<PAGE>
As filed with the Securities and Exchange Commission on September 5, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
AMERICAN BUSINESS INFORMATION, INC.
(Exact name of Registrant as specified in its charter)
Delaware 47-0751545
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5711 South 86th Circle,
Omaha, Nebraska 68127
(402) 593-4500
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Jon H. Wellman
PRESIDENT
American Business
Information, Inc.
5711 South 86th Circle,
Omaha, Nebraska 68127
(402) 593-4500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Francis S. Currie, Esq.
Martin A. Wellington, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
(415) 493-9300
Approximate date of commencement of proposed sale to the public: From time
to time after the Effective Date of this Registration Statement.
[ ] If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box.
[x] If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box.
[ ] If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. _____________
[ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. _____________
[ ] If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================
Title of Each Class Amount Proposed Proposed Amount of
of Securities to to be Maximum Maximum Registration
be Registered Registered(1) Offering Aggregate Fee
Price Offering
Per Share Price
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 560,000 shares $27.375 $15,330,000.00 $4,645.45
===============================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rule 457(c) under the Securities Act, based on
the average of the high and low prices of the Common Stock on the Nasdaq
National Market on August 29, 1997.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION, DATED SEPTEMBER 5, 1997
560,000 Shares
AMERICAN BUSINESS INFORMATION, INC.
Common Stock
All of the shares of Common Stock offered hereby are being sold by certain
stockholders of the Company (the "Selling Stockholders") who received
unregistered shares of the Company's Common Stock as consideration for their
stock in County Data Corp. ("CDC") which the Company acquired in November 1996.
The shares of Common Stock offered hereby represent approximately 2 percent of
the Company's currently outstanding Common Stock. Such shares are being offered
on a continuous basis pursuant to Rule 415 under the Securities Act of 1933, as
amended. No underwriting discounts, commissions or expenses are payable or
applicable in connection with the sale of such shares. The Common Stock of
American Business Information, Inc. (the "Company") is quoted on the National
Association of Securities Dealers' Automated Quotation System ("Nasdaq")
National Market System ("NMS") under the symbol "ABII." The shares of Common
Stock offered hereby will be sold from time to time at then prevailing market
prices, at prices relating to prevailing market prices or at negotiated prices.
On September 2, 1997, the closing price of the Common Stock on the Nasdaq NMS
was $27.5625.
SEE "RISK FACTORS" COMMENCING ON PAGE 4 HEREOF FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON
STOCK OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS SEPTEMBER 5, 1997
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all
amendments, and exhibits, the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the shares of Common
Stock offered hereby. This Prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which have been
omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Company and the Common Stock offered
hereby, reference is made to the Registration Statement. Statements in this
Prospectus as to the contents of any contract or other document referred to
herein are not necessarily complete, and in each instance in which a copy of
such contract is filed as an exhibit to the Registration Statement, reference is
made to such copy, and each such statement shall be deemed qualified in all
respects by such reference. Copies of the Registration Statement may be
inspected, without charge, at the offices of the Commission, or obtained at
prescribed rates from the Public Reference Section of the Commission at the
address set forth below.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities of the
Commission located at Room 1024, Judiciary Plaza, 450 Fifth Street. N.W.,
Washington, D.C. 20549, and at the Commission's regional offices at Seven World
Trade Center, 13th Floor, New York, New York 10048; and Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission also maintains a website that contains reports, proxy and
information statements, and other information regarding registrants that file
electronically with the Commission at the address "HTTP://WWW.SEC.GOV." The
Company's Common Stock is quoted for trading on the Nasdaq National Market and
reports, proxy statements and other information concerning the Company may be
inspected at the offices of the National Association of Securities Dealers,
Inc., 9513 Key West Avenue, Rockville, Maryland 20850.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY BY ANY PERSON
IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN
OFFER OR SOLICITATION.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated herein
by reference:
(a) The Company's Annual Report on Form 10-K filed with the Commission for
the fiscal year ended December 31, 1996, as amended, and Quarterly
Reports on Form 10-Q filed with the Commission for the three months
ended March 31, 1997, as amended, and for the three months ended June
30, 1997.
2
<PAGE>
(b) The Company's Current Report on Form 8-K filed with the Commission on
February 28, 1997, as amended by the Company's Current Report on Form
8-K/A filed with the Commission on April 30, 1997, as further amended
on September 4, 1997, and on the Company's Current Report on Form 8-K
filed with the Commission on August 5, 1997.
(c) The description of the Company's Common Stock contained in the
Company's registration statement on Form 8-A filed with the Commission
on October 31, 1991, and the description of the Company's Preferred
Stock Purchase Rights contained in the Company's registration
statement on Form 8-A filed with the Commission on August 6, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act following the date of this Prospectus and prior to
the termination of the offering contemplated hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. The Company will provide without charge to each
person, including any beneficial owner, to whom this Prospectus is delivered, a
copy of any and all of the information that has been incorporated by reference
in this Prospectus (not including exhibits to the information that is
incorporated by reference unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates), upon written
or oral request to: Corporate Secretary, American Business Information, Inc.,
5711 South 86th Circle, Omaha, Nebraska 68127, telephone number (402) 593-4500.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document that also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
American Business Information, American Business Lists, Inc., Compilers
Plus, Inc., American Business Credit, American Sales Leads, SalesLeads USA, CD
USA, PhoneDisc, InfoAccess, InfoUSA, List Wizard, and LookupUSA are certain
trademarks of the Company. This Prospectus also includes other trademarks of
companies other than the Company.
3
<PAGE>
THE COMPANY
The principal executive offices of the Company are located at 5711 South
86th Circle, Omaha, Nebraska 68127, and its telephone number is (402) 593-4500.
In this Prospectus, the term "ABI" or the "Company" refers to American Business
Information, Inc., a Delaware corporation, its predecessors and its
subsidiaries, unless the context otherwise requires.
RISK FACTORS
Investors should consider carefully the following risk factors, in addition
to the other information contained in this Prospectus, before purchasing the
shares of Common Stock offered hereby. The information contained herein and in
documents incorporated by reference herein include forward-looking statements
within the meaning of Section 27A of the Securities Act, and Section 21E of the
Exchange Act. Actual results of the Company could differ materially from those
projected in the forward-looking statements. Additional information concerning
factors which could cause actual results to differ materially from those in the
forward-looking statements are set forth below in "Risk Factors."
Fluctuations in Operating Results
The Company believes that future operating results may be subject to
quarterly and annual fluctuations based on numerous factors. The Company's net
sales on a quarterly basis can be affected by seasonal characteristics and
certain other factors including the timing and extent of the Company's own
direct marketing activity. In addition, the expenses associated with acquiring
data, direct marketing campaigns and the timing of acquisitions and the costs
and expenses associated therewith may also affect operating results.
Costs of Acquisitions; Debt; Amortization of Goodwill
Since mid-1996, the Company has completed six acquisitions of other
businesses. In connection with such acquisitions, the Company has issued
approximately 3,609,000 shares of common stock and has paid approximately $98.0
million in cash. The issuance of stock in these transactions may be dilutive to
the extent that earnings per share of the acquired companies do not offset the
additional number of shares outstanding. In connection with the acquisition of
DBA Holdings, Inc. ("DBA") in February 1997 and Pro CD, Inc. in August 1997, the
Company incurred substantial new debt. Servicing such debt may result in
decreases in earnings per share, and failure to service such debt would result
in a material adverse effect on the Company's financial condition. In addition,
debt obligations require certain covenants that restrict business operations or
otherwise require the Company's business to perform at certain levels. Failure
to fulfill such covenants could result in the unavailability of future needed
credit, the acceleration of the Company's obligations under existing debt
arrangements, or foreclosure by lenders on the assets of the Company securing
such debt arrangements. In addition, acquisitions may involve substantial
integration costs and diversions of management resources. Finally, some
acquisitions may be accounted for using the purchase method instead of the
pooling of interests method, as was the case in certain acquisitions since mid-
1996 including the DBA acquisition. Purchase method accounting may require the
Company to take charges to operations and to amortize substantial amounts for
goodwill. As a result of acquisitions completed since mid-1996, the Company was
required to take one-time charges to operations of approximately $21.5 million
in the second half of 1996
4
<PAGE>
and a one-time charge of $51.8 million in the first quarter of 1997. In
addition, in connection with those acquisitions the Company will amortize
approximately $64.1 million in goodwill and certain other intangibles over a
period of 1 to 15 years. The Company anticipates an additional one-time charge
and additional amortization of goodwill in conjunction with the acquisition of
Pro CD, Inc., to be taken in the third quarter of 1997. The one-time charges and
amortization of goodwill will have an adverse effect on net income. Future
acquisitions could result in substantial charges to operations, incurrence of
debt, and amortization of goodwill and, to the extent they do, such acquisitions
will have an adverse effect on the Company's net income, earnings per share and
overall financial condition.
Dependence Upon Key Personnel
The Company believes that the hiring and retaining of qualified individuals
at all levels in the Company will be essential to the Company's ability to
manage growth successfully, and there can be no assurance that the Company will
be successful in attracting and retaining the necessary personnel. The Company
will be particularly dependent upon the efforts and abilities of its senior
management personnel. The departure of any of the Company's executive officers
could have a material adverse effect on the Company's business, financial
condition, or results of operations depending upon the timing of the departure,
changes in the Company's business prior to such time, the availability of
qualified personnel to replace them, and whether such personnel depart singly,
contemporaneously, or as a group, among other factors.
Competition
The business information industry is highly competitive. In particular, the
rapid expansion of the Internet creates a substantial new channel for
distributing business information to the market, and a new avenue for future
entrants to the business information industry. There is no guarantee that the
Company will be successful in this new market. Many of the Company's principal
competitors have substantially greater resources than the Company. In addition,
the Company has no control over the possible future entry into the marketplace
of other potential competitors, some of which may be much larger than the
Company and may have much larger capital bases from which to develop and compete
with the Company.
Direct Marketing Regulation and Postal Rates
The Company and many of its customers engage in direct marketing. Any
negative impact on direct marketing, including changes to existing laws or
regulations or future laws and regulations, may adversely affect the Company's
operating results. The direct mail industry depends and will continue to depend
upon the services of the United States Postal Service and other private mail
carriers. Any modification by the Postal Service of its rate structure, any
increase in public or private postal rates, or any substantial disruption in
such public or private postal services would generally have a negative impact on
the demand for business information, direct mail activities and the cost of the
Company's direct mail activities. In addition to the risk of rate increases, the
direct mail industry, and thus the Company's operating results, could be
adversely affected by postal strikes.
Loss of Data Centers
The Company's business depends on computer systems contained in the
Company's two data centers. The Company's disaster recovery program is based
upon maintaining redundant computer equipment at each of its data centers. The
data centers are protected by Halon fire suppression systems, designed to
extinguish a fire without damaging the computer equipment. The centers are
further protected by uninterrupted power supply backup systems. There can be no
guarantee that a fire or other disaster affecting one or both of its data
centers would not disable the Company's computer systems. Any significant damage
to either or both of the data centers could have a material adverse affect on
the Company.
5
<PAGE>
Limited Protection of Intellectual Property and Proprietary Rights
The Company relies on a combination of copyright, trademark and trade
secret laws, employee and third-party nondisclosure agreements and other methods
to protect its proprietary rights. Despite these precautions, it may be possible
for unauthorized third parties to copy certain portions of the company's
products or reverse engineer or obtain and use information that the Company
regards as proprietary. The Company generally licenses its software products to
end-users on a "right to use" basis pursuant to a perpetual license. The Company
licenses some of its products under "shrink-wrap" licenses (i.e., licenses
included as part of the product packaging). Shrink-wrap licenses are not
negotiated with or signed by individual licensees, and purport to take effect
upon the opening of the product package. Certain license provisions protecting
against unauthorized use, copying, transfer and disclosure of the licensed
program may be unenforceable under the laws of certain jurisdictions and foreign
countries. In addition, the laws of some foreign countries do not protect
proprietary rights to the same extent as do the laws of the United States. There
can be no assurance that the foregoing measures will be adequate to protect the
Company's intellectual property.
Shares Eligible for Future Sale
Of the shares of the Company's common stock outstanding, approximately 20.8
million are freely tradeable, and approximately 3.6 million are subject to
restrictions under Rule 144 of the Securities Act, based on stock ownership as
of September 2, 1997. Such shares will become freely tradeable either (i)
pursuant to certain registration rights agreements by and among the Company and
the holders thereof or (ii) upon the expiration of the applicable holding
periods pertaining to such stock, subject to applicable volume limitations on
trading, under federal securities laws. Future sales of a substantial number of
such shares of the Company's common stock could adversely affect or cause
substantial fluctuations in the market price of the Company's common stock.
SELLING STOCKHOLDERS
The Selling Stockholders acquired the shares of Common Stock offered hereby
(the "Shares") in connection with the Company's acquisition of CDC on November
1, 1996. The following is a list of Officers of CDC prior to the acquisition,
who are Selling Stockholders hereunder:
Terry F. Allen - President
Andrew F. Allen - Secretary
Jared P. Allen - Vice President
Seth W. Allen - Treasurer
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
September 2, 1997 by the Selling Stockholders (without regard to shares sold by
such person pursuant to this Prospectus). The following table assumes the
Selling Stockholders sell all of the shares offered hereby. The Company is
unable to determine the exact number of shares that will actually be sold.
6
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Owned Shares Shares
Prior to Offering Being Owned After
Name Number Percent Offered Offering
(1) (1)
<S> <C> <C> <C> <C>
Terry F. Allen 235,600 1% -- --
Terry F. Allen
Family Charitable Trust 50,000 * -- --
Andrew F. Allen 44,800 * -- --
Jared P. Allen 44,800 * -- --
Seth W. Allen 44,800 * -- --
Winston Lewis 67,200 * -- --
Brian L. O'Connell 50,400 * -- --
Leslie P. Allen 22,400 * -- --
-------
560,000
</TABLE>
- --------------------
*Represents less than 1% of the outstanding shares of Common Stock
(1) Each Selling Stockholder above is having all of the shares of the Company's
Common Stock owned by them registered hereon. The Company is unaware of whether
such Selling Stockholders intend to sell any, some or all of such shares. None,
some or all of such shares may be sold.
PLAN OF DISTRIBUTION
In connection with the Company's acquisition of CDC, the Company entered
into a Registration Rights Agreement with the Selling Stockholders (the
"Agreement"), which is attached as an Exhibit to the Registration Statement of
which this Prospectus is a part. The Registration Statement of which this
Prospectus forms a part has been filed pursuant to the Agreement. To the
Company's knowledge, the Selling Stockholder has not entered into any agreement,
arrangement or understanding with any particular broker or market maker with
respect to the shares offered hereby, nor does the Company know the identity of
the brokers or market makers which will participate in the offering.
The Selling Stockholders' shares of Common Stock covered hereby may be
offered and sold from time to time by the Selling Stockholders. Subject to
certain agreements between the Selling Stockholders and the Company, the Selling
Stockholders will act independently of the Company in making decisions with
respect to the timing, manner and size of each sale. The Selling Stockholders
plans to sell the shares of Common Stock offered hereby only in brokers'
transactions, as defined in Rule 144 promulgated under the Securities Act. In
general, brokers' transactions are ones in which the broker merely executes the
sell order, receives no more than the customary commission and does not solicit
orders to buy the shares. No assurances can be given that the Selling
Stockholders will sell any of the shares that are subject to this Prospectus or
that the Selling Stockholders will not sell such shares in a private transaction
or other transaction that is exempt from the registration requirements of the
Securities Act. The Company has been advised by the Selling Stockholders that
they have not, as of the date hereof, entered into any arrangement with a
broker-dealer for the sale of shares. In effecting sales, broker-dealers engaged
by the Selling Stockholders may arrange for other broker-dealers to participate.
Broker-dealers will receive commissions or discounts from the Selling
Stockholders in amounts to be negotiated immediately prior to the sale.
In offering the shares, the Selling Stockholders and any broker-dealers who
execute sales for the Selling Stockholders may be deemed to be "underwriters"
within the meaning of the Securities Act in
7
<PAGE>
connection with such sales, and any profits realized by the Selling Stockholders
and the compensation of each broker-dealer may be deemed to be underwriting
discounts and commissions.
The Selling Stockholders have advised the Company that, during such time as
they may be engaged in a distribution of the shares of Common Stock included
herein, they will comply with Rules 102 and 104 of Regulation M under the
Exchange Act and, in connection therewith, the Selling Stockholders have agreed
not to engage in any stabilization activity in connection with any securities of
the Company, to furnish copies of this Prospectus to each broker-dealer through
which the shares of Common Stock included herein may be offered, and not to bid
for or purchase any securities of the Company or attempt to induce any person to
purchase any securities of the Company except as permitted under the Exchange
Act. The Selling Stockholders have also agreed to inform the Company and broker-
dealers through whom sales may be made hereunder when the distribution of the
shares is completed.
Rule 102 of Regulation M prohibits a Selling Stockholder in a distribution
from bidding for or purchasing, directly or indirectly, any of the securities
which are the subject to the distribution. Rule 104 under Regulation M governs
bids and purchases made to stabilize the price of a security in connection with
a distribution of the security.
The Selling Stockholders have agreed not to sell any of the shares of
Common Stock offered hereby without first submitting a written notice to the
Company (the "Notice of Resale"). The Company has in turn agreed to notify the
Selling Stockholders as soon as practicable, but in no event more than five
business days after receipt of the Notice of Resale, whether it believes this
Prospectus is current (with the Company using the five business day period to
supplement this Prospectus or make an appropriate filing under the Exchange Act)
or should be amended prior to use in connection with such sale (with the Company
amending the Registration Statement as soon as practicable). Once the Company
has notified the Selling Stockholders that this Prospectus is available to use,
the Selling Stockholders will have up to 60 days within which to sell shares of
Common Stock subject to compliance with the Company's policies applicable to
executive officers of the Company, including recommended trading windows.
This offering will terminate as to the Selling Stockholders on the earlier
of November 4, 1997, or the date on which all shares offered hereby have been
sold by the Selling Stockholders. There can be no assurance that the Selling
Stockholders will sell any or all of the shares of Common Stock offered hereby.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Wilson Sonsini Goodrich & Rosati, P.C.,
650 Page Mill Road, Palo Alto, California 94304-1050. Those members of Wilson
Sonsini Goodrich & Rosati, P.C., who work with the Company own no shares of the
Company's Common Stock.
EXPERTS
The consolidated financial statements of American Business Information,
Inc. incorporated by reference in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996, as amended, have been audited by Coopers &
Lybrand L.L.P., independent auditors, as set forth in their report thereon
incorporated by reference therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
8
<PAGE>
AMERICAN BUSINESS INFORMATION, INC.
560,000 SHARES OF
COMMON STOCK
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Registrant in connection with
this offering are as follows:
Securities and Exchange Commission registration fee....... $ 4,645.45
Accounting fees and expenses.............................. 5,000.00
Legal fees and expenses................................... 5,000.00
Miscellaneous............................................. 1,000.00
----------
Total................................................ $15,645.45
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnity to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act. Article VIII of the Company's
Certificate of Incorporation (Exhibit 4.1) and Article VIII of the Company's
Bylaws (Exhibit 4.2 hereto) provide for indemnification of the Company's
directors and officers to the maximum extent permitted by the Delaware General
Corporation Law.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference
herein:
<TABLE>
<CAPTION>
Exhibit Exhibit Title
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<C> <S>
2.1 Agreement and Plan of Reorganization between the Company and
the Shareholders of County Data Corporation
4.1 Certificate of Incorporation, as amended through September 5,
1996 is incorporated herein by reference to the Company's
Annual Report on Form 10-K for the Fiscal Year Ended December
31, 1996, filed with the Commission on March 31, 1997.
4.2 Certificate of Designation of Rights, Preferences, and
Privileges of Series A Participating Preferred Stock is
incorporated herein by reference to the Company's registration
statement on Form 8-A (File No. 97-652508), filed on August 6,
1997.
4.3 Bylaws are incorporated herein by reference to the Company's
Registration Statement on Form S-1 (File No. 33-42887), which
became effective February 18, 1992.
</TABLE>
II-1
<PAGE>
<TABLE>
Exhibit Exhibit Title
- ------- -------------
<S> <C>
4.4 Registration Rights Agreement by and among the Company and the former
shareholders of County Data Corp. is incorporated herein by reference
to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, filed with the Commission on March 31, 1997.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, P.C., regarding certain
legal matters.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, P.C. (See Item 5.1,
above).
24.1 Power of Attorney (contained in signature pages hereto.)
</TABLE>
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement: (in) to include any
prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect
in the prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective Registration
Statement; and (iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement; provided,
however, that (in) and (ii) do not apply if the information required to be
included in a post-effective amendment thereby is contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to Section
13 or Section 15(d) of the Exchange Act that are incorporated by reference in
the Registration Statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Omaha, State of Nebraska, on the 4th day of
September 1997.
AMERICAN BUSINESS INFORMATION, INC.
By: /s/ JON H. WELLMAN
-------------------------------------
Jon H. Wellman
President and Chief Operating Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints Jon H. Wellman and Steven Purcell, and each of
them, his attorneys-in-fact, and agents, each with the power of substitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to sign any registration statement for the same offering covered
by this Registration Statement that is to be effective upon filing pursuant to
Rule 462(b) promulgated under the Securities Act of 1933, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or his or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
II-4
<PAGE>
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Name Position Date
<S> <C> <C>
/s/ VINOD GUPTA Chairman of the Board and September 4, 1997
- ----------------------- Chief Executive Officer
Vinod Gupta (principal executive officer)
/s/ JON H. WELLMAN President and Chief Operating September 4, 1997
- ----------------------- Officer, Director
Jon H. Wellman
/s/ STEVEN PURCELL Chief Financial Officer (principal September 4, 1997
- ---------------------- accounting officer)
Steven Purcell
/s/ JON D. HOFFMASTER Director September 4, 1997
- ----------------------
Jon. D. Hoffmaster
/s/ GAUTAM GUPTA Director September 4, 1997
- ----------------------
Gautam Gupta
/s/ ELLIOT S. KAPLAN Director September 4, 1997
- ----------------------
Elliot S. Kaplan
/s/ HAROLD ANDERSEN Director September 4, 1997
- ----------------------
Harold Andersen
/s/ GEORGE F. HADDIX Director September 4, 1997
- ----------------------
George F. Haddix
/s/ GEORGE J. KUBAT Director September 4, 1997
- ----------------------
George J. Kubat
/s/ PAUL A. GOLDNER Director September 4, 1997
- ----------------------
Paul A. Goldner
</TABLE>
II-5
<PAGE>
Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
AMERICAN BUSINESS INFORMATION, INC.
AND
COUNTY DATA CORPORATION
AND
THE SHAREHOLDERS THEREOF
NOVEMBER 1, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
EXCHANGE OF STOCK
<S> <C> <C>
Section 1.1.......................................................................Exchange of Stock 1
Section 1.2.....................................................................Registration Rights 1
ARTICLE II
CLOSING
Section 2.1.............................................................................The Closing 2
Section 2.2..................................................................... Actions at Closing 2
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF CDC AND THE SHAREHOLDERS
Section 3.1............................................................................Organization 2
Section 3.2...............................................................................Authority 3
Section 3.3........................................................................Noncontravention 3
Section 3.4.......................................................................Capital Structure 3
Section 3.5.................................................................Ownership of CDC Shares 3
Section 3.6...........................................................................Bank Accounts 4
Section 3.7....................................................................Financial Statements 4
Section 3.8..............................................................Absence of Certain Changes 4
Section 3.9.....................................................................Accounts Receivable 4
Section 3.10....................................................No Undisclosed Material Liabilities 4
Section 3.11.............................................................................Litigation 5
Section 3.12..................................................................Properties and Leases 5
Section 3.13.......................................................................Product Warranty 5
Section 3.14..................................................................................Taxes 5
Section 3.15..............................................................Commitments and Contracts 6
Section 3.16..............................................................................Insurance 6
Section 3.17.................................................Licenses, Authorizations and Approvals 6
Section 3.18............................................................Personnel and Labor Matters 6
Section 3.19.................................................................Employee Benefit Plans 7
Section 3.20...............................................................................Defaults 7
Section 3.21...........................................................Intellectual Property Rights 7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 3.22.................................................Condition of Business Equipment 8
Section 3.23.........................................................Environmental Liability 8
Section 3.24..............................................................Business Relations 8
Section 3.25.................................................No Other Agreements To Sell CDC 8
Section 3.26...................................................No Agreements With Management 8
Section 3.27..................................................................... No Brokers 9
Section 3.28..................................................................... Disclosure 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF ABI
Section 4.1.....................................................................Organization 9
Section 4.2...................................................................... Authority 9
Section 4.3.................................................................Noncontravention 10
Section 4.4................................................................Capital Structure 10
Section 4.5...................................................................... Litigation 10
ARTICLE V
CONDUCT OF BUSINESS PRIOR TO CLOSING
Section 5.1.......................................................Carry on in Regular Course 10
Section 5.2...................................................Shareholders to Retain Control 12
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1.....................................................................Best Efforts 12
Section 6.2......................................................................No Shopping 12
Section 6.3................................................Third-party Consents and Releases 12
Section 6.4.............................................................Due Diligence Review 12
Section 6.5........................................................................Publicity 13
Section 6.6..................................................................Confidentiality 13
Section 6.7...............................................................Income Tax Filings 13
ARTICLE VII
CONDITIONS PRECEDENT TO THE
PARTIES' OBLIGATIONS AT CLOSING
Section 7.1..................................................Conditions of ABI's Obligations 13
Section 7.2..............................Conditions of CDC and the Shareholders' Obligations 15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARTICLE VIII
TERMINATION
<S> <C> <C>
Section 8.1......................................................................Termination 17
Section 8.2............................................................Notice of Termination 17
ARTICLE IX
INDEMNIFICATION
Section 9.1..............................................Indemnification by the Shareholders 17
Section 9.2...........................................................Indemnification by ABI 18
Section 9.3.......................................................Claims for Indemnification 18
ARTICLE X
MISCELLANEOUS
Section 10.1......................................................Assignment; Binding Effect 18
Section 10.2...................................................................Governing Law 18
Section 10.3.........................................................................Notices 19
Section 10.4......................................Survival of Representations and Warranties 20
Section 10.5........................................................................Headings 20
Section 10.6...............................................................Fees and Expenses 20
Section 10.7................................................................Entire Agreement 20
Section 10.8............................................................Waiver and Amendment 20
Section 10.9....................................................................Counterparts 21
Section 10.10......................................................Third-party Beneficiaries 21
Section 10.11...................................................................Severability 21
Schedule 1 CDC Shareholders
Schedule 2 Legal Description of Spruce Island.
Schedule 3 Legal Description of CDC Offices and Description of Leasehold Improvements
Disclosure Schedule
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of the first day of November, 1996 by and among American
Business Information, Inc., a Delaware corporation ("ABI"), County Data
Corporation, a Vermont corporation ("CDC") and each of the shareholders of CDC
set forth in Schedule 1 hereto (collectively, the "Shareholders").
W I T N E S S E T H :
WHEREAS, both ABI and CDC are engaged in the business of compiling,
licensing, distributing, selling, developing and marketing database information;
and
WHEREAS, the Shareholders owns all of the issued and outstanding shares of
capital stock of CDC which consist of 100 shares of common stock, par value
$1.00 per share, (the "CDC Shares"); and
WHEREAS, the Shareholders desire to transfer all of the issued and
outstanding CDC Shares to ABI in exchange for shares of the common stock of ABI,
par value $.0025 per share (the "ABI Shares"), in a transaction intended to
qualify as a reorganization within the meaning of Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended (the "Code"), subject to the terms and
conditions set forth herein;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, the parties agree as follows:
ARTICLE I
EXCHANGE OF STOCK
Section 1.1. Exchange of Stock. Subject to the terms and conditions
of this Agreement, at the Closing on the Closing Date (as those terms are
hereinafter defined) ABI agrees to issue a total 560,000 ABI Shares to the
Shareholders in exchange of all of the issued and outstanding CDC Shares. The
number of ABI Shares to be issued to each Shareholder at the Closing in exchange
for such Shareholder's CDC Shares is set forth in Schedule 1 hereto. The parties
intend that the issuance of ABI Shares in exchange for CDC Shares be treated as
a tax free reorganization under Section 368(a)(1)(B) of the Code and that it be
eligible for pooling accounting treatment by ABI.
<PAGE>
Section 1.2. Registration Rights. The issuance of ABI Shares to the
Shareholders at the Closing will not be registered under the Securities Act of
1933, as amended (the "Securities Act"). Accordingly, each Shareholder agrees
that he or she will not sell, assign, pledge or otherwise dispose of ABI Shares
unless such ABI Shares have been registered under the Securities Act or pursuant
to an available exemption from such registration requirements and acknowledges
that the certificates representing the ABI Shares will contain a legend to that
effect. In that regard, at the Closing, ABI will enter into a Registration
Rights Agreement with each of the Shareholders, in the form attached as Exhibit
A hereto, pursuant to which ABI will agree to file a registration statement
under the Securities Act and Rule 415 thereunder relating to the sale, or pledge
as collateral, of ABI Shares by the Shareholders and to use its best efforts to
cause such registration statement to become effective under the Securities Act
by no later than March 1, 1997.
ARTICLE II
CLOSING
Section 2.1. The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at offices of
Kutak Rock, 1650 Farnam Street, Omaha, Nebraska on November 4, 1996 or such
later date agreed to by the parties; provided, however, that in no event shall
the closing be held on a date later than November 15, 1996 (the "Closing Date").
Section 2.2. Actions at Closing. At the Closing, the Shareholders
shall deliver certificates evidencing all CDC Shares, each of which shall have
been duly endorsed for transfer to ABI (or with properly executed stock powers
attached) and ABI shall deliver certificates evidencing ABI Shares which shall
be issued in the names of the respective Shareholders. In addition, each party
agrees to execute and deliver at the Closing all such certificates and documents
set forth in Article VII hereof as well as such others as may be reasonably
requested by any other party to evidence the transaction and agreements
described in this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF CDC AND THE SHAREHOLDERS
CDC and the Shareholders hereby represent and warrant to ABI that the
statements made in this Article III are correct and complete as of the date of
this Agreement and will be correct and complete on the Closing Date. For
purposes of the following representations and warranties, a "Material Adverse
Effect" shall mean any adverse effect on the financial condition, operations or
property of CDC of $50,000 or greater.
Section 3.1. Organization. CDC is a corporation duly organized,
validly existing and in
2
<PAGE>
good standing under the laws of the State of Vermont and is qualified or
otherwise authorized to act as a foreign corporation and is in good standing
under the laws of every other jurisdiction in which such qualification or
authorization is necessary under applicable law and where the failure to be so
qualified or otherwise authorized would have a Material Adverse Effect. CDC has
all requisite corporate power and authority necessary to own and operate its
properties and to carry on its business as now conducted by it.
Section 3.2. Authority. CDC 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 CDC has been duly authorized by all necessary corporate action
and this Agreement constitutes the valid and legally binding obligation of CDC
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 CDC or any of the
Shareholders in connection with the consummation of the transactions
contemplated by this Agreement.
Section 3.3. Noncontravention. The execution and the delivery of this
Agreement and the consummation of the transactions contemplated in this
Agreement will not (i) violate any statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which CDC or any of the Shareholders is subject
or (ii) 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 CDC's certificate of incorporation
or bylaws or any agreement, contract, lease, license, instrument or other
arrangement to which CDC or any Shareholder is a party or by which it is bound
or to which any of its assets are subject.
Section 3.4. Capital Structure. The authorized capital stock of CDC
consists of 100 shares of common stock, par value $1.00 per share, of which 100
shares are issued and outstanding. CDC has no other authorized class of capital
stock. All of the issued and outstanding CDC Shares are fully paid and
nonassessable, have been legally and validly authorized and issued and have been
offered and sold in compliance with applicable state and federal securities laws
and will be free of restrictions on transfer other than restrictions on transfer
which may be imposed under applicable state and federal securities laws. There
are no outstanding options, warrants, rights (including conversion or preemptive
rights) or other agreements for the purchase or acquisition from CDC of any
shares of its capital stock, stock appreciation rights, phantom stock or similar
rights and there are no agreements or understandings between any persons and/or
entities which affect or relate to the voting of, or the giving of written
consents with respect to, any security of CDC. CDC has no obligation, contingent
or otherwise, to reacquire any CDC Shares.
Section 3.5. Ownership of CDC Shares. The Shareholders are the holder of
record and
3
<PAGE>
beneficially own all the CDC Shares and each has good, valid and marketable
title to his or her CDC Shares free and clear of any liens, encumbrances or
security interests, restrictions on transfer, shareholder agreements, voting
trusts or other defects in title. None of the Shareholders has pledged or
assigned his or her CDC Shares to any person and, at the Closing, ABI will
receive good, valid and marketable title to CDC Shares from each Shareholder,
free and clear of all liens and encumbrances.
Section 3.6. Bank Accounts. Item 3.6 of the Disclosure Schedule attached
hereto (the "Disclosure Schedule") sets forth a true and correct list of all
banks or other financial institutions with which CDC has an account or maintains
a safe deposit box, showing the type and account number of each such account and
safe deposit box and the names of the persons authorized as signatories thereon
or to act or deal in connection therewith.
Section 3.7. Financial Statements. The unaudited Financial Statements of
CDC for the year ended December 31, 1995 and the nine month period ended
September 30, 1996 present fairly in all material respects the financial
condition and results of operations of CDC as of the dates and for the periods
indicated therein.
Section 3.8. Absence of Certain Changes. Other than as set forth in Item
3.8 of the Disclosure Schedule, since September 30, 1996 CDC has conducted its
business in the ordinary course, consistent with past practice, and there has
not been (a) any material adverse change, or any event, occurrence or
development that could reasonably be expected to cause a material adverse change
in the financial condition, results of operations or liabilities (contingent or
otherwise) of CDC; (b) any dividend or other distribution declared, set aside or
paid with respect to any shares of capital stock of CDC, or any repurchase,
redemption or other acquisition by CDC of any outstanding shares of its capital
stock or other securities or ownership interest therein; (c) any amendment of
any outstanding security of CDC; (d) any incurrence, assumption or guarantee by
CDC of any material indebtedness for borrowed money, except in the ordinary
course of CDC's business; (e) any incurrence of any material liability,
contingent or otherwise, by CDC, except in the ordinary course of its business;
(f) any making of any material loan, advance or capital contribution or
investment by CDC to or in any person or entity, except in the ordinary course
of CDC's business; (g) except in the ordinary course of CDC's business, any
transaction or commitment made or contract or agreement entered into by CDC or
any relinquishment or waiver by CDC of any contract or other right that is
material to CDC's business taken as a whole; (h) any change in any method of
accounting or accounting practice by CDC, except for any such change required by
reason of a concurrent change in generally accepted accounting principles; or
(i) any agreement or commitment to do or resulting in any of the foregoing.
Section 3.9. Accounts Receivable. All of CDC's accounts receivable as of
the date hereof are bona fide and represent amounts validly due for goods sold
or services rendered and, other than as described in Item 3.9 of the Disclosure
Schedule, are free and clear of any security interest, lien, or encumbrance and
are not subject to any claim of offset. None of the obligors of
4
<PAGE>
such receivables has given notice to CDC that it will or may refuse to pay the
full amount or any portion thereof or, to the knowledge of CDC, has filed a
petition in bankruptcy or is the subject of an involuntary bankruptcy
proceeding.
Section 3.10. No Undisclosed Material Liabilities. There are no material
liabilities of CDC of any kind whatsoever, whether accrued, contingent or
otherwise, and there is no existing condition or set of circumstances that could
reasonably be expected to result in such a liability, other than those set forth
in Item 3.10 of the Disclosure Schedule or in the balance sheet of CDC referred
to in Section 3.7 hereof. Item 3.10 of the Disclosure Schedule sets forth each
debt or other liability of CDC which is owned to any of the Shareholders.
Section 3.11. Litigation. Other than as set forth in Item 3.11 of the
Disclosure Schedule, there are no actions, orders, writs, judgments or decrees
outstanding or suits, litigations or proceedings pending against CDC which, if
adversely determined, would have a Material Adverse Effect. CDC is not in
default with respect to any judgment, order, writ or decree of any court or
governmental agency, and there are no unsatisfied judgments against CDC which
would have a Material Adverse Effect. No court or governmental authority of
competent jurisdiction has issued an order restraining, enjoining or otherwise
prohibiting CDC or any Shareholder from consummating the transactions
contemplated by this Agreement and there is no pending or, to be knowledge of
CDC and the Shareholders, threatened lawsuits, claims, actions, investigations
or proceedings seeking to restrain or prohibit or obtain material damages or
other relief with respect to this Agreement or the consummation of the
transactions contemplated hereby or as a result of which ABI could be deprived
of any of the material benefits of the transactions contemplated hereby.
Section 3.12. Properties and Leases. Except for any lien for current
taxes not yet delinquent, CDC has good and marketable title free and clear of
any material liens, claims, charges, options, encumbrances or similar
restrictions to all the real and personal property which is material to the
conduct of its business. All leases of real property and all other leases
material to CDC pursuant to which CDC, as lessee, leases real or personal
property are valid and effective in accordance with their respective terms, and
there is not, under any such lease, any material existing default by CDC or any
event which, with notice or lapse of time or both, would constitute such a
material default.
Section 3.13. Product Warranty. No product manufactured, sold, leased, or
delivered by CDC is subject to any express guaranty, warranty, or other
indemnity beyond the applicable standard terms and conditions of sale or lease.
Copies of the standard terms and conditions of sale or lease for CDC's products
have been made available to ABI.
Section 3.14. Taxes. CDC has accurately and timely filed all federal,
state, county, local and foreign tax returns, including information returns,
required to be filed by it, and has timely paid all taxes owed by it, and no
taxes shown on such returns to be owed by it or assessments received by it are
delinquent. CDC is not a party to any pending action or proceeding, nor to the
5
<PAGE>
knowledge of CDC or the Shareholders is any such action or proceeding threatened
by any governmental authority, for the assessment or collection of taxes,
interest or penalties. CDC has not executed or filed with any taxing authority
any agreement extending the period for assessment or collection of any taxes.
CDC has paid all taxes owed or which it is required to withhold from amounts
owing to its employees, creditors or other third parties. Any tax liabilities
are appropriately reflected in the financial statements of CDC referred to in
Section 3.7 hereof.
Section 3.15. Commitments and Contracts. Except as set forth it Item 3.15
of the Disclosure Schedule, CDC is not a party or subject to any contract
(whether written or oral, express or implied) containing covenants which
materially limit the ability of CDC to compete in any line of business or with
any person or which involve any material restriction of the geographical area in
which, or method by which, CDC may carry on its business, other than as may be
required by law or applicable regulatory authorities.
Section 3.16. Insurance. CDC is presently insured and since the
commencement of its business has been insured or self-insured for reasonable
amounts with financially sound and reputable insurance companies against such
risks as companies engaged in a similar business would, in accordance with good
business practice, customarily be insured and has maintained all insurance
required by applicable law and regulation.
Section 3.17. Licenses, Authorizations and Approvals. (a) CDC has all
permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, federal, state or local
governmental or regulatory bodies that are required in order to permit it to own
or lease its properties or assets and to carry on its business as presently
conducted and that are material to the business of CDC. All such permits,
licenses, certificates of authority, orders and approvals are in full force and
effect, and, to the knowledge of CDC and the Shareholders, no suspension or
cancellation of any of them is threatened and all such filings, applications and
registrations are current.
(b) The conduct by CDC of its business and the condition and use of its
properties does not violate or infringe, in any respect material to any such
business, any applicable domestic (federal, state or local) or foreign law,
statute, ordinance, license or regulation. CDC is not in material default under
any order, license, regulation or demand of any federal, state, municipal or
other governmental agency or with respect to any order, writ, injunction or
decree of any court. Except for statutory or regulatory restrictions of general
application, no federal, state, municipal or other governmental authority has
placed any restrictions on the business or properties of CDC which reasonably
could be expected to have a Material Adverse Effect.
Section 3.18. Personnel and Labor Matters. (a) Item 3.18 of the
Disclosure Schedule correctly sets forth the names, titles, rates of
compensation and hiring dates of each employee of CDC as the date hereof and
summarizes the bonus, profit sharing, percentage compensation, company
automobile, club membership, and other like benefits, if any, paid or payable to
or on behalf of each such employee from January 1, 1996 through such date.
Except as disclosed in
6
<PAGE>
Item 3.18 of the Disclosure Schedule, each such employee devotes their full
business time and effort to the operations and activities of CDC.
(b) CDC maintains a good relationship with its employees and no work
stoppage involving CDC is pending or, to the knowledge of CDC and the
Shareholders, threatened and CDC has not been threatened with or affected by any
labor dispute, arbitration, lawsuit or administrative proceeding which could
have a Material Adverse Effect. Employees of CDC are not represented by any
labor union nor are any collective bargaining agreements otherwise in effect
with respect to such employees. CDC has not committed any unfair labor practice
or any material violation of any federal or state law respecting employment and
employment practices, terms and conditions of employment (including wage and
hour regulations).
(c) To the knowledge of CDC or the Shareholders, no officer, key employee,
or group of employees has any plans to terminate employment with CDC.
(d) Any individual, corporation, sole proprietorship, or any other legal
entity that is engaged in the collection of data and/or information on behalf of
CDC will be recognized for federal income tax purposes and under the applicable
law of the jurisdiction in which such person or entity engages in such
collection activity as an independent contractor and not as an employee of CDC.
Section 3.19. Employee Benefit Plans. (a) Item 3.19 of the Disclosure
Schedule sets forth all bonus, deferred compensation, pension, profit-sharing
and retirement plans, including without limitation any multiemployer plans as
defined in Section 4001(a)(3) of ERISA, and all health and life insurance and
other welfare plans maintained by CDC or with respect to which CDC has any
liability. Such plans and arrangements are referred to hereafter as the "Benefit
Plans." All Benefit Plans have been operated substantially in compliance with
ERISA and other applicable laws and all material reports have been filed with
respect to the Benefit Plans in accordance with ERISA and the Internal Revenue
Code.
Section 3.20. Defaults. CDC is not in default, nor has any event occurred
which, with the passage of time or the giving of notice, or both, would
constitute a default under any material agreement, indenture, loan agreement or
other instrument to which it is a party or by which it or any of its assets are
bound or to which any of its assets are subject, the result of which has had or
could reasonably be expected to have a Material Adverse Effect. To the knowledge
of CDC and the Shareholders, all parties with whom CDC has material leases,
agreements or contracts or who owe to CDC material obligations other than with
respect to those arising in the ordinary course of the business of CDC are in
compliance therewith in all material respects.
Section 3.21. Intellectual Property Rights. Item 3.21 of the Disclosure
Schedule sets forth all trademark, service mark 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 CDC on the date hereof (the "Intellectual
7
<PAGE>
Property") and lists each license or other agreement or arrangement pursuant to
which CDC uses any of the Intellectual Property. To the knowledge of CDC and the
Shareholders, all such Intellectual Property is exclusive to CDC and none of
such Intellectual Property, or the use thereof by CDC, 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 CDC or any third party with respect to any of the Intellectual
Property.
Section 3.22. Condition of Business Equipment. All material, machinery,
equipment and other tangible assets of CDC being used in the conduct of its
business have been maintained in accordance with normal industry practice, are
in good operating condition and repair (reasonable wear and tear expected) and
are adequate for the operation of CDC's business as conducted as of the date
hereof.
Section 3.23. Environmental Liability. None of the real property and
tangible personal property owned or leased by CDC contain any hazardous
materials or hazardous substances, as such terms are defined or used in the
Comprehensive Environmental Response, Compensation and Recovery Act of 1980, as
amended, the Resource Conservation and Recovery Act of 1976, as amended, and all
other federal, state and local laws, ordinances, rules, regulations, orders or
determinations of any governmental authority now or hereafter pertaining to
health or the environment, including, without limitation, petroleum products,
friable asbestos and PCBs ("Hazardous Materials"), other than in such quantities
which are incidental and customary for the maintenance and operation of such
assets (e.g., cleaning fluids). No notice or other communication has been made
or issued by any governmental agency or any other person, with respect to any
alleged violation of any federal, state or local laws, rules, regulations,
ordinances and codes governing Hazardous Materials which are applicable to CDC
or its assets and neither CDC nor any Shareholder has knowledge of any pending
or threatened notice or communication of any such violation. All Hazardous
Materials which have been remediated from any assets of CDC prior to or during
CDC's ownership of such assets have been handled in compliance with all
applicable laws.
Section 3.24. Business Relations. Except as set forth in Item 3.24 of the
Disclosure Schedule or for such matters that would not reasonably be expected to
have a Material Adverse Effect, (i) CDC has no knowledge that any customer of
CDC will cease to do business on substantially the same terms and at
substantially the same levels (considered on an annualized basis) with CDC as a
result of the consummation of the transaction contemplated hereby; (ii) no
vendor of goods or services has notified CDC of any expected or projected
increase in the cost of goods or services provided by such vendor to CDC; and
(iii) no customer or client of CDC has requested any decrease in the cost of
goods or services provided by CDC.
Section 3.25. No Other Agreements To Sell CDC. Neither CDC nor any
Shareholder has entered into any agreement with any other person or entity to
sell the capital stock, assets (other than sales of assets in the ordinary
course of business) or business of CDC or to effect any merger, consolidation or
other reorganization of CDC.
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Section 3.26. No Agreements With Management. Neither CDC nor any other
person or entity has contracts, agreements, arrangements or understandings,
whether in writing, oral or tacit, with any officer, director, employee or agent
of CDC, relating to this Agreement or ABI's acquisition of control of CDC. The
acquisition of the CDC Shares by ABI will not constitute a stated triggering
event under any employee benefit arrangement that will result in any payment
(whether of severance pay or otherwise) becoming due from CDC to any employee of
CDC.
Section 3.27. No Brokers. Neither the Shareholders nor CDC has employed
any broker, finder, consultant or other intermediary in connection with the
transactions contemplated by this Agreement or is subject to a valid claim for a
fee or commission in connection with such transactions.
Section 3.28. Disclosure. No representation, warranty, assurance or
statement by CDC or the Shareholders in this Agreement and no statement
contained in any document (including the Disclosure Schedule or financial
statements of CDC), certificates or other writings furnished or to be furnished
by CDC or the Shareholders (or caused to be furnished by CDC or the
Shareholders) to ABI or any of its representatives pursuant to the provisions
hereof contains or will contain any untrue statement of material fact, or omits
or will omit to state any fact necessary, in light of the circumstances under
which such statement was made, in order to make the statements herein or therein
not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ABI
ABI hereby represents and warrants to the Shareholders that the statements
made in this Article IV are correct and complete as of the date of this
Agreement and will be correct and complete on the Closing Date. For purposes of
the following representations and warranties, a "Material Adverse Effect" shall
mean any adverse effect on the financial condition, operations or property of
ABI of $50,000 or greater.
Section 4.1. Organization. ABI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
qualified or otherwise authorized to act as a foreign corporation and is in good
standing under the laws of every other jurisdiction in which such qualification
or authorization is necessary under applicable law and where the failure to be
so qualified or otherwise authorized would have a Material Adverse Effect. ABI
has all requisite corporate power and authority necessary to own and operate its
properties and to carry on its business as now conducted by it.
Section 4.2. Authority. ABI has full power and authority to execute and
deliver this Agreement and to perform each of its obligations under this
Agreement. The execution, delivery
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and performance of this Agreement by ABI, including the issuance of the ABI
Shares in exchange for the CDC Share, has been duly authorized by all necessary
corporate action and this Agreement constitutes the valid and legally binding
obligation of ABI, 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 in connection with the consummation of the
transactions contemplated by this Agreement.
Section 4.3. Noncontravention. The execution and the delivery of this
Agreement and the consummation of the transactions contemplated in this
Agreement will not (i) violate any statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which ABI is subject or (ii) 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 ABI's certificate of incorporation or bylaws or any
agreement, contract, lease, license, instrument or other arrangement to which
ABI is a party or by which it is bound or to which any of its assets are
subject.
Section 4.4. Capital Structure. The authorized capital stock of ABI
consists of (a) 75,000,000 shares of common stock, par value $.0025 per share,
of which 21,259,960 shares are issued and outstanding and 165,000 are issued and
held in treasury, and (b) 5,000,000 shares of preferred stock, par value $.0025
per share, no shares of which are outstanding. All of the ABI Shares to be
delivered to the Shareholders at Closing in exchange for CDC Shares will be duly
authorized and validly issued and outstanding shares of ABI common stock and,
assuming due and effective delivery of the CDC Shares to ABI, will be fully paid
and nonassessable.
Section 4.5. Litigation. Other than as set forth in Item 4.5 of the
Disclosure Schedule, there are no actions, orders, writs, judgments or decrees
outstanding or suits, litigations or proceedings pending against ABI which, if
adversely determined, would have a Material Adverse Effect. ABI is not in
default with respect to any judgment, order, writ or decree of any court or
governmental agency, and there are no unsatisfied judgments against ABI which
would have a Material Adverse Effect. No court or governmental authority of
competent jurisdiction has issued an order restraining, enjoining or otherwise
prohibiting ABI from consummating the transactions contemplated by this
Agreement and there is no pending or, to be knowledge of ABI, threatened
lawsuits, claims, actions, investigations or proceedings seeking to restrain or
prohibit or obtain material damages or other relief with respect to this
Agreement or the consummation of the transactions contemplated hereby or as a
result of which CDC or the Shareholders could be deprived of any of the material
benefits of the transactions contemplated hereby.
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ARTICLE V
CONDUCT OF BUSINESS PRIOR TO CLOSING
Section 5.1. Carry on in Regular Course. Except as may be required to
accomplish one or more of the conditions set forth in Article VII hereof or as
otherwise agreed to in writing by ABI, CDC and the Shareholders hereby covenant
and agree that prior to the Closing Date, CDC will:
(a) carry on its business diligently and substantially in the same
manner as heretofore, preserve the business organization of CDC intact,
preserve the present relationships with customers and others having
business relations with CDC and not make or institute any unusual or
unconventional methods of management, accounting or operation;
(b) not issue any additional shares of capital stock;
(c) not do any act or omit to do any act which will cause or permit a
breach of any material contract, commitment or obligation of CDC;
(d) keep available the services of its officers and employees, except
for such terminations as management of CDC deems prudent and in the best
interest of CDC and, other than in the ordinary and normal course of
business or as provided in agreements existing as of the date hereof, not
grant any bonus to, or increases in the rates of pay of, any of its
officers, employees or agents, or amend any pension or other contract or
commitment to increase the benefits or compensation of any such officers,
employees or agents;
(e) not enter into any contract or commitment or engage in any
transaction not in the ordinary and normal course of business and
consistent with past practices;
(f) not sell or dispose of any asset out of the ordinary and normal
course of business;
(g) not make any expenditures for fixed assets or enter into any
leases of fixed assets other than (i) pursuant to contracts and commitments
disclosed under this Agreement and (ii) in the ordinary and normal course
of business;
(h) not borrow money outside of the ordinary and normal course of
business:
(i) not amend CDC's certificates of incorporation or bylaws or make
any change in its authorized or issued capital stock;
(j) keep in force, in the same amounts, all insurance policies
presently in existence;
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(k) duly comply in all material respects with all applicable laws,
local, state or federal, pertaining to the operation of its business; and
(l) not cause any dividend or other distribution to be declared or
paid by CDC on its capital stock, or any redemption or other repurchase of
any shares of its capital stock to be made by CDC, except for distributions
to the Shareholders as are necessary to allow them to pay income tax
liabilities relating to any period prior to the Closing.
(m) CDC shall not pay or discharge any of the principal balance of
the mortgage loan from The Howard Bank that is secured by certain real
estate, described in Schedule 2 hereto, consisting of an island in Lake
Iroquois in Hinesburg, Vermont (the "Spruce Island Property").
Section 5.2. Shareholders to Retain Control. Notwithstanding any rights
of ABI under Section 5.1 or any other provision of this Agreement, the
Shareholders and ABI acknowledge that, prior to the Closing Date, ABI will have
no right to direct the operations of CDC and that the Shareholders will remain
in control of CDC and will be responsible for all management decisions
concerning CDC.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1. Best Efforts. Each party hereto covenants and agrees to use
its reasonable best efforts to perform each of its obligations hereunder and
take such other actions as are reasonably necessary for the consummation of the
transactions contemplated by this Agreement.
Section 6.2. No Shopping. The Shareholders agrees that neither they nor
any of their agents or affiliates will, during the period beginning on the date
hereof and ending on the first to occur of (a) the Closing or (b) the
termination of this Agreement, (i) undertake any sale of the CDC Shares, sale of
the business or assets of CDC or any merger, consolidation, share exchange or
other similar transaction involving CDC; (ii) negotiate, solicit, encourage or
authorize any person to solicit from any third party any proposals relating to
the foregoing; or (iii) make any information concerning CDC available to any
person for the purpose of affecting or causing a disposition of CDC, its assets
or the CDC Shares.
Section 6.3. Third-party Consents and Releases. Prior to the Closing
Date, the Shareholders shall use their best efforts to cause CDC to obtain all
consents which may be required to preserve the contractual and other rights
which may be affected by the consummation of the transactions contemplated by
this Agreement under the terms of any loan agreement, lease or other contract to
which CDC is a party in order that CDC may consummate the transactions
contemplated by this Agreement without risk to those contractual and other
rights. The Shareholders shall send ABI a copy of each such consent upon its
receipt.
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Section 6.4. Due Diligence Review. (a) The Shareholders agrees that ABI may
conduct and complete a due diligence review of CDC, including, but not limited
to, its financial condition, operations, contracts and commitments, licenses,
customer base and management (the "Due Diligence Review"). The Shareholders
agrees that ABI and its authorized representatives shall have full access to CDC
personnel and to all properties, books, records, contracts, tax returns and
documents of CDC and the Shareholders shall furnish to ABI and its authorized
representatives all information with respect to the affairs of CDC as ABI and
its authorized representatives may reasonably request and will otherwise fully
cooperate with the Due Diligence Review.
(b) The Shareholders agree to provide ABI with such updated financial
statements and other information relating to CDC as becomes available prior to
the Closing Date.
Section 6.5. Publicity. Prior to Closing, ABI, CDC and the Shareholders
agree to communicate and cooperate with each other prior to any public
disclosure of this transaction. ABI and the Shareholders agree that no public
release or announcement concerning the transactions contemplated by this
Agreement or any of the terms thereof shall be issued by any party without the
prior consent of the other party, except as such release or announcement may be
required by law or any agreement to which any party is subject, in which case
the party required to make the release or announcement shall limit the extent of
such release to the requirements of such law or agreement and allow the other
party reasonable time to review any such announcement in advance of its
issuance.
Section 6.6. Confidentiality. All nonpublic information obtained by either
party hereto regarding the other party (including, specifically, information
obtained by ABI or its authorized representatives during the conduct of its Due
Diligence Review) shall be kept confidential by such party and such party will
not distribute or divulge any such information to any third party except as may
be required for regulatory approval or use any such information for purposes
other than those relating to the consummation of the transactions contemplated
by this Agreement. If said transactions are not consummated, each party agrees
that all papers, financial statements and other documents containing such
nonpublic information that have been delivered to such party or its
representatives by the other party or its representatives (including all copies
thereof) shall be promptly returned to the appropriate party or, if agreed to by
the other party, destroyed. The agreements set forth in this Section 6.6 shall
survive the termination of this Agreement.
Section 6.7. Income Tax Filings. ABI will cause to be prepared and filed
all federal, state and local income tax returns for CDC relating to 1996.
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ARTICLE VII
CONDITIONS PRECEDENT TO THE
PARTIES' OBLIGATIONS AT CLOSING
Section 7.1. Conditions of ABI's Obligations. Each and every obligation of
ABI to be performed at the Closing shall be subject to the satisfaction of the
following conditions (or waiver by ABI) prior to or on the Closing Date:
(a) The representations and warranties made by CDC and the
Shareholders in this Agreement shall be true and correct in all material
respects on the date hereof and on the Closing Date with the same effect as
though such representations and warranties had been made or given on the
Closing Date;
(b) CDC and the Shareholders shall have performed and complied in all
material respects with all of their respective obligations, covenants and
agreements required to be performed prior to the Closing under this
Agreement;
(c) ABI shall have received a certificate, signed by the Chairman of
CDC and by each of the Shareholders, to the effect that the conditions set
forth in paragraphs (a) and (b) of this Section 7.1 have been satisfied;
(d) ABI shall have receive a certificate, signed by Secretary of CDC
containing various representations as to CDC's Articles of Incorporation,
Bylaws and the corporate resolutions of CDC relating to the transactions
contemplated by this Agreement and as to the incumbency of those officers
and other representatives of the Shareholders taking action at the
Closing;
(e) The Shareholders shall have delivered to ABI certificates
evidencing all of the CDC Shares, each of which has been duly endorsed for
transfer to ABI or with properly executed valid stock powers attached;
(f) Miller, Eggleston & Rosenberg, counsel for CDC and the
Shareholders, shall have delivered an opinion, addressed to ABI and dated
as of the Closing Date, in form and content satisfactory to ABI;
(g) ABI shall have completed the Due Diligence Review and is fully
satisfied with the results thereof;
(h) Ownership of all of the assets of New Business Research Center,
Inc., a Vermont corporation ("NBRC"), including the right to utilize the
name "New Business Research Center" have been transferred to CDC and CDC
shall be conducting the business operations of NBRC in substantially the
same manner as such operations are currently being conducted by NBRC.
(i) Ownership of (A) certain leasehold improvements at CDC's offices
which are described in Schedule 3 hereto and (B) the Spruce Island Property
shall have been
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transferred to Terry Allen (or to such other persons as he shall have
designated) and assignment and assumption agreements relating to all debts,
liabilities and encumbrances secured by such leasehold improvements and
real estate shall have been executed and delivered by Terry Allen or such
other persons and releases of CDC therefrom shall have been obtained from
all lenders with respect thereto;
(j) Each of the debts or other liabilities owed by CDC to any of the
Shareholders, each of which is described in Item 3.10 of the Disclosure
Schedule have been released and forgiven by the Shareholders and evidence
thereof, in a form satisfactory to ABI, has been executed by the
appropriate Shareholder and delivered to ABI;
(k) CDC shall have entered into a lease for its offices, as described
in Schedule 3 hereto, with Terry Allen in the form set forth as Exhibit B
hereto;
(l) CDC shall have entered into employment agreements, in the forms
set forth as Exhibits C, D, E and F hereto, with Terry Allen, Andrew Allen,
Jared Allen and Seth Allen;
(m) All necessary consents, authorizations and other approvals from
governmental authorities and other parties including, but not limited to,
all persons lending capital to CDC, required for the consummation of the
transactions contemplated by this Agreement shall have been obtained, and
any applicable waiting period shall have expired;
(n) CDC has made available to ABI the original books of account of
CDC or correct and complete copies of such books of account;
(o) No court or governmental authority of competent jurisdiction
shall have issued an order restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated by this Agreement and
there shall be no pending or threatened lawsuits, claims, actions,
investigations or proceedings seeking to restrain or prohibit or obtain
material damages or other relief with respect to this Agreement or the
consummation of the transactions contemplated hereby or as a result of
which ABI could be deprived of any of the material benefits of the
transactions contemplated hereby; and
(p) CDC and the Shareholders shall have delivered all other documents
contemplated by this Agreement or required to be delivered by CDC or the
Shareholders to ABI pursuant to this Agreement and not previously delivered
or which are otherwise reasonably requested by ABI.
Section 7.2. Conditions of CDC and the Shareholders' Obligations. Each and
every obligation of CDC and the Shareholders to be performed at Closing shall be
subject to the
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satisfaction of the following conditions (or waiver by CDC or the Shareholders)
prior to or on the Closing Date:
(a) The representations and warranties made by ABI in this Agreement
shall be true and correct in all material respects on the date hereof and
on the Closing Date with the same effect as though such representations and
warranties had been made or given on the Closing Date;
(b) ABI shall have performed and complied in all material respects
with all of its obligations, covenants and agreements required to be
performed prior to the Closing under this Agreement;
(c) The Shareholders shall have received a certificate, signed by the
Chairman of ABI to the effect that the conditions set forth in paragraphs
(a) and (b) of this Section 7.2 have been satisfied;
(d) The Shareholders shall have received a certificate, signed by
Secretary of ABI containing various representations as to corporate
resolutions of ABI relating to the transactions contemplated by this
Agreement and as to the incumbency of those officers and other
representatives of ABI taking action at the Closing;
(e) ABI shall have delivered to each Shareholder a certificate
evidencing ABI Shares issued to such Shareholder in consideration for such
Shareholder's CDC Shares;
(f) Kutak Rock, counsel for ABI, shall have delivered an opinion,
addressed to the Shareholders and dated as of the Closing Date, in form and
content satisfactory to the Shareholders;
(g) Miller, Eggleston & Rosenberg, counsel for CDC and the
Shareholders, shall have delivered an opinion, addressed to the
Shareholders and dated as of the Closing Date, as to the federal income tax
consequences of the transactions contemplated by this Agreement;
(h) ABI shall have entered into a registration rights agreement, in
the forms set forth as Exhibit A hereto, with the Shareholders;
(i) All necessary consents, authorizations and other approvals from
governmental authorities and other parties required for the consummation of
the transactions contemplated by this Agreement shall have been obtained,
and any applicable waiting period shall have expired;
(j) No court or governmental authority of competent jurisdiction
shall have issued an order restraining, enjoining or otherwise prohibiting
the consummation of the
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transactions contemplated by this Agreement and there shall be no pending
or threatened lawsuits, claims, actions, investigations or proceedings
seeking to restrain or prohibit or obtain material damages or other relief
with respect to this Agreement or the consummation of the transactions
contemplated hereby or as a result of which ABI could be deprived of any of
the material benefits of the transactions contemplated hereby; and
(k) ABI shall have delivered all other documents contemplated by this
Agreement or required to be delivered by ABI to CDC or the Shareholders
pursuant to this Agreement and not previously delivered or which are
otherwise reasonably requested by CDC or the Shareholders.
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ARTICLE VIII
TERMINATION
Section 8.1. Termination. This Agreement may be terminated prior to the Closing
Date:
(a) by mutual written consent of the Shareholders and ABI;
(b) by ABI if it determines, in its sole discretion, that the results of
the Due Diligence Review are unsatisfactory;
(c) by ABI, by notice provided hereunder to the Shareholders, if any
condition precedent to ABI's performance set forth in Article VII is not met or
will not be met, unless the failure to meet such condition precedent results
primarily from ABI's own breach of any representation, warranty or covenant
contained in this Agreement;
(d) by the Shareholders, by notice provided hereunder to ABI, if any
condition precedent to the Shareholders's performance set forth in Article VII
is not met or will not be met, unless the failure to meet such condition
precedent results primarily from the Shareholders's own breach of any
representation, warranty or covenant contained in this Agreement;
(e) by ABI or the Shareholders if the Closing shall not have occurred on
or before November 15, 1996.
Section 8.2. Notice of Termination. Any right of termination, as
hereinabove provided, shall be exercised by written notice given by the party
entitled to exercise such right and submitted to the other party to this
Agreement.
ARTICLE IX
INDEMNIFICATION
Section 9.1. Indemnification by the Shareholders. The Shareholders,
jointly and severally, shall indemnify and hold harmless ABI and CDC from and
against any and all loss, diminution in value, damage, cost, expense (including
court costs, attorneys' fees and expenses, accountants' fees and expenses and
costs of investigation), fine, penalty, suit, action, claim, deficiency,
liability or obligation caused by or arising from or in connection with (i) any
misrepresentation or breach of warranty or failure to fulfill any covenant or
agreement of the Shareholders in this Agreement and (ii) any and all claims of
third parties based upon facts alleged that, if true, would constitute such a
misrepresentation, breach or failure.
Section 9.2. Indemnification by ABI. ABI shall indemnify and hold harmless
the
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Shareholders from and against any and all loss, diminution in value, damage,
cost, expense (including court costs, attorneys' fees, accountants' fees and
expenses and expenses and costs of investigation), fine, penalty, suit, action,
claim, deficiency, liability or obligation caused by or arising from or in
connection with (i) any misrepresentation or breach of warranty or failure to
fulfill any covenant or agreement of ABI in this Agreement and (ii) any and all
claims of third parties based upon facts alleged that, if true, would constitute
such a misrepresentation, breach or failure.
Section 9.3. Claims for Indemnification. (a) With respect to every third-
party claim giving rise to a claim for indemnification under this Article IX,
the party seeking indemnification (the "Indemnified Party") shall give prompt
written notice to the party from which indemnification is sought (the
"Indemnifying Party") of such claim for indemnity, which notice shall set forth
the nature of the third-party claim and the basis for the indemnity being sought
hereunder; provided, however, that failure to give such notice shall not relieve
or limit the indemnity obligations of the Indemnifying Party except to the
extent the Indemnifying Party is materially prejudiced thereby. The Indemnifying
Party shall have the right to assume the defense of any action giving rise to
the claim for indemnity, including the employment of counsel and payment of all
fees and expenses. Any Indemnified Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses, (ii) the Indemnifying Party has failed to assume the defense and
employ counsel, or (iii) the Indemnified Party has been advised in writing by
counsel that the representation by such counsel of both the Indemnified Party
and the Indemnifying Party may result in a conflict of interest prohibiting such
representation under applicable ethical standards, in which case the
Indemnifying Party shall not have the right to assume the defense of such action
on behalf of the Indemnified Party.
(b) The Indemnified Party shall not consent to a settlement of, or the
entry of any judgment arising from, any such action, unless the Indemnifying
Party consents thereto, which consent shall not be unreasonably withheld.
ARTICLE X
MISCELLANEOUS
Section 10.1. Assignment; Binding Effect. This Agreement and the rights
hereunder are not assignable unless such assignment is consented to in writing
by all parties hereto. This Agreement shall inure to the benefit of and be
binding upon the heirs, personal representatives, successors and permitted
assignees of the parties hereto.
Section 10.2. Governing Law. This Agreement and all rights and obligations
of the parties shall be construed and interpreted under and pursuant to the
internal laws, and not the law of conflicts, of the State of Nebraska.
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Section 10.3. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered personally, when sent by confirmed cable,
telecopy, telegram or telex, when sent by overnight courier service or when
mailed by certified or registered mail, return receipt requested, with postage
prepaid to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if to CDC or the Shareholders, to:
County Data Corporation
136 West Canal Street
Winooski, VT 05404
Attention: Terry F. Allen
Facsimile Number: (802) 655-0479
Telephone Number: (802) 655-5888
with a copy to:
Miller, Eggleston & Rosenberg, Ltd.
1500 South Champlain Street
P.O. Box 1489
Burlington, VT 05402
Attention: Jon R. Eggleston, Esq.
Facsimile Number: (802) 864-0328
Telephone Number: (802) 864-0880
(b) if to ABI, to:
American Business Information, Inc.
5711 South 86th Circle
Omaha, Nebraska 68127
Attention: Vinod Gupta
Facsimile Number: (402) 339-0265
Telephone Number: (402) 593-4500
with a copy to:
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Kutak Rock
1650 Farnam Street
Omaha, Nebraska 68102
Attention: Steven P. Amen
Facsimile Number: (402) 346-1148
Telephone Number: (402) 346-6000
Section 10.4. Survival of Representations and Warranties. The
representations and warranties of the Shareholders and ABI contained in this
Agreement shall in no way be affected by any investigation of the subject matter
thereof made by or on behalf of ABI or the Shareholders, as the case may be, and
all such representations and warranties shall continue and survive the Closing
without limitation other than the passage of any applicable statute of
limitations with respect to any claim that might exist with respect thereto.
Section 10.5. Headings. The headings contained in this Agreement are
inserted for convenience only and shall not be considered in interpreting or
construing any of the provisions contained in this Agreement.
Section 10.6. Fees and Expenses. Except as otherwise specified in this
Agreement, each of CDC, the Shareholders and ABI will each bear its own costs
and expenses (including, but not limited to, legal, accounting and financial
advisory fees) incurred in connection with this Agreement and the transactions
contemplated hereby.
Section 10.7. Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto and the Disclosure Schedule) constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
Section 10.8. Waiver and Amendment. Any provisions of this Agreement may
be waived in writing at any time prior to Closing by ABI or by the Shareholders.
No provision of this Agreement may be modified or amended unless such amendment
is set forth in a written instrument executed by each of ABI and the
Shareholders.
Section 10.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument.
Section 10.10. Third-party Beneficiaries. Except as expressly provided
otherwise by this Agreement, this Agreement is for the sole benefit of the
parties hereto, and nothing by this Agreement expressed or implied shall give or
be construed to give to any person or entity, other than the parties hereto, any
legal or equitable rights hereunder.
Section 10.11. Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
AMERICAN BUSINESS INFORMATION, INC.
By __________________________________
Name:
Title:
COUNTY DATA CORPORATION
By __________________________________
Name:
Title:
SHAREHOLDERS
_____________________________________
Terry F. Allen
_____________________________________
Andrew F. Allen
_____________________________________
Jared P. Allen
_____________________________________
Seth W. Allen
_____________________________________
Winston Lewis
_____________________________________
Brian L. O'Connell
_____________________________________
Leslie P. Allen
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Exhibit 5.1
September 4, 1997
American Business Information, Inc.
5711 South 86th Circle
Omaha, Nebraska 68127
RE: REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by you
with the Securities and Exchange Commission on or about the date hereof (the
"Registration Statement"), in connection with the registration under the
Securities Act of 1933, as amended, of up to 560,000 shares of your Common Stock
(the "Shares"), all of which are issued, outstanding and held by certain
stockholders named in the Registration Statement (the "Selling Stockholders").
The Shares are to be sold by the Selling Stockholders as described in the
Registration Statement.
As your counsel, we have examined the proceedings taken by you in
connection with the issuance of the Shares. It is our opinion that the Shares
are legally issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us in the Registration
Statement, the Prospectus constituting a part thereof and any amendments thereto
which have been approved by us.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI
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Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3, of our reports dated January 24, 1997 (except for Notes 17 and 18, for
which the dates are February 15, 1997 and July 31, 1997, respectively), on our
audits of the financial statements and financial statement schedules of American
Business Information, Inc. as of December 31, 1996 and 1995, and for the three
years ended December 31, 1996, which report is included in the Company's 1996
Annual Report on Form 10-K/A. We also consent to the reference to our firm under
the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Omaha, Nebraska
September 4, 1997
