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EXHIBIT 2.4
AGREEMENT OF AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into
as of this 18th day of November, 1996 by and between American Business
Information, Inc., a Delaware corporation ("ABI"), American Business
Information Marketing, Inc., a Delaware corporation and a wholly-owned
subsidiary of ABI (the "Purchaser"), Marketing Data Systems, Inc., a New Jersey
corporation ("MDS") and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, being
all of the shareholders of MDS (collectively referred to herein as the
"Shareholders").
W I T N E S S E T H:
WHEREAS, ABI is a corporation duly organized and existing under the
laws of Delaware with authorized capital stock of 75,000,000 shares of common
stock, par value $.0025 per share, of which 21,984,960 shares are issued and
outstanding and 165,000 are held in treasury, and 5,000,000 shares of preferred
stock, par value $.0025 per share, of which no shares are issued and
outstanding; and
WHEREAS, Purchaser is a corporation duly organized and existing under
the laws of Delaware with authorized capital stock of 10,000 shares of common
stock, par value $1.00 per share, of which 10,000 shares are issued and
outstanding and owned by ABI; and
WHEREAS, MDS is a corporation duly organized and existing under the
laws of New Jersey with authorized capital stock of 1,000 shares of common
stock, par value $.00 per share, of which 110 shares are issued and 58 shares
outstanding all of which are owned by the Shareholders; and
WHEREAS, pursuant to Sections 14A:10-4 and 14A:10-7 of the New Jersey
Business Corporation Act (the "New Jersey Act") and Section 252 of the Delaware
General Corporation Law (the "Delaware Law"), MDS and the Purchaser agree to
merge upon the terms and conditions set forth herein (the "Merger"), with the
Purchaser as the surviving corporation thereof. (The Purchaser and MDS are
sometimes referred to herein as the "Constituent Corporations");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration the sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
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Section 1. THE MERGER. (a) The effective time of the Merger (the
"Effective Time") shall be the time at which the Delaware Certificate and the
New Jersey Certificate (each defined below) shall have been filed in accordance
with the Delaware Law and the New Jersey Act pursuant to paragraph (b) of this
Section 1. At the Effective Time, the separate existence of MDS shall cease and
MDS shall be merged with and into the Purchaser, which shall continue its
corporate existence and be the corporation surviving the merger.
(b) Contemporaneously with closing described in Section 2, and in no
event later than the next business day after the Closing Date (as defined in
Section 2), the parties hereto will cause the filing of a Certificate of
Ownership and Merger in substantially the form attached hereto as Exhibit A
(the "Delaware Certificate") with the Secretary of State of the State of
Delaware in accordance with the Delaware Law and the filing of Certificate of
Merger in substantially the form attached hereto as Exhibit B (the "New Jersey
Certificate") with the Secretary of State of the State of New Jersey in
accordance with the New Jersey Act.
(c) The Purchaser, as the corporation surviving the Merger, shall
possess all the rights, privileges, immunities and franchises, both public and
private, of the Constituent Corporations; shall be vested with all property,
whether real, personal, or mixed, and all debts due on whatever account, and
all other causes in action, and all and every other interest belonging to or
due to each of the Constituent Corporations; and shall be responsible and
liable for all the obligations and liabilities of each of the Constituent
Corporations, all with the effect set forth in the Delaware Law and New Jersey
Act. Notwithstanding the foregoing, each Shareholder acknowledges and agrees
that the Purchaser will not as a result of the Merger assume any liability for
the personal debts or other obligations of the Shareholders, including
obligations incurred by the Shareholders with respect to any employee or other
party related to MDS.
(d) The certificate of incorporation of the Purchaser at the Effective
Time of the Merger shall become and continue to be the certificate of
incorporation of the Purchaser as the surviving corporation of the Merger until
amended as provided therein and by law. The bylaws of the Purchaser at the
Effective Time of the Merger shall become and continue to be the bylaws of the
Purchaser as the surviving corporation until altered or amended in accordance
with the provisions thereof. The directors and officers of the Purchaser at the
Effective Time of the Merger shall become and continue to be the directors and
officers of the Purchaser as the surviving corporation until their respective
successors are chosen.
(e) At the Effective Time of the Merger, by virtue thereof and without
any action on the part of Purchaser, MDS or the Shareholders, each share of
common stock of MDS which was issued and outstanding immediately prior to the
Effective Time shall automatically be converted into the right to receive a
proportionate share of the merger consideration consisting of the following
(the "Merger Consideration"):
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(i) cash of $1,034,000; and
(ii) 118,000 shares of unregistered common stock of ABI.
The Merger Consideration allocated to each Shareholder shall be determined by
(A) multiplying the total amount of cash set forth in (i) above by a fraction
equal to (x) the total number of shares of the common stock of MDS owned by
such shareholder immediately prior to the Merger by (y) the total number of
issued and outstanding shares of common stock of MDS issued and outstanding at
such time and by (B) by multiplying the total number of ABI shares set forth in
(ii) above by such fraction. It is the intent of the parties that this merger
transaction qualify as tax free, except for the monetary consideration,
pursuant to Internal Revenue Code Section 368(a)(2) and (d), the Regulations
thereunder and the administrative and judicial interpretation thereof.
Section 2. CLOSING. (a) The Closing will take place at the offices of
▇▇▇▇▇ ▇▇▇▇ at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ at 1:00 p.m. local
time, on November 18, 1996 (the "Closing Date") or on such other place or such
later time as the Purchaser and MDS agree.
(b) On the Closing Date, MDS shall deliver to the Purchaser:
(i) a fully executed Certificate of Merger;
(ii) a fully executed Articles of Merger;
(iii) written evidence that the Merger has been approved by
the Shareholders as required pursuant to Section 14A:10-3 of the New
Jersey Act;
(iv) a certified copy of the resolutions of MDS's board of
directors authorizing the execution of this Agreement and the
consummation of the transactions contemplated hereby; and
(v) all other documents reasonably requested by the
Purchaser and contemplated by this Agreement or required to be
delivered by MDS and the Shareholders to Purchaser pursuant to Section
6 this Agreement and not theretofore delivered.
(c) On the Closing Date, ABI and the Purchaser shall deliver to
MDS:
(i) a fully executed Certificate of Merger;
(ii) a fully executed Articles of Merger;
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(iii) certified copies of the resolutions of ABI's and
Purchaser's boards of directors authorizing the execution of this
Agreement and the consummation of the transactions contemplated
hereby; and
(iv) all other documents reasonably requested by MDS and
contemplated by this Agreement or required to be delivered by ABI or
the Purchaser to MDS pursuant to Section 7 of this Agreement and not
theretofore delivered.
(d) On the Closing Date, the Purchaser shall deliver the Merger
Consideration to ▇▇▇▇▇ ▇▇▇▇ (the "Paying Agent ") which shall remit
the Merger Consideration to the Shareholders as provided in Section
1(e) hereof at the Effective Time.
Section 3. REPRESENTATIONS AND WARRANTIES OF MDS AND THE SHAREHOLDERS.
MDS and the Shareholders represent, warrant and covenant to the Purchaser as of
the date of this Agreement and the Closing Date, which representations,
warranties and covenants shall survive Closing, as follows:
(a) Sole Owners. The shares of the common stock of MDS which
they own (the "Stock") represents of all of the issued and outstanding
shares of the capital stock of MDS and all of the Stock is owned by
the Shareholders free and clear of any liens and encumbrances.
(b) Corporate Existence. MDS is duly incorporated, validly
existing and in good standing as a corporation under the laws of the
State of New Jersey and has the requisite corporate power and
authority to carry on its business as it is now being conducted.
(c) Authority. MDS and each of the Shareholders has full
power and authority to execute and deliver this Agreement and to
perform each of its obligations under this Agreement. The execution,
delivery and performance of this Agreement by MDS has been duly
authorized by all necessary corporate action and this Agreement
constitutes the valid and legally binding obligation of MDS and each
of the Shareholders, enforceable in accordance with its terms and
conditions, subject only to bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general principles of
equity. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with,
any federal, state or local governmental authority will be required on
the part of MDS or any of the Shareholders in connection with the
consummation of the transactions contemplated by this Agreement.
(d) Noncontravention. The execution and delivery of this
Agreement by MDS and the Shareholders and the consummation of the
transactions contemplated in this Agreement do not or will not violate
or result, with the giving of notice or the lapse of time or both, in
a material violation of any provision of (a) any existing law or
regulation or any order, award or decree of any court, arbitrator or
governmental authority by
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which MDS or they are bound or (b) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify or cancel or
require any notice under MDS's certificate of incorporation or bylaws
or any agreement, contract, lease, license, instrument or other
arrangement to which MDS or any Shareholder is a party or by which it
is bound or to which any of its assets are subject.
(e) Claims and Proceedings. There are no pending or
threatened claims (except those customary in the business conducted by
MDS and which are not material to the Business), complaints,
proceedings, demands, liabilities, suits or actions against the
Shareholders or MDS (including, without limitation, proceedings by any
public or quasi-public authority, and foreclosure procedures or other
action by any mortgage or lienholder) before any court or
governmental, administrative or regulatory agency or authority.
(f) Compliance With Laws. MDS is in material compliance with
all, and has received no notice of any violation of any, laws or
regulations applicable to its operations.
(g) Financial Statements. Prior to the execution of this
Agreement, the Shareholders have delivered to the Purchaser true and
complete copies of the following financial statements:
(i) the audited balance sheet of MDS as of December
31, 1995 and the related audited statements of income, cash
flow and shareholders' equity of MDS for the year then ended
(the "Annual Financial Statements"); and
(ii) the unaudited balance sheet of MDS as of , 1996
and the related unaudited statements of income, cash flow and
shareholders' equity for the interim period then ended (the
"Interim Financial Statements" and, together with the Annual
Financial Statements, the "Financial Statements").
The Financial Statements were prepared in accordance with generally
accepted accounting principals consistently applied and present fairly
in all material respects the financial condition and results of
operations of MDS as of the respective dates thereof and for the
respective periods covered thereby except for such deviations as have
been disclosed therein or explained to the Purchaser. Except for the
execution and delivery of this Agreement and the transactions to take
place pursuant hereto on or prior to the Closing Date, since the date
of the Interim Financial Statements there has not been any material
adverse change in the financial condition or results of operations of
MDS which will have caused the current after tax earnings to have been
less than as determined according to the accounting principles applied
to financial statement.
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(h) Taxes. MDS has properly filed or caused to be filed all
federal, state, local and foreign income and other tax returns,
reports and declarations that are required by applicable law to be
filed by it, and has paid, or made full and adequate provision for the
payment of, all such taxes properly due for the periods covered by
such returns, reports and declarations.
(i) Ownership of Assets. MDS has good and marketable title
to, or hold by valid and existing lease or license, all real and
personal property used by it in the conduct of its business, free and
clear of any liens, claims, encumbrances and charges, except as may be
set forth in the Financial Statements (which shall include liens
related to payables) or which, singly or in the aggregate, are not
substantial in amount.
(j) Insurance. MDS has insurance policies covering all risks
normal for the operation of the Business including any property,
hazard and liability coverage for any automobiles, personal property
or real property it may own in full force and effect.
(k) Intellectual Property Rights. (a) Schedule 3(k) discloses
all trademark, service ▇▇▇▇ and copyright registrations, all material
unregistered trademarks and service marks and all software (other than
noncustomized software for use on personal computers) and computer
databases used by MDS on the date hereof (the "Intellectual Property")
and lists each license or other agreement or arrangement pursuant to
which MDS uses any of the Intellectual Property. To the best of
Seller's knowledge, all such Intellectual Property is exclusive to the
Shareholders and none of such Intellectual Property, or the use
thereof by MDS, infringes upon the proprietary rights of any third
party, and there have been no oppositions, interferences, challenges,
legal proceedings or suits pending or threatened either by MDS or the
Shareholders or any third party with respect to any of the
Intellectual Property.
(l) Contracts. Schedule 3(l) contains a true and
complete list of each material contract to which MDS is a party
including, but not limited to any of the following:
(i) employment or consulting contracts;
(ii) agreements prohibiting or materially limiting
the ability of MDS or the Shareholders to engage in any
business activity or compete with any person in connection
with the business conducted by MDS, or prohibiting or
materially limiting the ability of any person to compete with
MDS or the Shareholders in connection with such business;
(iii) all material partnership, joint venture,
shareholders' or other similar agreements;
(iv) all agreements relating to the future
disposition or acquisition of any material assets of MDS;
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(v) all collective bargaining or similar labor
agreements covering any employee of MDS; and
(vi) all other contracts or agreements of any nature
that (A) involve the payment or potential payment by MDS of
more than $10,000 annually and (B) cannot be terminated
within 90 days after giving notice of termination without
resulting in any material cost or penalty to MDS.
(vii) all contacts or agreements which require
consent for a transfer of control such as contemplated by
this Stock Purchase Agreement.
Each such material contract is in full force and effect and
constitutes a legal, valid and binding agreement, enforceable in
accordance with its terms and neither Corporation nor, to the
knowledge of Shareholders, any other party to such a contract is in
material violation or breach of or default under any such contract.
(m) Licenses. Schedule 3(m) contains a true and complete list
of all licenses held by MDS that are material to its business and all
such licenses are in full force and effect and no proceeding is
pending or threatened seeking the revocation or limitation of any such
license that, individually or in the aggregate, would reasonably be
expected to have a material adverse effect on the operations or
financial condition of MDS.
(n) Labor Relations. No employee of MDS is presently a member
of a collective bargaining unit and there are no threatened or
contemplated attempts to organize for collective bargaining purposes
any of the employees of MDS. As of the date hereof, no work stoppage,
strike or other concerted action by the employees of MDS is pending or
threatened.
(o) Vehicles. Schedule 3(o) contains a true and complete list
of all motor vehicles owned or leased by MDS and MDS has good and
valid title to, or has valid leasehold interests in or valid rights
under contract to use, each such vehicle, free and clear of all liens.
(p) Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by the
Shareholders with the Purchaser without the intervention of any person
on behalf of the Shareholders in such manner as to give rise to any
valid claim by any person against the Purchaser or MDS for a finder's
fee, brokerage commission or similar payment.
(q) Employee Benefit Plans. All employee benefit plans,
vacation plans and sick leave policies maintained by MDS are set forth
in Schedule 3(q) hereto. MDS is not in default or delinquent in any
manner under any such employee benefit plan and each such employee
benefit plans is in full compliance with all applicable provisions of
the Employee Retirement Notification Act of 1974, as amended.
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(r) WARN Act. MDS has fewer than 40 employees at any one
location.
(s) Salaries and Business. Since May 31, 1996 there have been
no material changes in the conduct of business nor have there been any
material changes in salaries for employees of MDS except as set forth
in Schedule 3(s) attached hereto and incorporated herein by reference.
(t) No Intention to Sell. Each Shareholder intends to hold
indefinitely each share of common stock of ABI which will be issued to
such Shareholder as part of the Merger Consideration pursuant to the
terms of this Agreement and has no present intention to sell any of
such shares. This Representation shall survive Closing notwithstanding
any provision to the contrary contained herein.
(u) No Material Untrue Statements or Omissions. No
representation or warranty made by the Shareholders in this Agreement
or in any instrument or document furnished or to be furnished to the
Purchaser pursuant to this Agreement contains or will, as of the date
thereof, contain any untrue statement of a material fact, and such
representations and warranties, taken as a whole, do not and will not,
as of the date thereof, omit to state a material fact necessary to
make any statement herein or therein not materially misleading.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. ABI and
the Purchaser represent, warrant and covenant to MDS and the Shareholders as of
the date of this Agreement and the Closing Date, which representations,
warranties and covenants shall survive Closing, as follows:
(a) Corporate Existence. ABI and the Purchaser is each duly
incorporated, validly existing and in good standing as a corporation
under the laws of the State of Delaware.
(b) Authority. ABI and the Purchaser each has full power and
authority to execute and deliver this Agreement and to perform each of
their respective obligations under this Agreement. The execution,
delivery and performance of this Agreement by ABI and the Purchaser
has been duly authorized by all necessary corporate action and this
Agreement constitutes the valid and legally binding obligation of both
ABI and the Purchaser enforceable in accordance with its terms and
conditions, subject only to bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general principles of
equity. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with,
any federal, state or local governmental authority will be required on
the part of ABI or the Purchaser in connection with the consummation
of the transactions contemplated by this Agreement.
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(c) Noncontravention. The execution and delivery of this
Agreement by ABI or the Purchaser and the consummation of the
transactions contemplated in this Agreement do not or will not violate
or result, with the giving of notice or the lapse of time or both, in
a material violation of any provision of (a) any existing law or
regulation or any order, award or decree of any court, arbitrator or
governmental authority by which ABI or the Purchaser is bound or (b)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel or require any notice under
their respective certificates of incorporation or bylaws or any
agreement, contract, lease, license, instrument or other arrangement
to which ABI or the Purchaser is a party or by which it is bound or
to which any of its assets are subject.
(d) No Brokers. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried out by the
Purchaser directly with MDS and the Shareholders without the
intervention of any person on behalf of the Purchaser in such manner
as to give rise to any valid claim by any person against the
Shareholders for a finder's fee, brokerage commission or similar
payment.
Section 5. COVENANTS OF THE SHAREHOLDERS. (a) The Shareholders
covenant and agree that, prior to the Closing Date, they will:
(i) not enter into any contract, agreement or understanding
of any nature with any party other than the Purchaser with respect to
the sale, transfer, assignment, pledge or other disposition of the
Stock.
(ii) provide the Purchaser and its accountants, counsel and
other representatives with reasonable access during normal business
hours, to all of the books and records of MDS and its business and
allow the Purchaser and its representatives access to MDS's executive
offices and other property and to its officers and employees in order
to perform such investigations as the Purchaser shall deem reasonably
necessary.
(iii) cause MDS to conduct its business in the ordinary and
usual course, to keep intact its business organization and good will,
keep available the services of its officers and employees, maintain
its licenses and authorities and use their best efforts to maintain
good relationships with suppliers, lenders, creditors, employees,
customers and others and will promptly notify the Purchaser of any
material event or occurrence which is not in the ordinary course of
its business;
(iv) not amend MDS's Articles of Incorporation or Bylaws or
split, combine or reclassify any of its securities, declare or pay any
dividend or other distribution or make or agree to make any exchange
or redemption of any such securities except such dividends as shall be
required to pay the taxes of the shareholders caused by the income of
the corporation prior to closing which dividend shall be approved by
the Purchaser in Amendment.
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(v) not allow MDS to create or assume any indebtedness or
make any capital expenditures other than in the ordinary course of its
business and consistent with past practices and in any event not in an
amount greater than $10,000;
(vi) not allow MDS to sell, lease, mortgage, encumber or
otherwise dispose of or grant any interest in any of MDS's assets
other than in the ordinary course of business and consistent with past
practice;
(vii) not allow MDS to enter into or terminate any material
contract, agreement, commitment or understanding except this Agreement
and any duly executed amendments hereto;
(viii) cause MDS to continue to properly and timely file all
federal, state, and local tax returns required to be filed by it, and
to pay, when due, all taxes and governmental charges due from or
payable by it:
(ix) cause MDS to maintain in full force and effect all
insurance coverage presently in effect; and
(x) cooperate with the Purchaser and its counsel,
accountants and other representatives in every way reasonably
requested in carrying out the transaction contemplated by this
Agreement and the preparation and delivery of all documents and
instruments reasonably necessary to the accomplishment thereof.
(b) In addition, each Shareholder hereby covenants and agrees with ABI
and the Purchaser that such Shareholder will not sell any of the shares of
common stock of ABI which will be issued to such Shareholder as part of the
Merger Consideration for a period of no less than two (2) years from the
Effective Time. Each Shareholder acknowledges that the ABI shares are
restricted securities and agrees not to offer, sell, pledge or otherwise
transfer such securities without registration thereof under the Securities Act
of 1933, as amended, and appropriate state securities laws unless such offer,
sale, pledge or transfer is made pursuant to an available exemption from such
registration requirements. This covenant shall survive Closing notwithstanding
any provisions to the contrary contained herein.
Section 6. CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT CLOSING. The
obligation of the Purchaser at closing shall be subject to the fulfillment of
each of the following conditions at or prior to the Closing Date, unless the
Purchaser shall waive fulfillment of such condition:
(i) this Agreement and the transactions contemplated hereby
shall have received all approvals, consents, authorizations and
waivers from governmental and other regulatory agencies and other
third parties required to consummate the transaction including all
leases;
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(ii) the Shareholders shall have delivered to the
Purchaser each of the documents specified in Section 2(b) hereof;
(iii) the entire principal of each loan from the Company to
any of the Shareholders, members of the Shareholders' families or any
corporation or other entity controlled by any such person shall have
been repaid in full along with interest through the date of Closing;
(iv) the Shareholders shall have performed in all material
respects each of their agreements and obligations contained in this
Agreement and required to be performed by them on or prior to the
Closing and shall have complied with all material requirements, rules
and regulations of all regulatory authorities having jurisdiction
relating to the transaction;
(v) no material adverse change shall have taken place in
the business, condition (financial or otherwise, including the book
value of MDS and current ratios), operations or prospects of MDS
since the date of the last annual financial statements of MDS other
than those, if any, that result from the changes permitted by, and
transactions contemplated by, this Agreement;
(vi) the representations and warranties of the Shareholders
set forth in this Agreement shall have been true in all material
respects as of the date of this Agreement and, except in such respects
as, in the reasonable judgment of the Purchaser, do not materially and
adversely affect the business, condition (financial or otherwise),
operations or prospects of MDS, shall continue to be true as of the
Closing Date;
(vii) the Purchaser shall have received the resignation in
writing of all directors and officers of MDS in writing effective
immediately after the Closing, subject to the acceptance by the
Purchaser;
(viii) the Purchaser shall have satisfactorily completed its
due diligence of MDS;
(ix) the Shareholders shall have delivered Assignment and
Assumption Agreements covering all leases in which they are personally
parties;
(x) as of September 30, 1996, MDS shall have a net book
value of at least $340,000 and exclusive of assets being retained by
Shareholders, with cash and accounts receivable of at least $335,000
included as an asset; and
(xi) the Shareholders shall have executed all agreements
contemplated by this Agreement.
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Section 7. CONDITIONS TO THE OBLIGATIONS MDS AND THE SHAREHOLDERS AT
CLOSING. The obligations of MDS and the Shareholders at closing shall be
subject to the fulfillment of each of the following conditions at or prior to
the Closing Date, unless MDS and the Shareholders shall waive fulfillment of
such condition:
(i) this Agreement and the transactions contemplated hereby
shall have received all approvals, consents, authorizations and
waivers from governmental and other regulatory agencies and other
third parties required to consummate the transaction;
(ii) the Purchaser shall have delivered to MDS each of the
documents specified in Section 2(c) hereof;
(iii) the Purchaser shall have delivered to the Merger
Consideration to the Paying Agent;
(iv) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and any member of
their families shall be released from their guarantee of MDS's bank
loan;
(v) the Purchaser shall have enter into an employment
agreement with ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in substantially the form attached as
Exhibit C hereto;
(vi) ABI and the Purchaser shall have performed in all
material respects their respective agreements and obligations
contained in this Agreement required to be performed by them on or
prior to the Closing and shall have complied with all material
requirements, rules and regulations of all regulatory authorities
having jurisdiction relating to the transaction;
(vii) the representations and warranties of ABI and the
Purchaser set forth in this Agreement shall be true in all material
respects as of the date of this Agreement and shall continue to be
true as of the Closing Date; and
(viii) ABI and the Purchaser shall have executed all
agreements contemplated by this Agreement.
Section 8. CONFIDENTIALITY. ABI and the Purchaser, for themselves and
on behalf of their respective officers, employees, counsel, accountants,
financial advisors, consultants, agents and other representatives ("the
Purchaser's Representatives"), agrees that all information regarding MDS
furnished by the Shareholders to the Purchaser or a Purchaser's Representative,
whether prior to or after the execution of this Agreement, in connection with
the transactions contemplated herein, will be kept confidential and, except as
otherwise required by law, will not be disclosed by the Purchaser or a the
Purchaser's Representative without the prior written consent of MDS until after
Closing or as required by law or regulation. If, as of the date hereof or at
any time hereafter the Purchaser becomes aware of or discovers any breach of
any representation or warranty contained herein or any circumstance or condition
that at the Closing would constitute such a breach, the Purchaser covenants
that it will promptly so inform Shareholders in writing.
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Section 9. TERMINATION. (a) This Agreement may be terminated, and
the transactions contemplated hereby may be abandoned:
(i) at any time before the Closing, by mutual written
agreement of MDS and the Purchaser;
(ii) at any time before the Closing, by MDS or the
Purchaser, in the event that any judicial order or law becomes
effective restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by
this Agreement, upon notification of the nonterminating party by the
terminating party; or
(iii) at any time after November 30, 1996 by MDS or the
Purchaser upon notification of the nonterminating party by the
terminating party if the Closing shall not have occurred on or before
such date and such failure to consummate is not caused by a breach of
this Agreement by the terminating party.
(b) If this Agreement is validly terminated, it will forthwith become
null and void, and there will be no liability or obligation on the part of MDS
or the Purchaser (or any of their respective officers, directors, employees,
agents or other representatives or affiliates), except that (i) the provisions
with respect to expenses in Section 10 will continue to apply following any
such termination, (ii) Section 8 shall survive any termination of this
Agreement and (iii) termination of this Agreement shall not relieve any party
hereto of any liability for any willful material breach of this Agreement.
Section 10. EXPENSES. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated hereby are consummated,
each party will pay its own costs and expenses incurred in connection with the
negotiation, execution and closing of this Agreement and the transactions
contemplated hereby.
Section 11. INDEMNIFICATION. (a) Subject to paragraph (c) of this
Section 11, from and after the Closing, the Shareholders shall indemnify the
Purchaser and its officers, directors, employees and agents in respect of, and
hold each of them harmless from and against, any and all claims, suits, causes
of action, losses suffered, incurred or sustained by any of them or to which
any of them becomes subject, resulting from, arising out of or relating to (i)
any breach of any representation, warranty, covenant or agreement of MDS or the
Shareholders contained herein or (ii) any matter relating to the conduct of the
business of MDS prior to the Effective Time.
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(b) Subject to paragraphs (c) of this Section 11, from and after
the Closing, the Purchaser shall indemnify the Shareholders in respect of, and
hold each of them harmless from and against, any and all claims, suits, causes
of action and losses suffered, incurred or sustained by any of them or to which
any of them becomes subject, resulting from, arising out of or relating to (i)
any breach of any representation, warranty, covenant or agreement of the
Purchaser contained herein or (ii) any matter relating to the conduct of the
business of the Constituent Corporations arising after the Effective Time.
(c) Notwithstanding anything to the contrary contained in this
Agreement, no amounts of indemnity shall be payable as a result of any claim in
respect of a loss arising under paragraph (a) or (b) of this Section 11 unless,
with respect to any claim, such claim involves a loss in excess of $1,000 and
all claims together aggregate at least $10,000.
(d) Any party claiming a right to payment under this Section 11 shall,
as a condition thereto, give written notice to the party from whom
indemnification is claimed and the nature and amount of such claim promptly
upon the claiming parties becoming aware thereof and, in any event, within the
later of (i) three years of Closing Date or (ii) for any matters related to tax
issues, the termination of the applicable statute of limitations.
Section 12. PUBLIC ANNOUNCEMENTS. At all times at or before the
Closing, MDS and the Purchaser will, except as required by law (and then only
after consultation in good faith with the other such party), not issue or make
any reports, statements or releases to the public or generally to the
customers, suppliers or other persons to whom MDS sells goods or provides
services or with whom MDS otherwise has significant business relationships with
respect to this Agreement or the transactions contemplated hereby without the
consent of the other party, which consent may be withheld for whatever reason.
Notwithstanding the above, both parties agree to cooperate in good faith in
preparing such announcements as may be necessary to satisfy the regulations of
NASDAQ and the SEC with regard to the transaction.
Section 13. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and
all of which shall constitute one in the same agreement.
Section 14. HEADINGS. All headings of sections of this Agreement are
inserted for convenience only and do not form a part of this Agreement or
limit, expand or otherwise alter the meaning of any provisions hereof.
Section 15. CONSTRUCTION. This Agreement shall be construed without
regard to any presumption or rule requiring construction against the party
causing such instrument to be drafted.
Section 16. ASSIGNMENT OR DELEGATION. No rights, obligations or duties
of either party hereto may be assigned or delegated without the prior written
consent of the other party.
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Section 17. SEVERABILITY. Should any provision of this Agreement be
deemed unenforceable by a court of competent jurisdiction, the unenforceable
provision shall be considered severed from this Agreement and the remainder
shall remain in force.
Section 18. ENTIRE AGREEMENT. This instrument contains and constitutes
the entire agreement of the parties regarding the subject matter hereof, and
there are no other agreements, written or oral, between the parties affecting
the subject matter hereof.
Section 19. NOTICES. All notices or other communications to be given
hereunder shall be given in writing and delivered by (i) certified mail, return
receipt requested, (ii) personal delivery, (iii) facsimile or (iv) overnight
express carrier addressed as follows: if to MDS or the Shareholders, c/o ▇▇▇▇▇
▇▇▇▇▇▇▇▇, Marketing Data Systems, Inc., ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, with a copy to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇ and if to ABI or the
Purchaser, American Business Information, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇, with a copy to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
or to such other address furnished by any party to the other in writing at any
time and from time to time for such notice purposes. Any notice served by
either party on the other shall be deemed effective on the third business day
following deposit in the mail if sent by certified mail, return receipt
requested, when received, if delivered personally or by facsimile, or on the
next business day following deposit with an overnight express carrier.
Section 20. NONWAIVER. No delay, forbearance or neglect by either
party in the enforcement of any of the conditions of this Agreement or any of
their respective rights or remedies hereunder shall constitute or be construed
as a waiver thereof.
Section 21. AMENDMENTS. This Agreement may not be modified or amended,
except by an agreement in writing signed by the parties hereto. The parties may
waive any of the conditions contained herein or any of the obligations of the
other parties hereunder, but any such waiver shall be effective only if it is
in writing and signed by the party waiving such condition or obligation.
Section 22. FURTHER ASSURANCES. Each of the parties hereto agrees to
take such further action and to execute such further instruments as may be
reasonably required by any of the other parties in order to consummate the
transactions contemplated by this Agreement and to carry out the intentions
expressed in this Agreement.
[SIGNATURES APPEAR ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
AMERICAN BUSINESS INFORMATION,
INC., a Delaware corporation
By /s/ ▇▇▇ ▇▇▇▇▇▇▇
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Its Executive Vice President
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AMERICAN BUSINESS INFORMATION
MARKETING, INC., a Delaware corporation
By /s/ ▇▇▇ ▇▇▇▇▇▇▇
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Its Vice President
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MARKETING DATA SYSTEMS, INC., a
New Jersey corporation
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its President
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SHAREHOLDERS:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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