**Exhibit 2.01**

 

**AGREEMENTAND PLAN OF MERGER**

 

by and between

 

**RESEARCHPARK ACQUISITION, INC.,**

 

a Maryland corporation,

 

and

 

**RWDTECHNOLOGIES, INC.,**

 

a Maryland corporation

 

Dated as of April 29, 2003

 

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TABLE OF CONTENTS

 
| Article  I   | THE  MERGER                                |
|--------------|--------------------------------------------|
|         |                                       |   |
|         | 1.1                                        | The Merger |
|         |                                       |   |
|         | 1.2                                        | Closing |
|         |                                       |   |
|         | 1.3                                        | Effective  Time |
|         |                                       |   |
|         | 1.4                                        | Effects of the Merger |
|         |                                       |   |
|         | 1.5                                        | Articles of Incorporation |
|         |                                       |   |
|         | 1.6                                        | By-Laws |
|         |                                       |   |
|         | 1.7                                        | Directors and Officers of the Surviving  Company |
|         |                                       |   |
|         | 1.8                                        | Effect on Capital Stock |
|         |                                       |   |
|         | 1.9                                        | Dissenting Shares |
|         |                                       |   |
|         | 1.10                                       | Company Stock Options |
|         |                                       |   |
| Article  II  | EXCHANGE OF CERTIFICATES                   |
|         |                                       |   |
|         | 2.1                                        | Exchange  Fund |
|         |                                       |   |
|         | 2.2                                        | Exchange Procedures |
|         |                                       |   |
|         | 2.3                                        | Further Ownership Rights in Company Common  Stock |
|         |                                       |   |
|         | 2.4                                        | Payment of Company Stock Options |
|         |                                       |   |
|         | 2.5                                        | Termination of Exchange Fund; Unclaimed  Funds |
|         |                                       |   |
|         | 2.6                                        | No  Liability |
|         |                                       |   |
|         | 2.7                                        | Lost Certificates |
|         |                                       |   |
|         | 2.8                                        | Withholding Rights |
|         |                                       |   |
| Article  III | REPRESENTATIONS  AND WARRANTIES            |
|         |                                       |   |
|         | 3.1                                        | Representations and Warranties of the  Company |
|         |                                       |   |
|         | 3.2                                        | Representations and Warranties of Acquirer |
|         |                                       |   |
| Article  IV  | COVENANTS  RELATING TO CONDUCT OF BUSINESS |
|              |                                            |  |  |  |

 

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|          | 4.1                        | Covenants of the Company                                              |
|---------------|----------------------------|-----------------------------------------------------------------------|
|          |                       |                                                                  |
|          | 4.2                        | Covenants of Acquirer                                                 |
|          |                       |                                                                  |
|          | 4.3                        | Advice of Changes; Government Filings                                 |
|          |                       |                                                                  |
|          |                       |                                                                  |
| Article  V    | ADDITIONAL  AGREEMENTS     |
|          |                       |                                                                  |
|          | 5.1                        | Stockholders’ Meeting; Preparation of  Disclosure Documents      |
|          |                       |                                                                  |
|          | 5.2                        | Access to Information; Confidentiality                                |
|          |                       |                                                                  |
|          | 5.3                        | Approval and Consents; Cooperation                                    |
|          |                       |                                                                  |
|          | 5.4                        | Acquisition Proposals                                                 |
|          |                       |                                                                  |
|          | 5.5                        | Fees and Expenses                                                     |
|          |                       |                                                                  |
|          | 5.6                        | Indemnification, Directors’ and Officers’  Insurance        |
|          |                       |                                                                  |
|          | 5.7                        | Public Announcements                                                  |
|          |                       |                                                                  |
|          | 5.8                        | Further Assurances                                                    |
|          |                       |                                                                  |
|          | 5.9                        | State Takeover Laws                                                   |
|          |                       |                                                                  |
|          | 5.10                       | Limited Guarantee                                                     |
|          |                       |                                                                  |
|          | 5.11                       | Acquirer Ownership                                                    |
|          |                       |                                                                  |
| Article  VI   | CONDITIONS  PRECEDENT      |
|          |                       |                                                                  |
|          | 6.1                        | Conditions to Each Party’s Obligation to  Effect the Merger      |
|          |                       |                                                                  |
|          | 6.2                        | Conditions to the Obligation of Acquirer to  Effect the Merger        |
|          |                       |                                                                  |
|          | 6.3                        | Conditions to the Obligation of the Company  to Effect the Merger     |
|          |                       |                                                                  |
|          |                       |                                                                  |
| Article  VII  | TERMINATION  AND AMENDMENT |
|          |                       |                                                                  |
|          | 7.1                        | Termination                                                           |
|          |                       |                                                                  |
|          | 7.2                        | Effect of Termination                                                 |
|          |                       |                                                                  |
|          | 7.3                        | Amendment                                                             |
|          |                       |                                                                  |
|          | 7.4                        | Extension; Waiver                                                     |
|          |                       |                                                                  |
|          | 7.5                        | Procedure for Termination, Amendment, Extension or Waiver             |
|          |                       |                                                                  |
| Article  VIII | GENERAL  PROVISIONS        |
|          |                       |                                                                  |
|          | 8.1                        | Non-Survival of Representations, Warranties, Covenants and Agreements |
|               |                            |                                                                       |  |  |

 

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|   |   |                                            |
|--------|--------|-------------------------------------------------|
|   | 8.2    | Notices                                         |
|   |   |                                            |
|   | 8.3    | Interpretation                                  |
|   |   |                                            |
|   | 8.4    | Counterparts                                    |
|   |   |                                            |
|   | 8.5    | Entire Agreement; No Third Party  Beneficiaries |
|   |   |                                            |
|   | 8.6    | Governing  Law                                  |
|   |   |                                            |
|   | 8.7    | Waiver of Jury Trial                            |
|   |   |                                            |
|   | 8.8    | Severability                                    |
|   |   |                                            |
|   | 8.9    | Assignment                                      |
|   |   |                                            |
|   | 8.10   | Enforcement                                     |
|   |   |                                            |
|   | 8.11   | Definitions                                     |

 

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THIS AGREEMENTAND PLAN OF MERGER (this “Agreement”), dated as of April 29, 2003, is by andbetween Research Park Acquisition, Inc., a Maryland corporation (“Acquirer”),RWD Technologies, Inc., a Maryland corporation (the “Company”), and, withrespect to Section 5.10 hereof only, Dr. Robert W. Deutsch, a Maryland resident(“Deutsch”).

 

**WITNESSETH:**

 

A.            The Board of Directors of Acquirerand the Board of Directors of the Company (the “Company Board”) have approvedthis Agreement and the transactions contemplated hereby, including the Merger,subject to the terms and conditions set forth in this Agreement.

 

B.            The Company Board has established aspecial committee of independent directors of the Company Board (the “SpecialCommittee”) to consider and evaluate the fairness to the Company and itsstockholders of any proposed business combination or strategic alternativeinvolving the Company (a “Proposed Transaction”) and to report its recommendationconcerning any such Proposed Transaction to the full Company Board.

 

B.            The Special Committee has carefullyreviewed and negotiated the terms of this Agreement and has unanimouslyrecommended that the Company Board approve and authorize this Agreement and thetransactions contemplated hereby.

 

C.            The Company Board, based in partupon the recommendation of the Special Committee, has determined that thisAgreement and the transactions contemplated hereby, including the Merger, areadvisable and fair to, and in the best interests of, the Company’s stockholdersother than Acquirer, Deutsch and their respective Affiliates and Associates.

 

D.            Acquirer and the Company desire tomake certain representations, warranties, covenants and agreements inconnection with the Merger and also to prescribe various conditions to theMerger as set forth in this Agreement.

 

E.             Acquirer agrees, pursuant to theterms below, to vote its shares Company Common Stock in favor of the adoptionof this Agreement and the Merger at any meeting of the Company’s stockholders.

 

NOW,THEREFORE, in consideration of the foregoing and the respectiverepresentations, warranties, covenants and agreements set forth herein and forother good and valuable consideration, the parties hereto, intending to belegally bound hereby, agree as follows:

 

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**ARTICLE I**

 

**THE MERGER**

 

1.1.          THEMERGER.  Upon the terms and subject tothe conditions set forth in this Agreement, and in accordance with the MarylandGeneral Corporation Law (the “MGCL”), Acquirer shall be merged with and intothe Company (the “Merger”) at the Effective Time.  Upon the Effective Time, the separate corporate existence ofAcquirer shall cease and the Company shall continue as the surviving company(the “Surviving Company”) in accordance with the MGCL.

 

1.2.          CLOSING.  Unless this Agreement shall have beenterminated pursuant to Section 7.1, the closing of the Merger (the“Closing”) will take place no later than the second Business Day after satisfactionor waiver (as permitted by this Agreement and applicable Law) of the conditions(excluding conditions that, by their terms, cannot be satisfied until theClosing Date) set forth in Article 6 (the “Closing Date”), unlessanother time or date is agreed to in writing by the parties hereto.  The Closing shall be held at the offices ofPiper Rudnick LLP, 6225 Smith Avenue, Baltimore, Maryland  21209, unless another place is agreed to inwriting by the parties hereto.

 

1.3.          EFFECTIVE TIME. Upon the Closing, the parties shall (i) file with the Maryland StateDepartment of Assessments and Taxation (“MSDAT”) articles of merger or otherappropriate documents (in any such case, the “Articles of Merger”), executed inaccordance with the relevant provisions of the MGCL and (ii) make all otherfilings, recordings or publications required under the MGCL in connection withthe Merger.  The Merger shall becomeeffective upon the filing of the Articles of Merger with MSDAT, or at suchlater time as the parties may agree and specify in the Articles of Merger (thedate and time the Merger becomes effective being herein referred to as the“Effective Time”).

 

1.4.          EFFECTS OF THE MERGER.  At and after the Effective Time, the Merger will have the effectsset forth in the MGCL.  Without limitingthe generality of the foregoing, and subject thereto, at the Effective Time,all the properties, rights, privileges, powers and franchises of the Companyand Acquirer shall vest in the Surviving Company, and all debts, liabilitiesand duties of the Company and Acquirer shall become the debts, liabilities andduties of the Surviving Company.

 

1.5.          ARTICLES OF INCORPORATION.  The articles of incorporation of Acquirer ineffect immediately prior to the Effective Time shall be the articles ofincorporation of the Surviving Company from and after the Effective Time, untilthereafter amended as provided therein or by applicable Law.

 

1.6.          BY-LAWS.  The By-Laws of Acquirer as in effectimmediately prior to the Effective Time shall be the By-Laws of the SurvivingCompany from and after the Effective Time, until thereafter amended as providedtherein or by applicable Law.

 

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1.7.          DIRECTORS AND OFFICERS OF THE SURVIVINGCOMPANY.  The members of the Boardof Directors of Acquirer immediately prior to the Effective Time and theofficers of the Company immediately prior to the Effective Time shall, from andafter the Effective Time, be the members of the Board of Directors andofficers, respectively, of the Surviving Company until their successors shallhave been duly elected or appointed or qualified or until their earlier death,resignation or removal in accordance with the Articles of Incorporation and theBy-Laws of the Surviving Company.

 

1.8.          EFFECTON CAPITAL STOCK.  As of theEffective Time, by virtue of the Merger and without any action on the part ofthe Company, Acquirer or any holder of any Common Stock, par value $0.10 pershare, of the Company (“Company Common Stock”) or Common Stock, par value $0.10per share, of Acquirer (“Acquirer Common Stock”):

 

(a)           Cancellation of Company CommonStock Owned by Acquirer.  Each shareof Company Common Stock owned by Acquirer as set forth on Exhibit Aissued and outstanding immediately prior to the Effective Time (the “CancelledShares”) shall automatically be cancelled and retired and shall cease to exist,and no cash or other consideration shall be delivered or deliverable inexchange therefor.

 

(b)           Conversion of Converted Shares.  Each share of Acquirer Common Stock issuedand outstanding immediately prior to the Effective Time (the “ConvertedShares”) as set forth on Exhibit A, shall be converted into and shallbecome one duly authorized, validly issued, fully paid and non-assessable shareof Surviving Company Common Stock upon the surrender of the certificatespreviously representing such Converted Shares.

 

(c)           Conversion of Company Common Stock.  Each share of Company Common Stock issuedand outstanding immediately prior to the Effective Time (other than theCancelled Shares and Dissenting Shares, if any) shall be converted into andbecome the right to receive an amount equal to $2.10 in cash, without interestthereon (the “Merger Consideration”). As of the Effective Time, all such shares of Company Common Stock shallno longer be outstanding and shall automatically be cancelled and retired andshall cease to exist, and each holder of a certificate representing any suchshares of Company Common Stock shall cease to have any rights with respectthereto, except the right to receive the Merger Consideration, upon surrenderof such certificate(s) in accordance with Article 2.

 

1.9.          DISSENTING SHARES. Notwithstanding anything in this Agreement to the contrary, including Section1.8, shares of Company Common Stock issued and outstanding immediatelyprior to the Effective Time and held by a holder who has not voted in favor ofthe Merger or otherwise consented thereto in writing and who has the right todemand, and properly demands, an appraisal of such holder’s shares inaccordance with Title 3, Subtitle 2 of the MGCL, or any successor provision(such holder being herein referred to as a “Dissenting Stockholder” and suchshares being herein referred to as “Dissenting Shares”), shall not be convertedinto or represent the right to receive the Merger Consideration, unless suchDissenting Stockholder fails to perfect or otherwise loses or withdraws anysuch right to appraisal.  With respectto any Dissenting Shares, a Dissenting Stockholder shall have solely the appraisalrights 

 

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provided under Title 3,Subtitle 2 of the MGCL, provided such Dissenting Stockholder complies with theprovisions thereof.  If, after theEffective Time, such Dissenting Stockholder fails to perfect or otherwise losesor withdraws any such right to appraisal, each Dissenting Share held by suchDissenting Stockholder shall be treated as if such share had been convertedinto, as of the Effective Time, the right to receive, without any interestthereon, the Merger Consideration.  TheCompany shall give Acquirer prompt notice of any demand for appraisal of sharesof Company Common Stock received by the Company and any withdrawals of suchdemands, and Acquirer shall have the right to participate in and approve (whichapproval shall not be unreasonably withheld or delayed) all negotiations andproceedings with respect to any such demand. The Company shall not, except with the prior written consent of Acquirer,voluntarily make any payment with respect to any demands for appraisal, orsettle or offer to settle any such demands.

 

1.10.        COMPANY STOCK OPTIONS.  Each outstanding and unexercised option to purchase shares ofCompany Common Stock (each, a “Company Stock Option” and, collectively, the“Company Stock Options”), whether vested or unvested, shall terminate and becancelled as of the Effective Time. Each Person (other than Deutsch and his Affiliates and Associates) whoholds an exercisable Company Stock Option (including options which, by theirterms, become exercisable as a result of the transactions contemplated hereby)shall be entitled to receive, in consideration therefor, a cash payment on theClosing Date equal to the product of (i) the excess, if any, of the MergerConsideration over the per share exercise price of such Company Stock Option,multiplied by (ii) the aggregate number of shares of Company Common Stock thensubject to such Company Stock Option, reduced by the amount of withholding orother taxes required by applicable Law to be withheld, payable in cash.

** **

**ARTICLE II**

 

**EXCHANGE OFCERTIFICATES**

 

2.1.          EXCHANGE FUND.  Ator prior to the Effective Time, the Company shall designate a bank or trustcompany reasonably acceptable to Acquirer and the Special Committee to act asexchange agent (the “Exchange Agent”) and shall deposit, or shall cause to bedeposited into a segregated account, with the Exchange Agent for the benefit ofthe holders of shares of Company Common Stock (other than Cancelled Shares andDissenting Shares, if any) and Company Stock Options, cash in an aggregateamount (the “Aggregate Merger Consideration”) equal to the sum of (a) theproduct of (i) the number of shares of Company Common Stock outstandingimmediately prior to the Effective Time (other than Cancelled Shares andDissenting Shares, if any), and (ii) the Merger Consideration (the “ExchangeFund”), and (b) the aggregate amount to be paid to the holders of Company StockOptions pursuant to Section 1.10 above. The Exchange Agent shall invest all cash in the Exchange Fund asdirected by the Surviving Company, provided all such investments shall bemarketable U.S. government securities backed by the full faith and credit ofthe U.S. government.  Interest and otherincome with respect to the Exchange Fund shall accrue for the account of, andshall be promptly paid to, the Surviving Company.

 

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2.2.          EXCHANGE PROCEDURES.  The exchange of outstanding shares of Company Common Stock (otherthan Cancelled Shares and Dissenting Shares, if any) shall take place in thefollowing manner:

 

(a)           Exchange of Certificates.  Each holder of an outstanding certificate orcertificates which prior thereto represented shares of Company Common Stock(other than Cancelled Shares and Dissenting Shares, if any) shall, uponsurrender to the Exchange Agent of such certificate(s) and acceptance thereofby the Exchange Agent (together with the Letter of Transmittal described in Section2.2(b), duly executed, and such other documents as may reasonably berequired by the Exchange Agent), be entitled to receive the amount of theMerger Consideration into which the number of shares of Company Common Stockpreviously represented by such certificate(s) so surrendered shall have beenconverted pursuant to this Agreement. After the Effective Time, there shall be no further transfer on therecords of the Company or its transfer agent of certificates representingshares of Company Common Stock which have been converted pursuant to thisAgreement into the right to receive the Merger Consideration, and if suchcertificates are presented for transfer, they shall be cancelled againstdelivery of the Merger Consideration. If the Merger Consideration is to be delivered to any Person other thanthe Person in whose name the certificate(s) representing shares of CompanyCommon Stock surrendered for exchange is registered, it shall be a condition ofsuch exchange that the certificate(s) so surrendered shall be properly endorsedwith the signature guaranteed or otherwise in proper form for transfer, andthat the Person requesting such exchange shall pay to the Exchange Agent anytransfer or other taxes required by reason of the payment of the MergerConsideration to a Person other than the registered holder thereof, or shallestablish to the satisfaction of the Exchange Agent that such tax has been paidor is not applicable.  Until surrenderedas contemplated by this Section 2.2(a), each certificate which, prior tothe Effective Time, represented outstanding shares of Company Common Stock(other than Cancelled Shares and Dissenting Shares, if any) shall be deemed atany time after the Effective Time to represent only the right to receive uponsuch surrender the Merger Consideration in accordance with Section 1.8.  No interest will be paid or will accrue onany cash payable as Merger Consideration.

 

(b)           Letter of Transmittal.  Promptly following the Effective Time (butno later than five (5)****Business Days thereafter), the SurvivingCompany shall cause the Exchange Agent to mail to each holder of record of acertificate or certificates which immediately prior to the Effective Timerepresented outstanding shares of Company Common Stock (other than CancelledShares and Dissenting Shares, if any) a letter of transmittal (which shallspecify that delivery shall be effected, and risk of loss and title to thecertificate(s) shall pass, only upon delivery thereof to the Exchange Agent andshall be in such form and have such other provisions as the Surviving Companymay reasonably specify) (the “Letter of Transmittal”) and instructions for usein effecting the surrender of such certificate(s) in exchange for the MergerConsideration.

 

(c)           Payment of Merger Consideration.  Upon surrender to the Surviving Company of acertificate representing shares of Company Common Stock (other than CancelledShares and Dissenting Shares, if any), for cancellation, together with therelated Letter of Transmittal, duly executed and completed in accordance withthe instructions thereto, the holder of such certificate shall be entitled toreceive in exchange for each share of Company Common 

 

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Stock represented by suchcertificate cash in an amount equal to the Merger Consideration, after givingeffect to any required withholding tax as provided in Section 2.7, andthe certificate so surrendered shall forthwith be marked as canceled.  Such payment of Merger Consideration shallbe made to the holder of such share of Company Common Stock as soon asreasonably practicable, but in no event later than ten (10) Business Days afterthe Surviving Company receives the certificate representing such share ofCompany Common Stock and Letter of Transmittal, duly executed and completed inaccordance with the instructions thereto. In the event of a transfer of ownership of Company Common Stock which isnot registered in the transfer records of the Company, the Merger Considerationshall be paid to such a transferee if the certificate representing such CompanyCommon Stock is presented to the Surviving Company, accompanied by alldocuments required to evidence and effect such transfer and to evidence thatany applicable stock transfer taxes have been paid.

 

2.3.          FURTHER OWNERSHIP RIGHTS IN COMPANYCOMMON STOCK.  The Merger Considerationpaid upon the surrender for exchange of certificates representing shares ofCompany Common Stock in accordance with the terms of Article 1 and this Article2 shall be deemed to have been paid in full satisfaction of all rightspertaining to the shares of Company Common Stock theretofore represented bysuch certificates, and no holder of shares of Company Common Stock shallthereby have any equity interest in the Surviving Company.

 

2.4           PAYMENT OF COMPANY STOCK OPTIONS.  As soon as practicable (but in no event morethan ten (10) Business Days) after the Effective Time, the Exchange Agent shallmake a cash payment to each holder of Company Stock Options in the amount, ifany, that is payable pursuant to Section 1.10.

 

2.5.          TERMINATION OF EXCHANGE FUND; UNCLAIMEDFUNDS.  Any portion of the ExchangeFund that remains undistributed to or unclaimed by the holders of certificatesrepresenting shares of Company Common Stock (other than Cancelled Shares andDissenting Shares, if any) for six (6) months after the Effective Time shall bedelivered to the Surviving Company or otherwise at the direction of theSurviving Company, upon demand, and any holders of such certificates who havenot theretofore complied with this Article 2 shall thereafter look onlyto the Surviving Company for the Merger Consideration to which such holders areentitled pursuant to this Agreement (subject to applicable abandoned property,escheat or other similar Laws) and only as general creditors thereof forpayment of their claim for the Merger Consideration, without any interestthereon.

 

2.6.          NO LIABILITY.  None of Acquirer, the Company, the SurvivingCompany or the Exchange Agent shall be liable to any person for any MergerConsideration delivered to a public official pursuant to any abandonedproperty, escheat or similar Law.  Anyportion of the Exchange Fund remaining unclaimed by holders of certificatesrepresenting shares of Company Common Stock as of a date that is immediatelyprior to such time as such amounts would otherwise escheat to or becomeproperty of any Governmental Entity will, to the extent permitted by applicableLaw, become the property of the Surviving Company free and clear of any claimsor interest of such Person previously entitled thereto.

 

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2.7.          LOST CERTIFICATES. If any certificate representing shares of Company Common Stock (otherthan Cancelled Shares and Dissenting Shares, if any) has been lost, stolen ordestroyed, then upon the making of an affidavit of that fact by the Personclaiming such certificate to be lost, stolen or destroyed and, if required bythe Company, the posting by such Person of a bond in such reasonable amount asthe Company may direct as indemnity against any claim that may be made againstthe Company with respect to such certificate, the Exchange Agent will deliverin exchange for such lost, stolen or destroyed certificate the applicableMerger Consideration with respect to the shares of Company Common Stockformerly represented thereby.

 

2.8.          WITHHOLDINGRIGHTS.  The Surviving Company orthe Exchange Agent, as applicable, shall be entitled to deduct and withholdfrom the consideration otherwise payable pursuant to this Agreement to anyholder of shares of Company Common Stock or Company Stock Options such amountsas the Surviving Company or the Exchange Agent, as the case may be, may berequired to deduct and withhold with respect to the making of such paymentunder the Internal Revenue Code of 1986, as amended (the “Code”), or any applicableprovision of Law, including withholdings required in connection with paymentsunder Section 1.10.  To theextent withheld by the Surviving Company or the Exchange Agent, such withheldamounts shall be treated for all purposes of this Agreement as having been paidto the holder of shares of Company Common Stock in respect of which suchdeduction and withholding was made.

 

**ARTICLE III**

 

**REPRESENTATIONS ANDWARRANTIES**

 

3.1.          REPRESENTATIONS AND WARRANTIES OF THECOMPANY.  The Company represents andwarrants to Acquirer as set forth in this Section 3.1.

 

(a)           Organization, Standing and Power.  Each of the Company and its Subsidiaries isvalidly existing and in good standing under the Laws of its respective state ofincorporation and has the corporate power and authority to carry on itsbusiness as presently being conducted and to own, operate and lease itsproperties.

 

(b)           Authority; No Conflicts;Acquisition Proposals.

 

(i)            The Company has all requisitecorporate power and authority to enter into this Agreement and, subject to theadoption of this Agreement by the Required Company Vote and the AdditionalVote, to consummate the transactions contemplated hereby.  The execution and delivery of this Agreementand the consummation of the transactions contemplated hereby have been dulyauthorized by all necessary corporate action on the part of the Company,subject in the case of the consummation of the Merger to obtaining the RequiredCompany Vote and the Additional Vote (other than the filing of the Articles of Mergeras required by the MGCL).  ThisAgreement has been duly executed and delivered by the Company and, assuming dueand valid authorization, execution and delivery thereof by Acquirer,constitutes a valid and binding obligation of the Company, enforceable againstthe Company in 

 

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accordance with its terms,except as such enforceability may be limited by bankruptcy, insolvency,fraudulent conveyance, reorganization, moratorium and similar Laws relating toor affecting creditors’ rights generally or by general equity principles(regardless of whether such enforceability is considered in a proceeding inequity or at law).

 

(ii)           No consent, approval, permit, orderor authorization of, or registration, declaration or filing with, or notice toany supranational, national, state, municipal or local government, anyinstrumentality, subdivision, court, administrative agency or commission orother authority thereof, or any quasi-governmental authority or any privatebody exercising any regulatory, taxing or other governmental authority (a“Governmental Entity”), which has not been received or made, is required by orwith respect to the Company or any of its Subsidiaries in connection with theexecution and delivery of this Agreement by the Company or the consummation bythe Company of the transactions contemplated hereby, except for (A) the filingwith the Securities and Exchange Commission (the “SEC”) of a proxy statement inconnection with the Stockholders’ Meeting (such proxy statement, including anypreliminary version thereof, in either case, as amended, modified orsupplemented from time to time, herein referred to as the “Proxy Statement”),(B) the filing with the SEC of a Rule 13e-3 Transaction Statement on Schedule13E-3 (the “Schedule 13E-3”) under the Securities Exchange Act of 1934, asamended (the “Exchange Act”), (C) certain filings under state securities or“blue sky” Laws, (D) any other filings or reports required under the ExchangeAct or the rules and regulations promulgated thereunder in connection with thetransactions contemplated by this Agreement, (E) the filing and recordation ofArticles of Merger under the MGCL, (F) compliance with the rules andregulations of the Nasdaq National Market (“NASDAQ”), and (G) such consents,approvals, permits, orders, authorizations, registrations, declarations,filings and notices with any Governmental Entity or under any CompanyAgreements, the failure of which to make or obtain would not, individually orin the aggregate, reasonably be expected to have a Material Adverse Effect onthe Company or prevent the consummation of the Merger by the Outside Date;provided, however, that no representation or warranty is made with respect toany state takeover statute or similar statute.

 

(c)           Disclosure Documents.  The Proxy Statement and the Schedule 13E-3will comply as to form in all material respects with the requirements of theExchange Act and the rules and regulations promulgated thereunder.  None of the information supplied or to besupplied by the Company for inclusion or incorporation by reference in (i) theProxy Statement, at the date such Proxy Statement is first mailed to theCompany’s stockholders or at the time of the Stockholders’ Meeting, or (ii) theSchedule 13E-3, at the time of filing with the SEC (and at any time such ProxyStatement or Schedule 13E-3 is amended or supplemented), will contain anyuntrue statement of a material fact or omit to make the statements therein, inlight of the circumstances under which they are made, not misleading.  Notwithstanding the foregoing provisions ofthis Section 3.1(c), no representation or warranty is made by theCompany with respect to statements made or incorporated by reference in theProxy Statement or the Schedule 13E-3 based on information supplied in writingby Acquirer or any of its Representatives specifically for inclusion orincorporation by reference therein.

 

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(d)           Brokers or Finders.  No agent, broker, investment banker,financial advisor or other firm or Person, the fees of which will be paid bythe Company, is or will be entitled to any broker’s, financial advisory orfinder’s fee or any other similar commission or fee in connection with any ofthe transactions contemplated by this Agreement, based upon arrangements madeby or on behalf of the Company by the Special Committee, except the feespayable to Friedman, Billings, Ramsey & Co., Inc. (“FBR”) pursuant to theengagement letter dated March 14, 2003 (a copy of which has been delivered toAcquirer).

 

(e)           Company Action; Vote Required.  As of the date hereof, the Company Board,based upon the recommendation of the Special Committee, at a meeting thereofduly called and held has (i) approved the acquisition by Acquirer of theCompany pursuant to the Merger and approved and adopted and declared advisablethis Agreement and the transactions contemplated hereby, including the Merger,(ii) determined that this Agreement and the transactions contemplated hereby,including the Merger, are advisable and fair to and in the best interests ofthe Company’s stockholders, and (iii) recommended approval of this Agreementand the transactions contemplated hereby, including the Merger, by theCompany’s stockholders.  The affirmativevote of the holders of at least a majority of the aggregate votes of theoutstanding shares of Company Common Stock (the “Required Company Vote”) is theonly vote of the holders of any class or series of the Company’s capital stocknecessary under applicable Law or the Company’s Charter to approve thisAgreement, the Merger and the other transactions contemplated hereby.

 

(f)            Fairness Opinion.  As of the date hereof, the Special Committeehas received the written opinion of FBR, financial advisor to the SpecialCommittee, dated the date hereof, to the effect that, subject to thequalifications and limitations stated therein, the Merger Consideration to bereceived by the holders of shares of Company Common Stock (other than CancelledShares and Dissenting Shares, if any) is fair to such holders from a financialpoint of view.  The Special Committeehas furnished an accurate and complete copy of such written opinion toAcquirer.

 

3.2.          REPRESENTATIONS AND WARRANTIES OFACQUIRER.  Acquirer represents andwarrants to the Company as follows:

 

(a)           Organization, Standing and Power.  Acquirer has been duly organized and isvalidly existing and in good standing under the Laws of Maryland and has thepower and authority to carry on its business as presently being conducted andto own, operate and lease its properties. Acquirer is duly qualified or licensed to do business and is in goodstanding in each jurisdiction in which the nature of its business or theownership or leasing of its properties makes such qualification or licensingnecessary, except where the failure to be so qualified or licensed, eitherindividually or in the aggregate, would not reasonably be expected to preventthe consummation of the Merger by the Outside Date.  The copies of the Organizational Documents of Acquirer which werepreviously furnished to the Company are true, complete and correct copies ofsuch documents.

 

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(b)           Capital Structure.  All of the outstanding shares of AcquirerCommon Stock are owned in the amounts and by the Persons identified on ExhibitA.  Acquirer owns the shares ofCompany Common Stock set forth on Exhibit A.

 

(c)           Authority; No Conflicts.

 

(i)            Acquirer has all requisite corporatepower and authority to enter into this Agreement and to consummate thetransactions contemplated hereby.  Theexecution and delivery of this Agreement and the consummation of thetransactions contemplated hereby have been duly authorized by all necessarycorporate action on the part of Acquirer. This Agreement has been duly executed and delivered by Acquirer and,assuming due and valid authorization, execution and delivery thereof by theCompany, constitutes a valid and binding agreement of Acquirer, enforceableagainst it in accordance with its terms, except as such enforceability may belimited by bankruptcy, insolvency, fraudulent conveyance, reorganization,moratorium and other similar Laws relating to or affecting creditors’ rightsgenerally, or by general equity principles (regardless of whether suchenforceability is considered in a proceeding in equity or at law).

 

(ii)           The execution and delivery of thisAgreement do not, and the consummation of the transactions contemplated herebyand compliance with the provisions hereof will not, (A) violate any provisionof the Organizational Documents of Acquirer, (B) subject to obtaining or makingthe consents, approvals, orders, authorizations, registrations, declarationsand filings referred to in Section 3.2(c)(iii) below, conflict with orresult in any violation of or constitute a default or give rise to any right oftermination, amendment, cancellation or acceleration or loss of any benefitunder (in any case with or without notice or lapse of time, or both) any Law,judgment, order, decree, injunction, determination or award currently in effectwhich, individually or in the aggregate, would prevent the consummation of theMerger by the Outside Date, or (C) violate, conflict with, constitute a breachor default under or give rise to a right of termination, amendment,cancellation or acceleration or loss of any benefit under any contract, loan,credit agreement, note, mortgage, bond, indenture, lease, benefit plan or otheragreement, obligation, instrument, permit, concession, franchise or license towhich Acquirer is a party or by which any of its properties or assets is boundor subject, which, individually or in the aggregate, would reasonably beexpected to prevent the consummation of the Merger by the Outside Date.

 

(iii)          No consent, permit, approval, order orauthorization of, or registration, declaration or filing with, or notice to anyGovernmental Entity, which has not been received or made, is required by orwith respect to Acquirer in connection with the execution and delivery of thisAgreement by Acquirer or the consummation by Acquirer of the transactionscontemplated hereby, except for (A) filings under state securities or “bluesky” Laws, (B) any filings, or reports required under the Exchange Act or therules and regulations promulgated thereunder in connection with thetransactions contemplated by this Agreement, (C) the filing and recordation ofArticles of Merger under the MGCL, and (D) such consents, approvals, orders,authorizations, registrations, declarations and filings the failure of which toobtain would not reasonably be expected to prevent the consummation of theMerger by the Outside Date.

 

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(d)           Disclosure Documents.  None of the information to be supplied byAcquirer for inclusion or incorporation by reference in (i) the ProxyStatement, at the date such Proxy Statement is first mailed to the Company’sstockholders or at the time of the Stockholders’ Meeting, or (ii) the Schedule13E-3, at the time of filing with the SEC (and at any time such Proxy Statementor Schedule 13E-3 is amended or supplemented), will contain any untruestatement of a material fact or omit to state a material fact required to bestated therein or necessary in order to make the statements therein, in lightof the circumstances under which they are made, not misleading.

 

(e)           No Vote Required.  No vote of the stockholders or the Board ofDirectors of Acquirer is necessary to approve this Agreement and thetransactions contemplated hereby other than those obtained by Acquirer as ofthe date hereof.

 

(f)            Brokers or Finders.  No agent, broker, investment banker,financial advisor or other firm or Person is or will be entitled to anybroker’s, financial advisory or finder’s fee or any other similar commission orfee in connection with any of the transactions contemplated by this Agreement,based upon arrangements made by or on behalf of Acquirer, except the feespayable to Signal Hill Capital Group LLC pursuant to an engagement letter datedJanuary 31, 2003 (a copy of which has been delivered to the Company).

 

(g)           No Business Activities.  Acquirer is not a party to any materialagreement nor has it conducted any activities other than in connection with itsincorporation, the preparation, negotiation and execution of this Agreement andthe consummation of the transactions contemplated hereby.  Acquirer has no material liabilities exceptto the extent arising under this Agreement. Except for its ownership of the shares of Company Common Stock set forthin Section 3.2(b), Acquirer does not own, directly or indirectly, anycapital stock or other ownership interest in any Person and Acquirer has noSubsidiaries.

** **

**ARTICLEIV**

** **

**COVENANTS RELATING TO CONDUCT OF BUSINESS**

 

4.1.          COVENANTSOF THE COMPANY.  The Companycovenants and agrees that during the period from the date of this Agreement tothe Effective Time, except (i) as set forth in the Company Disclosure Schedule,or (ii) as agreed in writing by Acquirer after the date hereof, the Companyshall, and shall cause each of its Subsidiaries to, conduct its businesses onlyin the usual, regular and ordinary course and substantially in the same manneras heretofore conducted, and use its reasonable efforts to (A) preserve itsbusiness organization intact, (B) keep available the services of its currentofficers and employees, and (C) maintain its existing relations with customers,suppliers, creditors, business partners and others having business dealingswith it.  Without limiting thegenerality of the foregoing, and subject to exceptions set forth in clauses(i) and (ii) above, during the period from the date of this Agreement tothe Effective Time, the Special Committee shall not and shall not authorize orrecommend that the Company or any of its Subsidiaries:

 

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(a)           (i) amend or propose to amend itsOrganizational Documents, (ii) issue, sell, grant, transfer, or subject to anyLien any shares of any class or series of its capital stock, or securitiesconvertible into or exchangeable for, or options, warrants, calls, commitmentsor rights of any stock or phantom appreciation rights or performance shareawards or other rights to receive capital stock other than (x) the issuance ofCompany Common Stock reserved for issuance on the date hereof pursuant to theexercise in accordance with their present terms of Company Stock Options to theextent outstanding on the date hereof, (iii) declare, set aside or pay anydividend or make any other actual, constructive or deemed distribution payablein cash, stock or property with respect to any shares of any class or series ofits capital stock, (iv) split, combine or reclassify any shares of any class orseries of its stock or (v) redeem, purchase or otherwise acquire directly orindirectly any shares of any class or series of its capital stock, or anyinstrument or security which consists of or includes a right to acquire suchshares;

 

(b)           adopt a plan of complete or partialliquidation, dissolution, merger, consolidation, restructuring,recapitalization or other reorganization of the Company or any of itsSubsidiaries (other than the Merger);

 

(c)           take, or agree or commit to take, anyaction that would reasonably be expected to result in any of the conditions tothe Merger set forth in Article VI not being satisfied or that would materiallyimpair the ability of the Company to consummate the Merger in accordance withthe terms of this Agreement or materially delay such consummation; or

 

(d)           enter into an agreement, contract,commitment or arrangement to do any of the foregoing, or to authorize,recommend, propose or announce an intention to do any of the foregoing.

 

4.2.          COVENANTSOF ACQUIRER.  During the period fromthe date of this Agreement and continuing until the Effective Time (except asexpressly contemplated or permitted by this Agreement or to the extent that theCompany (acting through the Special Committee) otherwise consents in writing,which consent shall not be unreasonably withheld or delayed):

 

(a)           Changes in Capital Structure.  Acquirer shall not change its capitalstructure or permit any material change with respect to the ownership ofAcquirer.  Acquirer shall not transferany Company Common Stock.

 

(b)           Company Stockholder Meetings.  Acquirer will vote any and all CompanyCommon Stock owned by Acquirer in favor of the Merger and the adoption of thisAgreement at any meeting of the Company’s stockholders at which a proposalrelating to such approval or adoption is submitted to a vote of the Company’sstockholders.

 

(c)           Other Actions.  Acquirer shall not take, or agree to committo take, any action that could reasonably be expected to result in any of theconditions to the Merger set forth in Article 6 not being satisfied.

 

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4.3.          ADVICE OF CHANGES; GOVERNMENT FILINGS.  Each party hereto shall promptly advise theother orally and in writing of the failure by it to comply with or satisfy inany material respect any covenant or agreement set forth in Articles IV and Vhereof or any condition set forth in Article VI hereof required to be compliedwith or satisfied by it under this Agreement; provided, however,that the Company’s obligation pursuant to this Section 4.3 is limited tothose matters as to which the Special Committee has knowledge; and provided,further, that no such notification shall affect the covenants oragreements of the parties or the conditions to the obligations of the partiesunder this Agreement.  Subject toapplicable Laws relating to the exchange of information, each of the Companyand Acquirer shall have the right to review and comment upon in advance, and tothe extent practicable each will consult with the other with respect to, allthe information relating to the other party which appears in any filings,announcements or publications made with, or written materials submitted to, anyGovernmental Entity in connection with the transactions contemplated by thisAgreement.  In exercising the foregoingright, each of the parties hereto agrees to act reasonably and as promptly aspracticable.  Each party agrees that, tothe extent practicable, it will consult with the other party with respect tothe obtaining of all permits, consents, approvals and authorizations of allthird parties and Governmental Entities necessary or advisable to consummatethe transactions contemplated by this Agreement and each party will keep theother party apprised of the status of matters relating to completion of thetransactions contemplated hereby.

 

**ARTICLEV**

** **

**ADDITIONAL AGREEMENTS**

 

5.1.          STOCKHOLDERS’ MEETING; PREPARATION OFDISCLOSURE DOCUMENTS.

 

(a)           Except as otherwise provided in Section5.4, the Company shall, as soon as practicable following the date of thisAgreement, duly call, give notice of, convene and hold a meeting of itsstockholders (the “Stockholders’ Meeting”) for the purpose of adopting thisAgreement and approving the Merger by obtaining (i) the Required Company Vote,and (ii) the adoption of this Agreement and approval of the Merger by theaffirmative vote of the holders of at least a majority of outstanding shares ofCompany Common Stock not owned by Acquirer, Deutsch or their respectiveAffiliates or Associates (the “Additional Vote”).  Except as otherwise provided in Section 5.4, the CompanyBoard, based upon the recommendation of the Special Committee, shall declarethe advisability of, and recommend to its stockholders the approval of theMerger and adoption of this Agreement, shall include such recommendation in theProxy Statement and shall take all lawful action to solicit such approval andadoption.  Subject to Section 5.4,the Company shall use all reasonable efforts to solicit from its stockholdersproxies in favor of the approval of the Merger and adoption of this Agreementand shall take all other action necessary or, in the reasonable opinion ofAcquirer, advisable to secure the Required Company Vote and the AdditionalVote.

 

(b)           As soon as practicable following thedate of this Agreement, the Company and Acquirer shall jointly prepare, and theCompany shall file with the SEC, the Proxy Statement

 

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and the Schedule13E-3.  Acquirer will cooperate with theCompany in connection with the preparation and filing with the SEC of the ProxyStatement and the Schedule 13E-3, including, but not limited to, furnishing theCompany upon request with any and all information regarding Acquirer or itsAffiliates, the plans of such Persons for the Surviving Company after theEffective Time and all other matters and information as may be required to beset forth therein under the Exchange Act or the rules and regulationspromulgated thereunder.  Each of theCompany and Acquirer shall use its reasonable good faith efforts (i) to respondto the comments of the SEC concerning the Proxy Statement or the Schedule 13E-3as promptly as practicable, and (ii) to cause the definitive Proxy Statement tobe mailed to the Company’s stockholders not later than five (5) Business Daysafter clearance from the SEC.  TheCompany shall pay the filing fees for the Proxy Statement and the Schedule13E-3.  Acquirer shall be given areasonable opportunity to review and comment upon all filings with the SEC andall mailings to the Company’s stockholders in connection with the Merger priorto the filing or mailing thereof.  TheCompany and Acquirer each agree to correct any information provided by suchparty for use in the Proxy Statement or the Schedule 13E-3 which becomes falseor misleading.  The Company shall causethe fairness opinion of FBR referred to in Section 3.1(f) to be includedas an exhibit to the Proxy Statement and the Schedule 13E-3.

 

(c)           Each party shall notify the otherparty promptly of (i) the receipt of any notices, comments or othercommunications from the SEC or any other Governmental Entity, and (ii) anyrequests by the SEC for amendments or supplements to the Proxy Statement or theSchedule 13E-3 or for additional information, and will promptly provide theother party with copies of all correspondence between such party or itsRepresentatives, on the one hand, and the SEC or members of its staff, on theother hand, with respect to the Proxy Statement or the Schedule 13E-3.  The Company and Acquirer agree that alltelephonic calls and meetings with the SEC regarding the Proxy Statement, theSchedule 13E-3 and the Merger shall include Representatives each of the Companyand Acquirer.

 

(d)           If, at any time prior to theStockholders’ Meeting, any event should occur relating to the Company or itsSubsidiaries which should be set forth in an amendment of, or a supplement to,the Proxy Statement or the Schedule 13E-3, the Company will promptly informAcquirer.  If, at any time prior to theStockholders’ Meeting, any event should occur relating to Acquirer or relatingto the plans of Acquirer for the Surviving Company after the Effective Time,which should be set forth in an amendment of, or a supplement to, the ProxyStatement or the Schedule 13E-3, Acquirer will promptly inform theCompany.  In any such case, the Companyor Acquirer, as the case may be, with the cooperation of the other party,shall, upon learning of such event, promptly prepare, file and, if required,mail such amendment or supplement to the Company’s stockholders; provided that,prior to such filing or  mailing, theparties shall approve (which approval, with respect to either party, shall notbe unreasonably withheld or delayed) the form and content of such amendment orsupplement.

 

5.2.          ACCESS TO INFORMATION; CONFIDENTIALITY.

 

(a)           From and after the date hereof untilthe Effective Time, upon reasonable notice, the Company shall (and shall causeits Subsidiaries to) afford to the Representatives of

 

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Acquirerreasonable access, during normal business hours, to all its properties, books,contracts, commitments and records, and, during such period, the Company shall(and shall cause its Subsidiaries to) furnish promptly to Acquirer (i) a copyof each report, certification, schedule, registration statement and other documentfiled, published, announced or received by it during such period pursuant tothe requirements of federal or state securities Laws, as applicable, and (ii)consistent with its legal obligations, all other information concerning itsbusiness, properties and personnel as Acquirer may reasonably request; provided,however, the Company may restrict the foregoing access to the extentthat (A) a Governmental Entity requires it or any of its Subsidiaries torestrict access to any properties or information reasonably related to any suchcontract on the basis of applicable Laws and regulations, or (B) any Lawapplicable to it or any of its Subsidiaries requires it or any of itsSubsidiaries to restrict access to any properties or information.

 

(b)           Acquirer shall use the ConfidentialInformation solely for the purpose of evaluating the transactions contemplatedhereby or any modification of such transactions and for no other purpose.  Acquirer agrees to keep all ConfidentialInformation confidential and shall not, without the prior written consent ofthe Company, disclose any Confidential Information to any third party, in wholeor in part, except those who have an actual need to know the ConfidentialInformation for the purpose of evaluating the transactions contemplated hereby,who are informed of the confidential nature of the Confidential Information andwho agree to be bound by this Section 5.2(b) (“PermittedRecipients”).  Acquirer shall beresponsible for any breach of any provision of this Section 5.2(b) byits Permitted Recipients.  Upon theCompany’s request, following any termination of this Agreement pursuant to Article7, Acquirer shall: (i) destroy or, at the Company’s option, return to theCompany all Confidential Information which is in tangible form, including anycopies thereof, and destroy all Confidential Information provided on computerdisks or tape or in other digital format and all abstracts and summaries ofConfidential Information and references thereto which may have been prepared byAcquirer; and (ii) certify to the Company that all Confidential Information hasbeen returned or destroyed as requested by the Company.

 

In the event thatAcquirer becomes legally compelled to disclose any Confidential Information,Acquirer shall provide the Company with prompt notice, if lawful, so that theCompany may seek a protective order or other appropriate remedy and/or waivecompliance with the provisions of this Section 5.2(b).  If such protective order or other remedy isnot obtained, or the Company waives compliance with the provisions of this Section5.2(b), Acquirer shall furnish or permit to be furnished only that portionof the Confidential Information which Acquirer is advised by its counsel islegally required to be furnished, and Acquirer shall use its reasonable bestefforts to obtain assurances that such Confidential Information shall betreated confidentially by the recipient thereof.

 

Acquirer acknowledges andagrees that any breach or threatened breach of the terms of this Section5.2(b) regarding the treatment of Confidential Information may result inirreparable damage to the Company for which there may be no adequate remedy atlaw.  Therefore, Acquirer agrees that inthe event of any breach of this Section 5.2(b) by it or any third party towhom Acquirer makes Confidential Information available, the Company shall beentitled, in addition to

 

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any other rightsand remedies available to it, to specific enforcement of the terms of this Section5.2(b) and/or injunctive relief requiring the immediate return of allConfidential Information in the possession of Acquirer or any such third partyand enjoining Acquirer and any parties to which Acquirer has made ConfidentialInformation available from using Confidential Information in violation of this Section5.2(b), in either case without the necessity of showing or proving that anyactual damages have been sustained.  TheCompany shall be entitled to recover from Acquirer the costs of litigation, includingreasonable attorneys’ fees, incurred by it in any successful legal or equitableaction taken by it to enforce the provisions of this Section 5.2(b).

 

5.3.          APPROVAL AND CONSENTS; COOPERATION.  Each of the Company and Acquirer shallcooperate with each other and use (and the Company shall cause its Subsidiariesto use) their respective commercially reasonable efforts to take or cause to betaken all actions, and do or cause to be done all things, necessary, proper oradvisable on their part to consummate and make effective the Merger and theother transactions contemplated by this Agreement (including the satisfactionof the conditions set forth in Article 6) as soon as practicable,including (i) preparing and filing as promptly as practicable all documentationto effect all applications, notices, petitions, filings, tax ruling requestsand other documents and to obtain as promptly as practicable all consents,waivers, exemptions, licenses, orders, registrations, approvals, permits, taxrulings and authorizations necessary to be obtained from any GovernmentalEntity in order to consummate the Merger or any of the other transactionscontemplated by this Agreement (the “Required Regulatory Approvals”) and (ii)taking all reasonable steps as may be necessary to obtain all such RequiredRegulatory Approvals.  The Company andAcquirer each shall, upon request by the other, furnish the other with allinformation concerning itself, its Subsidiaries, its Representatives and equityholders and such other matters as may reasonably be necessary or advisable inconnection with the Proxy Statement, the Schedule 13E-3 or any RequiredRegulatory Approvals or other statement, filing, tax ruling request, notice orapplication made by or on behalf of the Company, Acquirer or any of theirrespective Subsidiaries to any third party and/or any Governmental Entity inconnection with the Merger or the other transactions contemplated by thisAgreement.

 

5.4.          ACQUISITIONPROPOSALS.

 

(a)           Neither the Company nor anySubsidiary of the Company shall (and the Company shall not authorize theRepresentatives of the Company or any Company Subsidiary to), directly orindirectly through any other Person, (i) solicit, initiate or knowinglyencourage (including by way of furnishing information), or take any otheraction designed to knowingly facilitate any Acquisition Proposal, or affordaccess to the properties, books or records of the Company or any of itsSubsidiaries to any Person or group in connection with any AcquisitionProposal, or (ii) participate in or initiate discussions or negotiationsconcerning any Acquisition Proposal; provided, however, that nothing containedin this Section 5.4 or any other provision hereof shall prohibitthe Company, the Company Board or the Special Committee from (A) taking anddisclosing to the Company’s stockholders a position with respect to a tender orexchange offer by a third party pursuant to Rules 14d-9 and 14e-2 promulgatedunder the Exchange Act, or (B) making such disclosure to the Company’s stockholdersas, in the good faith judgment of the Company Board or the Special Committee,after taking into account advice from

 

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outside counsel,is required under applicable Law, provided that the Company may not, except aspermitted by Section 5.4(c), withdraw or modify, or propose to withdrawor modify, its position with respect to the Merger or approve or recommend, orpropose to approve or recommend any Acquisition Proposal, or enter into anyletter of intent, agreement in principal or agreement concerning anyAcquisition Proposal.  Upon execution ofthis Agreement, the Company will immediately cease any existing activities,discussions or negotiations with any parties conducted heretofore with respectto any of the foregoing. Notwithstanding the foregoing, prior to the affirmative receipt of theRequired Company Vote and the Additional Vote, the Company may furnishinformation concerning it or any Company Subsidiary to any third party Personor group pursuant to customary confidentiality agreements, and may negotiateand participate in discussions and negotiations with such Person or groupconcerning a Superior Proposal if:  (x)such Superior Proposal shall not have resulted from a breach by the Company ofthe provisions of this Section 5.4(a)), and (y) the Company Board or theSpecial Committee concludes in good faith, after having taken into account theadvice of its outside legal counsel, that the failure to take such action wouldbe inconsistent with the fiduciary obligations of the Company Board or theSpecial Committee to the Company’s stockholders under applicable Law.

 

(b)           The Company will promptly notifyAcquirer of the existence of any request for information, proposal, discussion,negotiation or inquiry received by the Company, and the Company will promptlycommunicate to Acquirer the material terms of any proposal, discussion,negotiation or inquiry which it may receive (and will promptly provide toAcquirer copies of any written materials received by the Company in connectionwith such proposal, discussion, negotiation or inquiry) and the identity of thePerson or group making such proposal or inquiry or engaging in such discussionor negotiation.  The Company will keepAcquirer reasonably informed of the status and details (including amendments orproposed amendments) of any such request or Acquisition Proposal.  The Company will promptly provide toAcquirer any non-public information concerning the Company provided to anyother party which was not previously provided to Acquirer.

 

(c)           Except as set forth below in thissubsection (c), neither the Company Board nor the Special Committee shall (i)withdraw or modify, or propose to withdraw or modify, in a manner adverse toAcquirer, the approval or recommendation by the Company Board or any suchcommittee of this Agreement or the Merger, (ii) approve or recommend or proposeto approve or recommend, any Acquisition Proposal or (iii) cause theCompany (or any Subsidiary) to enter into any letter of intent, agreement inprinciple or agreement with respect to any Acquisition Proposal.  The Company Board or the Special Committeein response to a Superior Proposal which was not solicited by the Company andwhich did not otherwise result from a breach of Section 5.4(a), mayterminate this Agreement in order to enter into a letter of intent, agreementin principle or agreement with respect to a Superior Proposal, but only at atime that is prior to the affirmative receipt of the Required Company Vote andthe Additional Vote and that is after the second (2nd) Business Day followingAcquirer’s receipt of written notice from the Company advising Acquirer thatthe Company Board or the Special Committee has received a Superior Proposal,specifying the material terms and conditions of such Superior Proposal andidentifying the Person or group making such Superior Proposal; provided,however, that prior to such termination, the Company shall have caused itsfinancial and legal advisors to

 

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negotiate in goodfaith with Acquirer; and provided, further, however, that prior to suchtermination, Acquirer has not made an offer that the Company Board or theSpecial Committee determines in good faith after consulting with its financialadvisors is at least as favorable to the stockholders of the Company as theSuperior Proposal.

 

(d)           Nothing set forth in this Section5.4 or elsewhere in this Agreement shall require Acquirer, Deutsch or theirrespective Affiliates or Associates to vote their shares of Company CommonStock in favor of or tender such shares in response to, any AcquisitionProposal.

 

(e)           “Acquisition Proposal” shall mean (1)any inquiry, proposal or offer from any third party Person or group relating toany direct or indirect acquisition or purchase of a business that constitutes15% or more of the net revenues, net income or the assets of the Company andits Subsidiaries, taken as a whole, (2) any tender offer or exchange offer thatif consummated would result in any Person or group beneficially owning 15% ormore of any class of equity securities of the Company or any of itsSubsidiaries, or (3) any merger, consolidation, business combination,recapitalization, liquidation, dissolution or similar transaction involving theCompany or any of its Subsidiaries, other than the transactions contemplated bythis Agreement.

 

(f)            “Superior Proposal” shall mean anyAcquisition Proposal by a third party Person or group on terms that the SpecialCommittee determines, in its good faith judgment (after taking into account theprice and consideration offered and the likelihood that the proposedacquisition will ultimately be consummated and after taking into account theadvice of the financial advisor to the Special Committee) to be more favorableto the Company’s stockholders than the terms of the Merger.

 

5.5.          FEES ANDEXPENSES.  All Expenses incurred inconnection with this Agreement and the transactions contemplated hereby shallbe paid by the party incurring such Expenses.

 

5.6.          INDEMNIFICATION,DIRECTORS’ AND OFFICERS’ INSURANCE.

 

(a)           From and after the Effective Time,the Surviving Company shall indemnify and hold harmless each person who was oris a party or is threatened to be made a party to or is involved or isthreatened to be involved in (as a witness or otherwise) or otherwise requiresrepresentation by counsel now or at any time hereafter in connection with anythreatened, pending or completed action, suit or proceeding, or any inquirythat such person in good faith believes might lead to the institution of anysuch action, suit or proceeding, whether civil, criminal, administrative orinvestigative (hereinafter, a “proceeding”), by reason of the fact that he or she was a director,officer, employee or agent of the Company or was serving at the request of theCompany as a director, officer, trustee, partner, employee or agent of anothercorporation or of a partnership, joint venture, trust or other enterprise,including service with respect to employee benefit plans (each, an “IndemnifiedParty”), whether the basis of such proceeding is alleged action or inaction inan official capacity as a director, officer, trustee,

 

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partner, employeeor agent or in any other capacity while serving or having agreed to serve as asuch a director, officer, trustee, partner, employee or agent, suchindemnification to be given, made and provided to the fullest extent authorizedby the MGCL, as now in effect or as it may hereafter be amended (but, in thecase of any such amendment with reference to events occurring prior to theEffective Time, only to the extent that such amendment permits the SurvivingCompany to provide broader indemnification rights than said Law permitted theCompany to provide prior to such amendment), against all costs, charges,expenses, liabilities and losses (including reasonable attorneys’ fees,judgments, fines, ERISA excise taxes or penalties and amounts paid or to bepaid in settlement) actually and reasonably incurred or suffered by such personin connection therewith and such indemnification shall continue as to a personwho has ceased to serve in the capacity which initially entitled such person toindemnity hereunder and such indemnity shall also inure to the benefit of suchperson’s heirs, personal representatives and estate; provided, however,that except as provided in subsection (b) hereof, the Surviving Company shallindemnify any such person seeking indemnification in connection with aproceeding (or part thereof) initiated by such person against the Company orSurviving Company only if such proceeding (or part thereof) was authorizedprior to its initiation by a majority of the disinterested members of theCompany Board.  The rights toindemnification conferred in this Section 5.6(a) shall include the rightto be paid by the Surviving Company any expenses incurred in defending any suchproceeding in advance of its final disposition, provided, however,that, if and to the extent that the MGCL so requires, the payment of suchexpenses incurred in advance of the final disposition of a proceeding shall bemade to or on behalf of a person only upon delivery to the Surviving Company ofan undertaking, by or on behalf of such person, to repay all amounts so advancedif it shall ultimately be determined that such person is not entitled to beindemnified under this Section 5.6(a) or otherwise.  The rights to indemnification conferred inthis Section 5.6(a) shall be deemed to be contract rights between theSurviving Company and each person who served in the capacities described above.

 

(b)           If a claim made under subsection (a)above shall not have been paid in full by the Surviving Company within sixty(60) days after a written claim has been received by the Surviving Company, theclaimant may at any time thereafter bring suit against the Surviving Company torecover the unpaid amount of the claim, and if successful in whole or in part,the claimant shall be entitled to be paid, in addition, the expenses ofprosecuting such claim.  In any actionbrought by the claimant to enforce a right to indemnification hereunder or bythe Surviving Company to recover payments by the Surviving Company of expensesincurred by a claimant in a proceeding in advance of its final disposition, theburden of proving that the claimant is not entitled to be indemnified underthis Section or otherwise shall be on the Surviving Company.  Neither the failure of the Surviving Company(including its directors, independent legal counsel, or its stockholders) tohave made a determination prior to the commencement of such action thatindemnification of the claimant is proper under the circumstances because he orshe has met the applicable standard of conduct set forth in the MGCL, nor anactual determination by the Surviving Company (including its directors,independent legal counsel, or its stockholders) that the claimant has not metsuch applicable standard of conduct, shall create a presumption that theclaimant has not met the applicable

 

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standard ofconduct, or, in the case of such an action brought by the claimant, be adefense to this action.

 

(c)           The right to indemnification and thepayment of expenses incurred in defending a proceeding in advance of its finaldisposition conferred in this Section shall not be exclusive of any other rightwhich any person may have or hereafter acquire under any Law (common orstatutory) any agreement, or otherwise, both as to action in that person’sofficial capacity and as to action in any other capacity by holding suchoffice, and shall continue after the person ceases to serve in the capacitywhich initially entitled such person to indemnity hereunder.

 

(d)           For a period of six (6) years afterthe Effective Time, the Surviving Company shall cause to be maintained ineffect the current policies of directors’ and officers’ liability insurance andfiduciary liability insurance maintained by the Company (provided that theSurviving Company may substitute therefor policies with an insurer of equalclaims paying ratings and of at least the same coverage and amounts containingterms and conditions which are, in the aggregate, no less advantageous to theinsured) with respect to claims arising from facts or events that occurred onor before the Effective Time.  Thiscovenant is intended to be for the benefit of, and shall be enforceable by,each of the Indemnified Parties and their respective heirs and legalrepresentatives.  Notwithstanding theforegoing, the obligations of the Surviving Company to cause such insurance tobe maintained shall terminate and be of no further force or effect in the eventthat prior to the Effective Time “tail” coverage for the Company’s existingpolicies is obtained by the Company for the six-year period after the EffectiveTime upon terms and conditions approved in writing by the Special Committee.

 

(e)           If the Surviving Company or any ofits successors or assigns (i) consolidates with or merges into any other Personand will not be the continuing or surviving corporation or entity of suchconsolidation or merger or (ii) transfers all or substantially all of itsequity or assets to any Person, then, and in each such case, proper provisionwill be made so that the successors and assigns of the Surviving Company willassume the obligations set forth in this Section 5.6.

 

5.7.          PUBLICANNOUNCEMENTS.  From and after thedate hereof until the Effective Time, the Company and Acquirer shall use allreasonable best efforts to develop a joint communications plan and each partyshall use all reasonable best efforts (i) to ensure that all press releases andother public statements with respect to the transactions contemplated herebyshall be consistent with such joint communications plan, and (ii) unless otherwiserequired by applicable Law or by obligations pursuant to the rules of NASDAQ,to consult with each other before issuing any press release or otherwise makingany public statement with respect to this Agreement or the transactionscontemplated hereby.

 

5.8.          FURTHERASSURANCES.  The proper officers ofthe Company and Acquirer shall take any reasonably necessary actions if, at anytime after the Effective Time, any further action is reasonably necessary tocarry out the purposes of this Agreement. Without limiting the generality of the foregoing, if, at any time afterthe Effective Time, the Surviving Company shall consider or be advised of anydeeds, bills of sale, assignments, assurances or any other actions or

 

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things that arenecessary or desirable to vest, perfect or confirm of record or otherwise inthe Surviving Company its right, title or interest in, to or under any of therights, properties or assets of the Company or Acquirer or otherwise to carryout this Agreement, the officers of the Surviving Company shall be authorizedto execute and deliver, in the name and on behalf of the Company or Acquirer,as the case may be, all such deeds, bills of sale, assignments and assurancesand take and do, in the name and on behalf of the Company or Acquirer, as thecase may be, all such other actions and things as may be necessary or desirableto vest, perfect or confirm any and all right, title and interest in, to andunder such rights, properties or assets in the Surviving Company or otherwiseto carry out this Agreement.

 

5.9.          STATETAKEOVER LAWS.  If any statetakeover becomes or is deemed to become applicable to the Agreement, the Mergeror any other transactions contemplated hereby, the Company shall use itsreasonable best efforts to render such statute inapplicable to all of theforegoing.

 

5.10         LIMITEDGUARANTEE.  Deutsch agrees that hewill be personally responsible for causing the Surviving Company and Acquirerto perform their respective obligations pursuant to this Agreement (includingthe payment of the Merger Consideration, the payment with respect to CompanyStock Options set forth in Section 1.10 hereof and the payment ofExpenses in connection with the Merger or other transactions contemplated bythis Agreement).  Notwithstanding theforegoing, in no event will Deutsch be personally responsible for paying orproviding funds to any Person to pay for any portion of the MergerConsideration, the payment with respect to Company Stock Options set forth in Section1.10 hereof, or for any Expenses of the Company in connection with theMerger or the other transactions contemplated by this Agreement.

 

5.11         ACQUIREROWNERSHIP.  Acquirer will continueto own the shares of Company Common Stock that it currently owns, as set forthon Exhibit A.

 

**ARTICLEVI**

** **

**CONDITIONS PRECEDENT**

 

6.1.          CONDITIONS TO EACH PARTY’S OBLIGATIONTO EFFECT THE MERGER.  Therespective obligations of the Company and Acquirer to effect the Merger aresubject to the satisfaction or waiver on or prior to the Closing Date of thefollowing conditions:

 

(a)           Stockholder Approval.  The Company shall have obtained the RequiredCompany Vote and the Additional Vote.

 

(b)           No Injunctions or Restraints.  No temporary restraining order, preliminaryor permanent injunction or other order issued by a court or other GovernmentalEntity of competent jurisdiction shall be in effect and have the effect ofmaking the Merger illegal or otherwise prohibiting consummation of the Merger; provided,however, the party invoking this condition shall use its commerciallyreasonable efforts to have any such order or injunction

 

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vacated.  The provisions of this Section 6.1 (b)shall not be available to any party whose failure to fulfill its obligationspursuant to Section 5.3 shall have been the cause of, or shall haveresulted in, such order or injunction.

 

(c)           Fairness Opinion.  The fairness opinion of FBR referred to in Section3.1(f) shall not have been withdrawn, revoked, annulled or modified at orprior to the Effective Time.

 

(d)           Required Regulatory Approvals.  All Required Regulatory Approvals shall havebeen obtained, been filed or have occurred, other than Required RegulatoryApprovals the failure of which to obtain, make or occur, individually or in theaggregate, would not reasonably be expected to have a Material Adverse Effecton the Company; provided, however, that a Required Regulatory Approval shallnot be deemed to have been obtained if in connection with the grant thereofthere shall have been an imposition by any Governmental Entity of anycondition, requirement or restriction, or any other action directly orindirectly related to such grant taken by such Governmental Entity, that wouldreasonably expected to have a Material Adverse Effect on the Company.

 

6.2.          CONDITIONS TO THE OBLIGATION OFACQUIRER TO EFFECT THE MERGER.  Inaddition to the conditions set forth in Section 6.1, the obligation ofAcquirer to effect the Merger are further subject to the satisfaction or waiverby Acquirer, on or prior to the Closing Date, of the following conditions:

 

(a)           Performance of Obligations andCovenants.  The Company shall haveperformed or complied with all of its obligations and covenants required to beperformed by the Company under this Agreement at or prior to the Closing Date,except where the failure to so perform or comply would not reasonably beexpected to have a Material Adverse Effect on the Company and would not preventthe consummation of the Merger by the Outside Date, and Acquirer shall havereceived an officer’s certificate executed on behalf of the Company to sucheffect; provided, however, that the Company’s performance orcompliance with its obligations and covenants required to be performed by itunder this Agreement shall not be a condition to the obligation of Acquirer toeffect the Merger where the failure by the Company to so perform or comply isattributable to any action or inaction on the part of Deutsch or his Affiliatesor Associates.

 

(b)           Certificate.  The Company shall have delivered to Acquirerduly adopted resolutions of the Company Board approving the execution,delivering and performance of this Agreement, and resolutions of thestockholders of the Company pursuant to which the Required Company Vote and theAdditional Vote was obtained, in each case certified by the Secretary orAssistant Secretary of the Company.

 

6.3           CONDITIONS TO THE OBLIGATION OF THECOMPANY TO EFFECT THE MERGER.  Inaddition to the conditions set forth in Section 6.1, the obligation ofthe Company to effect the Merger is further subject to the satisfaction orwaiver by the Company, on or prior to the Closing Date, of the followingcondition:

 

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(a)           Performance of Obligations andCovenants.  Acquirer shall haveperformed or complied with all of its obligations and covenants required to beperformed by Acquirer under this Agreement at or prior to the Closing Date,except where the failure to so perform or comply would not prevent theconsummation of the Merger by the Outside Date, and the Company shall havereceived an officer’s certificate executed on behalf of Acquirer to sucheffect.

 

**ARTICLEVII**

** **

**TERMINATION AND AMENDMENT**

 

7.1.          TERMINATION.  This Agreement may be terminated at any timeprior to the Effective Time, whether before or after any approval of thematters presented in connection with the Merger by the stockholders of theCompany in the following manner:

 

(a)           By mutual written consent of theCompany (acting through the Special Committee) and Acquirer.

 

(b)           By either the Company (acting throughthe Special Committee) or Acquirer if the Merger shall not have beenconsummated by December 31, 2003 (the “Outside Date”); provided, however,the right to terminate this Agreement under this Section 7.1 (b) shallnot be available to any party whose material breach of any covenant oragreement under this Agreement has been the cause of, or resulted in, thefailure of the Merger to occur on or before the Outside Date.

 

(c)           By either the Company (acting throughthe Special Committee) or Acquirer if any Governmental Entity shall have issuedany judgment, injunction, order, permit, decree or ruling or taken any otheraction permanently restraining, enjoining or prohibiting Acquirer or theCompany from consummating the transactions contemplated by this Agreement,including the Merger, and such judgment, injunction, order, decree, ruling orother action shall have become final and nonappealable.

 

(d)           By either the Company (acting throughthe Special Committee) or Acquirer if the Required Company Vote and theAdditional Vote shall not have been obtained at the Stockholders’ Meeting orany adjournments or postponements thereof.

 

(e)           By the Company (acting through theSpecial Committee):

 

(i)            in connection with entering into adefinitive agreement as permitted by Section 5.4(c) hereof, provided theCompany has complied with all provisions thereof;

 

(ii)           if FBR withdraws its opinion that theMerger Consideration to be received by the holders of shares of Company CommonStock (other than Cancelled Shares and Dissenting Shares, if any) is fair tosuch holders from a financial point of view, provided that such withdrawal wasnot requested or knowingly encouraged by the Special Committee; or

 

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(iii)          if Acquirer shall have breached in anymaterial respect any of its covenants or agreements contained in thisAgreement, which would result in a failure of any of the conditions set forthin Section 6.3, which breach cannot be or has not been cured on or before theOutside Date.

 

(f)            By Acquirer:

 

(i)            if the Special Committee shall have(x) failed to make, withdrawn, modified or changed in a manner adverse toAcquirer its approval or recommendation of this Agreement or the Merger, (y)shall have made any recommendation with respect to an Acquisition Proposalother than a recommendation to reject such Acquisition Proposal, or (z) shallhave executed a letter of intent, agreement in principle or definitiveagreement relating to an Acquisition Proposal with a Person other thanAcquirer; or

 

(ii)           if the Company shall have breached inany material respect any of its covenants or other agreements contained in thisAgreement which would result in a failure of any of the conditions set forth inSection 6.2, which breach cannot be or has not been cured on or before theOutside Date; provided, however, that the Acquirer shall not beentitled to terminate this Agreement pursuant to this Section 7.1(f)(ii) wherethe breach by the Company of any of its covenants or other agreements containedin this Agreement is attributable to any action or inaction on the part ofDeutsch or his Affiliates or Associates.

 

7.2.          EFFECT OFTERMINATION.

 

In the event oftermination of this Agreement by either the Company or Acquirer as provided in Section7.1, this Agreement shall forthwith become void and have no effect, thereshall be no liability or obligation on the part of the Company, Acquirer ortheir respective Representatives and Affiliates, and all rights and obligationsof the parties hereto shall cease, except (i) with respect to Section 3.1(d)(Brokers and Finders), Section 3.2(f) (Brokers and Finders), Section5.2 (Access to Information; Confidentiality), Section 5.5 (Fees andExpenses), this Section 7.2 (Effect of Termination) and Article 8,and (ii) with respect to any liabilities or damages incurred or suffered by aparty as a result of the willful breach by the other party of any of itscovenants or other agreements set forth in this Agreement.

 

7.3.          AMENDMENT.  This Agreement may be amended by the partieshereto (which, in the case of the Company, shall require the approval of theSpecial Committee) at any time before or after any required approval of thematters presented in connection with the Merger by the stockholders of theCompany; provided, however, after any such approval, no amendmentshall be made which by applicable Law or in accordance with the rules of NASDAQrequires further approval by such stockholders without such furtherapproval.  This Agreement may not beamended except by an instrument in writing signed on behalf of each of theparties hereto.

 

7.4           EXTENSION;WAIVER.  At any time prior to theEffective Time, the parties hereto may, to the extent permitted by applicableLaw, (a) extend the time for the performance of any of the obligations or otheracts of the other party hereto, (b) waive any inaccuracies in the

 

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representationsand warranties contained in this Agreement or in any document deliveredpursuant hereto, or (c) subject to Section 7.3, waive compliance withany of the agreements or conditions contained in this Agreement.  Any agreement on the part of a party heretoto any such extension or waiver shall be valid only if set forth in a writteninstrument signed on behalf of such party. No delay or failure on the part of any party hereto in exercising anyright, power or privilege hereunder shall operate as a waiver thereof, norshall any waiver on the part of any party hereto of any right, power orprivilege hereunder operate as a waiver of any other right, power or privilegehereunder, nor shall any single or partial exercise of any right, power orprivilege hereunder preclude any other or further exercise thereof or theexercise of any other right, power or privilege hereunder.  Unless otherwise provided, the rights andremedies herein provided are cumulative and are not exclusive of any rights orremedies which the parties hereto may otherwise have at law or in equity.

 

7.5.          PROCEDUREFOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER.  A termination of this Agreement pursuant to Section 7.1,an amendment of this Agreement pursuant to Section 7.3, an extension orwaiver pursuant to Section 7.4 or any other approval or consent requiredor permitted to be given pursuant to this Agreement or the exercise of anyrights or satisfaction of any obligations of the parties hereunder shall, inorder to be effective and in addition to the requirements of applicable Law,require (a) in the case of the Company, the action of the Special Committee orthe Company Board or (b) in the case of Acquirer, the action by the Board ofDirectors thereof.

 

**ARTICLEVIII**

** **

**GENERAL PROVISIONS**

** **

8.1.          NON-SURVIVALOF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.  None of the representations, warranties,covenants and other agreements set forth in this Agreement or in any instrumentdelivered pursuant to this Agreement, including any rights arising out of anybreach of such representations, warranties, covenants and other agreements,shall survive the Effective Time, except for those covenants and agreementscontained herein and therein which by their terms apply or are to be performedin whole or in part after the Effective Time and this Article 8.  EACH PARTY HERETO AGREES THAT, EXCEPT FORTHE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER THECOMPANY NOR ACQUIRER MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACHPARTY HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS AND WARRANTIES MADE BY ITSELFOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGALADVISORS OR OTHER REPRESENTATIVES WITH RESPECT TO THE EXECUTION AND DELIVERY OFTHIS AGREEMENT, THE DOCUMENTS AND THE INSTRUMENTS REFERRED TO HEREIN, OR THETRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, NOTWITHSTANDING THE DELIVERY ORDISCLOSURE TO THE OTHER PARTY OR THE OTHER PARTY’S REPRESENTATIVES OF ANYDOCUMENTATION

 

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OR OTHER INFORMATIONWITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.

 

8.2.          NOTICES.  All notices and other communicationshereunder shall be in writing and shall be deemed duly given (i) on the date ofdelivery if delivered personally, (ii) on the first Business Day following thedate of dispatch if delivered by nationally recognized next-day courierservice, (iii) on the fifth Business Day following the date of mailing ifdelivered by registered or certified mail, return receipt requested, postageprepaid or (iv) if sent by facsimile transmission, when transmitted andconfirmation of such transmission is received. All notices hereunder shall be delivered as set forth below, or pursuantto such other instructions as may be designated in writing by the party to receivesuch notice:

 

(a)           if to Acquirer or Deutsch, to:

 

Research ParkAcquisition, Inc.

AppliedTechnology Laboratory

5521 ResearchPark Drive

Baltimore,Maryland  21228

Attn:  Robert W. Deutsch, Ph.D., President

Phone:  (410) 869-1010

Fax:  (443) 253-9380

 

with a copyto:

 

Piper RudnickLLP

6225 SmithAvenue

Baltimore,Maryland 21209-3600

Attn:  Richard C. Tilghman

Phone:  (410) 580-4274

Fax:  (410) 580-3001

 

(b)           if to the Company,to:

 

RWDTechnologies, Inc.

5521 ResearchPark Drive

Baltimore,Maryland  21228

Attn:  Mr. Henry Z Shelton, Chairman, SpecialCommittee of the Board of Directors

Phone:  (301) 564-3302

Fax:  (301) 564-3205

 

with a copyto:

 

King &Spalding LLP

191 PeachtreeStreet

Atlanta,Georgia 30303-1763

Attn:  William G. Roche

Phone:  (404) 572-4600

Fax:  (404) 572-5146

 

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8.3.          INTERPRETATION.  When a reference is made in this Agreementto a Section or Exhibit, such reference shall be to a Section of or Exhibit tothis Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are forreference purposes only and shall not affect in any way the meaning orinterpretations of this Agreement. Whenever the words “include,” “includes” or “including” are used in thisAgreement, they shall be deemed to be followed by the words “withoutlimitation.” The parties have participated jointly in the negotiation anddrafting of this Agreement.  In theevent an ambiguity or question of intent or interpretation arises, thisAgreement shall be construed as if drafted jointly by the parties and nopresumption or burden or proof shall arise favoring or disfavoring any party byvirtue of the authorship of any of the provisions of this Agreement.  Any reference to any federal, state, localor foreign statute or Law shall be deemed also to refer to all rules andregulations promulgated thereunder, unless the context requires otherwise.

 

8.4.          COUNTERPARTS.  This Agreement may be executed in one ormore counterparts (including by means of telecopied signature pages), all ofwhich shall be considered one and the same agreement and shall become effectivewhen one or more counterparts have been signed by each of the parties anddelivered to the other party, it being understood that both parties need notsign the same counterpart.

 

8.5           ENTIRE AGREEMENT; NO THIRD PARTYBENEFICIARIES.

 

(a)           This Agreement and the otheragreements referred to herein constitute the entire agreement and supersede allprior agreements and understandings, both written and oral, between the partieswith respect to the subject matter hereof.

 

(b)           This Agreement shall be binding uponand inure solely to the benefit of each party hereto and its successors andpermitted assigns, and except as set forth in Sections 1.4, 1.8, 1.9, 1.10,5.6, 8.5 and 8.9 (which are intended to and shall create third partybeneficiary rights if the Merger is consummated), nothing in this Agreement,express or implied, is intended to confer upon any other Person any rights orremedies of any nature whatsoever under or by reason of this Agreement.  Each of the Indemnified Parties referred toin Section 5.6 shall be entitled to enforce the provisions hereofdirectly against the Surviving Company, to the same extent as if suchIndemnified Party were a party hereto.

 

8.6.          GOVERNING LAW.  This agreement shall be governed andconstrued in accordance with the laws of the State of Maryland, without regardto the laws that might be applicable under conflicts of laws principles.

 

8.7.          WAIVER OFJURY TRIAL.  Each of the partieshereto acknowledges and agrees that any controversy which may arise under thisagreement is likely to involve complicated and difficult issues, and thereforeeach such party hereby irrevocably and unconditionally waives any right suchparty may have to a trial by jury in respect of any legal action or proceedingdirectly or indirectly arising out of or relating to this Agreement or thetransactions contemplated hereby and for any counterclaim therein.  Each party (i) understands and hasconsidered the implications of

 

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this waiver, (ii)makes this waiver voluntarily, and (iii) has been induced to enter into thisAgreement by, among other things, the provisions of this Section 8.7.

 

8.8.          SEVERABILITY.  If any term or other provision of thisAgreement is invalid, illegal or incapable of being enforced by any Law orpublic policy, all other terms and provisions of this Agreement shallnevertheless remain in full force and effect so long as the economic or legalsubstance of the transactions contemplated hereby is not affected in any mannermaterially adverse to any party.  Uponsuch determination that any term or other provision is invalid, illegal orincapable of being enforced, the parties hereto shall negotiate in good faithto modify this Agreement so as to effect the original intent of the parties asclosely as possible in an acceptable manner in order that the transactionscontemplated hereby are consummated as originally contemplated to the greatestextent possible.  Any provision of thisAgreement held invalid or unenforceable only in part, degree or in certainjurisdictions will remain in full force and effect to the extent not held invalidor unenforceable.  To the extent permittedby applicable Law, each party waives any provision of Law which renders anyprovision of this Agreement invalid, illegal or unenforceable in any respect.

 

8.9.          ASSIGNMENT.  Neither this Agreement nor any of therights, interests or obligations hereunder shall be assigned by any of theparties hereto, in whole or in part (whether by operation of Law or otherwise),without the prior written consent of the other party, and any attempt to makeany such assignment without such consent shall be null and void.

 

8.10.        ENFORCEMENT.  The parties agree that irreparable damagewould occur in the event that any of the provisions of this Agreement were notperformed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the partiesshall be entitled to specific performance of the terms and provisions of thisAgreement (without requirement to post a bond, if applicable), this being inaddition to any other remedy to which the parties are entitled at law or inequity.

 

8.11.        DEFINITIONS.  As used in this Agreement, the followingterms shall have the following definitions:

 

“Affiliate” shall havethe meaning ascribed to such term under Rule 12b-2 of the General Rules andRegulations under the Exchange Act.

 

“Associate” means, withrespect to any specified Person, (1) any corporation or organization of whichsuch Person is an officer or partner or is, directly or indirectly, thebeneficial owner of 10% or more of any class of equity securities, (2) anytrust or other estate in which such person has a substantial beneficialinterest or as to which such person serves as trustee or in a similar fiduciarycapacity, and (3) any relative or spouse of such Person, or any relative ofsuch spouse.

 

“Business Day” means anyday on which banks are not required or authorized to close in the City ofBaltimore, Maryland.

 

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“ConfidentialInformation” means information in whatever form provided by or on behalf of theCompany to Acquirer or its directors, officers, employees, agents, lenders,investors or advisors in connection with the evaluation by Acquirer of thetransactions contemplated herein, including information relating to thefinancial condition of the Company and its business strategies, marketingplans, developmental plans, computer programs, computer systems, processes,inventions, developments and trade secrets of every kind and nature.  However, Confidential Information does notinclude any information which (i) was or becomes generally available to thepublic other than as a result of an unauthorized disclosure by Acquirer, (ii)was or becomes available to Acquirer on a nonconfidential basis from a sourceother than the Company or its advisors, provided that the disclosure by such sourcedoes not violate any confidentiality obligation or duty of such source to theCompany or (iii) was within the possession of or known by Acquirer or any ofits Affiliates prior to its being furnished by or on behalf of Company,provided that the disclosure by the original source of such information did notviolate any confidentiality obligation or duty of such source to the Company.

 

“Expenses” means andincludes all out-of-pocket costs and expenses (including all fees and expensesof counsel, accountants, banks, investment bankers, experts and consultants toa party hereto and its Affiliates) incurred by a party or on its behalf,whenever incurred, in connection with or related to the authorization,preparation, negotiation, execution and performance of this Agreement and thetransactions contemplated hereby.

 

“Law” means allprovisions of any federal, state, foreign, local or other law, statute,ordinance, rule, regulation, or governmental requirement or restriction of anykind, including any rules, regulations and orders promulgated thereunder, andany final orders, decrees, consents or judgments of any regulatory agency orcourt.

 

“Material Adverse Effect”means, when used with respect to the Company, any event, change or effect thatwhen taken together with all other such events, changes or effects, ismaterially adverse to the business, financial condition or results ofoperations of the Company and its Subsidiaries, taken as a whole, except to theextent resulting from or relating to (i) any changes or events (including a waror terrorist incident) affecting general economic, industry or financial marketconditions, (ii) compliance with the terms of this Agreement, (iii) the takingof any action by the Company that has been approved in writing by Acquirer,(iv) any adverse change in the stock price of the Company, (v) any change,event, circumstance, development or effect resulting from a breach of thisAgreement by the Acquirer, or (vi) the announcement or pendency of thetransactions contemplated by this Agreement.

 

“OrganizationalDocuments” means, with respect to any entity, the articles or certificate ofincorporation or organization, bylaws or other governing documents of suchentity.

 

“Person” means anindividual, corporation, partnership, limited liability company, joint venture,association, trust, unincorporated organization, “group” (as defined in theExchange Act) or other entity.

 

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“Representatives” means,collectively, the directors, officers, employees, agents and otherrepresentatives (including any investment bankers, financial advisors,attorneys and accountants) of any Person.

 

“Subsidiary” when usedwith respect to any party means any corporation or other organization, whetherincorporated or unincorporated, (i) of which such party or any other Subsidiaryof such party is a general partner (excluding partnerships, the generalpartnership interests of which held by such party or any Subsidiary of suchparty do not have a majority of the voting and economic interests in suchpartnership), or (ii) at least a majority of the securities or other interestsof which having by their terms ordinary voting power to elect a majority of theboard of directors or others performing similar functions with respect to suchcorporation or other organization is directly or indirectly owned or controlledby such party or by any one or more of its Subsidiaries, or by such party andone or more of its Subsidiaries.

 

**[SIGNATUREPAGE FOLLOWS]**

 

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IN WITNESS WHEREOF,Acquirer and the Company have caused this Agreement to be signed by theirrespective officers thereunto duly authorized, in each case as of the datefirst written above.

 
|   | Research Park Acquisition, Inc., a Maryland corporation |
|--------|---------------------------------------------------------|
|   |                                                    |
|   |                                                    |
|   | By:                                                     |   |   |
|   |                                                    | Robert W. Deutsch, Ph.D., President |
|   |                                                    |
|   |                                                    |
|   | RWD TECHNOLOGIES, INC., a Maryland corporation          |
|   |                                                    |
|   | By:                                                     |   |   |
|   |                                                    | Name: |   |   |
|   |                                                    |
|   |                                                    |
|   | **As to Section 5.10 hereof only:**                     |
|   |                                                    |   |
|   |                                                    |   |
|   | Robert W. Deutsch, Ph.D.                                |
|        |                                                         |  |  |  |  |

 

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**EXHIBITA**

 

**ACQUIRER’SSTOCKHOLDERS AND OWNERSHIP INTERESTS IN THE COMPANY AS OF APRIL 29, 2003.**

 

 

1.             Company CommonStock owned by Acquirer:  10,133,678shares of Company Common Stock.

 

2.             Ownership ofAcquirer:

 
| **Name**                                                                                                                      |   | **Shares of Acquirer Common Stock** |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|--------|
|                                                                                                                          |   |                                |   |
| Robert W. Deutsch                                                                                                             |   | 8,905,500                           |   |
|                                                                                                                          |   |                                |   |
| Florence W. Deutsch                                                                                                           |   | 450,000                             |   |
|                                                                                                                          |   |                                |   |
| David J. Deutsch                                                                                                              |   | 158,081                             |   |
|                                                                                                                          |   |                                |   |
| Jane C. Brown                                                                                                                 |   | 170,097                             |   |
|                                                                                                                          |   |                                |   |
| David J.  Deutsch and Jane C.  Brown, Trustees of Florence  Deutsch Trust U/A dated  12/18/93 f/b/o Hannah Elizabeth  Deutsch |   | 112,500                             |   |
|                                                                                                                          |   |                                |   |
| David J.  Deutsch and Jane C.  Brown, Trustees of Florence  Deutsch Trust U/A dated  12/18/93 f/b/o Thomas Michael   Deutsch  |   | 112,500                             |   |
|                                                                                                                          |   |                                |   |
| David J.  Deutsch and Jane C.  Brown, Trustees of Florence  Deutsch Trust U/A dated  12/18/93 f/b/o Jonathan Daniel   Deutsch |   | 112,500                             |   |
|                                                                                                                          |   |                                |   |
| David J.  Deutsch and Jane C.  Brown, Trustees of Florence  Deutsch Trust U/A dated  12/18/93 f/b/o Daniel Joseph Brown       |   | 112,500                             |   |
|                                                                                                                          |   |                                |   |
| Total                                                                                                                         |   | 10,133,678                          |   |

 

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