Black Knight (BKI) Risk Analysis

Public sources of free or relatively inexpensive information have become increasingly available, particularly through the Internet, and this trend is expected to continue. Governmental agencies in particular have increased the amount of information to which they provide free public access. Public sources of free or relatively inexpensive information may reduce demand for, or the price that clients are willing to pay for, our data and information solutions. To the extent that clients choose not to obtain data and information from us and instead rely on information obtained at little or no cost from these public sources, it could have a material adverse effect on our business, financial condition and results of operations.

The costs for a mortgage lender or servicer to switch providers of software, data and analytics solutions and services can be significant and the process can take 12 to 18 months, or longer, to complete. As a result, potential clients may decide that it is not worth the time and expense to begin using our solutions and services, even if we offer competitive and economic advantages. If we are unable to convince these prospective clients to switch to our software and services, our ability to increase market share will be limited, which could have a material adverse effect on our growth.

Many of our clients' and our businesses are subject to various federal, state, local and foreign laws and regulations. Our failure to comply with applicable laws and regulations could restrict our ability to provide certain services or result in imposition of civil fines and criminal penalties, substantial regulatory and compliance costs, litigation expense, adverse publicity and loss of revenues. As a provider of electronic data processing to financial institutions, such as banks and credit unions, we are subject to regulatory oversight and examination by the FFIEC, the CFPB, the federal banking agencies and various other federal and state regulatory authorities. We also may be subject to possible review by state agencies that regulate banks in each state in which we conduct our electronic processing activities. In addition, our businesses are subject to an increased degree of compliance oversight by regulators and by our clients. Specifically, the CFPB has authority to write rules affecting the business of, supervise, conduct examinations of and enforce compliance with federal consumer financial laws and regulations with respect to certain "non-depository covered persons" determined by the CFPB to be "larger participants" that offer consumer financial products and services. The CFPB and the prudential financial institution regulators, such as the OCC, also have the authority to examine us in our role as a service provider to large financial institutions. In addition, we believe some of our largest bank clients' regulators are requiring the banks to exercise greater oversight and perform more rigorous audits of their key service providers such as us. The Real Estate Settlement Procedures Act ("RESPA") and related regulations generally prohibit the payment or receipt of fees or any other item of value for the referral of real estate-related settlement services. RESPA also prohibits fee shares or splits or unearned fees in connection with the provision of residential real estate settlement services, such as mortgage brokerage and real estate brokerage. Notwithstanding these prohibitions, RESPA permits payments for goods furnished or for services actually performed, so long as those payments bear a reasonable relationship to the market value of the goods or services provided. RESPA and related regulations may to some extent restrict our real estate-related businesses from entering into certain preferred alliance arrangements. The CFPB is responsible for enforcing RESPA. Changes to laws and regulations and regulatory oversight of our clients and us, including those that may result from changes in the political landscape, may cause us to increase our prices in certain situations or decrease our prices in other situations, may restrict our ability to implement price increases or otherwise limit the manner in which we conduct our business. We may also incur additional expense in keeping our software solutions services up to date as laws and regulations change, and we may not be able to pass those additional costs on to our clients. In addition, in response to increased regulatory oversight, participants in the mortgage lending industry may develop policies pursuant to which they limit the extent to which they can rely on any one vendor or service provider. Conversely, in an environment with less stringent regulatory oversight, prospective clients may choose to retain their in-house platforms, or current service providers, or seek alternative service providers who provide services that are less compliance and quality oriented at a lower price point. If we are unable to adapt our products and services to conform to increased or evolving laws and regulations, or if these laws and regulations have a negative effect on our clients, we may experience client losses or increased operating costs, which could have a material adverse effect on our business, financial condition and results of operations.

Completion of the Merger is conditioned on, among other things, the expiration or early termination of the waiting period applicable to the consummation of the Merger under the HSR Act. On March 9, 2023, the United States Federal Trade Commission (the "FTC") filed an administrative complaint challenging the Merger under the HSR Act and authorized the filing of a complaint in federal district court to pursue a preliminary injunction to prevent the consummation of the Merger pending an administrative trial, and ICE announced that ICE strongly disagrees with the FTC's decision to challenge the ICE Transaction. On April 10, 2023, the FTC filed a parallel complaint in federal court seeking injunctive relief and seeking to block ICE and BKI from completing the Merger during the pendency of the administrative proceeding on the merits.  On April 21, 2023, the United States District Court for the Northern District of California entered a temporary restraining order that prevents ICE and BKI from consummating the Merger until 11:59 p.m. on the second business day after the Court rules on the FTC's motion for a preliminary injunction, or a date set by the Court, whichever is later. On April 25, 2023, BKI filed its response to the FTC's complaint generally denying the allegations and asserting several defenses. BKI also asserted a counterclaim against the FTC seeking declaratory and injunctive relief alleging violations of BKI's constitutional rights. On July 17, 2023 the U.S. District Court granted the parties' joint motion to continue the hearing on the preliminary injunction, which had been scheduled to commence on July 24, 2023, until August 14, 2023 to allow the FTC time to evaluate BKI's and ICE's proposed remedy involving the divestiture of the Empower LOS business and the Optimal Blue business. On July 25, 2023, the FTC withdrew the matter from adjudication within its administrative forum until August 16, 2023 to facilitate settlement discussions. There can be no assurance as to the outcome of litigation with the FTC or that this condition to completion of the Merger will be satisfied on a timely basis or at all, and there can be no assurance that if regulatory clearance is obtained, it will not result in the imposition of conditions, limitations, obligations or restrictions that have the direct or indirect effect of preventing the completion of any of the transactions contemplated by the Merger Agreement, imposing additional material costs on or materially limiting the revenues of ICE following the Merger or otherwise reducing the anticipated benefits of the Merger, or result in the delay or abandonment of the Merger. Under the Merger Agreement, ICE and we have agreed to use our respective reasonable best efforts to cause the transactions contemplated by the Merger Agreement to be consummated as soon as practicable and to obtain all approvals from any governmental entity or third party that are necessary, proper or advisable to consummate the Merger. In particular, each party has agreed to use its reasonable best efforts to take promptly any and all steps necessary to avoid, eliminate or resolve each and every impediment and obtain all clearances, consents, approvals and waivers under U.S. antitrust laws so as to enable the parties to close the Merger as soon as practicable. Under the Merger Agreement, except as provided below, ICE is not obligated to agree to any structural or behavioral remedy that any government entity may seek to impose. There can be no assurance that regulators will not seek to impose any terms, conditions, limitations, obligations or costs, or restrictions (including a duty to agree to structural or behavioral relief) on the conduct of ICE's business following the completion of the Merger (which would include Black Knight's business) or otherwise require changes to the terms of the transactions contemplated by the Merger Agreement, or that such conditions, limitations, obligations or restrictions would not have the effect of preventing or delaying the completion of any of the transactions contemplated by the Merger Agreement, imposing additional material costs on or materially limiting the revenues of ICE following the Merger or otherwise reduce the anticipated benefits of the Merger if the Merger were consummated successfully within the expected timeframe. In addition, at any time before or after the completion of the Merger, and notwithstanding the termination of applicable waiting periods, any state attorney general could take such action under the antitrust laws as any such party deems necessary or desirable in the public interest. Such action could include, among other things, seeking to enjoin the completion of the Merger or seeking divestiture of substantial assets of the parties. In addition, in some circumstances, a third party could initiate a private action under antitrust laws challenging, seeking to enjoin, or seeking to impose conditions on the Merger. Although ICE was not obligated under the Original Merger Agreement to litigate to defend such efforts to enjoin the transaction contemplated by the Original Merger Agreement under U.S. antitrust laws, the parties, at ICE's option, were permitted to engage in litigation to obtain the clearances, consents, approvals and waivers under U.S. antitrust laws so as to enable the parties to close the Merger. Pursuant to the Amendment, ICE's obligation to use its "reasonable best efforts" to obtain U.S. antitrust clearance specifically requires ICE to (1) (a) effect the transactions contemplated by the Equity Purchase Agreement (the "Empower Divestiture Agreement") with Constellation Web Solutions Inc., a Delaware corporation and a subsidiary of Constellation Software Inc., and ICE (solely for the purposes set forth in the Empower Divestiture Agreement), and the ancillary agreements related thereto subject to the terms and conditions thereof and (b) if the Empower Divestiture Agreement is terminated for any reason prior to the earlier to occur of the closing of the Merger and the termination of the Merger Agreement and at such time ICE believes, acting reasonably and in good faith and after consultation with us, that it remains possible for the closing of the Merger to occur on or prior to the outside date, use reasonable best efforts to enter into a new agreement with a new purchaser, whose acquisition of the Empower  business and the Empower business products would not raise material antitrust concerns, and consummate the transactions contemplated thereby providing for the divestiture of the Empower business and the Empower  business products, and (2) litigate against any governmental entity or private party challenging the Merger transactions under any U.S. antitrust law in any litigation, action or proceeding that seeks to prevent, materially impede or materially delay the consummation of the Merger and seek to have vacated, lifted, reversed or overturned any injunction or order that prohibits, prevents or restricts the consummation of the Merger. ICE and Black Knight may not prevail and may incur significant costs in defending or settling any such action.