Document:

Exhibit 10.14

 

CONFIDENTIAL TREATMENT REQUESTED

 

CONFIDENTIAL TREATMENT
REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS
OMITTED AND IS NOTED WITH THREE ASTERICKS AS FOLLOWS ***. AN UNREDACTED VERSION
OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

FIRST AMENDMENT TO DATAFEED LICENSE AGREEMENT

 

This First Amendment to
Datafeed License Agreement (“Amendment”) is effective as of the 3rd day of January, 2005
(“Effective Date”), by and between ADP Investor Communication Services, Inc., a
Delaware corporation (“ADP”), and Institutional Shareholder Services Inc. (
“ISS”), a Delaware corporation (each a “party” and collectively the “parties”).

 

WHEREAS, the parties are
parties to that certain Datafeed License Agreement entered into as of the 27th  day of October, 2003 (the “Original Agreement”);

 

WHEREAS, the parties desire
to amend certain portions of the Original Agreement as set forth herein;

 

WHEREAS, the parties desire
to set forth herein certain other agreements in connection with the matters set
forth in the Original Agreement;

 

WHEREAS, ADP has expressed
an interest in using ISS agendas and agenda codes in order to enhance the
quality of the agendas generated by ADP and the reporting that ADP provides for
its clients;

 

WHEREAS, the parties intend
to commence discussions no later than May 30, 2005 to work together to explore
the possibility of ISS providing its agendas and agenda codes to ADP, and with
a view towards memorializing any agreement with respect thereto in a written
document covering, among other things, pricing and limitations on use; and

 

WHEREAS, the parties intend
to work together to find a way to automate and make more efficient the ballot
reconciliation process.

 

NOW THEREFORE, in
consideration of the mutual promises and covenants hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:

 

1.             Definitions. Capitalized terms not otherwise
defined in this Amendment are used with the definitions assigned to them in the
Original Agreement.

 

2.             Amendments. The Original Agreement shall be
amended as more particularly set forth below. In all other respects, the
Original Agreement shall remain in full force and effect.

 

a.             Annex II to the Original Agreement is amended and
restated in its entirety by replacing said Annex II with the new Annex II which
is attached to this Amendment as Exhibit A.

 

b.             Section 6.1 of the Original Agreement is amended by
adding the following text at the end of the section:

 

“Both ADP and ISS will work
to reduce the number of Ballots transmitted in paper form to ISS by ADP. For
purposes hereof, only ballots with a mailing address of 2099 Gaither Road shall
be considered “Ballots transmitted in paper form”. In this regard, the parties
will form a joint task force in order to seek mutually agreeable methods for
achieving this goal. With respect to Vote Instructions pertaining to Ballots
transmitted in paper form to ISS

 

1

 

by ADP, the following Vote
Instruction fees shall apply (the “Paper Vote Instruction Fee”): In the 2005
calendar year, the Paper Vote Instruction Fee shall be $ *** for the first *** paper
Ballots and there shall be no Paper Vote Instruction Fee for Paper Vote
Instructions in excess of that amount. ISS will report to ADP monthly at close
of business on the last business day of the month the number of paper ballots
received in that month addressed to 2099 Gaither Road and will allow ADP to
inspect its paper ballot scanning records on request. ADP will compare vote
instructions returned to ballots sent electronically and compare the resulting
count to ISS claim. On or before July 1, 2005, ADP and ISS will negotiate in
good faith regarding the Paper Vote Instruction Fee for calendar years after
2005.”

 

3.             Faxed/SWIFT Voting Instructions. There are
certain situations in which ADP is currently faxing vote instructions to ISS on
behalf of bank custodial clients using ISS’ global proxy distribution service.
Similarly, there are certain situations in which ISS is currently transmitting
via SWIFT vote instructions to ADP on behalf of a global custodian bank that
has indirectly outsourced part of its sub-custodian network to ADP. ISS and ADP
believe that there may be a method for automating these faxed data exchanges
and including them in the Consolidated Datafeed. The parties agree to work
together to implement an automated process whereby the faxing of vote instructions
between the parties can be eliminated or minimized. It is agreed that we will
begin discussion of this automation process within thirty days after the
Consolidated Datafeed has been fully implemented with respect to global
securities (meaning exclusive of the U.S. and Canada), currently anticipated to
be on or about February 15, 2005.

 

4.             Position Reporting. Historically, ADP has been
providing historical vote reporting information to ISS. The parties agree that
with the existence of the Consolidated Datafeed, this type of reporting is
generally redundant and unnecessary. Notwithstanding the foregoing, there may
be up to twenty-five (25) current accounts for which ISS may still need to
request historical vote reporting information. From and after the date of this
Amendment, ISS shall pay to ADP $*** per month for any current account for
which ISS requests historical vote reporting information with no option for
other accounts to be added or substituted. Further, ISS will use its reasonable
best efforts to eliminate the need for historical vote reporting for any and
all accounts.

 

5.             Reduction of Paper Ballots. As provided in
Section 6.1 of the Original Agreement (as amended by this Amendment), the
parties will form a joint task force to work on methods for reducing the number
of Ballots transmitted in  paper form to ISS by ADP.  ADP shall use its reasonable best efforts to have a process in place within 90
days of the Effective Date to identify accounts that would have been sent to
2099 Gaither Road. Such process will produce a daily file of such accounts to
be transmitted to ISS, assigned to Proxy Edge ID, and returned to ADP within
one business day of the receipt by ISS of such file.

 

6.             Service Level Agreement. Annex I of the Original Agreement is a Service Level
Agreement setting forth certain support services relating to the Original
Agreement. ADP and ISS acknowledge that there can and should be improvement in
certain areas in terms of how ADP services ISS under the Original Agreement. In
this regard, the parties agree to meet and negotiate in good faith either an
amendment to the existing Service Level Agreement and/or a new Service Level Agreement

 

2

 

outlining the
areas in which improvement is sought and ADP’s commitment to improve its
responsiveness and service in those areas with the expectation that any
amendment and/or new Service Level Agreement will be executed on or before
February 1, 2005. Any amendment and/or new Service Level Agreement will provide
specific and measurable performance metrics and service levels which will
enable the parties to manage and monitor the operational relationship
contemplated by the Original Agreement, as amended.

 

7.             Miscellaneous. This
Amendment is limited as specified and shall not constitute a modification,
amendment or waiver of any other provision of the Original Agreement. Except as
specifically amended by this Amendment, the Original Agreement shall remain in
full force and effect and is hereby ratified and confirmed. This Amendment may
be executed in counterparts, each of which shall be deemed an original, and all
of which shall constitute one and the same instrument.

 

IN WITNESS
WHEREOF, the parties hereto have executed this Amendment by their duly authorized
representatives as of the Effective Date.

 

ADP
INVESTOR COMMUNICATIONS SERVICES, INC.

 

	
  By:

  	
  /s/ ROBERT
  SCHIFELLITE

  	
   

  
	
  Name:

  	
    ROBERT
  SCHIFELLITE

  
	
  Title:

  	
  SENIOR VICE PRESIDENT

  
				

 

	
  INSTITUTIONAL SHAREHOLDER SERVICES INC.

  
	
   

  
	
  By:

  	
  /s/ John M. Connolly

  	
   

  
	
  Name:

  	
  John M. Connolly

  
	
  Title:

  	
  President & CO

  
				

 

3

 

 

EXHIBIT A

 

ANNEX II

 

ISS VOTE INSTRUCTIONS RETURNED VIA CONSOLIDATED
DATAFEED

 

The following reflects the
Price Per Vote Instruction(1) for the period beginning on January 1, 2005 and
ending on December 31, 2011 for Vote Instructions returned by ISS to ADP
through the Consolidated Datafeed; provided
however, these prices will become effective only upon successful
implementation by ISS and ADP of a system by which ISS provides ADP with ISS
agenda/proposal coding for redistribution to institutional clients (the “ISS
Agenda Code Project”).

 

***

 

Until
the ISS Agenda Code Project is successfully implemented, the following Price
Per Vote Instruction(1) shall be effective for the period beginning January 1,
2005 and ending on December 31, 2011 for Vote Instructions returned by ISS to
ADP through the Consolidated Data Feed.

 

***

 

(1)  The Price Per Vote
Instruction set forth herein may be reduced from time to time pursuant to
Section 8.1.

 

 

Schedule 4

 

Position
Reporting Accounts

 

 

Accounts for ISS monthly transmission file

Clt#       A/C #

59B  2604169

59B  2630828

59B  2632680

59B  2672568

59B  2690430

59B  2690446

59B  2604348

59B  2690431

59B  2649869

59B  2612132

59B  2612736

59B  2655803

59B  2603806

59B  2610908

59B  2603807

954  CXXXXX

954  B01DRFF5100062B

5T1  4700782

161  L0000000000390

954  C ISEFO100202MExhibit
10.15

AGREEMENT
AND PLAN OF MERGER

BY
AND AMONG

RISKMETRICS
GROUP, INC.,

RMG HOLDCO, INC.,

RMG
MERGER SUB, INC.,

ISS
MERGER SUB, INC.,

AND

INSTITUTIONAL
SHAREHOLDER SERVICES HOLDINGS, INC.

 

Dated
as of October 31, 2006

 

 

 

TABLE OF CONTENTS

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I - DEFINITIONS

  	
  2

  
	
   

  	
   

  
	
  1.1

  	
  Certain Definitions.

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II - THE MERGERS

  	
  13

  
	
   

  	
   

  
	
  2.1

  	
  The Mergers.

  	
  13

  
	
  2.2

  	
  Effective Time of the
  Mergers.

  	
  13

  
	
  2.3

  	
  Effects of the Mergers.

  	
  13

  
	
  2.4

  	
  Certificates of
  Incorporation and By-laws.

  	
  14

  
	
  2.5

  	
  Directors.

  	
  14

  
	
  2.6

  	
  Officers.

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE III - CONVERSION
  OF SHARES

  	
  14

  
	
   

  	
   

  
	
  3.1

  	
  Effect on Capital Stock;
  RMG Merger.

  	
  14

  
	
  3.2

  	
  Effect on Capital Stock;
  ISS Merger.

  	
  15

  
	
  3.3

  	
  Exchange of Stock
  Certificates; Payment of Merger Consideration.

  	
  22

  
	
  3.4

  	
  No Further Ownership
  Rights.

  	
  24

  
	
  3.5

  	
  Escheatment.

  	
  25

  
	
  3.6

  	
  Lost Certificates.

  	
  25

  
	
  3.7

  	
  Adjustments.

  	
  25

  
	
  3.8

  	
  Withholding Rights.

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV - CLOSING AND
  TERMINATION

  	
  26

  
	
   

  	
   

  
	
  4.1

  	
  Closing Date.

  	
  26

  
	
  4.2

  	
  Termination of Agreement.

  	
  26

  
	
  4.3

  	
  Procedure Upon
  Termination.

  	
  27

  
	
  4.4

  	
  Effect of Termination.

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE V -
  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  	
  27

  
	
   

  	
   

  
	
  5.1

  	
  Organization and Good
  Standing.

  	
  28

  
	
  5.2

  	
  Authorization of
  Agreement.

  	
  28

  
	
  5.3

  	
  Conflicts; Consents of
  Third Parties.

  	
  28

  
	
  5.4

  	
  Capitalization.

  	
  29

  
				

 

-i-

 

	
  5.5

  	
  Subsidiaries.

  	
  30

  
	
  5.6

  	
  Financial Statements.

  	
  30

  
	
  5.7

  	
  Accounts Receivable;
  Accounts Payable.

  	
  32

  
	
  5.8

  	
  Performance of Services;
  Deferred Revenues.

  	
  32

  
	
  5.9

  	
  No Undisclosed
  Liabilities.

  	
  32

  
	
  5.10

  	
  Absence of Certain Developments.

  	
  33

  
	
  5.11

  	
  Taxes.

  	
  33

  
	
  5.12

  	
  Real and Personal
  Property; Sufficiency of Assets.

  	
  34

  
	
  5.13

  	
  Intellectual Property.

  	
  35

  
	
  5.14

  	
  Material Contracts.

  	
  35

  
	
  5.15

  	
  Customers, Distributors
  and Suppliers.

  	
  37

  
	
  5.16

  	
  Employee Benefits Plans.

  	
  38

  
	
  5.17

  	
  Labor; Employees.

  	
  40

  
	
  5.18

  	
  Legal Proceedings.

  	
  42

  
	
  5.19

  	
  Compliance with Laws;
  Permits.

  	
  43

  
	
  5.20

  	
  Environmental Matters.

  	
  43

  
	
  5.21

  	
  Financial Advisors.

  	
  43

  
	
  5.22

  	
  Insurance.

  	
  43

  
	
  5.23

  	
  Transactions with
  Affiliates.

  	
  44

  
	
  5.24

  	
  Tax Treatment.

  	
  45

  
	
  5.25

  	
  Approval; Takeover
  Statutes.

  	
  45

  
	
  5.26

  	
  Registered Investment
  Advisor.

  	
  45

  
	
  5.27

  	
  Disclosure Statement;
  Information Supplied.

  	
  45

  
	
  5.28

  	
  Absence of Certain
  Payments.

  	
  46

  
	
  5.29

  	
  Books and Records

  	
  46

  
	
  5.30

  	
  Deposit Accounts.

  	
  46

  
	
  5.31

  	
  Business Process
  Reengineering Initiative.

  	
  46

  
	
  5.32

  	
  Indebtedness; Transaction
  Expenses; Other Expenses.

  	
  46

  
	
  5.33

  	
  Condition of the Business.

  	
  47

  
	
  5.34

  	
  No Other Representations
  or Warranties.

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI -
  REPRESENTATIONS AND WARRANTIES OF RMG

  	
  48

  
	
   

  	
   

  
	
  6.1

  	
  Organization and Good
  Standing of the RMG Parties.

  	
  48

  

 

-ii-

 

	
  6.2

  	
  Authorization of
  Agreement.

  	
  48

  
	
  6.3

  	
  Conflicts; Consents of
  Third Parties.

  	
  49

  
	
  6.4

  	
  Investment Intention.

  	
  50

  
	
  6.5

  	
  Financial Advisors.

  	
  50

  
	
  6.6

  	
  Financial Ability to
  Perform the Agreement.

  	
  50

  
	
  6.7

  	
  Tax Treatment.

  	
  50

  
	
  6.8

  	
  Disclosure Statement;
  Information Supplied.

  	
  50

  
	
  6.9

  	
  Capitalization.

  	
  51

  
	
  6.10

  	
  Financial Statements.

  	
  52

  
	
  6.11

  	
  Legal Proceedings.

  	
  52

  
	
  6.12

  	
  Ownership; No Prior
  Activities.

  	
  52

  
	
  6.13

  	
  Condition of the Business.

  	
  53

  
	
  6.14

  	
  No Other Representations
  or Warranties.

  	
  53

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII - COVENANTS

  	
  54

  
	
   

  	
   

  
	
  7.1

  	
  Disclosure Statement.

  	
  54

  
	
  7.2

  	
  Access to Information.

  	
  55

  
	
  7.3

  	
  Conduct of Business
  Pending the Closing.

  	
  56

  
	
  7.4

  	
  Indebtedness.

  	
  60

  
	
  7.5

  	
  Transaction Expenses.

  	
  61

  
	
  7.6

  	
  Consents.

  	
  61

  
	
  7.7

  	
  Regulatory Approvals.

  	
  61

  
	
  7.8

  	
  Further Assurances.

  	
  62

  
	
  7.9

  	
  Confidentiality.

  	
  63

  
	
  7.10

  	
  Indemnification,
  Exculpation and Insurance.

  	
  63

  
	
  7.11

  	
  Publicity.

  	
  65

  
	
  7.12

  	
  Negotiations.

  	
  65

  
	
  7.13

  	
  Stockholder Approvals.

  	
  65

  
	
  7.14

  	
  Debt Financing.

  	
  66

  
	
  7.15

  	
  Holding Company Option
  Plan.

  	
  66

  
	
  7.16

  	
  Company Options.

  	
  66

  
	
  7.17

  	
  Labor; Employees.

  	
  67

  
	
  7.18

  	
  Notification of
  Developments.

  	
  67

  

 

-iii-

 

	
  7.19

  	
  Series A Dividends.

  	
  67

  
	
  7.20

  	
  Tax Matters.

  	
  67

  
	
  7.21

  	
  Commitment Regarding
  Company Options.

  	
  68

  
	
  7.22

  	
  Capital Stock of Holding
  Company.

  	
  68

  
	
  7.23

  	
  2006 Annual Incentive
  Compensation Plan.

  	
  69

  
	
  7.24

  	
  280G Matters.

  	
  69

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII - CONDITIONS
  TO CLOSING

  	
  69

  
	
   

  	
   

  
	
  8.1

  	
  Conditions Precedent to
  Obligations of RMG.

  	
  69

  
	
  8.2

  	
  Conditions Precedent to
  Obligations of the Company.

  	
  70

  
	
  8.3

  	
  Frustration of Closing
  Conditions.

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX - SURVIVAL OF
  REPRESENTATIONS AND WARRANTIES

  	
  71

  
	
   

  	
   

  
	
  9.1

  	
  Survival Past Closing.

  	
  71

  
	
  9.2

  	
  Sole Remedy.

  	
  71

  
	
  9.3

  	
  No Reliance On or Recourse
  Against the Company.

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE X - MISCELLANEOUS

  	
  72

  
	
   

  	
   

  
	
  10.1

  	
  Payment of Sales, Use or
  Similar Taxes.

  	
  72

  
	
  10.2

  	
  Expenses.

  	
  72

  
	
  10.3

  	
  Submission to
  Jurisdiction; Consent to Service of Process.

  	
  72

  
	
  10.4

  	
  Entire Agreement;
  Amendments and Waivers.

  	
  73

  
	
  10.5

  	
  Governing Law.

  	
  73

  
	
  10.6

  	
  Notices.

  	
  73

  
	
  10.7

  	
  Severability.

  	
  74

  
	
  10.8

  	
  Binding Effect;
  Assignment; Third Party Beneficiaries.

  	
  74

  
	
  10.9

  	
  Counterparts.

  	
  75

  
	
  10.10

  	
  Waiver of Jury Trial.

  	
  75

  
	
  10.11

  	
  Specific Performance.

  	
  75

  

 

-iv-

 

EXHIBITS

 

Exhibit A — Form of ISS Written Consent

Exhibit B — Form of RMG Written Consent

Exhibit 3.2(f)(ii) — Form of Stock Form of
Election

Exhibit 3.2(f)(ii)(1) — Existing RMG
Stockholders Agreements

Exhibit 3.2(h)(ii) — Form of Option Form of
Election

Exhibit 3.3(a) — Letter of Transmittal

Exhibit 6.6 — Debt Commitment Letter

Exhibit 8.1(f) — Matters to be Addressed by
Opinion of Willkie Farr & Gallagher LLP

Exhibit 8.2(e) — Matters to be Addressed by Opinion of Kramer Levin Naftalis
& Frankel LLP

 

-v-

 

AGREEMENT AND PLAN OF MERGER

This
AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of October 31,
2006, is by and among RiskMetrics Group, Inc., a Delaware corporation (“RMG”),
RMG Holdco, Inc., a Delaware corporation and a direct, wholly-owned Subsidiary
of RMG (“Holding Company”), RMG Merger Sub, Inc., a Delaware corporation
and a direct, wholly-owned Subsidiary of Holding Company (“RMG Merger Sub”),
ISS Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned
Subsidiary of Holding Company (“ISS Merger Sub” and, together with RMG
Merger Sub, the “Merger Subs” and, each, a “Merger Sub”), and
Institutional Shareholder Services Holdings, Inc., a Delaware corporation (the “Company”).

RECITALS

WHEREAS,
RMG and the Company desire to effect a business combination between RMG and the
Company upon the terms and subject to the conditions of this Agreement as
follows:  Holding Company will acquire
all of the capital stock of each of RMG and the Company by means of the merger
of RMG Merger Sub with and into RMG, with RMG continuing as the surviving
corporation (the “RMG Merger”), and the merger of ISS Merger Sub with
and into the Company, with the Company continuing as the surviving corporation
(the “ISS Merger” and, together with the RMG Merger, the “Mergers”
and, each, a “Merger”);

WHEREAS,
the Company is a Delaware corporation having authorized capital stock
consisting of:  (i) 55,000 shares of
common stock, par value $0.01 per share (the “Company Common Stock” or
the “Company Common Shares”); and (ii) 35,000 shares of preferred
stock, par value $0.01 per share (the “Preferred Stock”), of which
35,000 shares are designated as Series A Convertible Preferred Stock (the “Series
A Preferred Stock” or the “Series A Shares”) and together with the
Company Common Stock, the “Company Stock”);

WHEREAS,
(i) RMG owns all of the issued and outstanding shares of the common stock, par
value $0.01 per share, of Holding Company (“Holding Company Common Stock”
or “Holding Company Shares”), (ii) Holding Company owns all of the
issued and outstanding shares of the common stock, par value $0.01 per share,
of RMG Merger Sub (“RMG Merger Sub Common Stock”) and all of the issued
and outstanding shares of the common stock, par value $0.01 per share, of ISS
Merger Sub (“ISS Merger Sub Common Stock”), and (iii) RMG has
organized Holding Company and Holding Company has organized RMG Merger Sub and
ISS Merger Sub for the purpose of effecting the transactions contemplated
hereby; and

WHEREAS,
(i) the respective boards of directors of the Company and each of the RMG
Parties (as defined herein) have approved and declared advisable this
Agreement, upon the terms and subject to the conditions set forth in this
Agreement, (ii) the board of directors of the Company has directed that this
Agreement be submitted to the Stockholders for adoption, (iii) the holders of a
majority of the issued and outstanding Company Common Shares (voting on an
as-converted basis assuming the conversion of all outstanding Preferred Stock)
and a majority of the issued and outstanding Series A Shares, voting as a
separate class, and in each case entitled to vote upon this Agreement and the
transactions contemplated hereby (including the ISS Merger), in accordance with
the terms of the Certificate of Incorporation (as hereinafter defined) and the
DGCL (as hereinafter defined) will, promptly following the execution of this
Agreement

 

 

on
the date hereof, execute and deliver a written consent, substantially in the
form attached hereto as Exhibit A (the “ISS Written Consent”),
pursuant to which such Stockholders shall approve the ISS Merger and adopt this
Agreement, (iv) the board of directors of RMG has directed that this Agreement
be submitted to the holders of the common stock, par value $0.01 per share, of
RMG (“RMG Common Stock”) for adoption, (v) the holders of a majority of
the issued and outstanding shares of RMG Common Stock entitled to vote upon
this Agreement and the transactions contemplated hereby, in accordance with the
terms of the certificate of incorporation of RMG and the DGCL, will, promptly
following the execution of this Agreement on the date hereof, execute and
deliver a written consent, substantially in the form attached hereto as Exhibit B
(the “RMG Written Consent”), pursuant to which such stockholders shall
approve the Mergers and adopt this Agreement, and (vi) Holding Company, as the
sole stockholder of each of ISS Merger Sub and RMG Merger Sub, has approved the
ISS Merger and the RMG Merger, respectively, and has adopted this Agreement;

WHEREAS, the parties intend
that for all Tax (as defined below)
purposes, (i) the RMG Merger qualify as a reorganization under the
provisions of Section 368(a) of the Code and/or, when taken together with
the ISS Merger, as an exchange under the provisions of Section 351 the
Code and (ii) the ISS Merger, when taken together with the RMG Merger,
qualify as an exchange under the provisions of Section 351 the Code; and

WHEREAS, simultaneously
with, and as a condition to, the execution of this Agreement, John Connolly, the
President of the Company, is entering into a letter agreement setting forth
certain obligations in respect of the transactions contemplated by this
Agreement.

NOW, THEREFORE, in
consideration of the representations, warranties, covenants and agreements
hereinafter contained, and intending to be legally bound hereby, the parties
hereby agree as follows:

ARTICLE I - DEFINITIONS

1.1           Certain Definitions.

(a)           For purposes of this Agreement, the following terms shall
have the meanings specified in this Section 1.1:

“Accredited Investor”
shall mean each Stockholder who is an “accredited investor” as such term is
defined in Rule 501 promulgated under the Securities Act , or is otherwise
excluded from the calculation of the number of purchasers under Rule 501(e)(1)
under the Securities Act.

“Affiliate” means,
with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person, and the term “control” (including the
terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
ownership of voting securities, by Contract or otherwise.

 

-2-

 

“Business Day” means
any day of the year other than a Saturday, Sunday or other day on which
national banking institutions in New York are open to the public for conducting
business and are not required or authorized to close.

“By-laws” means the
By-laws of the Company, as amended and in effect on the date hereof and as may
be further amended and in effect immediately prior to the Effective Time.

“Capitalized
Lease” means any lease of any property with respect to which the lessee is
required to account for such property or asset as a capital lease on the
balance sheet of such lessee, in accordance with GAAP.

“Capitalized Lease
Obligations” means, with respect to any Person, obligations of such Person
under Capitalized Leases and, for purposes hereof, the amount of any such
obligation is the capitalized amount thereof determined in accordance with
GAAP.

“Certificate of
Designation” means the Certificate of Designation of the Company, filed with
the Secretary of State of the State of Delaware on July 11, 2002, as amended
and in effect on the date hereof and as may be further amended and in effect
immediately prior to the Effective Time.

“Certificate of
Incorporation” means the Certificate of Incorporation of the Company, filed
with the Secretary of State of the State of Delaware on July 11, 2002, as
amended and in effect on the date hereof and as may be further amended and in
effect immediately prior to the Effective Time.

“Clayton Act” shall mean
the Clayton Antitrust Act of 1914, as amended.

“Code” shall mean the
Internal Revenue Code of 1986, as amended.

“Company Common Stock
Price Per Share” means, with respect to each issued and outstanding Company
Common Share, an amount equal to TEN THOUSAND TWO HUNDRED NINETY FIVE DOLLARS
AND NO CENTS ($10,295.00).

“Company Disclosure
Schedule” means the disclosure schedule delivered by the Company to RMG in
connection with this Agreement.

“Company Equity Incentive
Plan” means the Institutional Shareholder Services Holdings, Inc. Equity
Incentive Plan, as amended to date.

“Company Options”
means options exercisable for shares of Company Common Stock as of the Closing
Date.

“Company Organizational
Documents” means the Company’s Certificate of Incorporation, Certificate of
Designation and By-laws.

“Contract” means any
contract, understanding, indenture, note, bond, lease, license, commitment,
instrument, agreement, mortgage, option, warranty, purchase order, franchise,

 

-3-

 

insurance policy, benefit
plan or other legally binding commitment or undertaking of any kind or nature,
whether written or oral.

“Damages” means,
collectively, all claims, liabilities, losses, damages, awards, judgments,
fines, penalties, assessments, costs (including amounts paid in settlement or
compromise) and expenses (including, without limitation, interest, penalties
and reasonable fees and expenses of legal counsel).

“DGCL” means the
General Corporation Law of the State of Delaware.

“DOL” means the U.S.
Department of Labor.

“Election Date” means
December 11, 2006.

“Election Period”
means the period from the Delivery Date until and including the Election Date.

“Environmental Law”
means any Law or other legal requirement currently in effect relating to the
protection of the environment or natural resources, or discharges of Hazardous
Materials including the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. § 9601 et  seq.), the Hazardous
Materials Transportation Act (49 U.S.C. App. § 1801 et  seq.),
the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et  seq.),
the Clean Water Act (33 U.S.C. § 1251 et  seq.), the Clean
Air Act (42 U.S.C. § 7401 et  seq.), the Toxic
Substances Control Act (15 U.S.C. § 2601 et  seq.), the
Federal Insecticide and Fungicide, and Rodenticide Act (7 U.S.C. § 136 et
seq.) as each has been or may be amended and the regulations promulgated
pursuant thereto.

“Equity
Rights” means all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings, warrants, or
other binding obligations of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of the
capital stock of a Person or by which a Person is or may be bound to issue
additional shares of its capital stock or other Equity Rights.

“FTCA” shall mean the
Federal Trade Commission Act of 1914, as amended.

“GAAP” means
generally accepted accounting principles in the United States as of the
relevant date.

“Governmental Body”
means any government or governmental or regulatory entity, body thereof, or
political subdivision thereof, whether federal, state, local, foreign, or
supranational, or any department, commission, board, bureau, agency,
instrumentality or authority thereof, or any court or arbitrator (public or
private), or any other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

“Hazardous Material”
means any substance, material or waste that is regulated, classified, or
otherwise characterized under or pursuant to any Environmental Law as

 

-4-

 

“hazardous,” “toxic,” “pollutant,”
“contaminant,” “radioactive,” or words of similar meaning or effect, including
petroleum and its by-products, asbestos, polychlorinated biphenyls, radon, mold
and urea formaldehyde insulation.

“Holding Company Options”
means options exercisable for shares of Holding Company Common Stock.

“Holding
Company Per Share Value” means $38.23, the per share value of the Holding
Company Shares.

“HSR Act” shall mean
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Indebtedness” means,
with respect to any Person (without duplication): (a) all indebtedness of such
Person for borrowed money; (b) all obligations of such Person for the deferred
purchase price of property and assets or services (other than trade payables or
other accounts payable incurred in the ordinary course of such Person’s
business and not past due for more than ninety (90) days after the date on
which each such trade payable or account payable was created); (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, or upon which interest payments are customarily made; (d)
all obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property or assets acquired by
such Person, even though the rights and remedies of the seller or the
purchasers under such agreement in the event of default are limited to
repossession or sale of such property or assets; (e) all Capitalized Lease
Obligations of such Person; (f) all obligations, contingent or otherwise, of
such Person under acceptance, standby letter of credit or similar facilities;
(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any equity securities in such Person
or in any other Person; (h) all obligations of such Person in respect of
interest rate swap, cap or collar agreements, interest rate future or option
contracts, commodity future or option contracts, currency swap agreements,
currency future or option contracts and other similar agreements, take-or-pay
agreements or other similar arrangements; (i) all contingent obligations; and
(j) all obligations referred to in clauses (a) through (i) of this definition
of another Person secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien on
property or assets (including, without limitation, accounts and Contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness. 
The Indebtedness of any Person shall include (1) all obligations of the
types described in clauses (a) through (j) above of any partnership in
which such Person is a general partner and (2) all obligations of the
types described in clauses (a) through (j) above of such Person to the extent
such Person remains legally liable in respect thereof notwithstanding that any
such obligation is deemed to be extinguished under GAAP in effect at any date
of determination.

“Intellectual Property”
means all worldwide intellectual property rights, including, without limitation
(i) registered patents, patent applications and statutory invention
registrations, (ii) registered and applications for trademarks and service
marks, including all goodwill associated therewith, (iii) registered and
applications for copyrights, and (iv) trade secrets.

 

-5-

 

“IRS” means the U.S.
Internal Revenue Service.

“Knowledge of the Company”
means the actual knowledge of those Persons identified on Schedule 1.1(a)(1),
in each case after reasonable due inquiry.

“knowledge” means,
with respect to any Person other than the Company, the actual knowledge of such
Person, any Person controlling such Person or any of their respective officers
or directors.

“Law” means any law,
statute, code, ordinance, rule, act, treaty, concession or regulation of any
Governmental Body.

“Legal Proceeding”
means any judicial, administrative or arbitral action, cause of action, suit,
arbitration, mediation, claim, complaint, criminal prosecution, charge,
examination or investigation, audit, demand, compliance review, inspection,
hearing other or proceeding (public or private) by or before a Governmental
Body.

“Lien” means, with
respect to a Person, any lien, encumbrance, pledge, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, transfer restriction, hypothecation or other encumbrance
of any kind (including, without limitation, any agreement to give any of the
foregoing), or any sale of accounts receivable or chattel paper, or any
assignment, deposit arrangement or lease intended as, or having the effect of,
security, or any other interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title
retention agreement or upon or with respect to any property or asset of such
Person.

“Material Adverse Effect”
means any change, event, circumstance or effect that has had, or would
reasonably be expected to have, a material adverse impact on the business,
assets or liabilities, operations, results of operations or condition
(financial or otherwise) of the Company and its Subsidiaries (taken as a
whole), either individually or when aggregated with other such effects, other
than a change, event, circumstance or effect to the extent resulting from one
or more of the following:  (i) any
change in the United States or foreign economies or securities or financial
markets in general, to the extent that such change does not have a materially
disproportionate impact on the Company and its Subsidiaries (taken as a whole)
as compared to other similarly situated companies in similar industries;
(ii) any change that generally affects any industry in which the Company
or any of its Subsidiaries operates, to the extent that such change does not
have a materially disproportionate impact on the Company and its Subsidiaries
(taken as a whole) as compared to other similarly situated companies in such
industry; (iii) any change arising in connection with earthquakes,
hostilities, acts of war, sabotage or terrorism or military actions or any
escalation or material worsening of any such hostilities, acts of war, sabotage
or terrorism or military actions existing or underway as of the date hereof;
(iv) the performance by the Company or any of its Subsidiaries or
Affiliates of the Company’s obligations under this Agreement; (v) any
change in applicable Laws or accounting rules; (vi) the announcement of
this Agreement, including any impact thereof on relationships with customers,
suppliers or employees; (vii) any failure by the Company, in and of itself, to
meet any projections or forecasts; (viii) any act or omission by the Company or
any of its Subsidiaries taken with the prior written consent of RMG or at the
express written direction of

 

-6-

 

RMG; or (ix) compliance
with the terms of this Agreement or the consummation of the transactions
contemplated by this Agreement.

“Maximum Option Number”
means: (a) in the case of any holder of Company Options who is currently an
Employee and listed on Schedule 1.1(a)(2)(A) (which Schedule sets forth
each current Employee who has the title of “executive vice president” or
higher), (i) 75% of such holder’s aggregate outstanding shares of Preferred
Stock (on an as-converted basis), Company Common Shares and the number of
Company Common Shares issuable upon exercise in full of all vested Company
Options minus (ii) such holder’s aggregate number of shares of Preferred Stock
(on an as-converted basis) and Company Common Shares for which such holder will
receive merger consideration in cash; and (b) in the case of any holder of
Company Options who is an Employee listed on Schedule 1.1(a)(2)(B) (which
Schedule sets forth each current Employee who has the title of “senior vice
president” or lower), (i) 85% of such holder’s aggregate outstanding shares of
Preferred Stock (on an as-converted basis), Company Common Shares and the
number of Company Common Shares issuable upon exercise in full of all vested
Company Options minus (ii) such holder’s aggregate number of shares of
Preferred Stock (on an as-converted basis) and Company Common Shares for which
such holder will receive merger consideration in cash.

For purposes of the definition of “Maximum
Option Number” (and Article III) only, the term “Employee” shall be
deemed to exclude members of the Board of Directors of the Company.

“Non-Accredited Investor”
means each Stockholder who is not an Accredited Investor.

“Order” means any
order, consent, injunction, judgment, decree, ruling, writ, assessment or
arbitration award of a Governmental Body.

“Ordinary Course of
Business” means the ordinary course of business of the Company and its
Subsidiaries, consistent with past practice.

“Other Expenses”
means (i) any of the obligations and/or payments set forth on Schedule 1.1(a)(3)
and/or (ii) any amount to be paid or payment obligations incurred by or on
behalf of the Company or any of its Subsidiaries at or prior to the Effective
Time in connection with this Agreement or the transactions contemplated hereby,
including all retention, “stay-around” and similar payments, “single-trigger”
(but not “double trigger”) change of control or severance payments and related
Tax obligations, in each case under this clause (ii) payable as a result of the
consummation of the transactions contemplated hereby, each of which is also set
forth on Schedule 1.1(a)(3), excluding all Transaction Expenses, any
amounts payable under the Debt Commitment Letters or the definitive agreements
relating to the Debt Financing and any amounts that may become payable as a
result of any action taken by Holding Company, the ISS Surviving Corporation or
their respective Subsidiaries after the Closing to terminate an Employee under
an arrangement disclosed in the Schedules hereto.

“PBGC” means the U.S.
Pension Benefit Guaranty Corporation.

 

-7-

 

“Permits” means any
approvals, authorizations, consents, licenses, permits, grants, franchises,
easements, variances, exceptions, Orders or certificates of a Governmental Body
that are necessary for the Company and its Subsidiaries to own, lease and/or
operate their properties  or to conduct
the business of the Company and its Subsidiaries (taken as a whole) as it is
now being conducted.

“Permitted Exceptions”
means (i) Liens for current Taxes, assessments or other governmental charges
not yet due and payable as to which appropriate reserves have been established
on the Interim Balance Sheet; (ii) mechanics’, carriers’, workers’, repairers’
and similar Liens arising or incurred in the Ordinary Course of Business or
that are being contested in good faith, in each case as to which appropriate
reserves have been established on the Interim Balance Sheet; (iii) zoning,
entitlement and other similar land use regulations by any Governmental Body;
(iv) title of a lessor under a capital or operating lease; (v) Liens that will
be released prior to or as of the Closing, and (vi) Liens arising under this
Agreement.

“Person” means any
individual, corporation, partnership (general or limited), firm, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.

“Representative”
means, with respect to any Person, any officer, director, principal, manager,
member, attorney, accountant, agent, employee, consultant, financial advisor or
other authorized representative of such Person.

“RMG Common Stock” means
the common stock, par value $0.01 per share, of RMG.

“RMG Disclosure Schedule”
means the disclosure schedule delivered by RMG to the Company in connection
with this Agreement.

“RMG Parties” means
RMG, Holding Company, ISS Merger Sub and RMG Merger Sub.

“Series A Dividends Per
Share” means the amount of accrued
but unpaid dividends per each Series A Share immediately prior to the Effective
Time.

“Series A Price Per Share”
means, with respect to each issued and outstanding Series A Share, an amount
equal to TEN THOUSAND TWO HUNDRED NINETY FIVE DOLLARS AND NO CENTS ($10,295.00).

“Sherman Act” shall
mean the Sherman Antitrust Act of 1890, as amended.

“Stock Certificate”
means a certificate or certificates which, immediately prior to the Effective
Time, represented outstanding shares of Company Common Stock or Preferred
Stock, as the case may be, except for shares to be cancelled pursuant to Section
3.2(b).

“Stockholders” means
the stockholders of the Company.

 

-8-

 

“Stock Plans” means
the equity-based incentive plans of the Company set forth on Schedule 3.2(c)(iii)
including, without limitation, the Company Equity Incentive Plan.

“Subsidiary” of any
Person means any other Person of which a majority of the outstanding voting
securities or other voting equity interests, or a majority of any other
interests having the power to direct or cause the direction of the management
and policies of such other Person, are owned, directly or indirectly, by such
first Person.

“Subsidiary
Organizational Documents” means the certificate of incorporation, by-laws
or equivalent documents, as the case may be, of each Subsidiary of the Company.

“Taxes” means (i) all
federal, state, local or foreign taxes, charges, fees, imposts, levies or other
assessments, including all net income, gross receipts, capital, sales, use, ad
valorem, value added, transfer, franchise, profits, alternative, environmental,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, property (real or
personal) and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever, (ii) all interest, penalties, fines, additions to Tax or
additional amounts imposed by any taxing authority in connection with any item
described in clause (i); and “Tax” shall mean any one of them.

“Tax Return” means
all returns, declarations, reports, estimates, information returns and
statements required to be filed in respect of any Taxes.

“Transaction Expenses”
means all fees and expenses incurred by or on behalf of the Company or any of
its Subsidiaries for services rendered by counsel, actuaries, brokers,
investment bankers, auditors and other professional advisors in connection with
this Agreement or the transactions contemplated hereby.

“WARN” means the
Worker Adjustment and Retraining Notification Act of 1988, as amended.

(b)           Terms Defined Elsewhere in this Agreement.  For purposes of this Agreement, the following
terms have meanings set forth in the sections indicated:

	
   

  	
  Term

  	
   

  	
  Section

  
	
   

  	
  Agreement

  	
  Preamble

  
	
   

  	
  Antitrust Division

  	
  7.7(a)

  
	
   

  	
  Antitrust Laws

  	
  7.7(b)

  
	
   

  	
  Audited Financial Statements

  	
  5.6

  
	
   

  	
  Balance Sheet

  	
  5.6

  
	
   

  	
  Balance Sheet Date

  	
  5.6

  
	
   

  	
  Benefit Plans

  	
  5.16(a)

  
	
   

  	
  BPR Initiative

  	
  5.31

  
	
   

  	
  Cash-Out Options

  	
  3.2(d)(ii)

  
	
   

  	
  Certificate(s) of Merger

  	
  2.2

  
	
   

  	
  Claim

  	
  7.10(b)

  
	
   

  	
  Closing

  	
  4.1

  

 

-9-

 

	
   

  	
  Closing Date

  	
  4.1

  
	
   

  	
  COBRA

  	
  5.16(b)

  
	
   

  	
  Common Stock Election

  	
  3.2(f)(i)

  
	
   

  	
  Company

  	
  Recitals

  
	
   

  	
  Company Common Shares

  	
  Recitals

  
	
   

  	
  Company Common Stock

  	
  Recitals

  
	
   

  	
  Company Documents

  	
  5.2

  
	
   

  	
  Company Stock

  	
  Recitals

  
	
   

  	
  Confidentiality Agreement

  	
  7.9

  
	
   

  	
  Delivery Date

  	
  7.1(a)

  
	
   

  	
  Disclosure Statement

  	
  7.1(a)

  
	
   

  	
  Dissenting Shares

  	
  3.2(e)

  
	
   

  	
  Dissenting Stockholders

  	
  3.2(e)

  
	
   

  	
  Effective Time

  	
  2.2

  
	
   

  	
  EGTRRA

  	
  5.16(c)

  
	
   

  	
  Employee

  	
  5.16(a)

  
	
   

  	
  ERISA

  	
  5.16(a)

  
	
   

  	
  ERISA Affiliate

  	
  5.16(a)

  
	
   

  	
  Existing Policy

  	
  7.10(c)

  
	
   

  	
  Financial Advisor

  	
  5.21

  
	
   

  	
  Financial Statements

  	
  5.6

  
	
   

  	
  Form of Election

  	
  3.2(h)(ii)

  
	
   

  	
  FTC

  	
  7.7(a)

  
	
   

  	
  H-1B Documentation

  	
  5.17(i)

  
	
   

  	
  Holding Company

  	
  Preamble

  
	
   

  	
  Holding Company Common Stock

  	
  Recitals

  
	
   

  	
  Holding Company Option Plan

  	
  7.14

  
	
   

  	
  Holding Company Shares

  	
  Recitals

  
	
   

  	
  I-9 Forms

  	
  5.17(h)

  
	
   

  	
  Indemnitee(s)

  	
  7.10(a)

  
	
   

  	
  Interim Balance Sheet

  	
  5.6

  
	
   

  	
  Interim Balance Sheet Date

  	
  5.6

  
	
   

  	
  ISS

  	
  5.26

  
	
   

  	
  ISS Certificate of Merger

  	
  2.2

  
	
   

  	
  ISS Merger

  	
  Recitals

  
	
   

  	
  ISS Merger Sub

  	
  Preamble

  
	
   

  	
  ISS Merger Sub Common Stock

  	
  Recitals

  
	
   

  	
  ISS Surviving Corporation

  	
  2.1(b)

  
	
   

  	
  ISS Written Consent

  	
  Recitals

  
	
   

  	
  Kramer Levin

  	
  7.20(a)

  
	
   

  	
  Letter of Transmittal

  	
  3.3(a)

  
	
   

  	
  Licensed Intellectual Property

  	
  5.13

  
	
   

  	
  Material Contract(s)

  	
  5.14(a)

  
	
   

  	
  Material Customers

  	
  5.15(a)

  
	
   

  	
  Material Vendors

  	
  5.15(b)

  

 

-10-

 

	
   

  	
  Maximum Holding Company Share Number

  	
  3.2(c)(iii)

  
	
   

  	
  Merger Sub(s)

  	
  Preamble

  
	
   

  	
  Merger(s)

  	
  Recitals

  
	
   

  	
  Minimum Holding Company Share Number

  	
  3.2(c)(iv)

  
	
   

  	
  Option Election

  	
  3.2(h)(i)

  
	
   

  	
  Option Form of Election

  	
  3.2(h)(ii)

  
	
   

  	
  Option Price Per Share

  	
  3.2(d)(ii)

  
	
   

  	
  Outside Date

  	
  4.2

  
	
   

  	
  Owned Intellectual Property

  	
  5.13

  
	
   

  	
  Preferred Stock

  	
  Recitals

  
	
   

  	
  Releases

  	
  9.3

  
	
   

  	
  Required Consents

  	
  5.14(a)(ii)

  
	
   

  	
  Required Merger Stockholder Vote

  	
  5.25(b)

  
	
   

  	
  Required RMG Approvals

  	
  6.3(c)

  
	
   

  	
  RMG

  	
  Preamble

  
	
   

  	
  RMG Audited Financial Statements

  	
  6.10(a)

  
	
   

  	
  RMG Balance Sheet

  	
  6.10(a)

  
	
   

  	
  RMG Balance Sheet Date

  	
  6.10(a)

  
	
   

  	
  RMG Certificate of Merger

  	
  2.2

  
	
   

  	
  RMG Common Stock

  	
  Recitals

  
	
   

  	
  RMG Documents

  	
  6.2

  
	
   

  	
  RMG Financial Statements

  	
  6.10(a)

  
	
   

  	
  RMG Interim Balance Sheet

  	
  6.10(a)

  
	
   

  	
  RMG Interim Balance Sheet Date

  	
  6.10(a)

  
	
   

  	
  RMG Merger

  	
  Recitals

  
	
   

  	
  RMG Merger Sub

  	
  Preamble

  
	
   

  	
  RMG Merger Sub Common Stock

  	
  Recitals

  
	
   

  	
  RMG Options

  	
  3.1(c)(ii)

  
	
   

  	
  RMG Surviving Corporation

  	
  2.1(a)

  
	
   

  	
  RMG Unaudited Financial Statements

  	
  6.10(a)

  
	
   

  	
  RMG Written Consent

  	
  Recitals

  
	
   

  	
  Roll-Over Options

  	
  3.2(d)(ii)

  
	
   

  	
  Securities Act

  	
  5.4(d)

  
	
   

  	
  Security Deposits

  	
  5.12(d)

  
	
   

  	
  Series A Election

  	
  3.2(g)(i)

  
	
   

  	
  Series A Preferred Stock

  	
  Recitals

  
	
   

  	
  Series A Shares

  	
  Recitals

  
	
   

  	
  Specified Proceedings

  	
  5.18(a)

  
	
   

  	
  Stock Form of Election

  	
  3.2(f)(ii)

  
	
   

  	
  Stockholder Documents

  	
  3.3(a)

  
	
   

  	
  Stockholders Agreement

  	
  3.2(f)(ii)

  
	
   

  	
  Unaudited Financial Statements

  	
  5.6

  

 

(c)           Other Definitional and Interpretive Matters.  Unless otherwise expressly provided, for
purposes of this Agreement, the following rules of interpretation shall apply:

 

-11-

 

Calculation of Time Period.  When calculating the period of time before
which, within which or following which any act is to be done or step taken
pursuant to this Agreement, the date that is the reference date in calculating
such period shall be excluded.  If any
such period is measured in Business Days and the last day of such period is a
non-Business Day, the period in question shall end on the next succeeding
Business Day.

Dollars.  Any reference in this Agreement to $ or
dollars shall mean U.S. dollars.

Exhibits/Schedules.  The Exhibits and Disclosure Schedules to this
Agreement are hereby incorporated and made a part hereof and are an integral
part of this Agreement.  All Exhibits and
Disclosure Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein.  Any capitalized terms used in
any Disclosure Schedule or Exhibit but not otherwise defined therein shall be
defined as set forth in this Agreement. 
For purposes of convenience only, the Disclosure Schedules have been
arranged in sections corresponding to the Sections of Article V and VI.  Any information set forth in or incorporated
into any section of a Disclosure Schedule shall be deemed to be disclosed in
any other section of a Disclosure Schedule to the extent that it is reasonably
apparent that such information is relevant to such other section thereof.  The inclusion of any information in a
Disclosure Schedule shall not be deemed an admission or acknowledgement, in and
of itself or solely by virtue of the inclusion of such information in a
Disclosure Schedule, that such information is required to be contained in a
Disclosure Schedule or that such information is material to the Company, any of
the Company’s Subsidiaries or RMG.

Gender and Number.  Any reference in this Agreement to gender
shall include all genders, and words imparting the singular number only shall
include the plural and vice versa.

Headings.  The provision of a Table of Contents, the
division of this Agreement into Articles, Sections and other subdivisions and
the insertion of headings are for convenience of reference only and shall not
affect or be utilized in construing or interpreting this Agreement.  All references in this Agreement to any “Article”
or “Section” are to the corresponding Article or Section of this
Agreement unless otherwise specified.

Herein.  The words such as “herein,” “hereinafter,”
“hereof,” and “hereunder” refer to this Agreement as a whole and
not merely to a subdivision in which such words appear unless the context
otherwise requires.

Including.  The word “including” or any variation
thereof means “including, without limitation” and shall not be construed
to limit any general statement that it follows to the specific or similar items
or matters immediately following it.

Reflected On or Set Forth In.  An item arising with respect to a specific
representation or warranty shall be deemed to be “reflected on” or “set
forth in” a balance sheet or financial statements, to the extent any such
phrase appears in such representation or warranty, if (i) there is a reserve,
accrual or other similar item underlying a number on such balance sheet or
financial statements that related to the subject matter of such representation
and such item and underlying number is set forth on the Disclosure Schedule
hereto, (ii) such item is otherwise specifically set

 

-12-

 

forth on the balance sheet
or financial statements or (iii) such item is reflected on the balance sheet or
financial statements and is specifically set forth in the notes thereto.

No Drafting Presumptions.  The parties hereto have participated jointly
in the negotiation and drafting of this Agreement and the other agreements
contemplated hereby and, in the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as jointly drafted by
the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provision of this
Agreement.

ARTICLE II - THE MERGERS

2.1           The Mergers.

(a)           Upon the terms and subject to the conditions set forth in
this Agreement and in accordance with the DGCL, RMG Merger Sub shall be merged
with and into RMG at the Effective Time. 
Following the time of the RMG Merger, the separate corporate existence
of RMG Merger Sub shall cease, and RMG shall continue as the corporation
surviving the RMG Merger (the “RMG Surviving Corporation”).

(b)           Upon the terms and subject to the conditions set forth in
this Agreement and in accordance with the DGCL, ISS Merger Sub shall be merged
with and into the Company at the Effective Time.  Following the time of the ISS Merger, the
separate corporate existence of ISS Merger Sub shall cease, and the Company
shall continue as the corporation surviving the ISS Merger (the “ISS
Surviving Corporation”).

2.2           Effective Time of the Mergers.

Subject to the provisions of this Agreement,
at the Closing, the Company and ISS Merger Sub shall file (or cause to be
filed) with the Secretary of State of the State of Delaware a certificate of
merger (the “ISS Certificate of Merger”) executed in accordance with the
relevant provisions of the DGCL and shall make all other filings or recordings
required under the DGCL when and as so required, and RMG and RMG Merger Sub
shall file (or cause to be filed) with the Secretary of State of the State of
Delaware a certificate of merger (the “RMG Certificate of Merger” and,
together with the ISS Certificate of Merger, the “Certificates of Merger”)
executed in accordance with the relevant provisions of the DGCL and shall make
all other filings or recordings required under the DGCL when and as so
required.  Each of the RMG Merger and the
ISS Merger shall become effective at such time as each of the RMG Certificate
of Merger and the ISS Merger Certificate, respectively, is duly filed with the
Secretary of State of the State of Delaware, or at such other time as RMG and
the Company shall agree and shall specify in such Certificates of Merger (the
date and time that both Mergers become effective being the “Effective Time”).

2.3           Effects of the Mergers.

The Mergers shall have the effects set forth
in this Agreement and Section 259 of the DGCL. 
Without limiting the generality of the foregoing, and subject thereto,
at the Effective

 

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Time, all of the properties,
rights, privileges, powers and franchises of the Company and ISS Merger Sub
shall vest in the ISS Surviving Corporation, and all debts, liabilities and
duties of the Company and ISS Merger Sub shall become the debts, liabilities
and duties of the ISS Surviving Corporation, all as provided under the DGCL,
and all of the properties, rights, privileges, powers and franchises of RMG and
RMG Merger Sub shall vest in the RMG Surviving Corporation, and all debts,
liabilities and duties of RMG and RMG Merger Sub shall become the debts,
liabilities and duties of the RMG Surviving Corporation, all as provided under
the DGCL.

2.4           Certificates of Incorporation and By-laws.

(a)           The Certificate of Incorporation of the Company shall be
the certificate of incorporation of the ISS Surviving Corporation until
thereafter changed or amended as provided therein or by applicable Law.  The Certificate of Incorporation of RMG shall
be the certificate of incorporation of the RMG Surviving Corporation until
thereafter changed or amended as provided therein or by applicable Law.

(b)           The By-laws of the Company, as in effect immediately prior
to the Effective Time, shall be the By-laws of the ISS Surviving Corporation
until thereafter changed or amended as provided therein or by applicable
Law.  The By-laws of RMG, as in effect
immediately prior to the Effective Time, shall be the By-laws of the RMG
Surviving Corporation until thereafter changed or amended as provided therein
or by applicable Law.

2.5           Directors.

The directors of ISS Merger Sub immediately
prior to the Effective Time shall be the initial directors of the ISS Surviving
Corporation until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.  The directors of RMG Merger Sub immediately
prior to the Effective Time shall be the initial directors of the RMG Surviving
Corporation until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.

2.6           Officers.

The officers of ISS Merger Sub immediately
prior to the Effective Time shall be the initial officers of the ISS Surviving
Corporation, until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.  The officers of RMG immediately prior to the
Effective Time shall be the initial officers of the RMG Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.

ARTICLE III - CONVERSION OF SHARES

3.1           Effect on Capital Stock; RMG Merger.

As of the Effective Time, by virtue of the
RMG Merger and without any further action on the part of Holding Company, RMG
or RMG Merger Sub, or any holder of shares of capital stock or other securities
of any of them:

 

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(a)           Capital Stock of RMG Merger Sub.  Each share of RMG Merger Sub Common Stock issued
and outstanding immediately prior to the Effective Time shall be converted into
and exchanged for the right to receive one share of the common stock of the RMG
Surviving Corporation.

(b)           Cancellation of Treasury Stock, Etc.  Each share of RMG Common Stock that is owned
by RMG as treasury stock immediately prior to the Effective Time shall
automatically be cancelled and retired and shall cease to exist and no payment
shall be made or consideration delivered in exchange therefor.

(c)           Merger Consideration for RMG Common Stock; RMG Options.

(i)            RMG Common Stock. 
Each share of RMG Common Stock (other than shares to be cancelled
pursuant to Section 3.1(b) issued and outstanding at the Effective Time
shall cease to be outstanding and shall be deemed to be converted into and
exchanged for one share of Holding Company Common Stock, without the
requirement for the surrender of any certificate previously representing any
such shares of RMG Common Stock or issuance of new certificates representing
Holding Company Common Stock, with each certificate representing shares of RMG
Common Stock prior to the Effective Time being deemed to represent
automatically an equivalent number of shares of Holding Company Common Stock.

(ii)           RMG Options. 
At the Effective Time, each option or other Equity Right to purchase or
receive shares of RMG Common Stock (“RMG Options”) granted by RMG which
are outstanding at the Effective Time shall be converted into and exchanged for
an option or other Equity Right to purchase or receive an equal number of
shares of Holding Company Common Stock. All other terms and conditions of the
RMG Options shall remain the same.

3.2           Effect on Capital Stock; ISS Merger.

As of the Effective Time, by virtue of the
ISS Merger and without any further action on the part of Holding Company, the
Company or ISS Merger Sub, or any holder of shares of capital stock or other
securities of any of them:

(a)           Capital Stock of ISS Merger Sub.  Each share of ISS Merger Sub Common Stock
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for the right to receive one share of the common
stock of the ISS Surviving Corporation.

(b)           Cancellation of Treasury Stock, Etc.  Each share of Company Common Stock and
Preferred Stock that is owned by the Company as treasury stock immediately
prior to the Effective Time shall automatically be cancelled and retired and
shall cease to exist and no payment shall be made or consideration delivered in
exchange therefor.

(c)           Merger Consideration for Company
Stock.

The merger consideration payable to the
Stockholders in connection with the ISS Merger is payable as follows:

 

-15-

 

(i)            Company Common Stock.  Subject to Section 3.2(c)(iv), each
issued and outstanding share of Company Common Stock (other than shares to be
cancelled pursuant to Section 3.2(b) and Dissenting Shares) issued and
outstanding immediately prior to the Effective Time shall be converted into and
become the right to receive an amount in cash equal to the Company Common Stock
Price Per Share, without interest; provided, however, that, as
contemplated by Section 3.2(f), each holder of Company Common Stock that
is an Accredited Investor shall have the right, subject to Section 3.2(c)(iii),
to elect to receive, for such share of Company Common Stock, a number of
Holding Company Shares equal to the quotient of (A) the Company Common Stock
Price Per Share divided by (B) the Holding Company Per Share Value.

(ii)           Series A Preferred Stock.  Subject to Section 3.2(c)(iv), each issued
and outstanding share of Series A Preferred Stock (other than shares to be
cancelled pursuant to Section 3.2(b) and Dissenting Shares) issued and
outstanding immediately prior to the Effective Time shall be converted into and
become the right to receive an amount in cash equal to the Series A Price Per
Share, without interest; provided, however, that, as contemplated
by Section 3.2(g), each holder of Series A Preferred Stock that is an
Accredited Investor shall have the right, subject to Section 3.2(c)(iii),
to elect to receive, for such share of Series A Stock, a number of Holding
Company Shares equal to the quotient of (A) the Series A Price Per Share
divided by (B) the Holding Company Per Share Value.

(iii)          Notwithstanding anything contained in this Agreement to the
contrary, unless otherwise approved in writing by RMG in its sole discretion,
the maximum number of Holding Company Shares that shall be issued to the
Stockholders in the aggregate pursuant to this Section 3.2(c) shall not
exceed, collectively, the quotient of: 
(A) (1) 20%, multiplied by (2) the sum of (I) the Company Common Stock
Price Per Share multiplied by the number of Company Common Shares issued and
outstanding immediately prior to the Effective Time and (II) the Series A Price
Per Share multiplied by the number of Series A Shares issued and outstanding
immediately prior to the Effective Time, divided by (B) the Holding Company Per
Share Value (the “Maximum Holding Company Share Number”).  If the limitation in the foregoing sentence
is triggered, the elections of all of the Stockholders electing to receive
Holding Company Shares shall automatically be adjusted such that each such
Stockholder shall receive its pro rata share of the Maximum Holding Company Share
Number based upon the number of Holding Company Shares elected to be received
as among all such Stockholders, and the balance of the merger consideration
payable to each such Stockholder shall be in cash as provided in this Section
3.2(c).

(iv)          Notwithstanding anything contained in this Agreement to the
contrary, the minimum number of Holding Company Shares that shall be issued to
the Stockholders in the aggregate pursuant to this Section 3.2(c) shall
not be less than, collectively, the quotient of:  (A)(1) 10%, multiplied by (2) the sum of (I)
the Company Common Stock Price Per Share multiplied by the number of Company
Common Shares issued and outstanding immediately prior to the Effective Time,
(II) the Series A Price Per Share multiplied by the number of Series A
Preferred Shares issued and outstanding immediately prior to the Effective Time
(in case of the foregoing clauses (I) and (II), other than shares held by John
Connolly), and (III) (x) the product of the number of outstanding and unexercised
vested in-the-money

 

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Company Options (other than those held by Employees,
including John Connolly), multiplied by the Common Stock Price Per Share less (y)
the aggregate exercise price attributable to all such Company Options, divided
by (B) the Holding Company Per Share Value (the “Minimum Holding Company
Share Number”).  If RMG has not
received properly completed and duly executed Common Stock Elections and Series
A Elections as of 5:00 p.m., New York City time, on the Election Date, for a
number of Holding Company Shares equal to or in excess of, in the aggregate,
the Minimum Holding Company Share Number, each Stockholder (other than John
Connolly) that is an Accredited Investor (as determined by RMG in its
reasonable discretion based on the representations of such Stockholder in his,
her or its Letter of Transmittal) shall receive his, her or its pro rata share
on an as-converted, issued and outstanding basis of shares of Company Stock
outstanding immediately prior to the Effective Time (including all such shares
held by Non-Accredited Investors) as among all of the Stockholders (other than
John Connolly), of a number of Holding Company Shares equal to (x) the Minimum
Holding Company Share Number, less (y) the aggregate number of Holding Company
Shares to be issued to Stockholders (other than Employees, including John
Connolly) pursuant to Stock Forms of Election received as of 5:00 p.m., New
York City time on the Election Date, and the balance of the merger
consideration payable to each such Stockholder shall be in cash or Holding
Company Shares as provided in this Section 3.2(c).  In no event shall any Stockholder that is a
Non-Accredited Investor receive Holding Company Shares pursuant to this Section
3.2(c)(iv).

For purposes of this Article III (and
the definition of “Maximum Option Number”) only, the term “Employee” shall be
deemed to exclude members of the Board of Directors of the Company.

(d)           Company Options.

(i)            At the Effective Time, each then-outstanding unvested
Company Option shall be cancelled and retired and shall cease to exist and no
payment shall be made or consideration delivered in exchange therefor, and the
holder thereof shall cease to have any rights associated therewith.

(ii)           At the Effective Time, each holder of outstanding and
unexercised vested in-the-money Company Options who is not an Employee of the
Company shall have the right to receive for the cancellation of each such
Company Option an amount (the “Option Price Per Share”) in cash equal to
the difference of the Company Common Stock Price Per Share applicable to each
such Company Option (on a per share of Company Common Stock equivalent basis)
less the per share exercise price of such Company Option (such Company Options
are sometimes referred to herein as the “Cash-Out Options”).  At the Effective Time, each then-outstanding
and unexercised vested Company Option held by an Employee shall be assumed by
Holding Company and, as a result of such assumption, each such Company Option
will, immediately following such assumption, represent the right to purchase
Holding Company Shares; provided, however, that each holder of
Company Options who is an Employee shall have the right, at the option of such
holder as contemplated by Section 3.2(h), to elect to receive for the
cancellation of each such Company Option an amount in cash equal to the Option
Price Per Share, provided that the maximum number of such Company Options for
which such Employee holder may elect to receive cash shall equal such holder’s
Maximum Option Number.  The

 

-17-

 

number of such Company Options which are in excess
of such Maximum Option Number shall be assumed by Holding Company as set forth
in this Section 3.2(d)(ii) (all Company Options to be assumed by Holding
Company pursuant to this Section 3.2(d)(ii) are sometimes referred to
herein as the “Roll-Over Options”). 
The Roll-Over Options shall otherwise remain subject to the same terms
and conditions as were in effect immediately prior to the assumption, except
that the number of shares issuable upon exercise of each Roll-Over Option and
the applicable exercise price of each Roll-Over Option shall be appropriately
adjusted to reflect the difference in value as between the Holding Company
Common Stock and the Company Common Stock, such that the intrinsic value of
such Roll-Over Option immediately following the assumption remains the same as
the intrinsic value of the Roll-Over Option immediately prior to the
assumption, all as set forth on Schedule 3.2(d)(ii).  RMG and/or Holding Company shall use
reasonable efforts to ensure that the Roll-Over Options which qualified as
incentive stock options under Section 422 of the Code prior to the assumption,
as disclosed on Schedule 3.2(d)(ii), continue to so qualify after the
assumption, and that such assumption is done in a manner such that no
additional tax or penalties is incurred by a holder as a result of such
assumption and the application of Section 409A of the Code.  Notwithstanding the foregoing, each of the
RMG Parties reserves all rights to amend, modify or terminate any plan under
which Company Options are granted; provided, that such amendment,
modification, or termination shall not impair any rights under any Company Option
or other Equity Right granted prior to such amendment, modification or
termination. 
RMG and/or the Holding Company shall take all corporate
action necessary to reserve for issuance a sufficient number of Holding Company
Shares for delivery upon the exercise of Roll-Over Options after the
assumption.  This Section 3.2(d)(ii)
is subject to Section 10.8.

(e)           Dissenting Shares. 
Notwithstanding anything in this Agreement to the contrary, shares (the “Dissenting
Shares”) of Company Common Stock and Preferred Stock that are issued and
outstanding immediately prior to the Effective Time and which are held by
Stockholders who did not vote in favor of the ISS Merger (or consent thereto in
writing) and who are entitled to demand and properly demand appraisal of such
shares pursuant to, and who comply in all respects with, the provisions of
Section 262 of the DGCL (the “Dissenting Stockholders”), shall not be
converted into or be exchangeable for the right to receive the applicable
merger consideration hereunder but instead such holders shall be entitled to
payment of the fair value of such shares in accordance with the provisions of
Section 262 of the DGCL (and at the Effective Time, such Dissenting Shares
shall no longer be outstanding and shall automatically be cancelled and shall
cease to exist, and such holders shall cease to have any rights with respect
thereto, except the right to receive the fair value of such Dissenting Shares
in accordance with the provisions of Section 262 of the DGCL), unless and until
such holders shall have failed to perfect or shall have effectively withdrawn
or lost rights to appraisal under the DGCL. 
If any Dissenting Stockholder shall have failed to perfect or shall have
effectively withdrawn or lost such right, each of such holder’s shares of
Company Common Stock or Preferred Stock shall thereupon be treated as if it had
been converted into and become exchangeable for the right to receive, as of the
Effective Time, the applicable merger consideration hereunder, in accordance
with Section 3.2(c), without any interest thereon.  The Company shall give RMG (i) prompt notice
of any written demands for appraisal of any shares of Company Common Stock or
Preferred Stock, attempted withdrawals of such demands and any other
instruments served pursuant to the DGCL and received by the Company relating to
Stockholders’ rights of appraisal, and (ii) the opportunity (to the extent
reasonably practicable) to

 

-18-

 

participate in all negotiations and proceedings with
respect to demands for appraisal under the DGCL.  The Company shall not make any payments with
respect to, or compromise or settle, any demand for appraisal without the prior
written consent of RMG.

(f)            Company Common Stock Elections.

(i)            Each Person who, on or prior to the Election Date, is a
record holder of Company Common Stock shall have the right, subject to this Section 3.2,
to submit a Stock Form of Election (as defined below) specifying the
number (if any) of Company Common Shares that such Person desires to be
converted into Holding Company Shares as provided in Section 3.2(c)(i)
(such election, a “Common Stock Election”).

(ii)           RMG, or its authorized agent or Representative, shall
prepare a form of election, substantially in the form of Exhibit 3.2(f)(ii)
(the “Stock Form of Election”),
for delivery with the Stockholder Documents (as defined herein), which shall
include, in addition to the other documents described in Section 3.3(a),
an amended and restated stockholders agreement (which shall be executed by each
Stockholder electing or required to receive Holding Company Shares as provided
herein) and an amended and restated investor rights agreement (which shall be
executed by each Stockholder electing or required to receive Holding Company
Shares as provided herein that will own 2% or more of the issued and
outstanding Holding Company Shares, on a fully-diluted basis, at the Closing
Date) (collectively, the “Stockholders Agreement”).  The Stockholders Agreement will contain the
material terms of the existing stockholder agreements set forth as Exhibit 3.2(f)(ii)(1).  The Stock Form of Election (together with the
Stockholder Documents) shall be (A) delivered by RMG to each holder of
record of Company Common Stock as of the Delivery Date (as defined herein) (or
as of the most recent practicable date prior thereto) and (B) used by each
such holder to elect to receive Holding Company Shares, if applicable, subject
to this Section 3.2.  The
Company shall make the Stock Form of Election and the Stockholder Documents
available to all Persons who become record holders of Company Common Stock
during the period between the Delivery Date and the Election Date (as defined
herein).  Any such Common Stock Election
shall have been properly made only if RMG shall have received (at its address
set forth in Section 10.6), at or prior to 5:00 p.m., New York City time
on the Election Date, a Stock Form of Election properly completed and signed,
and accompanied by all other documents required thereby.

(iii)          Any Stock Form of Election may be revoked by the holder of
such Company Common Stock submitting such Stock Form of Election to RMG only by
written notice received by RMG prior to 5:00 p.m., New York City time on the
Election Date.  In addition, all Stock Forms
of Election shall automatically be revoked if this Agreement shall have
terminated or the Mergers shall have been abandoned.

(iv)          RMG shall determine in its reasonable discretion
whether Stock Forms of Election (together with the Stockholders Agreements and any other
applicable Stockholder Documents) have been properly
completed, signed and submitted or revoked and to disregard immaterial defects
therein.  The decision of RMG in such
matters shall be conclusive and binding. 
RMG shall use its commercially reasonable efforts to notify any Person
of any defect in a Stock Form of Election (or Stockholders Agreement or any other
applicable

 

-19-

 

Stockholder Document) submitted to RMG.  RMG shall make all computations contemplated
by Section 3.2 in good faith and all such computations shall be
conclusive and binding on the holders of Company Common Stock.  RMG may make such rules as are consistent
with Section 3.2 for the implementation of the Common Stock Elections
provided for herein and for the application of Section 3.2(c)(iv) as
shall be necessary or desirable to effect fully such Common Stock Elections and
the application of Section 3.2(c)(iv).

(v)           If RMG shall determine that any purported Common
Stock Election was not properly made and any such defect was not cured prior to
5:00 p.m., New York City time on the Election Date, such purported Common Stock
Election shall be deemed to be of no force and effect and the holder making
such purported Common Stock Election shall, for purposes of this Agreement, be deemed to have
made no election.

(vi)          Any holder of Company Common Stock who does not properly
make a Common Stock Election and/or who fails to submit to RMG a
properly completed and signed and properly and timely submitted Stock Form of
Election along with the other documents required thereby prior to 5:00 p.m.,
New York City time, on the Election Date, shall be deemed not to have made a
Common Stock Election, and all of such holder’s Company Common Shares shall be
converted into the right to receive the cash merger consideration as set forth
in Section 3.2(c)(i), subject to Section 3.2(c)(iv).

(g)           Series A Elections.

(i)            Each Person who, on or prior to the Election Date, is a
record holder of Series A Shares shall have the right, subject to this Section 3.2,
to submit a Stock Form of Election specifying the number (if any) of
Series A Shares that such Person desires to be converted into Holding Company
Shares as provided in Section 3.2(c)(ii) (such election, a “Series A
Election”).

(ii)           The Stock Form of Election (together with the Stockholder
Documents) shall be (A) delivered by RMG to each holder of record of
Series A Shares as of the Delivery Date (or as of the most recent practicable
date prior thereto) and (B) used by each such holder to elect to receive
Holding Company Shares, if applicable, subject to this Section 3.2.  The Company shall make the Stock Form of
Election and the Stockholder Documents available to all Persons who become
record holders of Series A Shares during the period between the Delivery Date
and the Election Date.  Any such Series A
Election shall have been properly made only if RMG shall have received (at its
address set forth in Section 10.6), by 5:00 p.m., New York City time on
the Election Date, a Stock Form of Election properly completed and signed, and
accompanied by all other documents required thereby.

(iii)          Any Stock Form of Election may be revoked by the holder of
such Series A Shares submitting such Stock Form of Election to RMG only by
written notice received by RMG prior to 5:00 p.m., New York City time on the
Election Date.  In addition, all Stock
Forms of Election shall automatically be revoked if this Agreement shall have
terminated or the Mergers shall have been abandoned.

(iv)          RMG shall determine in its reasonable discretion
whether Stock

 

-20-

 

Forms of Election (together with the Stockholders
Agreements and any other applicable Stockholder Documents) have been
properly completed, signed and submitted or revoked and to disregard immaterial
defects in Stock Forms of Election.  The
decision of RMG in such matters shall be conclusive and binding.  RMG shall use its commercially reasonable
efforts to notify any Person of any defect in a Stock Form of Election (or
Stockholders Agreement or any other applicable Stockholder Document) submitted to
RMG.  RMG shall make all computations
contemplated by Section 3.2 in good faith and all such computations
shall be conclusive and binding on the holders of Series A Shares.  RMG may make such rules as are consistent
with Section 3.2 for the implementation of the Series A Elections
provided for herein and the application of Section 3.2(c)(iv) as shall
be necessary or desirable to effect fully such Series A Elections and the
application of Section 3.2(c)(iv).

(v)           If RMG shall determine that any purported Series A
Election was not properly made and any such defect was not cured prior to 5:00
p.m., New York City time on the Election Date, such purported Series A Election
shall be deemed to be of no force and effect and the holder making such
purported Series A Election shall, for purposes of this Agreement, be deemed to have
made no election.

(vi)          Any holder of Series A Stock who does not properly
make a Series A Election and/or who fails to submit to RMG a properly completed
and signed and properly and timely submitted Stock Form of Election along with
the other documents required thereby prior to 5:00 p.m., New York City time, on
the Election Date, shall be deemed not to have made a Series A Election, and
all of such holder’s Series A shall be converted into the right to receive the
cash merger consideration as set forth in Section 3.2(c)(ii), subject to
Section 3.2(c)(iv).

(h)           Company Option Elections.

(i)            Each Employee who will hold, at the Effective Time,
outstanding and unexercised vested in-the-money Company Options shall have the
right, subject to this Section 3.2, to submit an Option Form of
Election (as defined below) specifying the number (if any) of Company Options,
up to the Maximum Option Number, that such holder desires to be cancelled for
the right to receive in cash the Option Price Per Share (such election, an “Option
Election”).

(ii)           RMG, or its authorized agent or Representative, shall
prepare a form of election, substantially in the form attached hereto as Exhibit
3.2(h)(ii) (the “Option Form of
Election” which, along with the Stock Form of Election, is sometimes
referred to individually herein as a “Form of Election”) for delivery
with the Disclosure Statement.  The
Option Form of Election (together with the Disclosure Statement) shall be
(A) delivered by RMG to each Employee who holds Company Options as of the
Delivery Date (or as of the most recent practicable date prior thereto) and
(B) used by each such holder to elect to receive the Option Price Per
Share, if applicable, subject to this Section 3.2.  The Company shall make the Option Form of
Election and the Disclosure Statement available to all Employees who become
holders of Company Options during the period between the Delivery Date and the
Election Date.  Any such holder’s Option
Election shall have been properly made only if RMG shall have received (at its
address set forth in Section 10.6), by 5:00 p.m., New York City time on
the Election Date,

 

-21-

 

an Option Form of Election properly completed and
signed.

(iii)          Any Option Form of Election may be revoked by the Employee
holding Cash-Out Options submitting such Option Form of Election to RMG only by
written notice received by RMG on or prior to 5:00 p.m., New York City time on
the Election Date.  In addition, all
Option Forms of Election shall automatically be revoked if this Agreement shall
have terminated or the Mergers shall have been abandoned.

(iv)          RMG shall determine in its reasonable discretion whether
Option Forms of Election have been properly completed, signed and submitted or
revoked and to disregard immaterial defects in Option Forms of Election. The
decision of RMG in such matters shall be conclusive and binding.  RMG shall use its commercially reasonable
efforts to notify any Employee of any defect in an Option Form of Election
submitted to RMG.  RMG shall make all
computations contemplated by Section 3.2 in good faith and all such
computations shall be conclusive and binding on the holders of Company
Options.  RMG may make such rules as are
consistent with Section 3.2 for the implementation of the Option
Elections provided for herein as shall be necessary or desirable to effect
fully such Option Elections.

(v)           If RMG shall determine that any purported Option
Election was not properly made and such defect was not cured prior to 5:00
p.m., New York City time on the Election Date, such purported Option Election
shall be deemed to be of no force and effect and the holder making such
purported Option Election shall, for purposes of this Agreement, be deemed to have
made no election.

(vi)          Any Employee who holds vested Company Options who does not
properly make an Option Election and/or who fails to submit to RMG a properly
completed and signed and properly and timely submitted Option Form of Election prior to 5:00
p.m., New York City time on the Election Date, shall be deemed not to have
made an Option Election, and each such Company Option held by such Employee
shall be assumed by Holding Company as set forth in Section 3.2(d)(ii).

3.3           Exchange of Stock
Certificates; Payment of Merger Consideration.

(a)           Exchange Procedures; Right to Receive Merger
Consideration.  On the Delivery Date,
RMG shall mail or cause to be delivered to each holder of record of a Stock
Certificate, along with the relevant Form of Election and the Disclosure
Statement, (i) a letter of transmittal (which shall be substantially in the
form of Exhibit 3.3(a) (the “Letter of Transmittal”), (ii)
instructions for use in surrendering such Stock Certificates in exchange for
payment thereof, and (iii) the Stockholders Agreement (together with the Letter
of Transmittal and the Disclosure Statement, collectively, the “Stockholder
Documents”).  At or after the
Effective Time, upon surrender of a Stock Certificate or Stock Certificates for
cancellation to RMG or to such agent or agents as may be appointed by RMG,
together with such Letter of Transmittal, duly completed and validly executed,
and, if applicable, a timely delivered and duly executed Form of Election and
Stockholders Agreement, and such other documents as may be reasonably required
by RMG, the holder of such Stock Certificate or Stock Certificates shall be
entitled to receive in exchange therefor an amount in cash (and Holding Company
Shares, if applicable) equal to the applicable merger consideration in
accordance with Section 3.2 and the

 

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Stock Certificates so surrendered shall forthwith be
cancelled.  No interest shall be paid or
shall accrue on any cash payable hereunder to holders of Stock
Certificates.  RMG shall, and shall use
its reasonable efforts to cause any agent or agents appointed by RMG to, as
promptly as practicable, provide copies to the Company of the Letters of
Transmittal it receives and coordinate communications with the Stockholders
prior to such communications.  In the
event of a transfer of ownership of shares of Preferred Stock and/or Company
Common Stock that is not registered in the transfer records of the Company, the
applicable cash merger consideration (and Holding Company Shares, if
applicable) with respect to such Preferred Stock and/or Company Common Stock
may be delivered to a Person other than the Person in whose name the Stock
Certificate or Stock Certificates so surrendered is registered, if, upon
presentation to RMG, such Stock Certificate or Stock Certificates shall be
properly endorsed or otherwise be in proper form for transfer as a condition to
such transfer, the transferor shall execute a release in form and substance
reasonably satisfactory to the RMG Parties, and the Person requesting such
payment shall pay any transfer or other Taxes required by reason of the payment
of the applicable cash merger consideration to a Person other than the
registered holder of such Stock Certificate or establish to the satisfaction of
RMG that such Tax has been paid or is not applicable.  Until surrendered as contemplated by this Section
3.3(a), each Stock Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
amount of cash merger consideration (and Holding Company Shares, if applicable)
payable with respect to such Stock Certificate pursuant to Section 3.2.

(b)           Payment of Merger Consideration; Issuance of Holding
Company Shares.

(i)            Promptly following valid tender by each holder of his,
her or its Company Stock, together with a Letter of Transmittal properly completed
and validly executed in accordance with the instructions thereto, and, if
applicable, a timely delivered and duly executed Form of Election and
Stockholders Agreement, together with the other Stockholder Documents, as
applicable, and such other documents as may be reasonably required by RMG, the
holder of such Company Stock shall be entitled to receive in exchange therefor
(A) certificate(s) representing that number of whole Holding Company
Shares, if any, to which such holder is entitled pursuant to Section 3.2(c)
and (B) the amount of cash to which such holder is entitled pursuant to Section
3.3(b)(iii), and Stock Certificates so surrendered shall be forthwith
cancelled.  RMG (or the Holding Company)
shall promptly accept such Stock Certificates upon compliance with such
reasonable terms and conditions as RMG (or the Holding Company) may impose to
effect an orderly exchange thereof in accordance with customary exchange
practices.  No interest shall accrue on
the merger consideration payable upon the surrender of Stock Certificates for
the benefit of, or be paid to, the holders of Stock Certificates.  The amount of cash merger consideration to
which each holder is entitled shall be paid to such holder by check or, in the
case of a holder who receives a payment of at least $25,000, by wire transfer
of immediately available funds to an account designated in writing by such
holder.  The cash merger consideration to
which each holder of Company Stock or Company Options is entitled to hereunder
shall be paid on the Closing Date, if such holder has delivered his, her or its
Company Stock or Company Options to RMG, together with a properly completed and
validly executed Letter of Transmittal, together with any other required
documentation, at least two (2) Business Days prior to the Closing Date.

 

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(ii)           No dividends or other distributions with respect to
Holding Company Shares with a record date at or after the Effective Time shall
be paid to the holder of any un-surrendered Stock Certificate with respect to
the Holding Company Shares represented thereby by reason of the conversion of
Company Shares pursuant to Section 3.2(c) and no cash
payment in lieu of fractional Holding Company Shares shall be paid to any such
holder pursuant to Section 3.3(b)(iii) until such Stock Certificate is
surrendered in accordance with this Article III.  Subject to the effect of applicable Laws,
following surrender of any such Stock Certificate, there shall be paid, without
interest, to the Person in whose name the Holding Company Shares representing
such securities are registered (A) at the time of such surrender, the
amount of any cash payable in lieu of fractional Holding Company Shares to
which such holder is entitled pursuant to Section 3.3(b)(iii) and the
proportionate amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to Holding Company
Shares issued upon conversion of Company Stock, and (B) at the appropriate
payment date or as promptly as practicable thereafter, the proportionate amount
of dividends or other distributions, with (x) a record date with respect
thereto after the Effective Time, but prior to such surrender, and (y) a
payment date subsequent to such surrender, payable with respect to such Holding
Company Shares.

(iii)          Notwithstanding any other provision hereof, no
fraction of a Holding Company Share will be issued and no dividend or other
distribution, stock split or interest with respect to Holding Company Shares
shall relate to any fractional Holding Company Share, and such fractional interest
shall not entitle the owner thereof to vote or to any rights as a security
holder of the Holding Company Shares.  In
lieu of any such fractional Holding Company Share, each holder of shares of
Company Stock otherwise entitled to a fraction of a Holding Company Share in
accordance with the provisions of this Article III will be entitled
to receive from RMG (or the Holding Company) a cash payment in an amount equal
to the product of (i) such fractional part of a Holding Company Share
multiplied by (ii) the Holding Company Per Share Value.  For each Stockholder, such Stockholder’s
entitlement to Holding Company Shares shall be determined in the aggregate and
then any fractional shares existing after such aggregation shall be addressed
as provided in this Section 3.3(b)(iii).

3.4           No Further Ownership Rights.

The
amounts paid in accordance with the terms of this Article III shall be
deemed to have been paid in full satisfaction of all rights pertaining to all
shares of Company Common Stock and Preferred Stock and Company Options, and
after the Effective Time there shall be no further registration of transfers on
the stock transfer books of the ISS Surviving Corporation of shares of Company
Common Stock and/or Preferred Stock and/or Company Options that were outstanding
immediately prior to the Effective Time. 
If, after the Effective Time, any Stock Certificates that immediately
prior to the Effective Time represented outstanding shares of Preferred Stock
or Company Common Stock are presented to Holding Company or RMG for any reason,
they shall be cancelled and exchanged as provided in this Article III.

 

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3.5           Escheatment.

If
any Stock Certificate shall not have been surrendered immediately prior to such
date on which any portion of the merger consideration with respect thereto
would otherwise escheat to or become the property of any Governmental Body, any
such portion of the merger consideration shall, to the extent permitted by
applicable Law, become the property of Holding Company, free and clear of all
claims or interest of any Person previously entitled thereto.  To the extent that any portion of the merger
consideration is delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law, none of the RMG Parties or the
Company shall be liable to any Person in respect thereof.

3.6           Lost Certificates.

Notwithstanding
anything herein to the contrary, in the event any Stock Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact
(and, if required by Holding Company, upon the provision of a customary and
reasonable contractual indemnity against any claims that may be made against
any of the RMG Parties with respect to such Stock Certificate), by the Person
claiming to be the holder of such lost, stolen or destroyed Stock Certificate,
Holding Company will pay in exchange for such lost, stolen or destroyed Stock
Certificate the amount of merger consideration to which such holder would be
entitled pursuant to Section 3.2 of this Agreement.

3.7           Adjustments.

Subject
to Section 7.3, if, during the period between the date hereof and the
Effective Time, any change in the outstanding shares of capital stock of the
Company shall occur, including by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of
shares, or any stock dividend thereon shall be declared with a record date
during such period, the Company Common Stock Price Per Share, the Series A
Price Per Share and the consideration payable to holders of Company Options
hereunder shall be appropriately adjusted without increasing the aggregate
consideration payable in connection with the Mergers hereunder.

3.8           Withholding Rights.

Holding
Company shall be entitled to deduct and withhold from the consideration
otherwise payable to any holder of Company Stock or Company Options, as the
case may be, or to any designee of such holder, pursuant to this Agreement such
amounts as may be required to be deducted and withheld with respect to the
making of such payment under the Code and the rules and regulations promulgated
thereunder, or under any provision of any state or foreign Law with respect to
Taxes.  To the extent that amounts are so
withheld and paid over to the appropriate taxing authority, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the Company Stock or Company Options in respect of which such
deduction and withholding was made by Holding Company.

 

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ARTICLE IV - CLOSING AND TERMINATION

4.1           Closing Date.

(a)           Subject to the satisfaction of the conditions set forth in
Section 8.1 and Section 8.2 hereof (or the waiver thereof by the
party entitled to waive that condition), the closing of the transactions
contemplated hereby (the “Closing”) shall take place at the offices of
Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY  10019 (or at such other place as RMG and the
Company may designate in writing) at 10:00 a.m. (Eastern time) on a date to be
specified by RMG and the Company, which date shall be no later than the fifth
Business Day after the satisfaction or waiver of each condition to Closing set
forth in Article VIII (other than conditions that by their nature are to
be satisfied at the Closing, but subject to the satisfaction or waiver of such
conditions), unless another time or date, or both, are agreed to in writing by
RMG and the Company; provided, however, that if each of the
conditions to Closing set forth in Article VIII shall have been
satisfied or waived but the Debt Financing shall not yet have been obtained,
then RMG may at its option extend the Closing to a date no later than the
Outside Date, unless the failure to obtain such Debt Financing shall have been
the result of a breach by RMG of its obligations under this Agreement entitling
the Company to terminate this Agreement pursuant to Section 4.2(e).  Notwithstanding anything contained in this Section
4.1(a) to the contrary, in no event shall the date of the Closing be
extended beyond the Outside Date.  The
date on which the Closing shall occur is referred to in this Agreement as the “Closing
Date”.

(b)           RMG and the Company shall in good faith prepare a closing
statement in connection with the Closing setting forth, among other things, the
payments and deliveries to be made at Closing, which shall be conclusive and
binding upon the RMG Parties, the Stockholders and the holders of the Company
Options.

4.2           Termination of Agreement.

This
Agreement may be terminated and the Mergers may be abandoned any time prior to
the Effective Time as follows:

(a)           at the election of the Company or RMG on or after January
31, 2007 (the “Outside Date”), if the Effective Time shall not have then
occurred by the close of business on such date, provided that neither the
Company nor RMG shall be entitled to terminate this Agreement on or after the
Outside Date if the principal reason the Mergers shall not have been
consummated by such time is the willful and material breach by such party (or
in the case of RMG, any of the RMG Parties) of any of its or their obligations
under this Agreement, and provided further that such date shall be
automatically extended for 60 days if only the conditions to Closing set forth
in Sections 8.1(i) and 8.2(d) remain unsatisfied or unwaived at
the Outside Date;

(b)           by mutual written consent of the Company and RMG;

(c)           by the Company or RMG, if there shall be in effect any
applicable Law or any final nonappealable Order of a Governmental Body of
competent jurisdiction, in each case restraining, enjoining or otherwise
prohibiting the consummation of the transactions

 

-26-

 

contemplated hereby; it being agreed that the
parties hereto shall promptly appeal any adverse determination which is not
nonappealable (and pursue such appeal with reasonable diligence);

(d)           by RMG, if (x) RMG is not then in material breach of any
of its representations, warranties, covenants or agreements contained in this
Agreement, and (y) any of the conditions set forth in Section 8.1(a) or
Section 8.1(b) is incapable of fulfillment, or if the breach giving rise to
the failure of any such conditions to be satisfied is capable of being cured,
such breach shall not have been cured within thirty (30) days following receipt
by the Company of written notice of such breach from RMG; or

(e)           by the Company, if (x) the Company is not then in material
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement, and (y) any of the conditions set forth in Section
8.2(a) or Section 8.2(b) is incapable of fulfillment, or if the
breach giving rise to the failure of any such conditions to be satisfied is
capable of being cured, such breach shall not have been cured within thirty
(30) days following receipt by RMG of written notice of such breach from the
Company.

4.3           Procedure Upon Termination.

In
the event of termination of this Agreement by RMG or the Company, or both,
pursuant to Section 4.2 hereof, written notice thereof shall forthwith
be given to the other party, and this Agreement shall terminate, and the
Mergers contemplated hereby shall be abandoned, without further action by RMG
or the Company.

4.4           Effect of Termination.

In
the event that this Agreement is validly terminated in accordance with Sections
4.2 and 4.3, then each of the parties shall be relieved of their
duties and obligations arising under this Agreement after the date of such
termination and such termination shall be without liability to any of the RMG
Parties or the Company; provided, that (i) no such termination shall
relieve any party hereto from liability for any breach of this Agreement (it
being acknowledged that if (x) each of the conditions to Closing set forth in Article
VIII shall have been satisfied or waived as of the Outside Date, (y) the
Company is not then in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement, and (z) RMG is
unable to close due to the failure to obtain the Debt Financing, then RMG shall
have breached this Agreement and the Company shall be entitled to seek remedies
therefor, which may include specific performance); and provided, further,
that the obligations of the parties set forth in Section 7.11 hereof
shall survive any such termination and shall be enforceable hereunder, and (ii)
no termination shall impair the right of any party to compel specific
performance by any other party of its obligations hereunder.

ARTICLE V - 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby
represents and warrants to the RMG Parties, as of the date hereof, that:

 

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5.1           Organization and Good Standing.

The
Company is a corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware, and has all requisite corporate power
and authority and governmental authorizations to own, operate, lease and
otherwise hold its assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business as a foreign
corporation in each other jurisdiction, as set forth on Schedule 5.1,
where the character of the properties owned, leased or operated by it, or the
nature of its assets, business or activities, makes such qualification or
licensing necessary, except where the lack of such qualification or licensing
would not have a Material Adverse Effect. 
Copies of the Company Organizational Documents have been made available
to RMG or its Representatives.

5.2           Authorization of Agreement.

The
Company has all requisite power and authority to execute and deliver this
Agreement and each other agreement, document, or instrument or certificate
contemplated by this Agreement or to be executed by the Company in connection
with the consummation of the transactions contemplated by this Agreement
(collectively, the “Company Documents”), and to consummate the
transactions contemplated hereby and thereby. 
The execution and delivery of this Agreement and the Company Documents
by the Company and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate action on the part
of the Company, except for approval of this Agreement and the transactions
contemplated thereby by the (i) the holders of a majority of the outstanding
shares of Company Common Stock (voting on an as-converted basis assuming the
conversion of all outstanding Preferred Stock) and (ii) the holders of a
majority of the outstanding shares of the Series A Preferred Stock voting as a
separate class, which approvals will be obtained on the date hereof as promptly
as practical following the execution of this Agreement.  This Agreement has been, and each of the
Company Documents will be at or prior to the Closing, duly and validly executed
and delivered by the Company and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes,
and each Company Document when so executed and delivered will constitute, the
legal, valid and binding obligations of the Company, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).

5.3           Conflicts; Consents of Third Parties.

(a)           Except as set forth on Schedule 5.3(a), none of the
execution and delivery by the Company of this Agreement or the Company
Documents, the consummation of the transactions contemplated hereby or thereby,
or compliance by the Company with any of the provisions hereof or thereof will
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of acceleration, termination or cancellation
of any obligation, or result in the creation of any Lien upon any of the
properties or assets of the Company or any of its Subsidiaries under, any
provision of (i) any Company Organizational

 

-28-

 

Documents or Subsidiary Organizational Documents;
(ii) any Contract or Permit to which the Company or any of its
Subsidiaries is a party or by which any of the properties or assets of the
Company or any of its Subsidiaries are bound; (iii) any Order applicable to the
Company or any of its Subsidiaries or by which any of the properties or assets
of the Company or any of its Subsidiaries are bound; or (iv) any applicable
Law, other than, in the case of clauses (ii), (iii) and (iv), such items that
would not have a Material Adverse Effect.

(b)           Except as set forth on Schedule 5.3(b), no consent,
waiver, approval, Order, Permit or authorization of, or declaration or filing
with, or notification to, any Person (under any Contract or otherwise) or
Governmental Body is required on the part of the Company or any of its
Subsidiaries in connection with the execution and delivery of this Agreement or
the Company Documents or the compliance by the Company or any of its
Subsidiaries with any of the provisions hereof or thereof, or the consummation
of the transactions contemplated hereby or thereby, except for (i) compliance
with the applicable requirements of the HSR Act and the rules and regulations
promulgated thereunder and any other applicable Antitrust Laws, (ii) approval
by the Stockholders of the ISS Merger in accordance with the DGCL and the
Company Organizational Documents, (iii) such consents, waivers, approvals,
Orders, Permits, authorizations, declarations or filings, the absence of which,
or the failure to make which would not have a Material Adverse Effect and (iv)
the filing of the ISS Certificate of Merger.

5.4           Capitalization.

(a)           As of the date hereof, the authorized capital stock of the
Company consists of: (i) 55,000 shares of Company Common Stock, of which
10,321.70810 shares are issued and outstanding and (ii) 35,000 shares of
Preferred Stock, of which 35,000 shares are designated Series A Preferred
Stock, of which 31,656.30296 are issued and outstanding.  8,147.23000 shares of Company Common Stock
are reserved for issuance under the Stock Plans.  Except as set forth in this Section 5.4(a),
there are no shares of capital stock or other equity securities of the Company
issued, reserved for issuance or outstanding.

(b)           Except as set forth on Schedule 5.4(b), all
outstanding shares of Company Stock are duly authorized, validly issued, fully
paid and nonassessable and are not subject to, and were not issued in violation
of, any Lien or any other purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision
of the DGCL, the certificate of incorporation or by-laws of the Company or any
Contract to which the Company is a party or otherwise bound.

(c)           Except as set forth on Schedule 5.4(c), as of the
date of this Agreement, there are no options, warrants, rights, convertible or
exchangeable securities, “phantom” stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or
undertakings of any kind to which the Company or any of its Subsidiaries is a
party or by which any of them is bound obligating the Company or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other equity interests in, or any
security convertible or exercisable for or exchangeable into any capital stock
of or other equity interest in, the Company or of any of its Subsidiaries.

 

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(d)           Except pursuant to the Company Organizational Document or
as set forth on Schedule 5.4(d), neither the Company nor any of its
Subsidiaries has any obligation to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company or any of its Subsidiaries or to
register any securities under the Securities Act of 1933, as amended (the “Securities
Act”), or under any state securities laws.

(e)           Schedule 5.4(e) sets forth a true and correct
list as of the date hereof of all (i) holders of record of Company Common
Stock and Preferred Stock and the number of shares held by each such holder and
(ii) outstanding Company Options including, in each case, identification
of the holder, exercise price, expiration date and vesting date thereof, and
the plan pursuant to which such Company Options were issued.

5.5           Subsidiaries.

(a)           Schedule 5.5 lists all Subsidiaries of the Company,
their respective jurisdictions of incorporation, the authorized and issued
capital stock or other securities of each such Subsidiary and the name of each
holder thereof.  Except as set forth on Schedule
5.5, the Company or its Subsidiaries do not directly or indirectly own, or
hold any rights to acquire, any capital stock or any other securities in any
other Person other than securities that constitute cash or cash
equivalents.  Copies of the Subsidiary
Organizational Documents have been made available to RMG or its
Representatives.

(b)           Except as set forth on Schedule 5.5(b), all of the
outstanding shares of capital stock of each of the Subsidiaries of the Company
have been validly issued and are fully paid and nonassessable, are owned by the
Company or one of its Subsidiaries, and are not subject to, and were not issued
in violation of, any Lien or any other purchase option, call option, right of first
refusal, preemptive right, subscription right or any similar right under any
provision of applicable law, the certificate of incorporation or by-laws of
such Subsidiary or any Contract to which Subsidiary is a party or otherwise
bound.

(c)           Each Subsidiary is a corporation or limited liability
company duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation or organization, and has all requisite
corporate or limited liability company power and authority and governmental
authorizations to own, operate, lease and otherwise hold its assets and to
carry on its business as it is now being conducted, and, except as set forth on
Schedule 5.5(c)(1), is duly licensed or qualified to do business as a
foreign corporation or company in each other jurisdiction, as set forth on Schedule
5.5(c)(2), where the character of the properties owned, leased or operated
by it, or the nature of its assets, business or activities, makes such
qualification or licensing necessary, except where the lack of such
qualification or licensing would not have a Material Adverse Effect.

5.6           Financial Statements.

(a)           Schedule 5.6 sets forth the following financial
statements of the Company (the “Financial Statements”): (a) the
consolidated balance sheets of the Company at each of December 31, 2005, 2004
and 2003, respectively (December 31, 2005, the “Balance Sheet Date” and,
such December 31, 2005 balance sheet, the “Balance Sheet”), and the
related consolidated

 

-30-

 

statements of operations, Stockholders’ equity and
cash flows for each of the fiscal years ended December 31, 2005, 2004 and 2003,
respectively, in each case audited by Ernst & Young LLP (collectively, the “Audited
Financial Statements”); and (b) the unaudited balance sheet of the Company
as of September 30, 2006 (the “Interim Balance Sheet Date” and such
September 30, 2006 balance sheet, the “Interim Balance Sheet”), and the
related unaudited statements of operations and cash flows for the nine-month
period ended September 30, 2006 (the “Unaudited Financial Statements”).  The Financial Statements (i) are accurate and
complete in all material respects, have been prepared in accordance with GAAP
consistently applied, except in the case of the Unaudited Financial Statements
as set forth on Schedule 5.6, (ii) are consistent with the books and
records of the Company and (iii) fairly present, in all material respects, the
consolidated financial condition, results of operations and cash flows of the
Company and its Subsidiaries as of the dates and for the periods indicated
therein; provided, however, that the Unaudited Financial
Statements are subject to normal year-end adjustments and lack footnotes and
other presentation items.

(b)           The Company has made available to RMG accurate and
complete copies of all material policies, manuals and other documents
promulgating or relating to internal accounting controls.

(c)           Since January 1, 2003, neither the Company nor any of
its Subsidiaries nor, to the Knowledge of the Company, any of their respective
directors, officers, employees, auditors, accountants or Representatives has
received or otherwise had or obtained knowledge of any complaint, claim,
assertion or allegation, whether made in writing or orally to any director,
executive officer, inside or outside legal counsel to the Company or any of its
Subsidiaries, regarding the accounting or auditing practices, procedures,
methodologies or methods of the Company or any of its Subsidiaries or their
respective internal accounting controls, including any complaint, claim,
assertion or allegation that the Company or any of its Subsidiaries has engaged
in questionable accounting or auditing practices and any oral or written
notification of a “reportable condition” or “material weakness” in the Company’s
or any of its Subsidiaries’ respective internal controls.  For purposes of this Agreement, the terms “reportable
condition” and “material weakness” shall have the meanings assigned to them in
the Statements of Auditing Standards 60, as in effect on the date hereof.  Since January 1, 2003, no attorney
representing the Company or any of its Subsidiaries, whether or not employed by
the Company or any such Subsidiary, has reported evidence of a material
violation of securities Laws, breach of fiduciary duty or similar violation by
the Company, any of its Subsidiaries, or any of their respective officers,
directors, employees or agents to the Board of Directors of the Company, the
board of directors of any of the Company’s Subsidiaries or any committee
thereof, or to any director or officer of the Company or any of its
Subsidiaries.  Since January 1,
2003, there have been no internal investigations regarding accounting or revenue
recognition discussed with, reviewed by or initiated at the direction of the
chief executive officer, chief financial officer, general counsel or similar
legal officer, the Board of Directors of the Company, the board of directors of
any of the Company’s Subsidiaries or any committee thereof.

(d)           Neither the Company nor any of its Subsidiaries is a party
to, or has any commitment to become a party to, any joint venture, off-balance
sheet, partnership or any other similar Contract (including any Contract
relating to any transaction, arrangement or relationship

 

-31-

 

between or among any of the Company or its
Subsidiaries, on the one hand, and any unconsolidated Affiliate, including any
structured finance, special purpose or limited purpose entity or Person, on the
other hand), where the purpose or effect of such Contract is to avoid
disclosure of any material transaction involving the Company or any of its
Subsidiaries in the Financial Statements.

(e)           Attached hereto as Schedule 5.6(e) is the estimated
consolidated balance sheet of the Company at December 31, 2006, which has been
prepared by the Company in good faith, using reasonable estimates, in
accordance with GAAP, except as set forth on such Schedule 5.6(e), and
except that such estimated consolidated balance sheet is subject to normal
year-end adjustments and lacks footnotes and other presentation items.

5.7           Accounts Receivable; Accounts Payable.

(a)           Except as set forth on Schedule 5.7(a), the
accounts receivable of the Company and its Subsidiaries as set forth on the
Interim Balance Sheet or arising since the date thereof (i) are valid and
genuine, (ii) have arisen solely out of bona fide sales and deliveries of
goods, performance of services and other business transactions in the Ordinary
Course of Business, (iii) have been billed or invoiced in the Ordinary
Course of Business in accordance with all applicable Laws, (iv) are not
subject to valid defenses, set-offs or counterclaims, and (v) to the
Knowledge of the Company, are collectible within ninety (90) days after
billing at the full recorded amount thereof less, in the case of accounts
receivable appearing on the Interim Balance Sheet, the recorded allowance for
collection losses on such balance sheet.

(b)           Except as set forth on Schedule 5.7(b), with
respect to all existing accounts payable of Company and its Subsidiaries
(including those accounts payable reflected in the Financial Statements that
have not been paid and those accounts payable that have arisen since the
Interim Balance Sheet Date and have not yet been paid), the Company and its
Subsidiaries have no outstanding disputes concerning the products or services
provided by any account creditor and, to the Company’s Knowledge, neither the
Company nor any of its Subsidiary has any basis:  (i) to refuse to pay any material amount
owing to any account creditor when due; (ii) return any material amount of
products to any account creditor; or (iii) seek to exercise any material remedy
against or seek relief from any obligations owed by Company or any Subsidiary
to any account creditor.

5.8           Performance of Services; Deferred Revenues.

All
services that have been performed by or on behalf of the Company or its
Subsidiaries have been performed in all material respects in conformity with
the terms and requirements of all applicable Contracts.

5.9           No Undisclosed Liabilities.

Neither
the Company nor any of its Subsidiaries is or may become responsible for
performing or discharging any accrued, contingent or any other liability of any
nature, either matured or unmatured, other than (i) liabilities set forth on
the Financial Statements, (ii) liabilities set forth on Schedule 5.9,
(iii) liabilities incurred in the Ordinary Course of Business

 

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after
the Interim Balance Sheet Date, (iv) liabilities incurred in connection with
the transactions contemplated hereby, (v) liabilities that have been discharged
or paid in full prior to the date hereof in the Ordinary Course of Business,
(vi) liabilities under Contracts not yet required to be performed and (vii)
liabilities that would not have a Material Adverse Effect.

5.10         Absence of Certain Developments.

Except
as contemplated by this Agreement or as set forth on Schedule 5.10,
since the Interim Balance Sheet Date, the Company and its Subsidiaries have
conducted their respective businesses only in the Ordinary Course of Business,
and there has not occurred (i) any event, condition or change that constitutes
a Material Adverse Effect, (ii) any amendments or changes in the Company
Organizational Documents or the Subsidiary Organizational Documents; (iii) any
damage to, destruction or loss of any asset of the Company or any of its
Subsidiaries (whether or not covered by insurance) that could have a Material
Adverse Effect; (iv) any material change by the Company or any of its
Subsidiaries in any of their respective accounting methods, principles or
practices (including, without limitation, procedures with respect to revenue
recognition, payments of accounts payable and collection of accounts
receivable); (v) any material revaluation by the Company or any of its
Subsidiaries of any of their respective assets, including, without limitation,
writing down the value of inventory or writing off notes or accounts receivable
other than in the Ordinary Course of Business; (vi) any other event or action
that would have required the consent of RMG pursuant to Section 7.3 had
such event or action occurred or been taken after the date of this Agreement;
or (vii) any purchase or sale of a material amount of property or assets by the
Company or any of its Subsidiaries, except in the Ordinary Course of Business.

5.11         Taxes.

(a)           Except as set forth on Schedule 5.11(a), each of
the Company and each of its Subsidiaries has timely filed all material Tax
Returns required to be filed by it and has paid all material Taxes required to
be paid by it (whether or not shown as due on such Tax Returns).

(b)           All material amounts collected or withheld by the Company
for the payment of Taxes have been, or will be, timely remitted to the taxing
authority to whom such payment is due.

(c)           No material examination, claim, assessment, deficiency or
other Legal Proceeding is pending or, to the Company’s Knowledge, threatened
with regard to any Taxes or Tax Returns of the Company or any of its
Subsidiaries.

(d)           True and complete copies of all material Tax Returns that
have been filed by the Company or any of its Subsidiaries for taxable periods
ending after January 1, 2004 have been delivered or made available to RMG or
its Representatives.

(e)           There has been no waiver or extension of any applicable
statute of limitations for the assessment or collection of any Taxes of the
Company or any of its Subsidiaries.

 

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(f)            Neither the Company nor any of its Subsidiaries (A) has
been a member of an affiliated group filing a consolidated federal income Tax
Return (other than a group the common parent of which was the Company) and (B)
has any liability for the Taxes of any Person (other than the Company) under
Treasury Regulation § 1.1502-6 (or any similar provision of state, local or
foreign Law), as a transferee or successor, by contract, or otherwise.

(g)           The Company and its Subsidiaries have adequately provided
in their Financial Statements and related records reserves for all material
accrued but unpaid Taxes.

(h)           Neither the Company nor any of its
Subsidiaries is a party to or bound by any Tax sharing or allocation agreement
or similar contract or assignment or any agreement that obligates them to make
any payment computed by references to the Taxes, taxable income or taxable
losses of any other Person.

(i)            Neither the Company nor any of its
Subsidiaries has received written notice from any Tax authority in a
jurisdiction in which such entity does not file a Tax Return stating that such
entity is or may be subject to taxation by that jurisdiction.

(j)            Neither the Company nor any
predecessors of the Company by merger or consolidation has within the past
three (3) years been a party to a transaction intended to qualify under
Section 355 of the Code or under so much of Section 356 of the Code
as relates to Section 355 of the Code.

(k)           Except as set forth on Schedule
5.11(k), the Company has not made any payments, is not obligated to make
any payments, and is not a party to any agreement (other than this Agreement)
or other arrangement that would obligate it to make any payments that would not
be deductible under Section 280G of the Code.

(l)            Neither the Company nor any of its
Subsidiaries is a party to any joint venture, partnership or other written
arrangement or contract which would be treated as a partnership for U.S.
Federal income Tax purposes for any period for which the statute of limitations
for any Tax on the income therefrom has not expired.

(m)          Neither the Company nor any
of its Subsidiaries have engaged in any transaction for which their
participation is required to be disclosed under Treasury Regulation Section
1.6011-4.

5.12         Real and Personal Property; Sufficiency of Assets.

(a)           Neither the Company nor any of its Subsidiaries owns any
real property.

(b)           The Company and its Subsidiaries have good and valid title
to all of the assets reflected on the Interim Balance Sheet and all of their
other assets, including without limitation all assets acquired after the
Interim Balance Sheet Date, other than those assets disposed of since the
Interim Balance Sheet Date in the Ordinary Course of Business, in each case
free and clear of all Liens, except (i) such Liens as are set forth in Schedule 5.12(b)
and (ii) Permitted Exceptions.

 

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(c)           The assets and properties owned by, or leased to, the
Company and/or any of its Subsidiaries are sufficient for the conduct of the
business and operation of the Company and its Subsidiaries as currently
conducted.  With respect to the property
and assets leased by the Company and/or any of its Subsidiaries, each such
Person is in compliance with each such lease in all material respects and holds
a valid leasehold interest free of any Liens, and there are no events or
circumstances existing which would, with the giving of notice, the passage of
time or both, constitute a material default or termination event under any such
lease.  All of the buildings, fixtures
and other improvements on such leased real property are in working condition
and repair, ordinary wear and tear excepted, and neither the Company nor any of
its Subsidiaries have received any written notice of any violation of any legal
requirement or any written notice from any Governmental Body of any
contemplated condemnation or eminent domain proceeding with respect to any such
leased real property.

(d)           Schedule 5.12(d) sets forth a list of all
security deposits (including the amounts thereof) in respect of the real
property leases by the Company and/or any of its Subsidiaries (collectively,
the “Security Deposits”).

5.13         Intellectual Property.

Schedule
5.13 sets forth a true and complete list of (i) all registered patents and
patent applications, registered trademarks and trademark applications,
registered copyrights and copyright applications and domain names owned by the
Company and its Subsidiaries (collectively, “Owned Intellectual Property”)
and (ii) licenses of Intellectual Property granted by third parties to the
Company or any of its Subsidiaries, or to third parties by the Company or any
of its Subsidiaries, except licenses of commercially available off-the-shelf
software that are material to the business (“Licensed Intellectual Property”).  Except as would not have a Material Adverse
Effect, the Company or one of its Subsidiaries: (a) is the owner of each listed
item of Owned Intellectual Property, and (b) is entitled to use each item of
Licensed Intellectual Property in the operation of its business as currently
conducted.  The Owned Intellectual
Property is free and clear of any Lien. 
Except as set forth on Schedule 5.13, no action, suit, proceeding
or claim has been made, is pending, has been asserted or, to the Knowledge of
the Company, is threatened by any person that the current use by the Company or
any of its Subsidiaries of the Owned Intellectual Property infringes
Intellectual Property of a third party. 
There are no pending claims asserted or threatened by the Company or any
of its Subsidiaries in respect of an infringement or misappropriation by a
third party of any Owned Intellectual Property and, to the Company’s Knowledge,
no third party is engaging in any activity that infringes or misappropriates
Owned Intellectual Property.

5.14         Material Contracts.

(a)           Schedule 5.14 sets forth all of the following
Contracts to which the Company or any of its Subsidiaries is a party or by
which any of them is bound (excluding any Contract set forth in any Schedule
pursuant to Section 5.16) (each a “Material Contract” and,
collectively, the “Material Contracts”):

(i)            all Contracts that involve obligations of, or payments
to, the Company or any of its Subsidiaries in excess of $250,000 per year (including,
without limitation,

 

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all consulting and independent contractor
Contracts), including, with respect to each such Contract, the category or type
of such Contract;

(ii)           all Contracts as described on Schedule 5.3(b) with
respect to which any consent, waiver, approval, Order, Permit or authorization
of, or declaration or filing with, or notification to (collectively, the “Required
Consents”), any Person or Governmental Body is required on the part of the
Company or any of its Subsidiaries in connection with the execution and
delivery of this Agreement or the Company Documents or the compliance by the
Company or any of its Subsidiaries with any of the provisions hereof or
thereof, or the consummation of the transactions contemplated hereby or
thereby;

(iii)          each Service Level Agreement (A) with each customer who is
a party to any Contract set forth on Schedule 5.14(a)(i) which provides
for potential service level credits and (B) pursuant to which service level
credits have been credited since January 1, 2004;

(iv)          all Contracts relating to the lease or sublease by the
Company or any of its Subsidiaries of any real property;

(v)           all Contracts that contain covenants of the Company or any
of its Subsidiaries or any successor thereto (A) to provide any “most favored
nations” terms and conditions (including, without limitation, with respect to
pricing), (B) relating to exclusivity 
obligations or restrictions, or (C) not to (or otherwise restrict their
right or ability to): (1) compete, engage in any line of business or conduct
any business in any geographical area or with any other Person; (2) acquire any
product or other asset or any services from any other Person; (3) develop,
sell, supply, distribute, offer, support or service any product to or for any
other Person; or (4) perform, offer or provide any service to or for any other
Person;

(vi)          all Contracts with any Affiliate, Stockholder or Employee
of the Company or any of its Subsidiaries, or any of their respective
Affiliates or family members;

(vii)         all Contracts incorporating or relating to any warranty, any
sharing of liabilities or any indemnity or similar obligation, other than
Contracts entered into in the Ordinary Course of Business;

(viii)        all Contracts with Material Vendors
(each as defined herein);

(ix)           all Contracts relating to currency hedging or derivatives;

(x)            all Contracts creating or relating to any partnership,
joint venture or alliance or requiring the Company or any of its Subsidiaries
to share any revenues with any other Person;

(xi)           all Contracts requiring the Company and any of its
Subsidiaries to give any notice or provide any information to any Person prior
to considering or accepting any of the transactions contemplated hereby, or
prior to entering into any discussions, agreement, arrangement or understanding
relating to any of the transactions contemplated hereby;

 

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(xii)          all Contracts relating to the Specified Proceedings (as
defined herein);

(xiii)         all Contracts entered into on or after
January 1, 2004, which relate to the acquisition by the Company or any of its
Subsidiaries of any operating business, assets or the capital stock of, or any
other interest in, any other Person, whether or not consummated;

(xiv)        all employment Contracts;

(xv)         all Contacts pursuant to which Transaction Expenses or Other
Expenses have been or will be incurred by the Company or any of its
Subsidiaries; and

(xvi)        all Contracts relating to any Indebtedness of the Company
and/or any of its Subsidiaries or any guarantee by the Company and/or any of
its Subsidiaries of any Indebtedness of any other Person.

(b)           All Material Contracts are valid,
binding and in full force and effect and are enforceable by the Company or the
applicable Subsidiary of the Company in accordance with their terms, except for
such failures to be valid, binding, in full force and effect or enforceable
that would not have a Material Adverse Effect. 
The Company or its applicable Subsidiary has performed all obligations
required to be performed by it to date under the Material Contracts, and it is
not (with or without the lapse of time or the giving of notice, or both) in
breach or default in any respect thereunder and, to the Knowledge of the
Company, no other party to any Material Contract is (with or without the lapse
of time or the giving of notice, or both) in breach or default in any respect
thereunder, except for such noncompliance, breaches and defaults that would not
have a Material Adverse Effect.  Neither
the Company nor any of its Subsidiaries has received any notice of termination
or non-renewal with respect to any of the Material Contracts.  Except as set forth on Schedule 5.14(b),
complete and correct copies of all Material Contracts, together with all
modifications and amendments thereto, and copies of all standard forms of
Contracts used by the Company and its Subsidiaries with their respective
customers, have been made available to RMG or its Representatives.

5.15         Customers, Distributors and Suppliers.

(a)           Schedule 5.15(a) sets forth the top fifty  (50) customers of the Company and its
Subsidiaries by revenue (collectively, the “Material Customers”) for
each of the years ended December 31, 2004 and December 31, 2005.  No Material Customer has cancelled,
terminated or indicated any intent to cancel or terminate its relationship with
the Company or any Subsidiary of the Company, as the case may be, or has
materially decreased its subscriptions for or usage of the products or services
provided by the Company or such Subsidiary, and no Material Customer has
decreased materially its subscriptions for or usage of such products or
services.

(b)           Schedule 5.15(b) sets forth the top ten (10)
distributors of, and suppliers to, the Company and its Subsidiaries by revenue
(collectively, the “Material Vendors”) for each of the years ended
December 31, 2004 and December 31, 2005.  No Material Vendor has cancelled, terminated
or indicated any intent to cancel or terminate its relationship with the

 

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Company or any Subsidiary of the Company, as the
case may be, or has materially reduced the availability of, or materially
increased the pricing for, the products or services provided by such Material
Vendor to the Company or any such Subsidiary.

5.16         Employee Benefits Plans.

(a)           Schedule 5.16(a) sets forth a list of each
plan, program, policy or Contract providing for compensation, severance,
termination pay, performance awards, stock or stock-related awards, pension,
savings, retirement, incentive, bonus, deferred compensation, cafeteria,
medical, disability, life, accident or other insurance, fringe benefits or
other employee benefits of any kind, including any “employee benefit plan”
within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), which is, or within the last
six (6) years was, sponsored, maintained, or contributed to by the Company, its
Subsidiaries or any ERISA Affiliate, and in which any current, former or
retired employee, officer, consultant, independent contractor, agent or
director of the Company or any of its Subsidiaries (an “Employee”)
participates or with respect to which the Company, its Subsidiaries or any
ERISA Affiliate has or may have any liability, including but not limited to any
obligation to contribute (collectively, the “Benefit Plans”).  “ERISA Affiliate” means any entity
(whether or not incorporated) other than the Company or its Subsidiaries that,
together with the Company or its Subsidiaries, is a member of a controlled
group of corporations within the meaning of Section 414(b) of the Code, of a
group of trades or businesses under common control within the meaning of
Section 414(c) of the Code, or in the case of any Benefit Plan subject to Part
3 of Subtitle B of Title I of ERISA, of an affiliated service group within the
meaning of Section 414(m) of the Code.

(b)           The Company has made available to Parent true and complete
copies of (i) each Benefit Plan document and amendments thereto (including
written summaries of any unwritten plan or amendment), (ii) trust agreements,
insurance and other contracts (including policies), summary plan descriptions,
and summaries of material modifications and material communications distributed
to the participants of each Benefit Plan, (iii) any employment or severance
agreements relating to the Employees of the Company or its Subsidiaries, (iv)
to the extent annual reports on Form 5500 are required with respect to any
Benefit Plan, the two most recent annual reports with accompanying schedules
and attachments, and (v) where applicable, the most recent opinion or
determination letter, audited financial statements, actuarial valuation reports
and nondiscrimination tests performed under the Code for each Benefit Plan.

(c)           Each Benefit Plan has been established and maintained in
accordance with its terms and in compliance in all material respects with all
applicable Laws, including but not limited to ERISA and the Code.  Each Benefit Plan intended to qualify under
Section 401 of the Code has received a favorable determination letter or
can rely on an opinion letter as to its qualification covering all amendments
required by the General Agreement on Tariff and Trade of 1994 and subsequent
legislation which constitute what is generally referred to as “GUST amendments,”
has timely adopted all amendments required for continued plan qualification
(including amendments required by the Economic Growth and Tax Relief
Reconciliation Act of 2001 (“EGTRRA”)), and nothing has occurred that would
reasonably be expected to adversely affect such qualification.  As of and including the date of the closing,
the Company and its

 

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Subsidiaries shall have made
all contributions required to be made by it up to and including the date of the
closing with respect to each Benefit Plan, or adequate accruals therefor will
have been provided for and will be properly reflected on the books of the
Companies and its Subsidiaries.  All
notices, filings and disclosures required by ERISA and the Code have been
timely made.

(d)           There is no Legal Proceeding pending, or, to the Knowledge
of the Company, threatened (other than routine claims for benefits) with
respect to any Benefit Plan or Employee Agreement.  No event has occurred in connection with
which the Company, its Subsidiaries or any Benefit Plan, directly or
indirectly, could be subject to any material liability, including under ERISA,
the Code or any other Law or governmental order applicable to any Benefit Plan.

(e)           Neither the Company nor any Subsidiary or ERISA Affiliate
maintains or contributes to or has ever maintained or contributed to a Benefit
Plan (including, without limitation, any “multiemployer plan” within the
meaning of Section 3(37) of ERISA) subject to Title IV of ERISA, and no
condition exists or is reasonably likely to exist as a result of which the
Company or any of its Subsidiaries could have any liability under Title IV of
ERISA.

(f)            No Benefit Plan is under audit, the
subject of a Legal Proceeding with respect to, or, to the Knowledge of the
Company, under investigation by the IRS, the DOL or the PBGC.

(g)           Except as set forth on Schedule
5.16(g) or as otherwise contemplated by this Agreement, the execution of,
and performance of the transactions contemplated in, this Agreement will not
constitute an event under any Benefit Plan that, either alone or in connection
with any other event, will or may result in any payment (whether of severance
pay or otherwise, including any “parachute payment” under Section 280G of the
Code), acceleration, forgiveness of Indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any
Employees.

(h)           With respect to each Benefit Plan, (i) no “party in
interest” or “disqualified person” (as defined in Section 3(14) of ERISA or
Section 4975 of the Code, respectively) has engaged in a transaction which
could subject the Company, any of the RMG Parties or any of their respective
Subsidiaries, directly or indirectly, to a tax, penalty or liability for
prohibited transactions imposed by ERISA or the Code and (ii) the Company does
not have any material liability with respect to a breach by a fiduciary (as
defined in Section 3(21) of ERISA) has breached any of the responsibilities or
obligations imposed upon the fiduciary under Title I of ERISA.

(i)            The Company has provided RMG with true and correct copies
of any communications or election forms sent to participants in any Benefit
Plan, employment agreement or similar contract regarding compliance with
Section 409A of the Code.

(j)            Each Benefit Plan which is a “welfare plan” within the
meaning of Section 3(1) of ERISA and which provides health, disability or death
benefits is fully insured and the Company and its Subsidiaries are not
obligated to directly pay any such benefits or to reimburse any third party
payor for the payment of such benefits.

 

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(k)           No Benefit Plan provides for post-retirement (or other
post-termination) medical or health, life insurance or death benefits (through
insurance or otherwise) for any Employee or any dependent or beneficiary of any
Employee except as may be required by COBRA or any other similar law.

(l)            No Benefit Plan is a “multiple employer plan” as
described in Section 3(40) of ERISA or Section 413(c) of the Code.

(m)          Except as set forth on Schedule 5.16(m), the Company
and its Subsidiaries have not proposed, announced or agreed to create any
additional Benefit Plans or to amend or modify any Benefit Plan in a manner
that would (i) cause an increase in benefits under such Benefit Plan, (ii)
cause the creation of new benefits or (iii) change any Employee coverage that
would cause an increase in the expense of maintaining such Benefit Plan.

(n)           No Benefit Plan is an employee stock ownership plan
(within the meaning of Section 4975(e)(7) of the Code) or otherwise invests in
Company Stock.

(o)           Schedule 5.16(o) sets forth each Benefit Plan which
covers any non-U.S. Employees.

(p)           No Benefit Plan, other than a “pension plan” within the
meaning of Section 3(2) of ERISA, is funded through a trust intended to be
exempt from Tax pursuant to Section 501 of the Code.

(q)           For the avoidance of doubt, this Section
5.16 represents the sole and exclusive representations and warranties of
the Company regarding employee benefit matters.

5.17         Labor; Employees.

(a)           Neither the Company nor any of its Subsidiaries is a party
to any labor or collective bargaining Contract and (i) no other such Contract
is currently being negotiated by the Company or any of its Subsidiaries, (ii)
as of the date hereof, neither the Company nor any such Subsidiary is under any
obligation to negotiate any such Contract, and (iii) to the Knowledge of the
Company, none of the Employees has indicated a desire to be covered by such a
Contract.  No labor organization or group
of Employees has made a pending demand for recognition or certification, there
are no existing organization drives targeting the Employees, and there are and
have been no representation or certification proceedings or petitions seeking a
representation proceeding relating to the Company or any of its Subsidiaries
before the National Labor Relations Board or any other Governmental Body, nor
have any such demands, proceedings or petitions been brought or filed or
threatened to be brought or filed within the past three (3) years.

(b)           There are no (i) strikes, work stoppages, work
slowdowns or lockouts pending or, to the Knowledge of the Company, threatened
against or involving the Company or any of its Subsidiaries nor have any
strikes, work stoppages, slowdowns or lockouts occurred within three (3) years
prior to the date hereof, (ii) unfair labor practices or other
labor-related charges, grievances or complaints pending or, to the Knowledge of
the Company, threatened by or on behalf of any Employee or group of Employees,
(iii)  written communications received by

 

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the Company or any of its Subsidiaries of the intent
of any Governmental Body responsible for the enforcement of labor or employment
Laws to conduct an investigation of or affecting the Company or any of its
Subsidiaries and, to the Knowledge of the Company, no such investigation is in
progress, or (iv) communication received by the Company or any of its
Subsidiaries from any Governmental Body of any alleged violation by the Company
or any of its Subsidiaries of any applicable Law that remains unresolved
respecting employment, employment practices, and terms and conditions of
employment. Schedule 5.17(b) sets forth a true, correct and complete
list of any employment-related claims that have been asserted in writing or are
pending against the Company or any of its Subsidiaries within the past three
(3) years.

(c)           Schedule 5.17(c) sets forth a true, correct and
complete list, as of October 19, 2006, of all of the Employees, and
with respect to each such Employee:  (i)
the total compensation (including base salary, paid salary, target bonus
percentage, total bonus payout and total gross earnings) received by such
individual in the immediately preceding fiscal year of the Company or the
applicable Subsidiary, as the case may be; (ii) such individual’s base salary
for the current fiscal year; (iii) such individual’s current title; and (iv)
the date of hire of such Employee.  There
are no outstanding loans to such individuals. 
Amounts have been withheld by the Company and its Subsidiaries from
their Employees for all periods in compliance with applicable Law.  Federal, state, local and foreign returns, as
required by applicable Law, have been filed by the Company and its Subsidiaries
for all periods for which returns were due with respect to employee income tax
withholding, social security and unemployment taxes, and the amounts shown
thereof to be due and payable have been paid, together with any interest and
penalties that are due as a result of the Company’s and/or any of its
Subsidiaries’ failure to file such returns when due and pay when due the
amounts shown thereon to be due.

(d)           Except as set forth on Schedule 5.17(d), each
Employee is employed on an at-will basis, and neither the Company nor any of
its Subsidiaries has any Contract with any Employee which would interfere with
the ability to discharge such Employee. 
To the Knowledge of the Company, as of the date hereof no key Employee
and no group of Employees has notified the Company of his, her or its plans to
terminate or modify his, her or its status as an Employee or Employees
(including upon consummation of the transactions contemplated hereby).

(e)           Neither the Company nor any of its Subsidiaries have any
liability based upon, arising out of or relating to the classification of any
individual working for or related to the Company or its Subsidiaries as an
independent contractor or “leased employee” (within the meaning of Section
414(n) of the Code) rather than as an employee, and no facts exist as a result
of which the Company or any of its Subsidiaries would reasonably be expected to
have any such liability.

(f)            All material levies, assessments and penalties made
against the Company or any of its Subsidiaries pursuant to all applicable
workers compensation legislation as of the date hereof have been paid by the
Company and such Subsidiaries or accrued on their respective balance sheets,
and the Company and such Subsidiaries have not been reassessed under any such
legislation.

 

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(g)           Except as disclosed on Schedule 5.17(g), (i) no
Employee has any Contract with the Company or any of its Subsidiaries providing
for the payment of severance or other compensation or benefits upon a
termination of employment, and (ii) the consummation of the transactions
contemplated hereby, either alone or in combination with another event, with
respect to each Employee, will not result in (A) any payment (including,
without limitation, severance, unemployment compensation or bonus payments)
becoming due under any employee benefit plan, Contract, arrangement or
commitment, (B) any increase in the amount of compensation, benefits or fees
payable to any such individual or (C) any acceleration of the vesting or timing
of payment of benefits, compensation or fees payable to any such individual.

(h)           Except where such default or violation would not have a
Material Adverse Effect, the Company and its Subsidiaries properly maintain and
have timely completed I-9 employment verification forms for every Employee as
of the date hereof and every Employee whose employment was terminated within
the past three (3) years (collectively, the “I-9 Forms”).

(i)            Except where such default or violation would not have a
Material Adverse Effect, the Company and its Subsidiaries properly maintain
complete H-1B labor condition application and permanent labor certification documentation
(collectively, “H-1B Documentation”) in connection with all Employees as
of the date hereof and all Employees whose employment was terminated within the
past four (4) years, in the case of a labor condition application, and within
the past five (5) years, in the case of a permanent labor certification.

(j)            As of the date hereof, all obligations to individuals who
are or have been Employees of the Company or any of its Subsidiaries for wages,
retirement, severance, deferred compensation, commissions, Company Options,
bonus and unemployment, other than for travel advances and reimbursements and
tuition reimbursements in the Ordinary Course of Business, accrued to and
including the date hereof and all contributions (voluntary or otherwise) to any
payments under all Employee Benefit Plans have been duly paid, accrued or
otherwise provided for by the Company or its Subsidiaries.

5.18         Legal Proceedings.

(a)           Except as set forth on Schedule 5.18, there are no
Legal Proceedings pending or, to the Knowledge of the Company, threatened
affecting or potentially affecting the Company or any of its Subsidiaries or
any of their respective businesses, properties or assets; (the Legal
Proceedings set forth on Schedule 5.18 are referred to herein as the “Specified
Proceedings”).  There are no Legal
Proceedings pending or, to the Knowledge of the Company, threatened that are
reasonably expected to prohibit or restrain the ability of the Company to
consummate the transactions contemplated hereby.

(b)           The Company has made available to RMG or its
Representatives: (i) copies of all documents providing indemnification and
related obligations of the Company and its Subsidiaries with respect to the
Specified Proceedings; (ii) copies of all material correspondence and all
material filings with any Governmental Body with respect to the Specified
Proceedings; (iii) any insurance coverage that applies to any of the
Specified Proceedings; and (iv) all Contracts that are material to any of
the foregoing.

 

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(c)           There are no Legal Proceedings entered against, involving,
pending or, to the Knowledge of the Company, threatened affecting or
potentially affecting any Indemnitee or relating to any Claim for Damages as
contemplated by Section 7.10.

5.19         Compliance with Laws; Permits.

(a)           The Company and its Subsidiaries are in compliance in all
material respects with all applicable Laws and Orders.  Except with respect to immaterial violations
of any Laws or Orders, neither the Company nor any of its Subsidiaries has
received any written notice of, has Knowledge of or has been charged with, the
alleged violation of any Laws or Orders.

(b)           As of the date hereof, there are no required Permits for
the conduct of the business of the Company and its Subsidiaries, other than
standard real property occupancy certificates and Permits.

5.20         Environmental Matters.

The
Company and each of its Subsidiaries is in compliance in all material respects
with all applicable Environmental Laws. 
Neither the Company nor any of its Subsidiaries has caused, arranged or
allowed, or contracted with any party for, the transportation, treatment,
storage or disposal of any Hazardous Substance. 
To the Company’s Knowledge, no Hazardous Substance has been released
into the environment on or from the premises of the Company or any of its
Subsidiaries which is required under applicable Environmental Laws to be abated
or remediated by the Company or any of its Subsidiaries.  To the Company’s Knowledge, there are no past
or present conditions, events, circumstances or facts that can reasonably be
expected to form the basis of any claim or Legal Proceedings against or
involving the Company or any of its Subsidiaries based on or related to any
violation of any Environmental Law.  For
the avoidance of doubt, this Section 5.20 represents the sole and
exclusive representations and warranties of the Company regarding compliance
with Environmental Laws.

5.21         Financial Advisors.

Except
for the financial advisors set forth on Schedule 5.21 (the “Financial
Advisor”), whose fees shall be included in the calculation of Transaction
Expenses hereunder, no Person has acted, directly or indirectly, as a broker,
finder or financial advisor for the Company or any of its Subsidiaries in
connection with the transactions contemplated by this Agreement, and no Person
is entitled to any fee or commission or like payment from the Company, RMG or
any of their respective Subsidiaries in respect thereof.

5.22         Insurance.

(a)           The Company and its Subsidiaries maintain policies of fire
and casualty, liability and other forms of insurance in such amounts, with such
deductibles and against such risks and losses as are reasonable for the
business and assets of the Company and its Subsidiaries, true and correct copies
of which have been furnished to the Company and/or its Representatives.  The material insurance policies and fidelity
bonds maintained with respect to

 

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the Company and its Subsidiaries and their respective
assets and properties are set forth on Schedule 5.22(a).  All such policies are in full force and
effect, all premiums due and payable thereon have been paid (other than
retroactive or retrospective premium adjustments that are not yet, but may be
required to be, paid with respect to any period ending prior to the Closing
Date and disclosed  on Schedule 5.22(a))
and no notice of cancellation or termination has been received (or is expected
by the Company to be received) with respect to any such policy which has not
been (or will not be) replaced on substantially similar terms prior to the date
of such cancellation or termination.

(b)           Except as set forth on Schedule 5.22(b), there
is no pending: (i) material workers’ compensation claim; or
(ii) other claim involving an amount in excess of $100,000 in any
individual case $500,000 in the aggregate, in each case under or based upon any
insurance policy of the Company or any of its Subsidiaries, except for routine
claims with respect to the Company’s welfare plans, including medical insurance
policies.  With respect to each claim or
Legal Proceeding that has been asserted or filed against the Company or any of
its Subsidiaries on or prior to the date hereof, the Company has provided
written notice of such claim or Legal Proceeding to the appropriate insurance
carrier(s), if any, and no such carrier has issued a denial of coverage or a
reservation of rights with respect to any such claim or Legal Proceeding, or
informed the Company or any of its Subsidiaries of its intent to do so.

(c)           Neither the Company nor any of its Subsidiaries have been
denied insurance for any reason with respect to any insurance policy for which
it applied.  Neither the Company nor any
of its Subsidiaries are in material breach or default under any insurance
policy, and no event has occurred which, with the notice or the lapse of time,
would constitute such a material breach or default or permit termination,
modification or acceleration, under such policy.  Since January 1, 2004, neither the Company
nor any of its Subsidiaries have received any notice from an insurer
disclaiming coverage or reserving rights with respect to any material
claim.  Since January 1, 2004, neither
the Company nor any of its Subsidiaries have incurred any material loss,
damage, expense or liability known to the Company and covered by any such
insurance policy for which either the Company or any such Subsidiary has not
properly asserted a claim under such policy. 
No policy limits for the Company or any of its Subsidiaries have been
exhausted or materially reduced.

5.23         Transactions with Affiliates.

Except
as set forth on Schedule 5.23, (a) no Contract or other arrangement
between the Company or any of its Subsidiaries, on the one hand, and any of
their respective directors, officers, employees or stockholders, or any of
their respective Affiliates or family members, on the other hand, existed or
has existed since January 1, 2004 or will continue in effect subsequent to the
Closing and (b) none of the respective directors, officers, employees or
stockholders of the Company or any of its Subsidiaries, or any of their
respective Affiliates or family members, directly or indirectly owns, or
otherwise has any right, title or interest in, to or under, any material
property or right, tangible or intangible, that is used by the Company or any
of its Subsidiaries, or has any claim or cause of action against the Company or
any of its Subsidiaries.

 

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5.24         Tax Treatment.

Neither
the Company nor any of its Subsidiaries has taken or agreed to take, or failed
to take, any action to, and the Company has no Knowledge of any fact or
circumstance that is reasonably likely to, prevent the ISS Merger, when taken
together with the RMG Merger, from qualifying as an exchange governed by
Section 351 of the Code.

5.25         Approval; Takeover Statutes.

(a)           No state takeover statute or similar statute or regulation
or charter or by-law anti-takeover provision applies or purports to apply to
the Company with respect to this Agreement, the ISS Merger or any other
transaction contemplated hereby.  The
board of directors of the Company has taken all action necessary to ensure that
any restrictions on business combinations contained in the DGCL, including Section
203 of the DGCL, will not apply to the ISS Merger.

(b)           The only required approvals of the Stockholders of the
Company of this Agreement and the ISS Merger are the approvals of the
following: (i) the holders of a majority of the outstanding shares of Company
Common Stock (voting on an as-converted basis assuming the conversion of all
outstanding Preferred Stock) and (ii) the holders of a majority of the
outstanding shares of the Series A Preferred Stock voting as a separate class
(the “Required Merger Stockholder Vote”).

5.26         Registered Investment Advisor.

The Company’s wholly-owned Subsidiary,
Institutional Shareholder Services Inc. (“ISS”), is duly registered with
the SEC as an investment adviser and is an investment adviser notice filer in
the States of Maryland, New York and Illinois and in the District of
Columbia.  ISS has no investment adviser
representatives, as such term is defined in Rule 203A-3(a) under the Investment
Advisers Act of 1940 (“Advisers Act”). 
ISS has delivered or made available to RMG a true and complete copy of
its most recent Form ADV, as amended to date. 
The information contained in such form was true and complete, in all
material respects, at the time of filing and ISS has made all amendments to
such form as it is required to make under the Advisers Act.  The information contained in such recent Form
ADV, as amended to date, is true and complete on the date hereof, in all
material respects.

5.27         Disclosure Statement; Information Supplied.

None
of the information supplied or to be supplied by the Company or any of its
Affiliates, directors, officers, employees, agents or Representatives for
inclusion in, and which is included in, the Disclosure Statement  will, at the time of mailing or other delivery of the
Disclosure Statement (or any amendment thereof or supplement thereto) to the
holders of Company Stock or Company Options, at the Election Date or at the
Effective Time, be false or misleading with respect to any material fact, or
omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  If, at any time prior to the
Effective Time, any event or circumstance relating to the Company or any of its
Subsidiaries, or their respective officers or directors, should be discovered

 

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by
the Company which, pursuant to applicable Law is required be set forth in an
amendment or supplement to the Disclosure Statement, the Company shall notify RMG
of the same in writing.

5.28         Absence of Certain Payments.

None
of the Company, any of its Subsidiaries or any of their respective Affiliates,
officers, directors or employees, or, to the Knowledge of the Company. agents,
Representatives or other Persons acting on behalf of any of them, have (a)
engaged in any activity prohibited by the U.S. Foreign Corrupt Practices Act of
1977 or any other similar Law or Order and (b) without limiting the generality
of the preceding clause (a), used any corporate or other funds for unlawful
contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activity to government officials or
others.  None of the Company, any of its
Subsidiaries or any of their respective Affiliates, directors, officers,
employees, agents, Representatives or other Persons acting on behalf of any of
them have accepted or received any contributions, payments, gifts or
expenditures on an unlawful basis or as a means of influencing the decision
making or any other process of the Company or any of its Subsidiaries.

5.29         Books and Records

Except
as set forth on Schedule 5.29, the books of account, minute books and
record books of the Company and each of its Subsidiaries, all of which have
been, or, with respect to certain Subsidiaries of the Company, prior to the
Effective Date will be, made available to RMG or its Representatives, are true,
complete and correct in all material respects.

5.30         Deposit Accounts.

Schedule 5.30 contains a true, correct and complete list
of (a) the name of each financial institution in which the Company and each of
its Subsidiaries has an account or safe deposit box, (b) the name(s) in which
each account or box is held, (c) the account type and (d) the name of each
Person authorized to draw on or have access to each account or box.

5.31         Business Process Reengineering Initiative.

The
material terms and current status of the Company’s Business Process
Reengineering initiative (the “BPR Initiative”), including, without
limitation, with respect to the status of the operational improvements to date
in (a) research gathering, (b) client service and reporting and (c) voting
processing, including the expected date of completion of each such improvement
and a reasonable estimate as to the outstanding amounts which will be required
to be invested in order to complete each such improvement, have been made
available to, and discussed with, RMG.

5.32         Indebtedness; Transaction Expenses; Other Expenses.

(a)           The amount of the Company’s outstanding Indebtedness for
borrowed money as of October 30, 2006 is set forth on Schedule 5.32(a).

 

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(b)           The aggregate amount of accrued but unpaid dividends on
the Series A Shares as of October 30, 2006 is set forth on Schedule 5.32(b).

(c)           Schedule 1.1(a)(3) sets forth the amount of each
Other Expense to be paid by the Company at or prior to the Effective Time, to
the extent such amount is reasonably ascertainable as of the date hereof.  Schedule 5.32(c) sets forth (i) the
letter agreement, dated as of March 6, 2006, as amended on August 2, 2006,
between the Company and the Financial Advisor, in its capacity as such, and
(ii) a list of counsel, actuaries, brokers, investment bankers, auditors and
other professional advisors to the Company or any of its Subsidiaries as of the
date hereof whose fees and any other amounts payable thereto would be
Transaction Expenses, indicating a breakdown of the Transaction Expenses paid
or payable (or a good faith estimate thereof if ascertainable) to each such
Person as of the date hereof.

5.33         Condition of the Business.

Notwithstanding
anything contained in this Agreement to the contrary, the Company acknowledges
that RMG is not making any representations or warranties whatsoever, express or
implied, beyond those expressly given by RMG in Article VI (as modified
by the Disclosure Schedule hereto as supplemented or amended in accordance with
the terms hereof).  Except with respect
to fraud or willful misrepresentation to the Company in connection with this
Agreement, any claims the Company may have for breach of representation or
warranty shall be based solely on the representations and warranties of RMG set
forth in Article VI (as modified by the Disclosure Schedule hereto as
supplemented or amended in accordance with the terms hereof).  The Company further acknowledges that none of
the RMG Parties, nor any of their respective Affiliates or Representatives, nor
any other Person, has made any representation or warranty, express or implied,
as to the accuracy or completeness of any information regarding any of the RMG
Parties or any of their respective Subsidiaries, or the transactions
contemplated by this Agreement, not expressly set forth in this Agreement, and
none of the RMG Parties, nor any of their respective Affiliates or
Representatives, nor any other Person, will have or be subject to any liability
to the Company or any other Person resulting from the distribution to the
Company or its Representatives or the Company’s use of any such information,
including any confidential memoranda distributed on behalf of RMG relating to
RMG or any of its Subsidiaries or other publications or data room information
provided to the Company or its Representatives, or any other document or
information in any form provided to the Company or its Representatives in
connection with the transactions contemplated hereby, except for RMG’s
representations and warranties contained in Article VI.  The Company acknowledges that it has
conducted (or will have conducted prior to the Effective Time), to its
satisfaction, its own independent investigation of the condition, operations
and business of RMG and its Subsidiaries and, in making its determination to
proceed with the transactions contemplated by this Agreement, the Company has
relied and will rely on the results of its own independent investigation,
subject to the truth and accuracy of the representations and warranties given
or made by RMG set forth in Article VI.

 

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5.34         No Other Representations or
Warranties.

Except
for the representations and warranties contained in this Article V
(as modified by the Disclosure Schedule hereto as supplemented or amended in
accordance with the terms hereof), neither the Company nor any other Person
makes any other express or implied representation or warranty with respect to
the Company, its Subsidiaries or the transactions contemplated by this
Agreement, and the Company disclaims any other representations or warranties, whether
made by the Company or any of its Affiliates or Representatives.  Except for the representations and warranties
contained in this Article V (as modified by the Disclosure Schedule
hereto as supplemented or amended in accordance with the terms hereof), the
Company hereby disclaims all liability and responsibility for any
representation, warranty, projection, forecast, statement, or information made,
communicated, or furnished (orally or in writing) to RMG or its Affiliates or
Representatives (including any opinion, information, projection, or advice that
may have been or may be provided to RMG by any Representative of the Company or
any of its Affiliates).  The disclosure
of any matter or item in any Disclosure Schedule hereto shall not be deemed to
constitute an acknowledgment that any such matter is required to be disclosed.

ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF RMG

RMG
hereby represents and warrants to the Company, as of the date hereof, that:

6.1           Organization and Good Standing of the RMG Parties.

RMG
is a Delaware corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority and governmental authorizations to own, lease and operate its
properties and carry on its business as it is now being conducted.  Each of the Merger Subs and Holding Company
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power and
authority and governmental authorizations to own, lease and operate properties
and carry on its business as it is now being conducted.  Each of the Merger Subs and Holding Company
is a newly-formed corporation organized for the sole purpose of effecting the
Mergers and the transactions contemplated hereby and has no assets, liabilities
or properties and otherwise does not conduct any business.

6.2           Authorization of Agreement.

Each
of the RMG Parties have all corporate power and authority to execute and
deliver this Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by any of the RMG
Parties in connection with the consummation of the transactions contemplated
hereby and thereby (collectively, the “RMG Documents”), and to
consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance by
the RMG Parties of this Agreement and each RMG Document have been duly
authorized by all necessary respective corporate action on behalf of the RMG
Parties.  This Agreement has been, and
each RMG Document will be at or prior to the Closing, duly executed and
delivered by the RMG Parties, and (assuming the due authorization, execution
and delivery by the other parties hereto and thereto) this Agreement
constitutes, and

 

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each
RMG Document when so executed and delivered will constitute, the legal, valid
and binding obligations of the RMG Parties, enforceable against the RMG Parties
in accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).

6.3           Conflicts; Consents of Third Parties.

(a)           Except as set forth on Schedule 6.3(a) hereto, none
of the execution and delivery by any of the RMG Parties of this Agreement or
the RMG Documents, the consummation of the transactions contemplated hereby or
thereby, or compliance by any of the RMG Parties with any of the provisions
hereof or thereof will conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination or cancellation under, any provision of (i) the
certificate of incorporation and by-laws of any of the RMG Parties;
(ii) any Contract or Permit to which any of the RMG Parties is a party or
by which any of the properties or assets of any of the RMG Parties are bound;
(iii) any Order applicable to any of the RMG Parties or by which any of the
properties or assets of any of the RMG Parties are bound; or (iv) any
applicable Law, other than, in the case of clauses (ii), (iii) and (iv),
such items that would not, individually or in the aggregate, have or be
reasonably expected to have a material adverse effect on the ability of any of
the RMG Parties to consummate the transactions contemplated by this Agreement.

(b)           Except as set forth on Schedule 6.3(b), no consent,
waiver, approval, Order, Permit or authorization of, or declaration or filing
with, or notification to, any Person or Governmental Body is required on the
part of any RMG Party in connection with the execution and delivery of this
Agreement or the RMG Documents or the compliance by any of the RMG Parties with
any of the provisions hereof or thereof, except for (i) compliance with the
applicable requirements of the HSR Act and the rules and regulations
promulgated thereunder and any other applicable Antitrust Laws, (ii) the
Required RMG Approvals, (iii) such consents, waivers, approvals, Orders,
Permits, authorizations, declarations or filings, the absence of which, or the
failure to make which would not have a material adverse effect on the ability
of any of the RMG Parties to consummate the transactions contemplated by this
Agreement, (iv) the filing of the Certificates of Merger, (v) consents,
waivers, approvals, filings or notices associated with complying with U.S.
Federal and State securities Laws in connection with the issuance of Holding
Company Shares and (vi) notice to RMG stockholders pursuant to Section 228(e)
of the DGCL.

(c)           The vote or consent of (i) the holders of the issued and
outstanding RMG Common Stock, (ii) RMG, as the sole stockholder of Holding
Company, and (iii) Holding Company, as the sole stockholder of each of ISS
Merger Sub and RMG Merger Sub (collectively, the “Required RMG Approvals”),
is the only vote or consent of the holders of any class or series of capital
stock of any of the RMG Parties necessary to approve this Agreement or the
Mergers or the transactions contemplated hereby.

 

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6.4           Investment Intention.

RMG
is acquiring through the ISS Merger the shares of capital stock of the ISS
Surviving Corporation for its own account, for investment purposes only and not
with a view to the distribution (as such term is used in Section 2(11) of the
Securities Act) thereof.  RMG understands
that the shares of capital stock of the ISS Surviving Corporation have not been
registered under the Securities Act and cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
available.

6.5           Financial Advisors.

No
Person has acted, directly or indirectly, as a broker, finder or financial
advisor for any RMG Party or any of their respective Subsidiaries in connection
with the transactions contemplated by this Agreement and no Person is entitled
to any fee or commission or like payment in respect thereof.

6.6           Financial Ability to Perform the Agreement.

A
true, correct and complete copy of the debt commitment letter dated the date of
this Agreement from Banc of America Securities LLC (the “Debt Commitment
Letter”) providing for $485.0 million in debt financing as described
therein (the “Debt Financing”) is attached hereto as Exhibit 6.6,
which is in full force and effect as of the date of this Agreement.  Assuming satisfaction of all applicable
conditions set forth in the Debt Commitment Letter and full funding thereunder
of all amounts available under the terms of the Debt Commitment Letter, on the
Closing Date, the RMG Parties shall have sufficient funds necessary to pay the
aggregate merger consideration due to the holders of Company Stock and Company
Options pursuant to Article III, and all fees and expenses payable in
connection with the transactions contemplated hereby.  The obligations of the financing sources to
fund the commitments under the Debt Commitment Letter are not subject to any
conditions other than as set forth in the Debt Commitment Letter.  As of the date of this Agreement, no event
has occurred that (with or without notice, lapse of time, or both) would
constitute a breach or default under the Debt Commitment Letter by any of the
RMG Parties.

6.7           Tax Treatment.

None
of the RMG Parties has taken or agreed to take, or failed to take, any action
to, and RMG has no knowledge of any fact or circumstance that is reasonably
likely to, prevent the ISS Merger, when taken together with the RMG
Merger, from qualifying as an exchange governed by Section 351 of the
Code.

6.8           Disclosure Statement; Information Supplied.

None
of the information supplied or to be supplied by or on behalf of any RMG Party
or any of their respective Affiliates, directors, officers, employees, agents
or Representatives for inclusion in, and which is included in, the Disclosure
Statement  will, at the time of mailing or other
delivery of the Disclosure Statement (or any amendment thereof or supplement
thereto) to the holders of Company Stock or Company Options, at the Election
Date

 

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or
at the Effective Time, be false or misleading with respect to any material
fact, or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  If, at any time prior to
the Effective Time, any event or circumstance relating to any RMG Party or any
of its Subsidiaries, or their respective officers or directors, should be
discovered by any RMG Party which, pursuant to applicable Law is required be set
forth in an amendment or supplement to the Disclosure Statement, RMG shall
notify the Company of the same in writing.

6.9           Capitalization.

(a)           As of the date hereof, the authorized capital stock of RMG
consists of 35,000,000 shares of RMG Common Stock, of which 17,024,397
shares are issued and outstanding. 
8,000,000 shares of RMG Common Stock are reserved for issuance under its
equity-based incentive plans.  As of the
date hereof, the authorized capital stock of Holding Company consists
of 200 shares of Common Stock, of which 200 shares are issued and
outstanding.  As of the date hereof, (i)
no Holding Company Shares are reserved for issuance under any equity-based
incentive plans and (ii) except as set forth in this Section 6.9(a) or
any Schedule delivered pursuant to this Section 6.9, there are no shares
of capital stock or other equity securities of RMG or Holding Company issued,
reserved for issuance or outstanding.

(b)           Except as set forth on Schedule 6.9(b), all
outstanding shares of RMG Common Stock are duly authorized, validly issued,
fully paid and nonassessable and are not subject to, and were not issued in
violation of, any Lien or any other purchase option, call option, right of
first refusal, preemptive right, subscription right or any similar right under
any provision of the DGCL, the certificate of incorporation or by-laws of RMG
or any Contract to which RMG is a party or otherwise bound.

(c)           Except as set forth on Schedule 6.9(c), as of the
date of this Agreement, there are no options, warrants, rights, convertible or
exchangeable securities, “phantom” stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or
undertakings of any kind to which RMG or any of its Subsidiaries is a party or
by which any of them is bound obligating RMG or any of its Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other equity interests in, or any security
convertible or exercisable for or exchangeable into any capital stock of or
other equity interest in, RMG or of any of its Subsidiaries.

(d)           Except pursuant to RMG’s Organizational Documents or as
set forth on Schedule 6.9(d), neither RMG nor any of its Subsidiaries
has any obligation to repurchase, redeem or otherwise acquire any shares of
capital stock of RMG or any of its Subsidiaries or to register any securities
under the Securities Act, or under any state securities laws.

(e)           Schedule 6.9(e) sets forth a true and correct
list as of the date hereof of all (i) holders of record of RMG Common
Stock and the number of shares held by each such holder and
(ii) outstanding RMG options including, in each case, identification of
the holder, exercise price, expiration date and vesting date thereof, and the
plan pursuant to which such RMG options were issued.

 

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6.10         Financial Statements.

(a)           Schedule 6.10(a) sets forth the following financial
statements of RMG (the “RMG Financial Statements”): (a) the consolidated
balance sheets of RMG at each of December 31, 2005, 2004 and 2003, respectively
(December 31, 2005, the “RMG Balance Sheet Date” and, such December 31,
2005 balance sheet, the “RMG Balance Sheet”), and the related
consolidated statements of operations, Stockholders’ equity and cash flows for
each of the fiscal years ended December 31, 2005, 2004 and 2003, respectively,
in each case audited by Deloitte & Touche LLP (collectively, the “RMG
Audited Financial Statements”); and (b) the unaudited balance sheet of RMG
as of September 30, 2006 (the “RMG Interim Balance Sheet Date” and such
September 30, 2006 balance sheet, the “RMG Interim Balance Sheet”), and
the related unaudited statements of operations and cash flows for the
nine-month period ended September 30, 2006 (the “RMG Unaudited Financial
Statements”).  The RMG Financial
Statements (i) are accurate and complete in all material respects, (ii) have
been prepared in accordance with GAAP consistently applied, (iii) are
consistent with the books and records of RMG and (iv) fairly present, in all
material respects, the consolidated financial condition, results of operations
and cash flows of RMG and its Subsidiaries as of the dates and for the periods
indicated therein; provided, however, that the RMG Unaudited
Financial Statements are subject to normal year-end adjustments and lack
footnotes and other presentation items.

(b)           Neither RMG nor any of its Subsidiaries is a party to, or
has any commitment to become a party to, any joint venture, off-balance sheet,
partnership or any other similar Contract (including any Contract relating to
any transaction, arrangement or relationship between or among any of RMG or its
Subsidiaries, on the one hand, and any unconsolidated Affiliate, including any
structured finance, special purpose or limited purpose entity or Person, on the
other hand), where the purpose or effect of such Contract is to avoid
disclosure of any material transaction involving RMG or any of its Subsidiaries
in the RMG Financial Statements.

6.11         Legal Proceedings.

There
are no Legal Proceedings pending or, to the knowledge of RMG, threatened
affecting or potentially affecting any RMG Party or any of their respective
Subsidiaries or any of their respective businesses, properties or assets.  There are no Legal Proceedings pending or, to
the knowledge of RMG, threatened that are reasonably expected to prohibit or
restrain the ability of any of the RMG Parties to consummate the transactions
contemplated hereby.

6.12         Ownership; No Prior Activities.

RMG
formed each of the Merger Subs and Holding Company solely for the purposes of
engaging in the transactions contemplated by this Agreement, and no RMG Party,
other than RMG, has engaged in any business activity or conducted any
operations other than in connection with the transactions contemplated hereby,
and as of the Closing Date will not have engaged in any business activities or
conducted any operations other than in connection with the transactions
contemplated by this Agreement.  All of
the outstanding shares of capital stock of Holding Company are owned of record
and beneficially by RMG, and all of the outstanding shares of capital stock of
each Merger Sub are owned of record and beneficially by Holding Company.

 

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6.13         Condition of the Business.

Notwithstanding
anything contained in this Agreement to the contrary, RMG acknowledges that the
Company is not making any representations or warranties whatsoever, express or
implied, beyond those expressly given by the Company in Article V (as
modified by the Disclosure Schedule hereto as supplemented or amended in
accordance with the terms hereof), and RMG acknowledges that, except for the
representations and warranties contained therein, the assets and the business
of the Company and its Subsidiaries are being acquired on a “where is” and, as
to condition, “as is” basis.  Except with
respect to fraud or willful misrepresentation to any of the RMG Parties in
connection with this Agreement, any claims RMG (or Holding Company) may have
for breach of representation or warranty shall be based solely on the
representations and warranties of the Company set forth in Article V (as
modified by the Disclosure Schedule hereto as supplemented or amended in
accordance with the terms hereof).  RMG
further acknowledges that none of the Company, nor any of its Affiliates or
Representatives, nor any other Person, has made any representation or warranty,
express or implied, as to the accuracy or completeness of any information
regarding the Company or any of its Subsidiaries, or the transactions
contemplated by this Agreement, not expressly set forth in this Agreement, and
none of the Company, nor any of its Affiliates or Representatives, nor any
other Person, will have or be subject to any liability to RMG or any other
Person resulting from the distribution to RMG or its Representatives or RMG’s
use of any such information, including any confidential memoranda distributed
on behalf of the Company relating to the Company or any of its Subsidiaries or
other publications or data room information provided to RMG or its
Representatives, or any other document or information in any form provided to
RMG or its Representatives in connection with the sale of the Company and its
Subsidiaries and the transactions contemplated hereby, except for the Company’s
representations and warranties contained in Article V.  RMG acknowledges that it has conducted, to
its satisfaction, its own independent investigation of the condition,
operations and business of the Company and its Subsidiaries and, in making its
determination to proceed with the transactions contemplated by this Agreement,
RMG has relied on the results of its own independent investigation, subject to
the truth and accuracy of the representations and warranties given or made by
the Company in this Agreement.

6.14         No Other Representations or Warranties.

Except
for the representations and warranties contained in this Article VI
(as modified by the Disclosure Schedule hereto as supplemented or amended in
accordance with the terms hereof), none of the RMG Parties nor any other Person
makes any other express or implied representation or warranty with respect to
any of the RMG Parties or any of their respective Subsidiaries or the
transactions contemplated by this Agreement, and RMG disclaims any other
representations or warranties, whether made by RMG or any of its Affiliates or
Representatives.  Except for the
representations and warranties contained in this Article VI (as modified
by the Disclosure Schedule hereto as supplemented or amended in accordance with
the terms hereof), RMG hereby disclaims all liability and responsibility for
any representation, warranty, projection, forecast, statement, or information
made, communicated, or furnished (orally or in writing) to the Company or its
Affiliates or Representatives (including any opinion, information, projection,
or advice that may have been or may be provided to the Company by any

 

-53-

 

Representative
of RMG or any of its Affiliates).  The
disclosure of any matter or item in any Disclosure Schedule hereto shall not be
deemed to constitute an acknowledgment that any such matter is required to be
disclosed.

ARTICLE VII - COVENANTS

7.1           Disclosure
Statement.

(a)           As promptly as practicable after the execution of this
Agreement, RMG and the Company shall prepare a disclosure statement (together
with any amendments thereof or supplements thereto, the “Disclosure
Statement”) relating to this Agreement and the transactions contemplated
hereby, which Disclosure Statement shall include, without limitation, the
following information:

(i)            a summary description of this Agreement, the Mergers and
the other transactions contemplated hereby;

(ii)           a summary description of the business of RMG and Holding
Company following the Closing;

(iii)          risk factors relating to, among other things, the
transactions contemplated by this Agreement and equity ownership of Holding
Company following the Closing;

(iv)          audited historical financial information of each of RMG and
the Company and unaudited interim financial information of each of RMG and the
Company; and

(v)           any additional information required by applicable Law.

Each of RMG and the Company
shall furnish all information concerning itself as may reasonably be requested
by the other party in connection with such the preparation of the Disclosure
Statement.  As promptly as practicable
after the Disclosure Statement has been prepared, but in no event more than ten
(10) Business Days following the date hereof, the Company shall deliver the
Disclosure Statement (along with the other Stockholder Documents, in the case
of holders of Company Stock, and the applicable Form(s) of Election) to all
holders of Company Stock and Company Options (the date of such delivery, the “Delivery
Date”).

(b)           Each of RMG and the Company shall, if required, prepare,
and the Company shall deliver to the Company’s stockholders, any amendment or
supplement to the Disclosure Statement which may become reasonably necessary or
advisable after the date the Disclosure Statement is mailed and before the
Effective Time.  No such amendment or
supplement to the Disclosure Statement shall be made by RMG or the Company
without the approval of the other party, which shall not be unreasonably
withheld or delayed.  If, at any time
prior to the Effective Time, any information relating to either party, or any
of their respective Affiliates, officers or directors, should be discovered by
the Company or RMG that should be set forth in an amendment or supplement to
the Disclosure Statement, so that the Disclosure Statement would not include
any misstatement of a material fact or omit to state any material fact

 

-54-

 

necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, the party that
discovers such information shall promptly notify the other party thereof, and
an appropriate amendment or supplement describing such information shall, to
the extent required by Law, be delivered or otherwise disseminated to all
holders of Company Stock and Company Options.

7.2           Access
to Information.

(a)           During the period commencing on the date hereof and ending
on the earlier of (i) the Closing Date and (ii) the date on which this
Agreement is terminated pursuant to Section 4.2, upon reasonable prior
notice to the Company (and, with respect to competitively sensitive information
of the Company or any of its Subsidiaries with respect to their respective
operations or business opportunities directly competitive with RMG or any of
RMG’s Subsidiaries, upon the consent of the Company, not to be unreasonably
withheld), RMG shall be entitled, through its Representatives, to reasonable
access (subject to restrictions imposed by requirements of applicable Law)
during normal business hours to the properties, businesses and operations of
the Company and its Subsidiaries and such examination of the books and records
of the Company and its Subsidiaries (including, without limitation, Tax
Returns, work papers, financial operating data, monthly financial statements
and other documents and information relating to the Company and its
Subsidiaries) as it reasonably requests and if the Company so requests, RMG or its
Representatives shall be accompanied by a Representative of the Company.  In addition, the Company shall, and shall
cause its Representatives to, permit RMG’s senior officers to meet, upon
reasonable notice and during normal business hours, with the chief financial
officer and other officers of the Company responsible for the Company’s
financial statements and internal controls to discuss such matters as RMG may
deem necessary or appropriate, among other things, in order to enable RMG,
following the Closing, to satisfy its obligations under applicable Law.  Notwithstanding anything herein to the
contrary, (i) no investigation or receipt of information pursuant to this Section
7.2(a) shall qualify any representation or warranty of the Company or the
conditions to the obligations of the RMG Parties, (ii) no such investigation or
examination pursuant to this Section 7.2(a) shall be permitted to the
extent that it would require the Company or any of its Subsidiaries to provide
any information or access that it reasonably believes could violate any
applicable Law, including Antitrust Laws, or conflict with any confidentiality
obligations to which the Company or any of its Subsidiaries is bound or cause
the forfeiture of any attorney-client privilege and (iii) prior to the Closing,
without the prior written consent of a Representative of the Company (who shall
be identified in writing to RMG as the Representative contemplated by this Section
7.2(a)), (x) RMG shall not contact any suppliers to, or customers of,
the Company or any of its Subsidiaries in respect of this Agreement or the
transactions contemplated hereby and (y) RMG shall have no right to perform
invasive or subsurface investigations of the properties or facilities of the
Company or any of its Subsidiaries.

(b)           Without limiting the generality of the foregoing Section
7.2(a), the Company shall prepare and deliver to RMG monthly financial
statements as and when prepared by the Company consistent with its usual and
historical practice and in accordance with GAAP.

 

-55-

 

(c)           During the period commencing on the date hereof and ending
on the earlier of (i) the Closing Date and (ii) the date on which this
Agreement is terminated pursuant to Section 4.2, upon reasonable prior
notice to RMG (and, with respect to competitively sensitive information of RMG
or any of its Subsidiaries with respect to their respective operations or
business opportunities directly competitive with the Company or any of its
Subsidiaries, upon the consent of RMG, not to be unreasonably withheld), the
Company shall be entitled, through its Representatives, to reasonable access
(subject to restrictions imposed by requirements of applicable Law) during
normal business hours to the properties, businesses and operations of RMG and
its Subsidiaries and such examination of the books and records of RMG and its
Subsidiaries (including, without limitation, Tax Returns, work papers,
financial operating data, monthly financial statements and other documents and
information relating to RMG and its Subsidiaries) as it reasonably requests and
if RMG so requests, the Company or its Representatives shall be accompanied by
a Representative of RMG.  Notwithstanding
anything herein to the contrary, (i) no investigation or receipt of information
pursuant to this Section 7.2(c) shall qualify any representation or
warranty of RMG or the conditions to the obligations of the Company, (ii) no
such investigation or examination pursuant to this Section 7.2(c) shall
be permitted to the extent that it would require RMG or any of its Subsidiaries
to provide any information or access that it reasonably believes could violate
any applicable Law, including Antitrust Laws, or conflict with any
confidentiality obligations to which RMG or any of its Subsidiaries is bound or
cause the forfeiture of any attorney-client privilege and (iii) prior to the
Closing, without the prior written consent of a Representative of RMG (who
shall be identified in writing to the Company as the Representative
contemplated by this Section 7.2(c)), (x) the Company shall not
contact any suppliers to, or customers of, RMG or any of its Subsidiaries in
respect of this Agreement or the transactions contemplated hereby and (y) the
Company shall have no right to perform invasive or subsurface investigations of
the properties or facilities of RMG or any of its Subsidiaries.

7.3           Conduct of Business Pending the Closing.

(a)           From the date hereof until the Closing, except (i) as set
forth on Schedule 7.3(a), (ii) as required by applicable Law, (iii) as
otherwise expressly contemplated by this Agreement or (iv) with the prior
written consent of RMG, the Company shall, and shall cause its Subsidiaries to:

(i)            conduct the respective businesses of the Company and its
Subsidiaries only in the Ordinary Course of Business; and

(ii)           use its commercially reasonable efforts to (A) preserve
the present business operations, organization and goodwill of the Company and
its Subsidiaries, and (B) preserve the present relationships with customers,
suppliers, licensors and licensees of the Company and its Subsidiaries.

(b)           Without limiting the generality of the foregoing, except
(w) as set forth on Schedule 7.3(b), (x) as required by applicable Law,
(y) as otherwise expressly contemplated by this Agreement or (z) with the prior
written consent of RMG, the Company shall not, and shall not permit its
Subsidiaries to:

 

-56-

(i)            (A) effect any recapitalization, reclassification or like
change in the capitalization of the Company or any of its Subsidiaries;
(B) declare or pay dividends on, or make other distributions in respect
of, any of its capital stock; (C) issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock; or (D) repurchase, redeem or otherwise acquire, or modify
or amend, any shares of capital stock of the Company or any of its Subsidiaries
or any other securities thereof or any rights, warrants or options to acquire
any such shares or other securities;

(ii)           issue, deliver, sell, pledge or encumber, or authorize,
propose or agree to the issuance, delivery, sale, pledge or encumbrance of, any
shares of capital stock or any other security (or any right to acquire such
capital stock or other security, including options) of the Company or any of
its Subsidiaries, other than the issuance of Company Shares upon the exercise
of Company Options for cash;

(iii)          amend or modify any of the Company Organizational Documents
or the Subsidiary Organizational Documents;

(iv)          (A) increase the compensation, bonuses or benefits
of any director, officer or any other employee, or consultant, other than
annual salary increases in the Ordinary Course of Business at the regularly
scheduled times (provided, that (1) the aggregate dollar amount of such
increases for the calendar year 2007 shall not exceed 105% of the corresponding
amount for the calendar year 2006, (2) in the case of incentive bonuses, the
aggregate dollar amount of such bonuses for calendar year 2007 shall not exceed
105% of the amount paid for calendar year 2006, and (3) the Company may
increase incentive bonuses for calendar year 2006 only in accordance with Section
7.23), (B) adopt any new stock plan or employee benefit plan or any
amendment to an existing Stock Plan or other benefit plan other than as
required by applicable Law or the express terms of this Agreement, or amend or
modify the Company’s Sales Commission Plan, Sales Management Bonus Plan or 2006
Annual Incentive Compensation Plan, other than as required by applicable Law,
(C) enter into any Contract with any current director, officer or
employee, other than to extend the term of a current Contract with such
director, officer or employee upon the expiration of the current term in the
Ordinary Course of Business as may be necessary to comply with applicable
statutory requirements (provided, that the Company shall be permitted in
any event to extend its employment agreement with John Connolly for a single
period of thirty (30) days or less), (D) enter into any consulting
Contract with any consultant providing for payments in excess of $100,000 in
the aggregate, (E) accelerate the payment of compensation or benefits to
any director, officer, employee or consultant except as required by applicable
Law, agreements in effect as of the date of this Agreement or the express terms
of this Agreement, (F) enter into any employment, severance, retention or
change of control Contract with any employee or other service provider of the
Company or any of its Subsidiaries, other than to extend the term of a current
Contract with such director, officer or employee upon the expiration of the
current term in the Ordinary Course of Business as may be necessary to comply
with applicable statutory requirements (provided, that the Company shall
be permitted in any event to extend its employment agreement with John Connolly
for a single period of thirty (30) days or less), or (G) settle the matter
identified in item 3 of Schedule 7.3(b) for an amount in excess of the
holdback as contemplated by the IRRC Agreement (as defined therein);

 

57

 

(v)           (A) subject to any Lien any of the properties or assets
(whether tangible or intangible) of the Company or any of its Subsidiaries,
except for Permitted Exceptions, (B) make any loans,
advances or capital contributions to, or investments in, any other Person,
other than in the Ordinary Course of Business, (C) otherwise incur any
additional Indebtedness or guarantee any such Indebtedness of another Person,
(D) otherwise incur any Indebtedness for borrowed money or guarantee any such
Indebtedness for borrowed money of another Person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities of the
Company or any of its Subsidiaries, guarantee any debt securities of another
Person, enter into any “keep well” or other agreement to maintain any financial
statement condition of another Person, grant any Lien for Indebtedness for
borrowed money to any Person, or (E) enter into any arrangement having the
economic effect of any of the foregoing;

(vi)          enter into any commitment for capital expenditures of the
Company and its Subsidiaries in excess of $100,000 for any individual
commitment and $500,000 for all commitments in the aggregate, or incur any
capital, operating or other such cost or expense, in each case, other than in
the Ordinary Course of Business, including for capitalized software development
consistent with past practice;

(vii)         enter into or agree to enter into any merger or
consolidation with any Person, or acquire the securities or a substantial
portion of the assets of any Person;

(viii)        sell, lease, exclusively
license or otherwise dispose of, or agree to sell, lease or otherwise dispose
of, any of its assets (including capital stock of Subsidiaries of the Company),
other than in the Ordinary Course of Business;

(ix)           discharge or satisfy any Lien in excess of $100,000 or pay
any obligation or liability (absolute or contingent) in excess of $100,000,
other than current liabilities paid in the Ordinary Course of Business;

(x)            remove any part or all of the Security Deposits;

(xi)           waive any rights or claims of material value, whether or
not in the Ordinary Course of Business;

(xii)          change in its methods of accounting in effect at
December 31, 2005, except as required by changes in GAAP as agreed to by
the Company’s independent public accountants or as may be required by
applicable Law;

(xiii)         (A) terminate, cancel
or request any material change in, or agree to any material change in, any
Material Contract or (B) enter into any Contract that, if executed prior
to the date hereof, would have been a Material Contract that would have been
required to be included on Schedule 5.14 (or any subpart or subsection
thereof), other than in the Ordinary Course of Business;

(xiv)        make any charitable contributions or pledges in excess of
$10,000 in the aggregate;

58

 

(xv)         make any change in the cash management or working capital
management of the Company and its Subsidiaries other than in the Ordinary
Course of Business;

(xvi)        loan or advance any amount to, or sell, transfer or lease any
of its assets to, any Stockholders or any of their respective Affiliates
(excluding the Company and any of its Subsidiaries);

(xvii)       settle any Legal Proceeding (including
the Specified Proceedings) or other material claim, except pursuant to a
settlement that does not involve any liability or obligation on the part of any
of the Company or any of its Subsidiaries, or involves only the payment of
monies by the Company or its Subsidiaries of not more than $500,000 in the
aggregate for all such settlements;

(xviii)      make any material change with respect to
the BPR Initiative;

(xix)         make any material Tax election or amend any material Tax
election, or settle or compromise any material liability for Tax;

(xx)          (A) incur any Other Expenses, other than substantially in
accordance with Schedule 1.1(a)(3), (B) amend, modify or enter into any
Contract with the Financial Advisor that results in any increase to the amount
of Transaction Expenses payable to the Financial Advisor, in its capacity as
such, (C) amend, modify or enter into any Contract with any Person that results
in any increase to the amount of Other Expenses, or (D) engage any counsel,
actuaries, brokers, investment bankers, auditors or other professional advisors
whose fees or any other amounts payable thereto would be Transaction Expenses,
other than the professionals identified on Schedule 5.32(c), except, in
the case of this clause (D), with RMG’s prior written consent, which consent
shall not be unreasonably withheld or delayed; or

(xxi)         authorize any of, or commit or agree to do, anything
prohibited by this Section 7.3(b).

(c)           From the date hereof until the Closing, except (i) as set
forth on Schedule 7.3(c), (ii) as required by applicable Law, (iii) as
otherwise expressly contemplated by this Agreement or (iv) with the prior
written consent of the Company, RMG shall, and shall cause its Subsidiaries to:

(i)            conduct the respective businesses of RMG and its
Subsidiaries only in the Ordinary Course of Business; and

(ii)           use its commercially reasonable efforts to (A) preserve
the present business operations, organization and goodwill of RMG and its
Subsidiaries, and (B) preserve the present relationships with customers,
suppliers, licensors and licensees of RMG and its Subsidiaries.

(d)           Without limiting the generality of the foregoing, except
(w) as set forth on Schedule 7.3(d), (x) as required by applicable Law,
(y) as otherwise expressly contemplated by

59

this Agreement or (z) with the prior written
consent of the Company, RMG shall not, and shall not permit its Subsidiaries
to:

 

(i)            (A) effect any recapitalization, reclassification or like
change in the capitalization of RMG or any of its Subsidiaries;
(B) declare or pay dividends on, or make other distributions in respect
of, any of its capital stock; (C) issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of any RMG
Parties’ capital stock; or (D) repurchase, redeem or otherwise acquire, or
modify or amend, any shares of capital stock of RMG or any of its Subsidiaries
or any other securities thereof or any rights, warrants or options to acquire
any such shares or other securities, other than repurchases of such shares from
the employees of RMG and its Subsidiaries in the Ordinary Course of Business or
as required pursuant to the arrangements disclosed in Schedule 6.9(d);

(ii)           issue, deliver, sell, pledge or encumber, or authorize,
propose or agree to the issuance, delivery, sale, pledge or encumbrance of, any
shares of capital stock or any other security (or any right to acquire such
capital stock or other security) of RMG or any of its Subsidiaries, other than
the issuance of shares of RMG Common Stock upon the exercise of options to purchase
such shares for cash and the granting of options to purchase shares of RMG
Common Stock to employees or directors of RMG or its Subsidiaries in the
Ordinary Course of Business;

(iii)          amend or modify the certificate of incorporation, by-laws
or other similar organizational documents of RMG or any of its Subsidiaries;

(iv)          loan or advance any amount to, or sell, transfer or lease
any of its assets to, any of its stockholders or any of their respective
Affiliates (excluding RMG and its Subsidiaries) outside of the Ordinary Course
of Business; or

(v)           authorize any of, or commit or agree to do, anything
prohibited by this Section 7.3(d).

(e)           Notwithstanding any other provision to the contrary in
this Agreement, nothing in this Agreement shall be deemed to prohibit any
holder of Company Stock from transferring some or all such shares of Company
Stock prior to the Election Date (i) to other existing holders of Company Stock
or (ii) to an Affiliate of such holder; provided, that as a condition to
such transfer, the transferor shall execute a release in form and substance
reasonably satisfactory to the Company and the RMG Parties.

7.4           Indebtedness.

No later than two (2)
Business Days prior to the date on which the Closing is expected to occur, the
Company shall deliver to RMG copies of customary forms of pay-off letters to be
executed at the Effective Time from all holders of outstanding Indebtedness of
the Company and its Subsidiaries set forth on Schedule 7.4, and shall
make arrangements satisfactory to RMG for the full, final and indefeasible
release at the Effective Time of (a) all Liens over the properties and assets
of the Company and its Subsidiaries securing such Indebtedness and (b) the
Company and its Subsidiaries from all liabilities, obligations or

 

60

 

commitments under any Contract relating to
such Indebtedness.  At the Effective
Time, at RMG’s election, either (x) the Company, to the extent the Company has
available cash, or (y) RMG (or Holding Company), on behalf of the Company,
shall settle all such Indebtedness in full.

 

7.5           Transaction Expenses.

No later than two (2)
Business Days prior to the date on which the Closing is expected to occur, the
Company shall furnish to RMG a statement, prepared in reasonable detail and
specificity, providing a complete and accurate listing of all Transaction
Expenses and the Persons to which such Transaction Expenses are payable.  At the Effective Time, RMG (or Holding
Company) shall, or shall cause the ISS Surviving Corporation to, pay the
Transaction Expenses listed on such statement in the amounts shown thereon.

 

7.6           Consents.

The RMG Parties and the
Company shall use (and the Company shall cause its Subsidiaries to use) their
respective reasonable best efforts to obtain at the earliest practicable date
all consents and approvals required to consummate the transactions contemplated
by this Agreement, including the consents and approvals referred to in Sections
5.3(a), 5.3(b), 5.14(a)(ii), 6.3(a), 6.3(b), 7.7(a)
and 7.7(b) hereof; provided, however, that no party shall
be obligated to pay any consideration to any third party from whom consent or
approval is requested.

 

7.7           Regulatory Approvals.

(a)           Each of the RMG Parties and the Company shall (i) make or
cause to be made all filings required of each of them or any of their
respective Subsidiaries or Affiliates under the HSR Act with respect to the
transactions contemplated hereby as promptly as practicable and, in any event,
within ten (10) Business Days after the date of this Agreement in the case of
all filings required under the HSR Act, (ii) comply at the earliest practicable
date with any request under the HSR Act for additional information, documents,
or other materials received by each of them or any of their respective
Subsidiaries or Affiliates from the U.S. Federal Trade Commission (“FTC”)
or the Antitrust Division of the U.S. Department of Justice (the “Antitrust
Division”) in respect of such filings or such transactions, and (iii)
cooperate with each other in connection with any such filing (including, to the
extent permitted by applicable Law, providing copies of all such documents to
the non-filing parties prior to filing and considering all reasonable
additions, deletions or changes suggested in connection therewith) and in
connection with resolving any investigation or other inquiry of any of the FTC,
the Antitrust Division or other Governmental Body with respect to any such
filing or any such transaction.  Each
such party shall use its commercially reasonable efforts to furnish to each
other all information required for any application or other filing to be made
pursuant to any applicable Law in connection with the transactions contemplated
by this Agreement.  Each such party shall
promptly inform the other parties hereto of any oral communication with, and
provide copies of written communications with, any Governmental Body regarding
any such filings or any such transaction. 
No party hereto shall independently participate in any substantive
meeting or discussion, either in person or by telephone, with any Governmental
Body in respect of any such

61

 

filings, investigation, or other inquiry without
giving the other parties hereto prior notice of the meeting and, to the extent
permitted by such Governmental Body, the opportunity to attend and/or
participate.  Subject to applicable Law,
the parties hereto will consult and cooperate with one another in connection
with any analyses, appearances, presentations, memoranda, briefs, arguments,
opinions and proposals made or submitted by or on behalf of any party hereto
relating to proceedings under the HSR Act.

(b)           Each of the RMG Parties and the Company shall use
commercially reasonable efforts to resolve such objections, if any, as may be
asserted by any Governmental Body with respect to the transactions contemplated
by this Agreement under the HSR Act, the Sherman Act, the Clayton Act, the
FTCA, and any other Laws or Orders that are designed to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade
(collectively, the “Antitrust Laws”). 
In connection therewith, if any Legal Proceeding is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement as in violation of any Antitrust Law, each of the RMG Parties and the
Company shall cooperate and use commercially reasonable efforts to contest and
resist any such Legal Proceeding, and to have vacated, lifted, reversed, or
overturned any Order, whether temporary, preliminary or permanent, that is in
effect and that prohibits, prevents, or restricts consummation of the
transactions contemplated by this Agreement, including by pursuing reasonably
available avenues of administrative and judicial appeal and reasonably
available legislative action, unless, by mutual agreement, RMG and the Company
decide that litigation is not in their respective best interests.  Each of the RMG Parties and the Company shall
use commercially reasonable efforts to take such action as may be required to
cause the expiration of the notice periods under the HSR Act or other Antitrust
Laws with respect to such transactions as promptly as possible after the
execution of this Agreement.  In
connection with and without limiting the foregoing, each of the RMG Parties and
the Company agree to use commercially reasonable efforts to take promptly any
and all steps necessary to avoid or eliminate each and every impediment under
any Antitrust Laws that may be asserted by any Federal, state and local and
non-United States antitrust or competition authority, so as to enable the
parties to close the transactions contemplated by this Agreement as
expeditiously as possible. 
Notwithstanding anything to the contrary, Parent shall take all such
actions, including (y) proposing, negotiating, committing to and effecting, by
consent decree, hold separate order, or otherwise, the sale, divestiture or
disposition of such assets or business of Parent (or any of its Subsidiaries)
and (z) otherwise taking or committing to take, actions that limit Parent or
its Subsidiaries’ freedom of action with respect to, or its ability of retain,
one or more of its or its Subsidiaries’ businesses, product lines or assets, in
each case, as may be required in order to avoid the entry of, or to effect the
dissolution of, any injunction, temporary restraining order, or other order in
any suit or proceeding, which would otherwise have the effect of preventing or
materially delaying the consummation of the transactions contemplated hereby.

(c)           RMG shall be responsible for the payment of all filing
fees under the HSR Act and any other Antitrust Laws in respect of the parties’
obligations under Section 7.7(a) and Section 7.7(b) above.

7.8           Further Assurances.

 

62

 

Each of the RMG Parties and
the Company shall use (and the Company shall cause each of its Subsidiaries to
use) commercially reasonable efforts to (i) take all actions necessary or
appropriate to consummate the transactions contemplated by this Agreement and
(ii) cause the fulfillment at the earliest practicable date of all of the
conditions to their respective obligations to consummate the transactions
contemplated by this Agreement.  Each of
the RMG Parties and the Company shall use commercially reasonable efforts to
cause the Closing to occur, subject to the conditions to Closing set forth in Article
VIII.  Each of the RMG Parties and
the Company shall not, and shall not permit any of their respective Subsidiaries
to, take any action that would, or that would reasonably be expected to, result
in any of the conditions set forth in Article VIII not being
satisfied.

 

7.9           Confidentiality.

The parties acknowledge that
the information provided to it in connection with this Agreement and the
transactions contemplated hereby is subject to the terms of the Non-Disclosure
Agreement between RMG and the Company dated as of July 19, 2006 (as amended
from time to time, the “Confidentiality Agreement”), the terms of which
are incorporated herein by reference. 
Effective upon, and only upon, the Closing Date, the Confidentiality
Agreement shall terminate.

 

7.10         Indemnification, Exculpation and Insurance.

(a)           For the six-year period commencing immediately after the
Effective Time, Holding Company shall, and shall cause the Company and the ISS
Surviving Corporation to, (i) indemnify and hold harmless each individual who
at the Effective Time is, or at any time prior to the Effective Time was, a
director or officer of the Company or of a Subsidiary of the Company (each, an “Indemnitee”
and, collectively, the “Indemnitees”) with respect to all Damages in
connection with any Legal Proceeding, whenever asserted, based on or arising
out of, in whole or in part, (A) the fact that an Indemnitee was a director,
officer, employee or agent of the Company or such Subsidiary or (B) acts or
omissions by an Indemnitee in the Indemnitee’s capacity as a director, officer,
employee or agent of the Company or such Subsidiary or taken at the request of
the Company or such Subsidiary (including in connection with serving at the
request of the Company or such Subsidiary as a director, officer, employee,
agent, trustee or fiduciary of another Person (including any employee benefit
plan)), in each case under (A) or (B), at, or at any time prior to, the
Effective Time (including any Legal Proceeding relating in whole or in part to
this Agreement and the transactions contemplated hereby), to the fullest extent
permitted under applicable Law and the Company Organizational Documents and the
Subsidiary Organizational Documents as currently in effect, and (ii) assume all
obligations of the Company and such Subsidiaries to the Indemnitees in respect
of indemnification and exculpation from liabilities for acts or omissions
occurring at or prior to the Effective Time as provided in the Company
Organizational Documents and the Subsidiary Organizational Documents as
currently in effect.  Without limiting
the foregoing, RMG and/or Holding Company, from and after the Effective Time,
shall cause the certificate of incorporation and the by-laws of the ISS
Surviving Corporation to contain provisions no less favorable to the
Indemnitees with respect to limitation of liabilities of directors and officers
and indemnification than those set forth as of the date of this Agreement in
the Company Organizational Documents, which provisions shall not be

63

 

amended, repealed or otherwise modified in a manner
that would adversely affect the rights thereunder of the Indemnitees, subject
to applicable Law.  In addition, from and
after the Effective Time, RMG and/or Holding Company shall, and shall cause the
Company and the ISS Surviving Corporation to, pay any reasonable expenses
(including reasonable fees and expenses of legal counsel) of any Indemnitee
under this Section 7.10 (including in connection with enforcing the
indemnity and other obligations referred to in this Section 7.10) as
incurred to the fullest extent permitted under applicable Law, provided that
the person to whom expenses are advanced provides an undertaking to repay such
advances to the extent required by applicable Law.

(b)           Each of Holding Company, the ISS Surviving Corporation and
the Indemnitees shall cooperate in the defense of any litigation, claim or
proceeding (each, a “Claim”) relating to any acts or omissions covered
under this Section 7.10, and shall provide access to properties and
individuals as reasonably requested and furnish or cause to be furnished
records, information and testimony, and attend such conferences, discovery
proceedings, hearings, trials or appeals, as may be reasonably requested in
connection therewith.

(c)           For the six-year period commencing immediately after the
Effective Time, Holding Company shall cause the ISS Surviving Corporation to
obtain and maintain “run-off” directors’ and officers’ liability insurance
covering acts or omissions occurring at or prior to the Effective Time with
respect to those Persons who are, as of the date hereof, covered by the Company’s
directors’ and officers’ liability insurance policy (the “Existing Policy”)
on terms and scope with respect to such coverage, and in amount, not less
favorable to such individuals than those of such Existing Policy in effect on
the date hereof, as disclosed by the Company to RMG prior to the date hereof; provided,
that (i) Holding Company may substitute therefor policies, issued by reputable
insurers, of at least the same coverage with respect to matters occurring prior
to the Effective Time; and (ii) Holding Company shall not be required to pay
annual premiums for the Existing Policy (or any substitute policies) in excess
of 150% of the current annual premium paid by the Company.

(d)           The provisions of this Section 7.10 are (i) intended
to be for the benefit of, and shall be enforceable by, each Indemnitee, his or
her heirs and his or her representatives and (ii) in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such Person may have by contract or otherwise. 
The obligations of RMG, Holding Company and the ISS Surviving
Corporation under this Section 7.10 shall not be terminated or modified
in such a manner as to adversely affect the rights of any Indemnitee to whom
this Section 7.10 applies unless (x) such termination or modification is
required by applicable Law or (y) the affected Indemnitee shall have consented
in writing to such termination or modification (it being expressly agreed that
the Indemnitees to whom this Section 7.10 applies shall be third party
beneficiaries of this Section 7.10).

(e)           In the event that RMG, Holding Company, the ISS Surviving
Corporation or any of their respective successors or assigns (i) consolidates
with or merges into any other Person and is not the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers or
conveys all or substantially all of its properties and assets to any Person,
then, and in each such case, proper provision shall be made so that the successors
and

64

 

assigns of RMG, Holding Company and the ISS
Surviving Corporation, as the case may be, shall assume all of the obligations
thereof set forth in this Section 7.10.

7.11         Publicity.

(a)           Neither the Company nor RMG nor any of their respective
Affiliates or Representatives shall issue any press release or public
announcement concerning this Agreement or the transactions contemplated hereby
without obtaining the prior written approval of the other party hereto, unless,
in the reasonable and good faith judgment of the Company or RMG, upon the
advice of counsel, disclosure is otherwise required by applicable Law or by the
applicable rules of any stock exchange on which RMG lists securities, provided
that, to the extent required by applicable Law, the party intending to make
such release shall use its commercially reasonable efforts consistent with
applicable Law to consult with the other party with respect to the content
thereof.  The Company and RMG agree that
the initial press release to be issued in connection with the transactions
contemplated hereby shall be in a form mutually agreed by them.

(b)           Each of RMG and the Company agree that the terms of this
Agreement shall not be disclosed or otherwise made available to the public and
that copies of this Agreement shall not be publicly filed or otherwise made
available to the public, except where such disclosure, availability or filing
is, in the reasonable and good faith judgment of the Company or RMG, upon the
advice of counsel, required by applicable Law, and only to the extent required
by such Law.

7.12         Negotiations.

From and after the date
hereof and until the earlier to occur of the Closing Date or the termination of
this Agreement pursuant to Section 4.2 hereof, subject to Section
7.3(b), the Company shall not, and shall not permit or cause any of its
Subsidiaries, the officers and directors of the Company, or any Persons
controlled by the Company or any its Subsidiaries, or any of their respective
Representatives, to, directly or indirectly, encourage, solicit, engage in
discussions or negotiations with, or provide any information to, any Person or
group (other than RMG or its Representatives) concerning any merger involving
the Company or its Subsidiaries, sale of all or any portion(s) of the
consolidated assets of the Company and its Subsidiaries, sale of the shares of
capital stock of the Company or any of its Subsidiaries or any other
transaction similar to the transactions contemplated hereby.  The Company shall promptly communicate to RMG
any substantial inquiries or communications concerning any such transaction
which the Company or its Subsidiaries may receive.

 

7.13         Stockholder Approvals.

(a)           Following the execution of this Agreement on the date hereof,
the Company shall promptly take all action necessary in accordance with the
DGCL and the Company Organizational Documents, for the purpose of approving
this Agreement and the transactions contemplated hereby, to convene a meeting
of the Company’s securityholders or to obtain the consent of the Company’s
securityholders by written action in lieu of a meeting, and the Company shall
use all reasonable efforts to solicit from securityholders of the Company

65

 

proxies or written consents in favor of the ISS
Merger and shall use reasonable efforts to secure the Required Merger
Stockholder Vote, evidence of which shall be delivered to RMG promptly
following the execution of this Agreement on the date hereof.  The approval of this Agreement by the
requisite vote or written consent of the Stockholders (including the ISS
Written Consent), when obtained, shall be deemed to constitute approval of all
arrangements relating to the transactions contemplated hereby and to the
provisions hereof binding upon the Stockholders.

(b)           Following the execution of this Agreement on the date
hereof, RMG shall promptly take all action necessary in accordance with the
DGCL and the certificate of incorporation of RMG, for the purpose of approving
this Agreement and the transactions contemplated hereby, to convene a meeting
of the holders of RMG Common Stock or to obtain the consent of such holders by
written action in lieu of a meeting, and RMG shall use reasonable efforts to
solicit from such holders proxies or written consents in favor of the RMG
Merger and shall use reasonable efforts to secure the Required RMG Approvals,
evidence of which shall be delivered to the Company promptly following the
execution of this Agreement on the date hereof.

7.14         Debt Financing.

The Company shall provide,
and shall cause each of its Subsidiaries to provide, all reasonable cooperation
in connection with the arrangement of the Debt Financing as may be reasonably
requested by RMG in connection therewith.

 

7.15         Holding Company Option Plan.

Upon the Closing, Holding
Company shall implement, or cause to be implemented, a stock option plan (such
plan, the “Holding Company Option Plan”).  Upon the Closing, the Compensation Committee
(or the equivalent thereof) of the Board of Directors of Holding Company shall
determine the number of Holding Company Options to be issued under the Holding
Company Option Plan (a) to John Connolly, and (b) after taking into
consideration the recommendations of each of John Connolly and Ethan Berman, to
the employees of each of the RMG Surviving Corporation and the ISS Surviving
Corporation; provided, that a number of Holding Company Options
exercisable once vested into at least 1.6 million Holding Company Shares shall
be issued to those former Employees who are continuing as employees of the ISS
Surviving Corporation or Holding Company as of the Effective Time, unless John Connolly and the Compensation
Committee (or the equivalent thereof) of the Board of Directors of Holding Company
shall have mutually agreed in writing upon a lower number prior to the
Effective Time; provided, further, that if each Employee
identified on Schedules 1.1(a)(2)(A) and (B) is not continuing as
an employee of the ISS Surviving Corporation or Holding Company as of the
Effective Time, then John Connolly and the Compensation Committee (or the
equivalent thereof) of the Board of Directors of Holding Company shall approve
a lower number of such Holding Company Options to be granted to such continuing
employees.

 

7.16         Company Options.

The Board of Directors of
the Company shall accelerate the vesting of the Company Options held by each
Employee immediately prior to the Effective Time only to the

 

66

 

extent that, with respect to the Company
Options held by each such Employee, such Employee has timely submitted to RMG a
properly completed and duly executed Option Election electing to receive, (a)
in the case of the Employees set forth on Schedule 1.1(a)(2)(A), Holding
Company Options having an aggregate value, based upon the Holding Company Per
Share Value taking into account the applicable exercise price therefor, equal
to at least 25% of the aggregate merger consideration otherwise payable to such
Employee in cash hereunder for the aggregate number of Company Options and
Company Shares held by such Employee, and (b) in the case of the Employees set
forth on Schedule 1.1(a)(2)(B), Holding Company Options having a value
equal to at least 15% of the aggregate merger consideration otherwise payable
to such Employee in cash hereunder for the aggregate number of Company Options
and Company Shares held by such Employee, in each case for determining the
amounts pursuant to the foregoing clauses (a) and (b), including any Roll-Over
Options.  Notwithstanding the foregoing,
the Board shall accelerate the vesting of the Company Options held by each
Person who is not Employee immediately prior to the Effective Time.

 

7.17         Labor; Employees.

(a)           At least fifteen (15) days prior to the expected Closing,
the Company and its Subsidiaries shall deliver to RMG (i) the I-9 Forms as part
of their normal business records, (ii) the H-1B Documentation and (iii) a full
list of all foreign national Employees and their respective visa statuses and
expiration dates.

(b)           The Company and its Subsidiaries shall notify the
Employees of the Closing at least fifteen (15) days prior to the expected date
thereof in order to facilitate the collection of the necessary documentation
with respect to the matters contemplated by this Section 7.17.

7.18         Notification of Developments.

The Company shall give
reasonably prompt notice to RMG, and RMG shall give reasonably prompt notice to
the Company, of the occurrence or non-occurrence of any event, the occurrence
or non-occurrence of which, as the case may be, would cause or be reasonably
expected to cause any condition set forth in Article VIII not to be
satisfied from the date hereof to the Closing; provided, however,
that the delivery of any notice pursuant to this Section 7.18 shall not
limit or otherwise affect the remedies available hereunder to a party receiving
such notice or the representations and warranties of the parties contained
herein, or the conditions to the obligations of the parties hereto.

 

7.19         Series A Dividends.

Immediately prior to the
Effective Time, the Company shall pay to each holder of Series A Shares an
amount equal to the Series A Dividends Per Share for each Series A Share held
by such holder at such time.

 

7.20         Tax Matters.

67

 

(a)           The RMG Parties shall use their commercially reasonable
efforts to obtain an opinion of Kramer Levin Naftalis & Frankel LLP (“Kramer
Levin”), counsel to the RMG Parties, in form and substance reasonably
satisfactory to the RMG Parties and dated the Closing Date, (i) to the effect
that the RMG Merger will be treated as a reorganization under Section 368(a) of
the Code and/or (ii) to the effect that the RMG Merger, when taken together
with the ISS Merger, will be treated as a transfer of property to Holding
Company by holders of RMG Company Stock governed by Section 351 of the Code (in
rendering such opinion, Kramer Levin may rely on customary assumptions and upon
representations contained in officers’ certificates of each of the parties
hereto addressing such matters as Kramer Levin shall reasonably request).

(b)           The Company shall use its commercially reasonable efforts
to obtain an opinion of Willkie Farr & Gallagher LLP, counsel to the
Company, in form and substance reasonably satisfactory to the Company and dated
the Closing Date, to the effect that the ISS Merger, when taken together with
the RMG Merger, will be treated as a transfer of property to Holding Company by
holders of Company Stock governed by Section 351 of the Code (in rendering such
opinion, Willkie Farr & Gallagher LLP may rely on customary assumptions and
upon representations contained in officers’ certificates of each of the parties
hereto addressing such matters as Willkie Farr & Gallagher LLP shall
reasonably request).

(c)           If for any reason either or both of the opinions referred
to in the foregoing paragraphs (a) and (b) above cannot be obtained on or prior
to the Closing, the parties hereto shall implement an alternative taxable
transaction structure in which a wholly-owned, newly-formed subsidiary of RMG
shall merge with and into ISS, with ISS continuing as the surviving
corporation, and which will otherwise be on the terms and conditions contained
in this Agreement (preserving the economic, financial and business terms and
conditions of this Agreement excluding the Tax consequences of the transaction,
but including all other rights, liabilities, obligations and covenants
contained herein).

(d)           Unless paragraph (c) above applies, with respect to the
RMG Merger, this Agreement is a “plan of reorganization” within the meaning of
Section 1.368-2(g) of the Treasury regulations promulgated under the Code. None
of the parties hereto shall take or cause to be taken any action (or fail to
take or cause not to be taken any action) which would or would be reasonably
expected to (i) cause the RMG Merger to fail to qualify as a “reorganization”
within the meaning of Section 368(a) of the Code or (ii) cause the ISS Merger
and the RMG Merger, when taken together, to fail to qualify as an exchange
under Section 351 of the Code.

7.21         Commitment Regarding Company Options.

The Company shall use its commercially
reasonable efforts to obtain, as promptly as practicable following the
execution of this Agreement, an agreement from each holder of Company Options
who has the title of “executive vice president” or higher that such holder
shall not exercise any Company Options prior to the earlier of (a) the Closing
Date and (b) the date this Agreement is terminated in accordance with its
terms.

7.22         Capital Stock of Holding Company.

 

68

 

With effect at the Effective Time, RMG shall
cause each share of capital stock of Holding Company, including all Holding
Company Shares, owned of record or beneficially by RMG or any other Person
outstanding immediately prior to the Effective Time to be cancelled and retired
and to thereafter cease to exist.

7.23         2006 Annual Incentive Compensation
Plan.

The 2006 Annual Incentive Compensation Plan of
the Company provides for bonus payments based upon the targets and metrics, and
according to the methodologies, set forth in Schedule 7.23.  The Company shall not amend such 2006 Annual
Incentive Compensation Plan and shall make accruals and payments (upwards and
downwards) consistent with Schedule 7.23 through the Closing Date, in
each case consistent with the Company’s usual and historical practice.

7.24         280G Matters.

Prior to the Closing, the Company shall take all actions necessary, including, as necessary,
obtaining the approval of the Stockholders, in a manner that meets the
shareholder approval requirements of Section 280G(b)(5) of the Code and
Treasury Regulation Section 1.280G-1, Q/A-7, such that no accelerated vesting of any Company Options, as contemplated hereunder, and
no payment of any amounts
(whether or not accelerated), will result
in the disallowance of a deduction to the Company under Section 280G of the
Code.

ARTICLE VIII - CONDITIONS TO CLOSING

8.1           Conditions Precedent to Obligations of RMG.

The obligation of RMG to consummate the
transactions contemplated by this Agreement is subject to the fulfillment, on
or prior to the Closing Date, of each of the following conditions (any or all
of which may be waived by RMG in whole or in part to the extent permitted by
applicable Law):

(a)           each of the representations and warranties of the Company
contained in this Agreement, disregarding all qualifications and exceptions
contained therein relating to materiality or Material Adverse Effect, shall be
true and correct in each case as of the date of this Agreement and as of the
Closing Date (or, if given as of a specific date, at and as of such date),
except where the failure to be true and correct would not have or be reasonably
likely to have a Material Adverse Effect; provided, however, that
each of the representations and warranties of the Company contained in Sections
5.4(a), 5.6(e), 5.21 and 5.32, disregarding all
qualifications and exceptions contained therein relating to materiality or
Material Adverse Effect, shall be true and correct in all material respects, in
each case as of the date of this Agreement and, solely with respect to Sections
5.4(a) (after giving effect to the exercises of Company Options as
permitted hereunder) and 5.21, as of the Closing Date (or, if given as
of a specific date, at and as of such date) (it being agreed that the Company’s
failure, in and of itself, to meet any performance-related projections or
forecasts shall not constitute a breach of Section 5.6(e)).  RMG shall have received a certificate signed
on behalf of the Company by an authorized officer of the Company to such
effect;

 

69

 

(b)           (i) the Company shall have performed and complied in all
respects with all of the obligations and agreements required by Sections
7.3(b)(i), 7.3(b)(ii), 7.3(b)(iii), 7.3(b)(iv), 7.3(b)(v)(D),
7.3(b)(xvi) (but only in relation to sales, transfers or leases of
assets to Stockholders), 7.3(b)(xx),  7.3(b)(xxi) (but only to the
extent to which such Section 7.3(b)(xxi) relates to the other Sections
listed in this clause (i)), Sections 7.16, 7.23 and 7.24
to be performed or complied with by it on or prior to the Closing Date, (ii)
the Company shall have performed and complied in all material respects with all
other obligations and agreements required by this Agreement to be performed or
complied with by it on or prior to the Closing Date, and (iii) RMG shall have
received a certificate signed by an authorized officer of the Company
confirming each of the foregoing clauses (i) and (ii);

(c)           there shall not be in effect any applicable Law or any
Order of a Governmental Body of competent jurisdiction, in each case
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby;

(d)           RMG shall have received the resignations of each of the
directors and officers of the Company in office immediately prior to the
Effective Time;

(e)           RMG shall have received from the Company an affidavit,
under penalties of perjury, stating that the Company is not and has not been a
U.S. real property holding corporation, dated as of the Closing Date and in
form and substance as required under Treasury Regulations section 1.897-2(h);

(f)            the RMG Parties shall have received the opinion of Willkie Farr & Gallagher LLP, counsel to
the Company, with respect to the matters set forth on  Exhibit
8.1(f);

(g)           there shall not have occurred any Material Adverse Effect
since the date hereof;

(h)           the Election Period shall have expired; and

(i)            the waiting period applicable to the transactions
contemplated by this Agreement under the HSR Act shall have expired or early
termination shall have been granted.

8.2           Conditions Precedent to Obligations of the Company.

The obligations of the
Company to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions (any or all of which may be waived by the Company in whole
or in part to the extent permitted by applicable Law):

 

(a)           each of the representations and warranties of the RMG
Parties contained in this Agreement, disregarding all qualifications and
exceptions contained therein relating to materiality or material adverse
effect, shall be true and correct in each case as of the date of this Agreement
and as of the Closing Date (or, if given as of a specific date, at and as of
such date), except where the failure to be true and correct would not have or
be reasonably likely to have a material adverse effect on the ability of any of
the RMG Parties to perform its respective

70

 

obligations under this Agreement or prevent or
materially delay consummation of the transactions contemplated hereby.  The Company shall have received a certificate
signed on behalf of RMG by an authorized officer of RMG to such effect;

(b)           the RMG Parties shall have performed and complied in all
material respects with all obligations and covenants required by this Agreement
to be performed or complied with by the RMG Parties on or prior to the Closing
Date, and the Company shall have received a certificate signed by an authorized
officer of RMG, confirming the foregoing;

(c)           there shall not be in effect any applicable Law or any
Order of a Governmental Body of competent jurisdiction, in each case
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby;

(d)           the waiting period applicable to the transactions
contemplated by this Agreement under the HSR Act shall have expired or early
termination shall have been granted; and

(e)           the Company shall have received the opinion of Kramer Levin, counsel to the RMG
Parties, with respect to the matters set forth on Exhibit 8.2(e).

8.3           Frustration of Closing Conditions.

None of the Company or any
of the RMG Parties may rely on the failure of any condition set forth in Section
8.1 or Section 8.2, as the case may be, if such failure was caused
by such party’s failure to use its reasonable best efforts to comply with any
provision of this Agreement.

 

ARTICLE IX - SURVIVAL OF REPRESENTATIONS AND
WARRANTIES

9.1           Survival Past Closing.

The representations and
warranties of the parties hereto contained herein shall not survive the
Closing.

 

9.2           Sole Remedy.

The rights of the parties
under Article IV and Section 10.11 shall be the exclusive remedy
available to the parties hereto with respect to any breach of the
representations, warranties, covenants or agreements of the parties to this
Agreement, except for fraud.

 

9.3           No Reliance On or Recourse Against the Company.

Subject to Section 7.10,
prior to the Closing, the Company shall use its commercially reasonable efforts
to obtain from each Stockholder a release (collectively, the “Releases”)
pursuant to which each such Stockholder (a) disclaims any reliance whatsoever
upon the truth or accuracy of any of the representations or warranties given or
made by the Company in this Agreement, (b) as of the Closing Date, irrevocably
waives any and all defenses or right to recourse with respect to any
misrepresentation or breach of any representation or warranty, or

 

71

 

breach of or noncompliance with any
agreements or covenants, given or made by the Company in this Agreement, and
(c) as of the Closing Date, releases and forever discharges the Company and its
Subsidiaries and their current and former Affiliates from liability for any and
all Claims for Damages, of whatever kind or nature, at law or at equity, known
or unknown, vested or contingent, suspected or unsuspected, and whether or not
concealed or hidden, whichever have or may have existed, or which do exist,
that may now or hereafter at any time be made or brought against the Company or
any of its Subsidiaries by any Stockholder arising out of, relating to or in
respect of any period prior to the Closing. 
No Stockholder shall be entitled to contribution from, subrogation to or
recovery against the Company or an of its Subsidiaries with respect to any
Damages imposed on or incurred by any Stockholder in connection with this
Agreement or the transactions contemplated hereby.

 

ARTICLE X - MISCELLANEOUS

10.1         Payment of Sales, Use or Similar Taxes.

Except as set forth in Section
3.3(a), all sales, use, transfer, intangible, recordation, documentary
stamp or similar Taxes or charges, of any nature whatsoever, applicable to, or
resulting from, the transactions contemplated by this Agreement shall be borne
by the RMG Parties.

 

10.2         Expenses.

Whether or not the
transactions contemplated hereby are consummated, and except as otherwise
provided in this Agreement, each of the Company and the RMG Parties shall bear
its own expenses incurred in connection with the negotiation and execution of
this Agreement, the Company Documents, the RMG Documents and each other
agreement, document and instrument contemplated by this Agreement and the
consummation of the transactions contemplated hereby and thereby, and each
holder of Company Stock and Company Options shall bear its own expenses in
connection herewith and therewith.

 

10.3         Submission to Jurisdiction; Consent to Service of Process.

(a)           The parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of any federal or state court located within the
State of New York, City of New York, Borough of Manhattan, over any dispute
arising out of or relating to this Agreement or any of the transactions
contemplated hereby and each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action proceeding related thereto may be
heard and determined in such courts.  The
parties hereby irrevocably waive, to the fullest extent permitted by applicable
Law, any objection which they may now or hereafter have to the laying of venue
of any such dispute brought in such court or any defense of inconvenient forum
for the maintenance of such dispute. 
Each of the parties hereto agrees that a judgment in any such dispute
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by Law.

(b)           Each of the parties hereto hereby consents to process
being served by any party to this Agreement in any suit, action or proceeding
by delivery of a copy thereof in accordance with the provisions of Section
10.6.

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10.4         Entire Agreement; Amendments and
Waivers.

This Agreement (including
the Disclosure Schedule and exhibits hereto), the Company Documents, RMG
Documents and the Confidentiality Agreement represent the entire understanding
and agreement, and supersede all prior understandings and agreements (written
or oral) between the parties hereto with respect to the subject matter
hereof.  This Agreement can be amended,
supplemented or changed, and any provision hereof can be waived, only by a
written instrument making specific reference to this Agreement signed by the
party against whom enforcement of any such amendment, supplement, modification
or waiver is sought.  No action taken
pursuant to this Agreement, including any investigation by or on behalf of any
party, shall be deemed to constitute a waiver by the party taking such action
of compliance with any representation, warranty, covenant or agreement
contained herein.  The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate
or be construed as a further or continuing waiver of such breach or as a waiver
of any other or subsequent breach.  No
failure on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.

 

10.5         Governing Law.

This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
applicable to contracts made and performed in such State.

 

10.6         Notices.

All notices and other
communications under this Agreement shall be in writing and shall be deemed
given (i) when delivered personally by hand (with written confirmation of
receipt), (ii) when sent by facsimile (with written confirmation of
transmission) or (iii) one Business Day following the day sent by overnight
courier (with written confirmation of receipt), in each case at the following
addresses and facsimile numbers (or to such other address or facsimile number
as a party may have specified by notice given to the other party pursuant to
this provision):

 

If
to the Company, to:

Institutional
Shareholder Services Holdings, Inc.

2099 Gaither Road

Rockville, MD 20850

Attn:  Chief Legal Officer

73

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

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Facsimile:  (212) 728-8111

Attn:  Jeffrey R. Poss, Esq.

If
to any of the RMG Parties, to:

RiskMetrics Group, Inc.

One Chase Manhattan Plaza

44th Floor

New York, NY 10005

Attn:  Chief Executive Officer

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

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, NY 10036

Facsimile: 
(212) 715-8000

Attn:  Howard T. Spilko, Esq.

10.7         Severability.

If any term or other
provision of this Agreement is invalid, illegal, or incapable of being enforced
by any law or public policy, all other terms or 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 materially adverse to any party. 
Upon such 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 in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.

 

10.8         Binding Effect; Assignment; Third Party Beneficiaries.

This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. 
Nothing in this Agreement shall create or be deemed to create any third
party beneficiary rights in any Person or entity not a party to this Agreement
except (i) as contemplated by Section 7.10, (ii) the rights of the
Stockholders and the holders of Company Options to receive the consideration
for their Company Stock and Company Options, respectively, at or following the
Effective Time in accordance with Article III, and (iii) the right of
the Company, on behalf of the Stockholders, to pursue damages for any RMG Party’s
breach of this Agreement or fraud that results in the Company’s termination of
this Agreement pursuant to Section 4.2(e) or in connection with RMG’s
breach of this Agreement as

 

74

 

contemplated in the first proviso of Section
4.4.  No assignment of this Agreement
or of any rights or obligations hereunder may be made by any party, directly or
indirectly (by operation of Law or otherwise), without the prior written
consent of the other parties hereto and any attempted assignment without the
required consents shall be void; provided, however, that any RMG
Party may (i) assign any or all of its rights and interests hereunder to
one or more of its direct or indirect wholly-owned Subsidiaries or to any
lender as collateral security, including to any of the Persons set forth on Schedule
10.8 in connection with the Debt Financing, and (ii) designate one or
more of its direct or indirect wholly-owned Subsidiaries to perform its
obligations hereunder; provided, further, however, that in
any such case, such RMG Party shall remain responsible for the performance of
all of its obligations hereunder.

 

10.9         Counterparts.

This Agreement may be
executed in one or more counterparts, each of which will be deemed to be an
original copy of this Agreement and all of which, when taken together, will be
deemed to constitute one and the same agreement.

 

10.10       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 Legal Proceeding directly or indirectly
arising out of, under or in connection with this Agreement, any Company
Documents, and RMG Documents or any transaction contemplated hereby or
thereby.  Each party hereto
(i) certifies that no Representative of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (ii) acknowledges
that it has been induced to enter into this Agreement, the Company Documents
and the RMG Documents, as applicable, by, among other things, the mutual
waivers and certifications contained in this Section 10.10.

 

10.11       Specific Performance.

The RMG Parties acknowledge
and agree that the breach of this Agreement by any of the RMG Parties would
cause irreparable damage to the Company and that the Company will not have an
adequate remedy at law, and the Company acknowledges and agrees that the breach
of this Agreement by the Company would cause irreparable damage to the RMG
Parties and that the RMG Parties will not have an adequate remedy at law.  Therefore, the obligations of the parties
hereto under this Agreement shall be enforceable by a decree of specific
performance issued by any court of competent jurisdiction, and appropriate
injunctive relief may be applied for and granted in connection therewith.  Such remedies shall, however, be cumulative and
not exclusive and shall be in addition to any other remedies which any party
may have under this Agreement or otherwise.

 

**
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK **

 

75

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
written above.

 

	
   

  	
  INSTITUTIONAL SHAREHOLDER
  SERVICES

  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ John M. Connolly

  
	
   

  	
   

  	
   

  	
  Name: John M.
  Connolly

  
	
   

  	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RISKMETRICS GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Ethan Berman

  
	
   

  	
   

  	
   

  	
  Name: Ethan Berman

  
	
   

  	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RMG HOLDCO, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Ethan Berman

  
	
   

  	
   

  	
   

  	
  Name: Ethan Berman

  
	
   

  	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RMG MERGER SUB, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Ethan Berman

  
	
   

  	
   

  	
   

  	
  Name: Ethan Berman

  
	
   

  	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ISS MERGER SUB, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Ethan Berman

  
	
   

  	
   

  	
   

  	
  Name: Ethan Berman

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

[Signature Page to Agreement and Plan of Merger]

 

 

Exhibit
A

 

Form of
ISS Written Consent

 

WRITTEN
CONSENT OF STOCKHOLDERS

OF

INSTITUTIONAL
SHAREHOLDER SERVICES HOLDINGS, INC.

IN LIEU OF A
SPECIAL MEETING

 

The undersigned, constituting
the holders of at least (i) a majority in interest of the outstanding capital
stock of Institutional Shareholder Services Holdings, Inc., a Delaware
corporation (the “Company”) and (ii) sixty-five percent (65%) of the
Company’s outstanding shares of Series A Preferred Stock (the “Required
Preferred Stockholders”), for the purpose of taking action without a
meeting of stockholders pursuant to Sections 228 and 251 of the General
Corporation Law of the State of Delaware (the “DGCL”), hereby consent to and adopt
the following resolutions by written consent, waive all requirements with
respect to notice regarding such actions, and direct that this Written Consent
be filed with the minutes of the proceedings of the stockholders of the
Company:

 

APPROVAL OF MERGER AGREEMENT

 

WHEREAS, the Agreement and Plan of Merger (the “Merger
Agreement”), by and among the Company, RiskMetrics Group, Inc., a Delaware
corporation (“RMG”), RMG Holdco, Inc., a Delaware corporation and a
direct, wholly-owned Subsidiary of RMG (“Holding Company”), RMG Merger
Sub, Inc., a Delaware corporation and a direct, wholly-owned Subsidiary of
Holding Company (“RMG Merger Sub”), ISS Merger Sub, Inc., a Delaware
corporation and a direct, wholly-owned Subsidiary of Holding Company (“ISS
Merger Sub”) was unanimously approved by the Board of Directors of the
Company;

WHEREAS, the Board of Directors of the Company
authorized the Officers (as defined below) to execute and deliver the Merger
Agreement in the name and on behalf of the Company in the form attached hereto
as Exhibit A;

WHEREAS, the Company’s Board of Directors has
determined that the Merger Agreement is fair and in the best interests of the
Company and its stockholders and has unanimously recommended, in accordance
with the requirements of Section 251(c) of the DGCL, that its stockholders
approve the Merger Agreement and the transactions contemplated thereby;

WHEREAS, the Merger described in the Merger Agreement
would constitute a “Change in Control” as defined in Section 8(a) of the
Company’s Certificate of Designation dated July 11, 2002, as amended and in
effect on the date hereof (the “Certificate of Designation”);

WHEREAS, pursuant to Section 8(c) of the Certificate
of Designation, the Company must provide written notice at least thirty (30)
days prior to any Change in Control to each holder of record of Series A
Preferred Stock notifying such holder of the Change in Control and

summarizing in reasonable detail the transaction
giving rise to the Change in Control (the “Notice Requirement”);

WHEREAS, pursuant to Section 4(e) of the Certificate
of Designation, the Company may amend, alter or repeal the preferences, special
rights or other powers of the Series A Preferred Stock with the written consent
or affirmative vote of the Required Preferred Stockholders; and

WHEREAS, the Required Preferred Stockholders believe
it is in their best interests and the best interests of the Company to waive
the Notice Requirement.

NOW, THEREFORE, BE IT
RESOLVED, that the
Merger, the Merger Agreement (including any exhibits and schedules referenced
therein) and any related transactions contemplated by the Merger Agreement be,
and they hereby are, authorized and approved in all respects by the undersigned
stockholders, including the Required Preferred Stockholders; and be it further

RESOLVED, that the Notice Requirement is hereby waived
by the Required Preferred Stockholders.

WAIVER OF DISSENTERS’ RIGHTS

 

WHEREAS, the undersigned
stockholders are afforded appraisal rights pursuant to the terms of Section 262
of the DGCL (“Dissenters’ Rights”); and

 

WHEREAS, pursuant to Section
262 of the DGCL, the Dissenters Rights are not available if the stockholder
votes in favor of, or consents to, the Merger Agreement and the transactions
contemplated thereby.

 

NOW, THEREFORE, BE  IT  RESOLVED,
that the undersigned, having voted in favor of the Merger Agreement and the transactions
contemplated thereby pursuant to this Written Consent, hereby acknowledge and
affirm the waiver of their Dissenters’ Rights and any notice requirements in
connection therewith with respect to the Merger Agreement or the transactions
contemplated thereby.

 

MISCELLANEOUS RESOLUTIONS

 

RESOLVED, that the directors and officers of the
Company are hereby authorized and directed to execute, deliver, perform, file
and record all such documents or instruments and to take all such action as
such directors and officers may deem necessary or desirable in connection with
the foregoing resolutions in order to consummate the intents and purposes
thereof; and be it further

RESOLVED, that this Written Consent may be
executed in one or more original or facsimile counterparts, and all such
counterparts taken together shall constitute one and the same document.

[SIGNATURE
PAGES FOLLOW]

IN WITNESS WHEREOF, the undersigned have executed this Written Consent of
Stockholders of Institutional Shareholder Services Holdings, Inc. in Lieu of A
Special Meeting as of ______________, 2006.

 

	
   

  	
  STOCKHOLDER:

  
	
   

  	
   

  
	
   

  	
  (Insert Name of Entity, if any)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title (if applicable):

  	
   

  
					

 

Exhibit
B

 

Form of
RMG Written Consent

 

ACTION
BY WRITTEN CONSENT

IN LIEU OF A MEETING

OF THE STOCKHOLDERS

OF

RISKMETRICS
GROUP, INC.

 

__________,
2006

 

The undersigned,
constituting the holders of a majority in interest of the issued and
outstanding capital stock of RiskMetrics Group, Inc., a Delaware corporation
(the “Corporation”), acting by written consent without a meeting
pursuant to Section 228 of the General Corporation Law of the State of
Delaware, do hereby adopt and consent to the adoption of the following
resolutions in lieu of a meeting of the stockholders of the Corporation (the “Stockholders”)
with the same force and effect as though adopted at a meeting duly called and
held:

WHEREAS, the Board of
Directors of the Corporation (the “Board”) has previously approved the
Agreement and Plan of Merger (the “Merger Agreement”) by and among the
Corporation, RMG Holdco, Inc. (“Holding Company”), RMG Merger Sub, Inc.
(“RMG Merger Sub”), ISS Merger Sub, Inc. (“ISS Merger Sub”), and
Institutional Shareholder Services Holdings, Inc. (“ISS”), in
substantially the form attached hereto as Exhibit A, and the
transactions contemplated thereby, including, without limitation, the
acquisition by Holding Company of all the capital stock of each of the
Corporation and ISS by means of the merger of the RMG Merger Sub with and into
the Corporation, with the Corporation continuing as the surviving company (the “RMG
Merger”), and the merger of ISS Merger Sub with and into ISS, with ISS
continuing as the surviving company (the “ISS Merger” and, together with
the RMG Merger, the “Mergers”); and

WHEREAS, the Board has
(i) declared the Merger Agreement and the Mergers to be advisable and in the
best interests of the Corporation and the Stockholders, including, with
respect to the Merger Agreement, with such changes, additions and modifications
thereto as the officer or officers of the Corporation executing and delivering
the same shall approve, such execution and delivery to be conclusive evidence
of such approval on behalf of the Corporation, and (ii) recommended that the
Stockholders adopt the Merger Agreement and approve the Mergers and the other
transactions contemplated by the Merger Agreement.

NOW, THEREFORE, BE IT  RESOLVED, that the Mergers, in accordance with the terms of
the Merger Agreement, in substantially the form approved by the Board and
attached hereto as Exhibit A, be, and the Mergers and the Merger
Agreement, and the other transactions contemplated by the Merger Agreement,
hereby are, approved and adopted, including, with respect to the Merger
Agreement, with such changes, additions and modifications thereto as the
officer or officers of the Corporation executing and delivering the same shall 

 

approve,
such execution and delivery to be conclusive evidence of such approval on
behalf of the Corporation; and be it further

RESOLVED, that the
proper officers of the Corporation, acting
individually or together, be, and each of them hereby is, authorized, empowered
and directed to take all such action, execute all such documents, take such
steps and perform such acts, each as may be necessary, appropriate or, in their
judgment, incident or convenient to the implementation and execution of the
purposes of any of the foregoing resolutions, and any such action taken,
documents executed or acts taken by them shall be conclusive evidence of their authority
in so doing.

IN WITNESS WHEREOF, the
undersigned Stockholders have executed this Written Consent as of the date set
forth above.  This Written Consent may be
executed in one or more counterparts, all of which together shall constitute
one and the same instrument.

	
   

  	
  STOCKHOLDER:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  (if not an individual):

  
	
   

  	
   

  
	
   

  	
   

  
				

 

 

Exhibit
8.1(f)

 

Matters to be Addressed by Opinion of Willkie Farr & Gallagher LLP

1.  The
Company(1) is duly organized, validly existing and in good standing under the
Laws of the State of Delaware.

2.  Each
Subsidiary of the Company that is incorporated or organized in the State of New
York or the State of Delaware is duly organized, validly existing and in good
standing under the Laws of such jurisdiction.

3.  The
Company has all requisite power and authority to execute and deliver the Merger
Agreement as well as the Company Disclosure Schedule, the ISS Certificate of
Merger and the certificates referred to in sections 8.1(a) and (b) of the
Merger Agreement (each, a “Company Document”) and to perform its obligations
under the Merger Agreement and each Company Document.

4.  The
Company has taken all requisite corporate actions to duly authorize the
execution, delivery and performance of the Merger Agreement and each Company
Document and has duly executed and delivered the Merger Agreement and each
Company Document.

5.  Each of
the Merger Agreement and the Company Documents constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.

6.  The
execution and delivery by the Company of the Merger Agreement and the Company
Documents, and the consummation by the Company of the transactions contemplated
thereby, do not: (i) require any approval of its stockholders, except for those
stockholder consents that have been obtained and not withdrawn; (ii) result in
the violation of any of the Company Organizational Documents; or (iii) result
in the violation of any applicable Law.

7.  The
execution and delivery by the Company of the Merger Agreement and the Company
Documents, and the consummation by the Company of the transactions contemplated
thereby, do not require approval or consent from, or any filings with, any
Governmental Body under any applicable Law, other than those listed on Schedule
I, which approvals, consents and/or filings have been obtained or made.

8.  The
authorized capital stock of the Company consists solely of 55,000 shares of
Company Common Stock and 35,000 shares of Preferred Stock, of which 35,000
shares are designated Series A Preferred Stock.

(1)  Capitalized
terms used but not otherwise defined herein have the meanings ascribed thereto
in the Merger Agreement.

Exhibit
8.2(e)

 

Matters to be Addressed by Opinion of Kramer Levin Naftalis & Frankel
LLP

1.  Each of the RMG Parties(1) is duly organized,
validly existing and in good standing under the Laws of the State of Delaware.

2.  Each of the RMG Parties has all requisite
power and authority to execute and deliver each of the Merger Agreement, the
RMG Disclosure Schedule, the Certificates of Merger and the certificates
referred to in Sections 8.2(a) and (b) of the Merger Agreement (each, an “RMG
Document”) to the extent executed and delivered by it and to perform its
obligations under the Merger Agreement and each RMG Document executed and
delivered by it.

3.  Each of the RMG Parties has taken all
requisite corporate actions to duly authorize the execution, delivery and
performance of the Merger Agreement and each RMG Document executed and delivered
by it and has duly executed and delivered the Merger Agreement and each RMG
Document executed and delivered by it.

4.  The Merger Agreement constitutes a valid and
binding obligation of each of the RMG Parties, enforceable against each of the
RMG Parties in accordance with its terms.

5.  Each of the RMG Documents constitutes a valid
and binding obligation of each of the RMG Parties that have executed and
delivered such RMG Document, and is enforceable against each such RMG Party in
accordance with its terms.

6.  The execution and delivery by the RMG Parties
of the Merger Agreement and the RMG Documents, and the consummation by the RMG
Parties of the transactions contemplated thereby, do not: (i) require any
approval of its stockholders, except for those stockholder consents that have
been obtained and not withdrawn; (ii) result in the violation of any of RMG
Parties’ organizational documents; or (iii) result in the violation of any
applicable Law.

7.  The execution and delivery by each of the RMG
Parties of the Merger Agreement and the RMG Documents executed and delivered by
it, and the consummation by the RMG Parties of the transactions contemplated
thereby, do not require approval or consent from, or any filings with, any
Governmental Body under any applicable Law, other than those listed on Schedule
I, which approvals, consents and/or filings have been obtained or made.

8.  The authorized capital stock of RMG consists
solely of 35,000,000 shares of RMG Common Stock.

(1)  Capitalized terms used but not
otherwise defined herein have the meanings ascribed thereto in the Merger
Agreement.

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