9222

If to Parent:

The Thomson Corporation

Metro Center

One Station Place

Stamford, Connecticut  06902

Attention: Carl Tobiasen

Facsimile: (203) 539-7552

With a copy (which shall not constitute notice) to:

Covington & Burling

1330 Avenue of the Americas

New York, New York  10019

6

Attention: J. D. Weinberg, Esq.

Facsimile No.:   (646) 441-9037

and

The Thomson Corporation

Metro Center

One Station Place

Stamford, Connecticut  06902

Attention: Darren Pocsik, Esq.

Facsimile No.:  (203) 357-9762

5.5.Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party.  Upon any determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the maximum extent possible.

5.6.Counterparts.  This Agreement may be executed by the parties hereto in separate counterparts (including by facsimile), each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

5.7.Amendment and Waiver.  This Agreement may not be amended, except by an instrument in writing signed by the parties hereto, and any provision herein may not be waived by any party except as set forth in an instrument in writing signed by such party.

5.8.Assignment, Binding Effect.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties.  Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.  Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.

5.9.Specific Performance.  The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement was not performed in accordance with its specific terms or was otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any Delaware Court, this being in addition to any other remedy to which they are entitled at law or in equity.

7

5.10.Governing Law.  This agreement shall be governed by, and construed in accordance, with the laws of the State of Delaware, without regard to its rules of conflict of laws.

5.11.Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

5.12.Stockholder’s Capacity.  Except for the provisions set forth in Section 4.6, notwithstanding any provision of this Agreement to the contrary, each Stockholder executes this Agreement in his capacity as the beneficial owner of such Stockholder’s Shares.  Except for the provisions set forth in Section 4.6, no Stockholder nor any of its Representatives who is an officer or member of the Board shall be deemed to have made any agreement or understanding in this Agreement, including but not limited to those agreements set forth in Sections 4.1 and 4.2, in his capacity as such officer or member of the Board.  Without limiting the generality of the foregoing, except for the provisions set forth in Section 4.6, nothing in this Agreement, including without limitation Sections 4.1 and 4.2, shall prevent or in any way limit such person from taking any action in his capacity as an officer or member of the Board, including without limitation any actions permitted under Section 5.2 and Section 6.1 of the Merger Agreement.

5.13.Termination.  This Agreement shall terminate and be of no further force and effect, (A) by the written mutual consent of the parties hereto, (B) automatically and without any required action of the parties hereto upon the Effective Time, (C) upon Termination of the Merger Agreement in accordance with its terms or (D) with respect to any Stockholder, any amendment to the Merger Agreement that reduces the amount of the Merger Consideration; provided, that the provision set forth in Section 4.6 shall survive termination upon the Effective Time and the provisions of this Article V hereof shall survive any termination of this Agreement; and provided, furtherthat no such termination shall relieve any party of liability for a willful breach hereof prior to termination.

5.14.Entire Agreement.  This Agreement and any documents delivered by the parties in connection herewith constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings among the parties with respect thereto.

5.15.Waiver of Jury Trial.  Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or other proceeding directly or indirectly arising out of, under or in connection with this Agreement. Each party hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such party would not, in the event of any action, suit or proceeding, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement, by, among other things, the mutual waiver and certifications in this Section 5.15.

5.16.Jurisdiction.  Each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any state or federal court located in the State of Delaware, in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any

8

court other than a state or federal court located in the State of Delaware and (iv) irrevocably waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.  Each of the parties hereto irrevocably consents to the service of any and all legal process, summonses, notices and other documents which may be served in any suit, action or proceeding referred to in Section 5.16, which service may be made in any manner provided for the giving of notices in Section 5.4, provided that nothing in this Section 5.16 shall affect the right of any party to serve any such legal process, summons, notice or other document in any other manner permitted by law.

[Signature Pages Follow.]

9

IN WITNESS WHEREOF, Parent has caused this Agreement to be executed by its officer thereunto duly authorized and each Stockholder has caused this Agreement to be executed, or duly executed by an authorized signatory, all as of the date first written above.

The Thomson Corporation
By:	/s/ D.J. Hulland
	Name:  D.J. Hulland
	Title: SVP, Finance
WARBURG, PINCUS VENTURES, L.P.
By:	Warburg Pincus & Co.,
	Its General Partner
By:	/s/ Sidney Lapidus
	Name:
	Title:
/s/ Mason P. Slaine
Mr. Mason P. Slaine

SCHEDULE I

Name and Address of Stockholder	Number of Shares Owned
Warburg, Pincus Ventures, L.P.(1) 466 Lexington Avenue New York, NY  10017 Attn:  Mr. Sid Lapidus Facsimile No.:  (212) 878-9100	6,804,762
Mr. Mason P. Slaine c/o Information Holdings Inc. 2777 Summer Street, Suite 602 Stamford, Connecticut  06905 Facsimile No.:  (203) 961-1431	2,000,000	(2)

(1)  The sole general partner of Warburg, Pincus Ventures, L.P. (“WPV”) is Warburg Pincus & Co., a New York general partnership (“WP”). Warburg Pincus LLC, a New York limited liability company (“WP LLC”), manages WPV.  Mr.  Sidney Lapidus and Mr. John Vogelstein are general partners of WP and members of WP LLC.  Due to their relationship with WPV, Messrs. Lapidus and Vogelstein may be deemed to beneficially own such shares owned by WPV.  Messrs. Lapidus and Vogelstein have disclaimed all beneficial ownership of all shares owned by WPV.

(2)  Includes 400,000 shares issuable upon exercise of options that are vested and exercisable.

SCHEDULE II

1.  Venturetek, L.P. v. Rand Publishing Co., et al, Index No. 605046/98 (Sup. Ct. N.Y. Cty.), including all appeals and related proceedings.

2.  Venturetek, L.P. v. Information Holdings Inc., Index No. 604416/02 (Sup. Ct. N.Y. Cty.), including all appeals and related proceedings.

3.  All Claims related to or arising from the foregoing litigations or proceedings.

4.  All Claims related to or arising from the facts alleged in the foregoing litigations or proceedings, or substantially similar facts.

EX-10.12

Exhibit 10.12

RELEASE

June 28, 2004

The Thomson Corporation

290 Harbor Drive

Stamford, Connecticut, 06902-7441

Ladies and Gentlemen:

Reference is made to that certain Agreement and Plan of Merger, dated as of June 28, 2004 (as it may be amended or supplemented from time to time, the “Merger Agreement”), among The Thomson Corporation, a Delaware corporation (“Parent”), Thyme Corporation, a Delaware corporation and a Subsidiary of Parent, and Information Holdings Inc., a Delaware corporation (the “Company”).  Capitalized terms used in this Release and not otherwise defined shall have the meanings ascribed to them in the Merger Agreement.

In order to induce Parent to enter into and consummate the Merger and the other transactions contemplated by the Merger Agreement, and as a condition to consummating the Merger and the other transactions contemplated thereby, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned, intending to be legally bound, hereby covenants and agrees as follows:

1.             Release.  Notwithstanding anything to the contrary in Section 6.8 of the Merger Agreement, the undersigned on behalf of himself and his successors, assigns and Affiliates, with respect to each and every Claim (as defined below) that the undersigned (or any of such Persons) may have had prior to, or may at or following the Effective Time have, against any of the Releasees (as defined below) (A) effective as of the Effective Time, irrevocably, unconditionally and completely releases, acquits and forever discharges each of the Releasees from any such Claim, and irrevocably, unconditionally and completely waives and relinquishes such Claim and (B) effective as of the date hereof, covenants not to sue or make any kind of demand or provide any kind of notice or undertaking with respect to any such Claim.  “Releasees” means (A) Parent; (B) the Company; (C) each Subsidiary of the Company, (D) each Affiliate of Parent and, after the Effective Time, of the Company; and (E) the successors, assigns and past, present and future directors, officers, agents, attorneys and representatives of the respective entities identified or otherwise referred to in clauses (A) through (D) of this definition.  “Claim” means any dispute, claim, suit, right, damages, judgments, expenses, affirmative defenses, actions and causes of action of every kind and nature, in law, equity or otherwise, that relates to the matters set forth on Schedule I attached hereto, whether brought pursuant to common law, statute, agreement, any insurance policy held by the Company or any of its Subsidiaries, the Certificate of Incorporation, Bylaws or similar organizational documents of the Company or any of its Subsidiaries, the DGCL or otherwise.  The undersigned acknowledges that the releases set forth in this paragraph have provided a material inducement to Parent’s willingness to enter into the Merger Agreement and without such releases Parent would not have been willing to enter into the Merger Agreement, which agreement provides to the undersigned substantial benefit and

accordingly the undersigned willingly grants this release in consideration therefor and for other good and valuable consideration, receipt of which is hereby acknowledged.

2.             Miscellaneous.   Sections 5.3 through 5.11 and 5.14 through 5.16 of the Voting and Proxy Agreement dated the date hereof, among Parent and certain stockholders of the Company (the “Voting Agreement”), are incorporated by reference herein, with, solely for purposes of this Release, (i) the term “parties” in such provisions meaning Parent and the undersigned, (ii) the term “Stockholder” in such provisions meaning the undersigned, and (iii) the address and facsimile number of the undersigned set forth on the signature page hereto being the address and facsimile number of the Stockholder referred to in Section 5.4 of the Voting Agreement.

		Very truly yours,
		/s/ Michael Danziger
		Name:	Michael Danziger
		Address:	7 Pollack Drive
			Malboro, NJ 07746
		Facsimile No.:	(732) 536-7285
ACKNOWLEDGED AND AGREED:
The Thomson Corporation
By:	/s/ Darren Pocsik
	Name: Darren Pocsik
	Title: General Counsel, Thomson Scientific & Healthcare

2

SCHEDULE I

1.  Venturetek, L.P. v. Rand Publishing Co., et al, Index No. 605046/98 (Sup. Ct. N.Y. Cty.), including all appeals and related proceedings.

2.  Venturetek, L.P. v. Information Holdings Inc., Index No. 604416/02 (Sup. Ct. N.Y. Cty.), including all appeals and related proceedings.

3.  All Claims related to or arising from the foregoing litigations or proceedings.

4.  All Claims related to or arising from the facts alleged in the foregoing litigations or proceedings, or substantially similar facts.

3

EX-10.13

Exhibit 10.13

June 28, 2004

Mason P. Slainec/o Information Holdings Inc.
2777 Summer Street
Suite 602
Stamford, CT  06905

Dear Mr. Slaine:

This letter confirms the amendment, as set forth below, to your employment agreement dated as of April 30, 2002, between you and Information Holdings Inc. (the “Company”), as amended (your “Employment Agreement”), which is made in connection with the Agreement and Plan of Merger dated as of June 28, 2004, among the Company, The Thomson Corporation (“Parent”) and Thyme Corporation (“Merger Sub”) (as it may be amended or supplemented from time to time, the “Merger Agreement”).

As a condition and inducement to Parent’s and Merger Sub’s willingness to enter into the Merger Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, effective at the Effective Time (as defined in the Merger Agreement), Section 7(a) of your Employment Agreement is hereby amended by (i) deleting the last sentence thereof and (ii) replacing the phrase “in the United States” with the word “worldwide”.  Accordingly, you acknowledge that the noncompete provisions of such Section 7(a) shall apply notwithstanding the circumstances of any termination of your employment with the Company at any time.  Except as expressly amended in this letter, the terms of your Employment Agreement shall remain in full force and effect.  You and we agree, for the benefit of Parent, that your Employment Agreement and this amendment may not be amended without the prior written consent of Parent.  This letter agreement shall terminate upon any termination of the Merger Agreement in accordance with its terms.

Notwithstanding anything in the Employment Agreement to the contrary, all payments to be made to the executive pursuant to Section 6(e), and any Tax Restoration Payment made pursuant to Section 6(g), of the Employment Agreement (other than the Non-Compete Payment) shall be made within 15 days of termination of employment, and the Non-Compete Payment shall be payable quarterly in advance, beginning at such time that it becomes due (payable for any partial quarter on a pro rata basis).  In the event the Company fails to make such payments within such 15 days of their due date, the obligations under the amendment to the Employment Agreement set forth in this letter agreement shall, unless Parent or the Company shall have pending a good faith dispute with you regarding such payment, have no force and effect.  All terms capitalized but not otherwise defined herein shall have the meaning ascribed to them in the Employment Agreement.

This agreement may be executed in on or more counterparts (including by facsimile), and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which shall constitute one and the same agreement.

Please confirm your agreement to this amendment by signing below.

	Very truly yours,
	INFORMATION HOLDINGS INC.
	By:	/s/ Vincent A. Chippari
		Name: Vincent A. Chippari
		Title: Executive VP & CFO
AGREED AS OF THE DATE FIRST WRITTEN ABOVE:
/s/ Mason P. Slaine
MASON P. SLAINE

EX-10.14

Exhibit 10.14

July 22, 2004

Mr. Jay Nadler

Liquent Inc.

1300 Virginia Drive

Ft. Washington, PA  19034

Re:Enhanced Retention Bonus

Dear Mr. Nadler:

Information Holdings Inc. (“the Company”) believes that its success following its acquisition by The Thomson Corporation (“Parent”) will be significantly enhanced by your continued employment with the Company.  Accordingly, the Company has obtained the consent of its Board of Directors to modify your Employment Agreement with the Company, dated April 10, 2000, and amended September 2, 2003 (your “Employment Agreement”), and to pay you an enhanced retention bonus, according to the following terms:

1.You will continue employment with the Company under the terms of your Employment Agreement but your title will be changed to Senior Vice President in Thomson Scientific’s Pharma Markets Business Unit, and you will report to Ian Tarr, Executive Vice President of Thomson Scientific’s Pharma Markets Business Unit (or his successor).  You agree that your change in title and reporting line will not constitute “Good Reason” under Section 6(f) of your Employment Agreement.  Without limiting the foregoing sentence, nothing herein shall be deemed to otherwise affect or limit your right to terminate your employment for “Good Reason” under Section 6(f) of your Employment Agreement under the circumstances listed therein which includes a material diminution in your responsibilities or authority.

2.If (A) you are still employed by the Company on the one-year anniversary of the “Closing Date” (as defined in the Agreement and Plan of Merger dated as of June 28, 2004 among Parent, the Company and Thyme Corporation (the “Merger Agreement”)), (B) your employment is involuntarily terminated “Without Cause” (as defined in Section 6(e) of your Employment Agreement) before such one-year anniversary or (C) the Company provides notice of non-renewal of your Employment Agreement before such one-year anniversary, then in each case (but, for the avoidance of doubt, not in the event that you terminate your employment for “Good Reason” under Section 6(f) of your Employment Agreement) you will receive, on the date of such one-year anniversary or within 10 days following such involuntary termination or expiration of the term of your Employment Agreement following

non-renewal, as applicable, a lump sum bonus payment equal to your “Salary” (as defined in Section 3(a) of your Employment Agreement) as in effect on such one-year anniversary or immediately prior to such termination (subject to applicable withholding and similar taxes).  This lump sum payment will be in addition to any payment you become eligible to receive under your Employment Agreement or your retention bonus letter agreement dated April 20, 2004.

Except as provided in this letter, all of the terms, provisions and conditions of your Employment Agreement will remain in full force and effect.  This letter is for the benefit of Parent, and your Employment Agreement (as modified by this letter) may not be further modified unless the modification is in writing and signed by each of you, the Company and Parent.

The terms set forth in this letter will automatically terminate upon any termination of the Merger Agreement in accordance with its terms and will not be effective before the “Effective Time” (as defined in the Merger Agreement).

We hope you will indicate your acceptance of the terms set forth above by signing and dating this letter in the spaces indicated below.

		Sincerely,
		INFORMATION HOLDINGS INC.
		By:	/s/ Mason Slaine
			Mason Slaine
			Chief Executive Officer
I, Jay Nadler, agree to the terms described in this letter, which modify my Employment Agreement.
/s/ Jay Nadler	July 22, 2004
Jay Nadler	Date

2

EX-10.15

Exhibit 10.15

July 22, 2004

Mr. Daniel Videtto

Micropatent LLC

250 Dodge Avenue

East Haven, CT  06512

Re:Enhanced Retention Bonus

Dear Mr. Videtto:

MicroPatent LLC (“MicroPatent”) believes that its success following the acquisition of Information Holdings Inc. (the “Company”) by The Thomson Corporation (“Parent”) will be significantly enhanced by your continued employment with MicroPatent.  Accordingly, MicroPatent has obtained the consent of its Board of Directors and the Board of Directors of the Company to modify your Employment Agreement with MicroPatent, dated June 23, 2003 (your “Employment Agreement”), and to pay you an enhanced retention bonus, according to the following terms:

1.You will continue employment with MicroPatent under the terms of your Employment Agreement, but your title will be changed to Senior Vice President in Thomson Scientific’s Corporate Markets Business Unit, and you will report to Brian Tyler, Executive Vice President of Thomson Scientific’s Corporate Markets Business Unit (or his successor).  You agree that your change in title and reporting line will not constitute “Good Reason” under Section 6(f) of your Employment Agreement.  Without limiting the foregoing sentence, nothing herein shall be deemed to otherwise affect or limit your right to terminate your employment for “Good Reason” under Section 6(f) of your Employment Agreement under the circumstances listed therein which includes a material diminution in your responsibilities or authority.

2.If (A) you are still employed by MicroPatent on the one-year anniversary of the “Closing Date” (as defined in the Agreement and Plan of Merger dated as of June 28, 2004 among Parent, the Company and Thyme Corporation (the “Merger Agreement”)), (B) your employment is involuntarily terminated “Without Cause” (as defined in Section 6(e) of your Employment Agreement) before such one-year anniversary or (C) the Company provides notice of non-renewal of your Employment Agreement before such one-year anniversary, then in each case (but, for the avoidance of doubt, not in the event that you terminate your employment for “Good Reason” under Section 6(f) of your Employment Agreement) you will receive, on the date of such one-year anniversary or within 10 days following such involuntary termination or expiration of the term of your Employment Agreement following

non-renewal, as applicable, a lump sum bonus payment equal to your “Salary” (as defined in Section 3(a) of your Employment Agreement) as in effect on such one-year anniversary or immediately prior to such termination (subject to applicable withholding and similar taxes).  This lump sum payment will be in addition to any payment you become eligible to receive under your Employment Agreement or your retention bonus letter agreement dated April 20, 2004.

Except as provided in this letter, all of the terms, provisions and conditions of your Employment Agreement will remain in full force and effect.  This letter is for the benefit of Parent, and your Employment Agreement (as modified by this letter) may not be further modified unless the modification is in writing and signed by each of you, the Company and Parent.

The terms set forth in this letter will automatically terminate upon any termination of the Merger Agreement in accordance with its terms and will not be effective before the “Effective Time” (as defined in the Merger Agreement).

We hope you will indicate your acceptance of the terms set forth above by signing and dating this letter in the spaces indicated below.

		Sincerely,
		MICROPATENT, LLC
		By:
		/s/ Vincent A. Chippari
		Vincent A. Chippari
I, Daniel Videtto, agree to the terms described in this letter, which modify my Employment Agreement.
/s/ Daniel Videtto	July 22, 2004
Daniel Videtto	Date

2

EX-10.16

Exhibit 10.16

April 20, 2004

Mr. Vincent A. Chippari

Executive Vice President and

Chief Financial Officer

Information Holdings Inc.

2777 Summer Street

Suite 602

Stamford, CT  06905

Re:          Retention Bonus

Dear Mr. Chippari:

This letter agreement sets forth the retention bonuses that you will be eligible to receive if a sale of all or substantially all of the capital stock or assets of Information Holdings Inc. (the “Company”) is completed within 12 months of the date hereof (a “Sale”).  All amounts payable to you under these bonus arrangements will be in addition to, not in lieu of, any and all amounts to which you are entitled, or may become entitled upon termination of your employment with the Company, under the terms of your employment agreement with the Company dated as of January 19, 1998 (the “Employment Agreement”), your stock option grants, and any other compensation or benefits payable under any Company plans.

In the event a Sale occurs, and provided that you have remained in the continuous employ of the Company from the date of this letter agreement until the closing date of such Sale (the “Closing Date”), you will receive, on the Closing Date, a lump sum bonus payment of $600,000.  In addition, if you continue to be employed by the Company on the one-year anniversary of the Closing Date (the “Anniversary Date”), or if your employment is terminated prior to the Anniversary Date by the Company or a buyer without “cause”, by you for “good reason”, you will receive an additional lump sum bonus payment of $600,000, either on the Anniversary Date, or on the date of such termination of employment, as the case may be.  In addition, if the Company or a buyer provides notice of non-renewal of your Employment Agreement prior to the Anniversary Date, you will receive the additional lump sum bonus payment of $600,000, on the earlier of the Anniversary Date or the expiration of your Employment Agreement.

For purposes of this letter agreement, “cause” shall have the meaning ascribed to such term in your Employment Agreement, and “good reason” shall mean (i) actions taken by the Company or a buyer which prevent you from performing the normal duties and responsibilities associated with your current position, or any adverse change or material diminution in your title, position authority or responsibilities; (ii) the failure by the Company or a buyer to pay any compensation due to you, whether under your Employment Agreement this letter agreement or otherwise; (iii) the failure by the Company or a buyer to allow you to participate in employee benefit plans generally made available from time to time to senior executives of the Company or a buyer, as

the case may be; (iv) a requirement to relocate to a place of employment more than 25 miles from Stamford, CT; or (v) the failure of a buyer or any successor to all or substantially all of the business and/or assets of the Company to assume your Employment Agreement or this letter agreement.

In addition, if your employment is terminated at any time on or after the Closing Date by the Company without cause, by you for good reason, or a result of the Company or a buyer electing not to renew your Employment Agreement, and if it is determined that any payment or distribution to you, pursuant to this letter agreement, your Employment Agreement or otherwise, alone or in the aggregate, made by the Company, any person who acquires ownership or effective control of the Company, or ownership of a substantial portion of the assets of the Company (within the meaning of section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder) or any affiliate of such person (the “total payments”) would be subject to the excise tax imposed by section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as, the “Excise Tax”), then you will be entitled to receive an additional payment (a “Tax Restoration Payment”) in an amount such that, after payment by you of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Tax Restoration Payment, you retain an amount of the Tax Restoration Payment equal to the Excise Tax imposed upon the Total Payments.

All amounts payable to you pursuant to the terms of this letter agreement shall be subject to withholding for all applicable federal, state and local withholding taxes.

Please indicate your acceptance of the terms of this letter agreement by signing and dating this letter in the spaces indicated below.

Sincerely,
INFORMATION HOLDINGS INC.
By:	/s/	Mason P. Slaine
		Mason P. Slaine
		Chief Executive Officer
	/s/	Vincent A. Chippari
		Vincent A. Chippari

2

EX-10.17

Exhibit 10.17

April 20, 2004

Mr. Jay Nadler

President, Liquent, Inc.

1300 Virginia Drive

Ft. Washington, PA 19034

Re:          Retention Bonus

Dear Mr. Nadler:

This letter agreement sets forth the retention bonuses that you will be eligible to receive if a sale of all or substantially all of the capital stock or assets of Information Holdings Inc. (the “Company”) is completed within 12 months of the date hereof (a “Sale”).  All amounts payable to you under these bonus arrangements will be in addition to, not in lieu of, any and all amounts to which you are entitled, or may become entitled upon termination of your employment with the Company, under the terms of your employment agreement with the Company dated as of April 10, 2000 (the “Employment Agreement”), your stock option grants, and any other compensation or benefits payable under any Company plans.

In the event a Sale occurs, and provided that you have remained in the continuous employ of the Company from the date of this letter agreement until the closing date of such Sale (the “Closing Date”), you will receive, on the Closing Date, a lump sum bonus payment of $500,000.  In addition, if you continue to be employed by the Company on the one-year anniversary of the Closing Date (the “Anniversary Date”), or if your employment is terminated prior to the Anniversary Date by the Company or a buyer without “cause”, by you for “good reason”, you will receive an additional lump sum bonus payment of $500,000, either on the Anniversary Date, or on the date of such termination of employment, as the case may be.  In addition, if the Company or a buyer provides notice of non-renewal of your Employment Agreement prior to the Anniversary Date, you will receive the additional lump sum bonus payment of $500,000, on the earlier of the Anniversary Date or the expiration of your Employment Agreement.

For purposes of this letter agreement, “cause” shall have the meaning ascribed to such term in your Employment Agreement, and “good reason” shall mean (i) actions taken by the Company or a buyer which prevent you from performing the normal duties and responsibilities associated with your current position, or any adverse change or material diminution in your title, position authority or responsibilities; (ii) the failure by the Company or a buyer to pay any compensation due to you, whether under your Employment Agreement this letter agreement or otherwise; (iii) the failure by the Company or a buyer to allow you to participate in employee benefit plans generally made available to senior executives of the Company or a buyer, as the case may be; (iv) a requirement to relocate from your existing place of employment to a place of employment greater than 50 miles from your home in Marlboro, NJ; or (v) the failure of a buyer or any

successor to all or substantially all of the business and/or assets of the Company to assume your Employment Agreement or this letter agreement.

In addition, if your employment is terminated at any time on or after the Closing Date by the Company without cause, by you for good reason, or as a result of the Company or a buyer electing not to renew the Employment Agreement, and if it is determined that any payment or distribution to you, pursuant to this letter agreement, your Employment Agreement or otherwise, alone or in the aggregate, made by the Company, any person who acquires ownership or effective control of the Company, or ownership of a substantial portion of the assets of the Company (within the meaning of section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder) or any affiliate of such person (the “total payments”) would be subject to the excise tax imposed by section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as, the “Excise Tax”), then you will be entitled to receive an additional payment (a “Tax Restoration Payment”) in an amount such that, after payment by you of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Tax Restoration Payment, you retain an amount of the Tax Restoration Payment equal to the Excise Tax imposed upon the Total Payments.

All amounts payable to you pursuant to the terms of this letter agreement shall be subject to withholding for all applicable federal, state and local withholding taxes.

Please indicate your acceptance of the terms of this letter agreement by signing and dating this letter in the spaces indicated below.

Sincerely,
INFORMATION HOLDINGS INC.
By:	/s/	Mason P. Slaine
		Mason P. Slaine
		Chief Executive Officer
	/s/	Jay Nadler
		Jay Nadler

2

EX-10.18

Exhibit 10.18

April 20, 2004

Mr. Daniel Videtto

President, MicroPatent LLC

250 Dodge Avenue

East Haven, CT 06512

Re:          Retention Bonus

Dear Mr. Videtto:

This letter agreement sets forth the retention bonuses that you will be eligible to receive if a sale of all or substantially all of the capital stock or assets of Information Holdings Inc. (the “Company”) is completed within 12 months of the date hereof (a “Sale”).  All amounts payable to you under these bonus arrangements will be in addition to, not in lieu of, any and all amounts to which you are entitled, or may become entitled upon termination of your employment with the Company, under the terms of your employment agreement with the Company dated as of June 23, 2003 (the “Employment Agreement”), your stock option grants, and any other compensation or benefits payable under any Company plans.

In the event a Sale occurs, and provided that you have remained in the continuous employ of the Company from the date of this letter agreement until the closing date of such Sale (the “Closing Date”), you will receive, on the Closing Date, a lump sum bonus payment of $300,000.  In addition, if you continue to be employed by the Company on the one-year anniversary of the Closing Date (the “Anniversary Date”), or if your employment is terminated prior to the Anniversary Date by the Company or a buyer without “cause”, by you for “good reason”, you will receive an additional lump sum bonus payment of $300,000, either on the Anniversary Date, or on the date of such termination of employment, as the case may be.  In addition, if the Company or a buyer provides notice of non-renewal of your Employment Agreement prior to the Anniversary Date, you will receive the additional lump sum bonus payment of $300,000, on the earlier of the Anniversary Date or the expiration of your Employment Agreement.

For purposes of this letter agreement, “cause” shall have the meaning ascribed to such term in your Employment Agreement, and “good reason” shall mean (i) actions taken by the Company or a buyer which prevent you from performing the normal duties and responsibilities associated with your current position, or any adverse change or material diminution in your title, position authority or responsibilities; (ii) the failure by the Company or a buyer to pay any compensation due to you, whether under your Employment Agreement this letter agreement or otherwise; (iii) the failure by the Company or a buyer to allow you to participate in employee benefit plans generally made available from time to time to senior executives of the Company or a buyer, as the case may be; (iv) a requirement to relocate to a place of employment outside of the greater Stamford, CT or New Haven, CT metropolitan areas; or (v) the failure of a buyer or any

successor to all or substantially all of the business and/or assets of the Company to assume your Employment Agreement or this letter agreement.

In addition, if your employment is terminated at any time on or after the Closing Date by the Company without cause, by you for good reason, or as a result of the Company or a buyer electing not to renew the Employment Agreement, and if it is determined that any payment or distribution to you, pursuant to this letter agreement, your Employment Agreement or otherwise, alone or in the aggregate, made by the Company, any person who acquires ownership or effective control of the Company, or ownership of a substantial portion of the assets of the Company (within the meaning of section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder) or any affiliate of such person (the “total payments”) would be subject to the excise tax imposed by section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as, the “Excise Tax”), then you will be entitled to receive an additional payment (a “Tax Restoration Payment”) in an amount such that, after payment by you of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Tax Restoration Payment, you retain an amount of the Tax Restoration Payment equal to the Excise Tax imposed upon the Total Payments.

All amounts payable to you pursuant to the terms of this letter agreement shall be subject to withholding for all applicable federal, state and local withholding taxes.

Please indicate your acceptance of the terms of this letter agreement by signing and dating this letter in the spaces indicated below.

Sincerely,
INFORMATION HOLDINGS INC.
By:	/s/	Mason P. Slaine
		Mason P. Slaine
		Chief Executive Officer
	/s/	Daniel Videtto
		Daniel Videtto

2

EX-31.1

Exhibit 31.1

Certification Pursuant to Rule 13a-14 of The Securities Exchange Act of 1934

as Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

I, Mason P. Slaine, President and Chief Executive Officer of Information Holdings Inc. (the “Registrant”), certify that:

1.I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2004 of the Registrant;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and we have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 9, 2004	/s/ Mason P. Slaine
	Mason P. Slaine
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Rule 13a-14 of The Securities Exchange Act of 1934

as Adopted Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

I, Vincent A. Chippari, Executive Vice President and Chief Financial Officer of Information Holdings Inc. (the “Registrant”), certify that:

1.I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2004 of the Registrant;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and we have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c)disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 9, 2004	/s/ Vincent A. Chippari
	Vincent A. Chippari
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Information Holdings Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2004 as filed with the Securities and Exchange Commission on August 9, 2004 (the “Report”), I, Mason P. Slaine, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 9, 2004	/s/ Mason P. Slaine
	Mason P. Slaine
	President and Chief Executive Officer

A signed original statement of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Information Holdings Inc. and will be retained by Information Holdings Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Information Holdings Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2004 as filed with the Securities and Exchange Commission on August 9, 2004 (the “Report”), I, Vincent A. Chippari, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 9, 2004	/s/ Vincent A. Chippari
	Vincent A. Chippari
	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

A signed original statement of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Information Holdings Inc. and will be retained by Information Holdings Inc. and furnished to the Securities and Exchange Commission or its staff upon request.