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Sample Business ContractsHome: Sample Business Contracts: 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
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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
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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.
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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 Companys 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,
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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
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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 Persons 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.
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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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
