<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8 -K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: February 24, 1998
(Date of the earliest event reported)
AMERICAN BUSINESS INFORMATION, INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-19598 47-0751545
(State or other juris- (Commission I.R.S. Employer
diction of incorporation) File Number) Identification Number)
5711 South 86th Circle, Omaha, Nebraska 68127
(Address of principal executive offices) (Zip Code)
402/593-4500
Registrant's telephone number, including area code
<PAGE> 2
Item 5. Other Events
On February 24, 1998, American Business Information, Inc. (the
"Company") announced the execution of a definitive agreement for the
acquisition of Walter Karl, Inc., a leading national direct marketing service
firm that provides list management, list brokerage, database marketing and
direct marketing services to a wide array of customers. Walter Karl, Inc. was
founded in 1957 by Mr. Walter Karl and is headquartered in Greenwich, CT.
The cash payment for the purchase price of approximately $19 million is
anticipated to be funded by First Union National Bank (the "Bank") of North
Carolina, pursuant to an existing loan agreement between the Company and the
Bank dated February 14, 1997, as amended and restated. The acquisition will be
accounted for under the purchase method of accounting.
The closing of the sale and the execution of the stock purchase transaction is
anticipated to occur not later than March 31, 1998. The closing of the sale is
subject to the termination of the waiting period pursuant to the Hart-Scott-
Rodino Antitrust Improvements Act of 1976.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Stock Purchase Agreement between the Company and Robert Cunniffe and
Sheldon Zaslansky and AO Capital Corp. dated as of February 23, 1998
99.2 Escrow Agreement between the Company and Robert Cunniffe and Sheldon
Zaslansky and AO Capital Corp.
99.3 Confidentiality and Noncompete Agreement between the Company and AO
Capital Corp.
99.4 Employment Agreement and Confidentiality and Noncompete Agreement
between the Company and Robert Cunniffe
99.5 Employment Agreement and Confidentiality and Noncompete Agreement
between the Company and Sheldon Zaslansky
99.6 Employment Agreement and Confidentiality and Noncompete Agreement
between the Company and Marla Maisner
99.7 Amended and Restated Credit Agreement between the Company and the Bank,
dated August 29, 1997, including all Exhibits thereto, is incorporated
herein by reference to the exhibits filed with the Company's Current
Report on Form 8-K dated September 8, 1997
99.8 Press Release dated February 24, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 18, 1998 /s/ Steven Purcell
-----------------------------
Steven Purcell,
Chief Financial Officer
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
99.1 Stock Purchase Agreement between the Company and Robert Cunniffe and
Sheldon Zaslansky and AO Capital Corp. dated as of February 23, 1998
99.2 Escrow Agreement between the Company and Robert Cunniffe and Sheldon
Zaslansky and AO Capital Corp.
99.3 Confidentiality and Noncompete Agreement between the Company and AO
Capital Corp.
99.4 Employment Agreement and Confidentiality and Noncompete Agreement
between the Company and Robert Cunniffe
99.5 Employment Agreement and Confidentiality and Noncompete Agreement
between the Company and Sheldon Zaslansky
99.6 Employment Agreement and Confidentiality and Noncompete Agreement
between the Company and Marla Maisner
99.7 Amended and Restated Credit Agreement between the Company and the Bank,
dated August 29, 1997, including all Exhibits thereto, is incorporated
herein by reference to the exhibits filed with the Company's Current
Report on Form 8-K dated September 8, 1997
99.8 Press Release dated February 24, 1998
</TABLE>
<PAGE> 1
EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
between
AMERICAN BUSINESS INFORMATION, INC.
and
Robert Cunniffe
and
Sheldon Zaslansky
and
AO Capital Corp.
Dated as of February 23, 1998
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STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. Purchase and Sale .................................................. 2
SECTION 2. Several Representations and Warranties of Sellers................... 2
SECTION 3. Joint and Several Representations And Warranties Of Sellers......... 4
SECTION 4. Representations and Warranties of Buyer............................. 13
SECTION 5. Additional Covenants................................................ 15
SECTION 6. The Closing......................................................... 15
SECTION 7. Conditions Precedent to the Obligations of Buyer.................... 16
SECTION 8. Conditions Precedent to the Obligations of Sellers.................. 19
SECTION 9. Conduct of Business Prior to Closing................................ 21
SECTION 10. Indemnification..................................................... 23
SECTION 11. Termination; Modification or Waiver................................. 25
SECTION 12. Costs Incident to Preparation of Agreement.......................... 26
SECTION 13. Parties in Interest and Assignment.................................. 27
SECTION 14. Investigation by Buyer; Confidentiality............................. 27
SECTION 15. Miscellaneous....................................................... 28
SIGNATURES .................................................................... 31
</TABLE>
Schedules and Exhibits
<PAGE> 3
THIS STOCK PURCHASE AGREEMENT dated as of February 23, 1998
("Agreement") between Robert Cunniffe, Sheldon Zaslansky and AO Capital Corp.
("Sellers"), and American Business Information, Inc., a Delaware corporation
("Buyer")
W I T N E S S E T H :
WHEREAS, Sellers are the owners of all of the outstanding common stock,
no par value per share, and warrants to purchase 74 shares of said common stock
(together referred to hereinafter as the "Shares"), of Armonk List Companies
Corp., a New York corporation (the "Company"), in the amounts set forth on
Schedule I hereto; and
WHEREAS, Sellers desire to sell, and Buyer desires to acquire, all of
the Shares; and
WHEREAS, as inducement to the Buyer to execute this Agreement, Robert
Cunniffe, Sheldon Zaslansky and Marla Maisner have agreed to enter into
employment agreements and confidentiality and noncompete agreements, each
effective upon the Closing (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and of the respective
representations and warranties hereinafter set forth, the covenants and
agreements herein contained, the employment agreements and confidentiality and
noncompete agreements to be entered into pursuant to this Agreement and the
purchase of the Shares pursuant hereto, and the payment of the purchase price
hereinafter provided, the parties hereto do hereby represent, warrant, covenant
and agree as follows:
SECTION 1. Purchase and Sale.
Subject to the terms and conditions of this Agreement, Buyer agrees to
pay and deliver to Sellers, in the respective amounts set forth opposite
Sellers' names on Schedule I hereto, on the Closing Date, the purchase price
(the "Purchase Price") in the amount of Fifteen Million Two Hundred Fifty-Six
Thousand Four Hundred Seventy-Three Dollars ($15,256,473), subject to
adjustment as contemplated by Exhibit D hereto, by certified or bank check or
wire transfer in immediately available funds and assume the debt outstanding as
detailed on Exhibit D attached hereto and incorporated herein by reference, and
Sellers agree to sell and deliver to Buyer, on the Closing Date, the Shares.
SECTION 2. Several Representations and Warranties of Sellers.
Each Seller hereby represents and warrants severally (and as to itself
only) and not jointly to Buyer that the statements contained in this Section 2,
including the disclosure schedules thereto, are correct and complete as of the
date of this Agreement and, when supplemented by additional or amended
disclosure schedules, if any, provided by the Sellers on or prior to the
Closing Date, will be correct and complete as of the Closing Date and as
follows:
(a) Title to Shares. Such Seller is the true and lawful
owner, of record and beneficially, of the Shares set forth next to such
Seller's name on Schedule I, free and clear of all liens, security interests,
pledges, assessments, charges, adverse claims, leases, licenses, restrictions,
options and other encumbrances of any nature whatsoever (collectively,
"Liens"), except as set forth on Schedule 2(a) hereto. At the Closing, such
Seller will validly transfer the Shares owned by it free and clear of all
Liens. Other than the rights and obligations arising under this Agreement,
none of the Shares owned by such Seller is subject to any rights of any other
person to acquire the same. None of the Shares owned by such Seller is subject
to any restrictions on transfer thereof, except (i) as set forth on Schedule
2(a) and (ii) for restrictions imposed by applicable federal and state
securities laws.
(b) Authority Relative to Agreement. Such Seller has full
power and authority to enter into this Agreement and to perform his obligations
hereunder. This Agreement has been duly executed and delivered by such Seller
and constitutes the legal, valid and binding obligation of such Seller,
enforceable against him in accordance with its terms. The execution and
delivery of this Agreement by such Seller and performance of his obligations
hereunder will not conflict with or result in a breach, default (or an event
which, with notice or lapse of time or both, would constitute a default) or
violation of any of the terms, provisions or conditions of any agreement,
document, or instrument, or any
<PAGE> 4
judgment, decree, court order, statute, regulation, ordinance or law to which
such Seller is subject, except such as would not, individually or in the
aggregate, have a Material Adverse Effect (as defined below) on such Seller's
authority to enter into this Agreement, ability to consummate the transactions
contemplated hereby or ability to perform his obligations hereunder. Except as
contemplated by Sections 7(g) and 8(f) hereof, no permit, authorization,
consent or approval of, or filing with or notification to, any court or public
body or authority or expiration of any governmentally imposed waiting period,
and no authorization, consent, or approval of, or release by, any other third
party, is necessary for the consummation by such Seller of the sale of the
Shares owned by him as contemplated by this Agreement and the performance of
his obligations hereunder.
SECTION 3. Joint and Several Representations And Warranties Of
Sellers.
AO Capital Corp. warrants and represents severally from the other
Sellers (and only to the extent of the actual knowledge of any one or more of
the following named persons: William D. Cotter, Maurice J. Cunniffe, Allen I
Skott, John van Dyke or William S. Zegras ("Actual Knowledge")) and Robert
Cunniffe and Sheldon Zaslansky, jointly and severally, to the best of their
knowledge,represent and warrant to, and agree with, Buyer that the statements
contained in this Section 3, including the disclosure schedules thereto, are
correct and complete as of the date of this Agreement and, when supplemented by
additional or amended disclosure schedules, if any, provided by the Sellers on
or prior to the Closing Date, will be correct and complete as of the Closing
Date and as follows:
(a) Corporate Organization. Each of the Company, Walter Karl,
Inc., Walter Karl List Management, Inc. (formerly, Qualified Lists Corp.), List
Maintenance Corp. and Armonk Facilities Corp. (each, a "Subsidiary";
collectively, the "Subsidiaries"), is a corporation duly incorporated, validly
existing and in good standing under the laws of New York with full corporate
power and authority to carry on its business as presently conducted by it and
to own, lease and operate its properties where such properties are now owned,
leased or operated, and is qualified to do business in all foreign
jurisdictions where the failure to be so qualified individually or in the
aggregate would have a material adverse effect on the condition (financial or
otherwise), properties, assets and operations of the Company and the
Subsidiaries, taken as a whole (as used here or elsewhere in this Agreement, a
"Material Adverse Effect"). The Company has no subsidiaries other than the
Subsidiaries.
(b) Capitalization. (i) The authorized capital stock of the
Company consists of 200 shares of Common Stock, no par value per share. The
only shares of capital stock of the Company issued and outstanding are the
Shares. All of the Shares were duly authorized and validly issued and are
fully paid and non-assessable. None of the Shares were issued in violation of
any preemptive or preferential right. Except as set forth on Schedule 3(b),
there are no outstanding conversion or exchange rights, subscriptions, options,
warrants or other arrangements or commitments obligating the Company to issue
or transfer any shares of its capital stock or other securities.
(ii) All of the outstanding shares of capital stock of the
Subsidiaries were duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company free and clear of all Liens, except
as set forth on Schedule 2(a). None of the shares of the Subsidiaries was
issued in violation of any preemptive or preferential rights. Except as set
forth in Schedule 3(b), there are no outstanding conversion or exchange rights,
subscriptions, options, warrants or other arrangements or commitments
obligating the Company or the Subsidiary to issue or transfer any shares of
capital stock or other securities of the Subsidiary.
(c) Charter Documents, Etc. Sellers previously have delivered
to Buyer true and accurate copies of the Certificate of Incorporation (or other
instrument of incorporation) and By-laws as of the date hereof of the Company
and each of the Subsidiaries and no action has been taken or authorized to
amend such Certificates of Incorporation or By-laws or to liquidate or dissolve
the Company or any Subsidiaries.
(d) No Violation. Neither the execution and delivery of this
Agreement by Sellers and the performance by Sellers hereunder, nor the
consummation of the transactions contemplated hereby, will violate, conflict
with, result in the breach of or accelerate the performance required by any of
the terms, conditions or provisions of the Certificate of Incorporation or
By-laws of the Company or any Subsidiary or any order, ruling, decree,
judgment, arbitration award or stipulation to which the Company or any
Subsidiary is subject, or constitute a default thereunder or result in the
creation or imposition of
<PAGE> 5
any Lien upon any of the assets of the Company or any material assets of any
Subsidiary, or terminate any lease of real property of the Company or material
lease of any Subsidiary, except as set forth on Schedule 3(i)(2), which
violations, conflicts, breaches, defaults, liens, charges or encumbrances or
terminations, individually or in the aggregate, would have a Material Adverse
Effect.
(e) Consents and Approvals of Governmental Authorities and
Others. Except as set forth in Schedule 3(e) hereto, no approval or
authorization of, filing or registration with, or notification to, any
governmental or regulatory authority is required by or on behalf of the Company
or any Subsidiary in connection with the execution and delivery of this
Agreement by Sellers, the performance of their obligations hereunder or the
consummation of the transactions contemplated hereby or for the prevention of
any termination of any right, privilege, license or agreement of the Company or
any Subsidiary. All such approvals, authorizations, filings, registrations and
notifications set forth on Schedule 3(e) hereto have been or will be obtained
on or prior to the Closing Date. The Company and the Subsidiaries each
currently has and will maintain in effect until the Closing Date such licenses,
permits and other authorizations from all federal, state and local authorities
as are necessary for the conduct of its business and which the failure to have
maintained would, individually or in the aggregate, have a Material Adverse
Effect. No suspension or cancellation of any such license, permit or other
authorization is, to the knowledge of Sellers, threatened and none of such
licenses, permits and authorizations, individually or in the aggregate, will be
affected to the material detriment of the business of the Company and the
Subsidiaries by consummation of the transactions contemplated in this
Agreement.
(f) Financial Statements. The draft, unaudited financial
statements of the Company and the Subsidiaries, on a consolidated basis, for
the year ended September 30, 1997 and for the three months ended December 31,
1997 (the "Financial Statements"), as set forth on Schedule 3(f)(1), were
prepared in accordance with generally accepted accounting principles
consistently applied, except for the unaudited financial statements for the
three months ended December 31, 1997 which may be subject to year end
adjustment and except as set forth on Schedule 3(f)(3). Additional information
regarding excess rent provisions are set forth on Schedule 3(f)(2). The
Financial Statements are accurate in all material respects and present fairly,
except that the Financial Statements will not have financial statement notes
attached to them, the assets and liabilities and results of operations of the
Company and its Subsidiaries, on a consolidated basis, at the dates and for the
periods specified therein on a basis that is consistent in all material
respects. Since the most recent dates of the Financial Statements, except as
disclosed in the Schedules to this Stock Purchase Agreement, there have not
been (1) any changes, individually or in the aggregate, in the business, assets
or operations of the Company and the Subsidiaries; or (2) any actual or, to the
knowledge of Sellers, threatened damages, losses, conversions, terminations,
cancellations, defaults or takings by eminent domain or other actions by
governmental authority which, individually or in the aggregate, would have a
Material Adverse Effect. All accounts receivable reflected on the Financial
Statements, and to be reflected on the books and records of the Company and the
Subsidiaries as of the Closing Date, are and will be bona fide and arose in the
ordinary course of business at the aggregate amounts thereof less the reserve
for doubtful accounts with respect thereto. On the Closing Date, no person
will have any Lien on such receivables, or any part thereof. No agreement for
deduction, free goods, discount or other material deferred price or quantity
adjustment has been made with respect to any of such receivables other than in
the ordinary course of business and consistent with historical practice. The
reserve for doubtful accounts has been established in accordance with the
experience of the Company and the Subsidiaries.
(g) Equipment, Etc. The list of material items of machinery
and equipment and of vehicles owned or leased by the Company or its
Subsidiaries set forth in Schedule 3(g) hereto is a complete and accurate list
in all material respects of all such items owned by the Company and the
Subsidiaries as of December 31, 1997 and included in the balance sheet dated
December 31, 1997 included in the Financial Statements, except for dispositions
and acquisitions in the ordinary course of the Business since December 31,
1997.
(h) Title to Assets, Etc. The Company and the Subsidiaries
have good and marketable title to or valid leasehold interests in or the right
to use the assets which they purport to own and use in their business.
(i) Contracts and Other Agreements. Schedule 3(i) hereto
accurately identifies (i) all leases, whether of real or personal property, to
which the Company or any Subsidiary is a party,
<PAGE> 6
(ii) all written consignment agreements with suppliers to which the Company or
any Subsidiary is a party, (iii) all distribution and agency agreements to
which the Company or any Subsidiary is a party and (iv) all other contracts,
agreements or understandings, including purchase contracts and sale contracts
or orders for amounts, in either case, equal to or exceeding $25,000, to which
the Company or any Subsidiary is a party. Neither the Company nor any
Subsidiary is in default under any of such leases, contracts, agreements, plans
or understandings, and none has breached any provision of any such lease,
contract, agreement, plan or understanding, which breach, except for notice or
the passage of time, would render it in default thereunder.
(j) Litigation. Except as set forth in Schedule 3(j), there
are no outstanding orders, rulings, decrees, judgments or stipulations or
proceedings in connection with their business to which the Company or any
Subsidiary is a party or by which any thereof is bound, by or with any court,
arbitrator or administrative agency, nor to the best of Sellers' knowledge are
any threatened.
(k) Taxes. Except as disclosed in Schedule 3(k) hereto,
neither the Company nor any Subsidiary is in default in the filing of any tax
returns and tax reports required to be filed by it and all taxes (including,
without limitation, all Federal, state and local property, sales, franchise,
use and other similar taxes) that are set forth on such returns have been paid
or adequately provided for in the Financial Statements.
(l) Intellectual Property. Neither the Company nor any
Subsidiary owns any patent, patent application, copyright, trademark, trade
name, service mark or other intellectual property, except as set forth on
Schedule 3(1) hereto. The Company or a Subsidiary has and owns all right,
title and interest to the intellectual property set forth on Schedule 3(1) as
owned by it and there are no claims or proceedings pending or, to the knowledge
of Sellers, threatened against the Company or any Subsidiary asserting that the
use by any thereof of such intellectual property infringes the rights of any
other person.
(m) Compensation and Benefit Plans.
(i) Except as set forth on Schedule 3(m) hereto, neither the
Company nor any Subsidiary is a party to (A) any collective bargaining or
similar agreement, (B) any pension, retirement, savings, profit sharing,
deferred compensation, bonus, health, welfare or incentive plan or agreement,
(C) any plan or policy providing for fringe benefits to its employees,
including, but not limited to, vacation, severance, disability, sick leave,
medical, dental, hospitalization, life insurance and other insurance plans, and
related benefits or (D) any express written employment agreement. True,
correct and complete copies of all current documents providing for any such
plan, agreement or policy will be made available to Buyer.
(ii) Except as set on Schedule 3(j) hereto, no present or
former employee of the Company or any Subsidiary has made any claims, and to
the knowledge of each of Robert Cunniffe and Sheldon Zaslansky no claim has
been threatened, against the Company or any Subsidiary on account of or for (A)
overtime pay, other than overtime pay for the current payroll period, (B)
accrued sick leave pay, (C) wages or salary (excluding amounts accruing under
pension and profit sharing plans) for any period other than the current payroll
period, (D) vacation, time off or pay in lieu of vacation or time off, other
than that earned in respect of the current vacation year or carried over from
prior years in an amount consistent with the ordinary course of business
consistent with past practice, or (E) any violation of any statute, ordinance
or regulation relating to minimum wages or maximum hours of work not
specifically reserved for on the Closing Balance Sheet.
(n) Certain Fees. Except for fees payable to Gordian Group,
L.P. (which shall be paid by Sellers), none of the Sellers nor any of their
affiliates has incurred any claims for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated hereby.
(o) Insurance. Schedule 3(o) hereto contains a complete and
accurate list of all policies of insurance of the Company and the Subsidiaries
currently in force, including, without limitation, such policies covering
public and product liability and personnel, properties, buildings, machinery,
equipment, furniture, fixtures and operations and such insurance is adequate to
cover the potential risks customarily insured against by a person carrying on
the same business as the Company.
(p) Consents and Conditions. Sellers will use their best
efforts to obtain such written consents or take such measures and actions as
may be necessary or appropriate to allow the consummation of the transactions
contemplated hereby and will use their best efforts to satisfy all the
conditions applicable to them to be satisfied to effect the transactions
contemplated hereby.
(q) Environmental Matters. Except as set forth on Schedule
3(q) hereto, neither the Company nor any Subsidiary is in material violation of
any existing federal, state or local law, statute or
<PAGE> 7
regulation, or any existing decree, order or arbitration award or any license
or permit issued by any federal, state or local governmental authority relating
to occupational health and safety or pollution or protection of the environment
(the "Environmental Laws"), including, without limitation, Environmental Laws
relating to treatment, storage, disposal, generation and transportation of
pollutants or contaminants, toxic or hazardous substances or solid or hazardous
waste regulated under Environmental Laws ("Hazardous Materials") or the release
or threatened release into the environment of Hazardous Materials and Seller
has received no notice or complaint of any violation of the Environmental Laws.
(r) Full Disclosure. All of the information provided by the
Company and the Sellers herein or in the schedules hereto, taken as a whole, is
true, correct and complete in all material respects, and no representation,
warranty or statement made by the Company or the Sellers in or pursuant to this
Agreement or the schedules hereto contains any untrue statement of a material
fact or omits or will omit to state any material fact necessary to make such
representation, warranty or statement not misleading.
SECTION 4. Representations and Warranties of Buyer.
Buyer hereby represents and warrants to Sellers that the statements
contained in this Section 4, including the disclosure schedules thereto, are
correct and complete as of the date of this Agreement and, when supplemented by
additional or amended disclosure schedules, if any, provided by the Buyer on or
prior to the Closing Date, will be correct and complete as of the Closing Date
and as follows:
(a) Corporate Organization. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and authority to
carry on its business. Buyer is, or prior to the Closing will be, duly
qualified to do business as a foreign corporation in all jurisdictions where
the failure to be so qualified, individually or in the aggregate, would
materially and adversely affect Buyer's consummation of the transactions
contemplated by this Agreement.
(b) Charter Documents, Etc. The Certificate of Incorporation
and By-laws of Buyer which have been delivered to Sellers are true and accurate
copies thereof as of the date hereof and Buyer will not, without the prior
written consent of Sellers, cause such Certificate or Articles of Incorporation
or By-laws to be amended in any manner or respect which would adversely affect
the rights of Sellers conferred by this Agreement or by any other instrument
delivered to either Seller pursuant hereto.
(c) Corporate Authority. Buyer has full corporate power and
authority to execute and deliver this Agreement and the other instruments and
documents delivered or to be delivered by it pursuant to this Agreement and to
consummate the transactions contemplated hereby and thereby. This Agreement
and the other documents delivered or to be delivered by it pursuant to this
Agreement have been duly authorized and approved by all necessary and proper
corporate action of Buyer and constitute, or will constitute when executed and
delivered, the valid and binding obligations of Buyer enforceable in accordance
with their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally and by general equity
principles, regardless of whether such enforceability is considered in
proceeding in equity or at law.
(d) Certain Fees. Neither Buyer nor any of its officers,
directors, employees or other affiliates has incurred any claims for any
brokerage fees, commissions or finders' fees in connection with the
transactions contemplated hereby.
(e) Consents and Conditions. Buyer will use its best efforts
to obtain such written consents or take such measures and actions as may be
necessary or appropriate to allow the consummation of the transactions
contemplated hereby and will use its best efforts to satisfy all the conditions
applicable to it to be satisfied to effect the transactions contemplated
hereby.
SECTION 5. Additional Covenants.
(a) Further Assurances. From time to time after the Closing, Sellers
will execute and deliver such other and further instruments of conveyance,
assignment and transfer and take such other action as Buyer may reasonably
request to consummate the transactions contemplated under this Agreement.
(b) Access to Company. From time to time after the Closing, at the
reasonable request of either Seller, Buyer will make available its employees to
such Seller during normal business hours for the
<PAGE> 8
purpose of preparing tax returns for periods which are, in whole or in part,
prior to the Closing Date or in connection with general and tax audits or
asserting, prosecuting or defending claims and litigation.
SECTION 6. The Closing.
The closing of the sale and purchase of the Shares (the "Closing") shall
take place at 80 Pine Street, New York, New York beginning at 10:00 a.m. local
time on such date (not later than March 31, 1998 as may be agreed to in writing
by Seller and Buyer (such date being herein sometimes referred to as the
"Closing Date") if all of the conditions set forth in Sections 7 and 8 hereof
have been satisfied or waived on or before such date; provided, however, that
if on March 31, 1998 the conditions to Closing set forth in Sections 7(g) and
8(f) of this Agreement shall not have been fulfilled, then the Closing Date
shall be extended to that date which is five business days after the
fulfillment of the conditions to Closing in Sections 7(g) and 8(f) subject to
Section 11(a)(ii) of this Agreement.
SECTION 7. Conditions Precedent to the Obligations of Buyer.
The obligation of Buyer to acquire the Shares as provided hereunder is
subject to the satisfaction, or waiver in writing by Buyer, on or prior to the
Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Sellers set forth in this Agreement shall be true and correct in
all material respects on and as of the Closing Date, giving effect to any
additional or revised disclosure schedules provided by the Sellers on or before
the Closing Date, with the same effect as though all such representations and
warranties had been made on and as of such date and there shall have been
delivered to Buyer certificates to that effect, dated the Closing Date, signed
by Sellers. Notwithstanding any provision in this Agreement to the contrary,
if any of the representations or warranties of any of the Sellers made as of
the date of this Agreement is not true or correct when made or at the Closing
Date, the Buyer may terminate this Agreement if the Buyer reasonably determines
that such failure to be true or correct relates to a condition which is a
Material Adverse Effect or the breach is of such a nature as to effectively
prevent the Buyer from owning or operating the Company in a manner as presently
conducted by the Company.
(b) Performance of Obligations. Each and all of the covenants
and agreements of Sellers to be performed or complied with pursuant to this
Agreement shall have been duly performed and complied with in all material
respects or duly waived and there shall have been delivered to Buyer a
certificate to that effect, dated the Closing Date, signed by Sellers.
(c) Instruments of Conveyance, Etc. Sellers shall have
delivered to Buyer certificates for the Shares, duly endorsed, and such other
instruments of transfer and assignment as shall be reasonably required by Buyer
for the transfer to Buyer of all of Sellers' right, title and interest to and
in the Shares free and clear of all Liens.
(d) Consents. There shall have been obtained all consents
necessary to the assignment of all contracts, leases, licenses and agreements,
except for the consents relating to the leases set forth on Schedule 3(i)(2)
hereto.
(e) Opinion of Counsel. Buyer shall have been furnished an
opinion, dated the Closing Date, of Smith, Ranscht, Connors, Mutino, Nordell &
Sirignano, P.C., counsel for the Company, Robert Cunniffe and Sheldon
Zaslansky, or of other counsel reasonably satisfactory to Buyer, substantially
to the effect set forth in Exhibit A hereto.
(f) Governmental Approvals. All approvals and authorizations
of, filings and registrations with, and notifications to, any governmental or
regulatory authority required for the execution, delivery and performance of
this Agreement by Sellers and the consummation of the transactions contemplated
by this Agreement, including the consents set forth on Schedule 3(e) hereto,
shall have been duly obtained or made and shall be in full force and effect.
(g) HSR. Sellers shall have made all filings required and
satisfied all requests for additional information under the Hart-Scott-Rodino
Antitrust Improvements Act (the "HSR Act"), and the required statutory periods
under such Act shall have expired and neither the Antitrust Division or the
U.S. Department of Justice (the "Antitrust Division") nor the U.S. Federal
Trade Commission (the "FTC") shall have indicated its objection to, or its
intent to challenge as violative of any federal laws, any of the transactions
contemplated by this Agreement.
(h) Litigation. At the date of the Closing, there shall be no
litigation pending or
<PAGE> 9
threatened in which any injunction or material damages are sought against or
from Buyer in connection with the transactions contemplated hereby.
(i) Employment Agreements and Noncompete Agreements. At or
prior to the Closing, and in consideration of the payment of the Purchase
Price, each of Robert Cunniffe and Sheldon Zaslansky shall have executed and
delivered an Employment Agreement and a Confidentiality and Noncompete
Agreement substantially in the form of Exhibit B-1 hereto and AO Capital Corp.
shall have executed and delivered a Confidentiality and Noncompete Agreement
substantially in the form of Exhibit B-2 hereto. Additionally, at or prior to
the Closing, Marla Maisner shall have executed and delivered an Employment
Agreement and a Confidentiality and Noncompete Agreement substantially in the
form of Exhibit B-3.
(j) Payment of Receivables. At or prior to the Closing, the
total amount of Receivables from Shareholders set forth on Exhibit D hereto
shall be paid to the Company.
(k) Financial Statements. At least five days prior to the
Closing Date, Buyer shall have received the financial statements of the Company
and the Subsidiaries, on a consolidated basis, for the year ended September 30,
1997, audited by Coopers & Lybrand LLP, prepared in accordance with generally
accepted accounting principles consistently applied. The net worth of the
Company and its Subsidiaries as reflected on the balance sheet of such audited
financial statements shall be an amount not more than $100,000 less than the
net worth of the Company and its Subsidiaries as reflected on the balance sheet
of the draft unaudited financial statements as of September 30, 1997 set forth
in Schedule 3(f).
(l) Termination of Consulting Agreement. At or prior to the
Closing Date, the Consulting Agreement between the Company and AO Capital Corp.
entered into on September 3, 1991 shall be terminated.
SECTION 8. Conditions Precedent to the Obligations of Sellers.
The obligation of Sellers to sell the Shares hereunder is subject to the
satisfaction, or waiver in writing by Sellers, on or prior to the Closing Date
of each of the following conditions:
(a) Corporate Action. All corporate and other actions
necessary to authorize and effectuate the consummation of the transactions
contemplated hereby by Buyer shall have been duly taken prior to the Closing,
and Buyer shall have delivered to Sellers a certificate of a duly authorized
officer to that effect, together with certified copies of resolutions of its
Board of Directors authorizing the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby.
(b) Representations and Warranties. The representations and
warranties of Buyer set forth in this Agreement shall be true and correct in
all material respects on and as of the Closing Date with the same effect as
though all such representations and warranties had been made on and as of that
date, and there shall have been delivered to Sellers a certificate to that
effect, dated the Closing Date, signed by a duly authorized officer of Buyer.
(c) Performance of Obligations. Each and all of the covenants
and agreements of Buyer to be performed or complied with pursuant to this
Agreement shall have been duly performed and complied with in all material
respects or duly waived, and there shall have been delivered to Sellers a
certificate to that effect, dated the Closing Date, signed by a duly authorized
officer of Buyer.
(d) Payment. Buyer shall have paid to Sellers the Purchase
Price.
(e) Opinion of Counsel. Sellers shall have been furnished an
opinion, dated the Closing Date, of Kutak Rock, counsel for Buyer, or of other
counsel reasonably satisfactory to Sellers, substantially to the effect set
forth in Exhibit C hereto.
(f) Filings. Buyer shall have made all filings required and
satisfied all requests for additional information under the HSR Act and the
required statutory periods under such Act shall have expired and neither the
Antitrust Division nor the FTC shall have indicated its objection to, or its
intent to challenge as violative of any Federal laws, any of the transactions
contemplated by this Agreement.
(g) Litigation. At the Closing Date, there shall be no
litigation pending or threatened in which any injunction or material damages
are sought against or from Sellers in connection with the transaction
contemplated hereby.
(h) Noncompete and Employment Agreements. At or prior to the
Closing, and in consideration of the payment of the Purchase Price, each of
Robert Cunniffe and Sheldon Zaslansky
<PAGE> 10
shall have executed and delivered an Employment Agreement and a Confidentiality
and Noncompete Agreement substantially in the form of Exhibit B-1 hereto and AO
Capital Corp. shall have executed and delivered a Confidentiality and
Noncompete Agreement substantially in the form of Exhibit B-2 hereto.
Additionally, at or prior to the Closing, Marla Maisner shall have executed and
delivered an Employment Agreement and a Confidentiality and Noncompete
Agreement substantially in the form of Exhibit B-3.
(i) Payment of Principal, Interest and Fees. At or prior to
the Closing, the total amount of the principal on the note payable to AO
Capital Corp. and interest and fees payable to AO Capital Corp. set forth on
Exhibit D hereto shall be paid to AO Capital Corp.
SECTION 9. Conduct of Business Prior to Closing.
From the date hereof through the Closing Date, Sellers will cause the
Company and the Subsidiaries to (i) conduct their business for their own
accounts in the ordinary course and consistent with historical practices, (ii)
preserve their business and their material properties intact, (iii) maintain in
force and effect all insurance policies listed in Schedule 3(o) hereto and (iv)
maintain in effect all their existing material qualifications, business
permits, licenses, registrations and authorizations. Sellers will cause the
Company and the Subsidiaries not to change their accounting policies or
procedures, prior to the Closing Date, from those used in prior years. From
the date hereof through the Closing Date, Sellers will cause the Company and
the Subsidiaries, without the prior written consent of Buyer:
(1) not to incur any material obligation or liability
(absolute or contingent), except as set forth in Schedule 9(1) and obligations
or liabilities incurred under leases, contracts and other agreements listed in
Schedule 3(i) hereto or under purchase and sale contracts and orders entered
into in the ordinary course of business and consistent with historical
practice;
(2) not to mortgage, pledge or subject to (or suffered to be
subjected to) lien, charge or other encumbrance or leased or placed under
option or right of first refusal any material assets;
(3) not to otherwise sell, transfer or dispose of any material
assets or cancel any debts or claims, except in the ordinary course of business
and consistent with historical practice or cancel or terminate any material
real property lease;
(4) except as set forth in Schedule 9(4), not to grant any
general increase in wage or salary rates or in employee benefits for their
employees, or grant any material increase in salary or in employment,
retirement or other benefits to any employee, other than merit increases
granted in the ordinary course of business and consistent with historical
practices or such changes in retirement or other benefits which are deemed
necessary or appropriate in order to comply with applicable requirements of
law, or to enter into any employment contract with any person providing for the
continued employment of such person in excess of one month or made any
extraordinary payment to employees;
(5) not to waive any rights or claims of substantial value;
(6) not to offer any material discounts, terms, free goods,
other price adjustments or returns, rebilling or other trade practices to
customers inconsistent with its normal historical business practice;
(7) not to make any capital expenditures or additions in
excess of $10,000;
(8) not to declare any dividends, or to make any transfers of
funds or assets to the Sellers or any party affiliated with Sellers other than
Sellers normal salaries.
SECTION 10. Indemnification.
(a) Sellers' Indemnification. Subject to the terms and conditions of
this Section 10, from and after the Closing, AO Capital Corp. will severally,
but not jointly, indemnify and hold Buyer harmless from and against all
damages, losses, liabilities, costs (including, without limitation, response
costs) and expenses (including reasonable attorneys' fees and disbursements)
(hereinafter in this Section 10 referred to collectively as "Losses") arising
out of or resulting from the breach or failure to be true and correct of any
representation or warranty or certification of AO Capital Corp. contained
herein, in any Schedule hereto or in any certificate delivered pursuant hereto,
in each case to the extent that the breach or failure related to information
within the Actual Knowledge of AO Capital Corp. Subject to the terms and
conditions of this Section 10, from and after the Closing, Robert Cunniffe and
Sheldon Zaslansky shall jointly and severally indemnify and hold Buyer harmless
from and against all damages, losses, liabilities, costs (including, without
limitation, response costs) and expenses (including
<PAGE> 11
reasonable attorneys' fees and disbursements) (hereinafter in this Section 10
referred to collectively as "Losses") arising out of or resulting from the
breach or failure to be true and correct of any representation or warranty or
certification made by either of them contained herein, in any Schedule hereto
or in any certificate delivered pursuant hereto, in each case to the extent
that the breach or failure related to information within the knowledge of
Robert Cunniffe and Sheldon Zaslansky.
(b) Buyer's Indemnification. Subject to the terms and conditions of
this Section 10, from and after the Closing, Buyer will indemnify and hold
Sellers harmless from and against (i) all Losses arising out of or resulting
from any breach or failure of any representation or warranty or certification
of Buyer contained herein, in any Schedule hereto or in any certificate
delivered pursuant hereto to be true and correct or (ii) the operations of the
Company and the Subsidiaries after the Closing.
(c) Time Limitation on Indemnities. Notwithstanding the foregoing,
no claim may be made or suit instituted under Section 10(a) or 10(b)(i) after
one year following the Closing Date except for any claims for unpaid taxes
which indemnification shall continue until the statute of limitation for such
tax period shall terminate unless there has been notice from a taxing
authority, in which case the indemnification shall continue until the tax issue
identified in such notice has been resolved.
(d) No Indemnity for Net Operating Losses. Notwithstanding any other
provision of this Agreement, no claim may be made or suit instituted by Buyer
for any Loss related to the denial, for tax purposes, by a taxing authority of
the net operating losses of the Company.
(d) Monetary Limits on Indemnities. No claim may be made under this
Section 10 for any individual Loss in an amount less than $15,000 or for any
Loss until Losses in the aggregate total at least $150,000 (in which event,
such claim shall be for Losses for the amount incurred). The aggregate
liability of all Sellers under this Section 10 is limited to $2,000,000.
(e) Third-Party Actions. In the event any claim is made, suit is
brought or tax audit or other proceeding instituted against an indemnified
party which involves or appears reasonably likely to involve a Loss for
purposes of this Section 10, the indemnified party will, promptly after receipt
of notice of any such claim, suit or proceeding for which indemnification may
be sought, notify the indemnifying party of the commencement thereof. The
failure to so notify the indemnifying party of the commencement of any such
claim, suit or proceeding will relieve the indemnifying party from liability
under Section 10 hereof only to the extent that such failure materially
adversely affects the ability of the indemnifying party to defend its interest
in such claim, action or proceeding. The indemnified party (at its expense)
shall have the right and shall be given the opportunity to associate with an
indemnifying party in the defense of such claim, suit or proceeding, provided
that counsel for the indemnifying party shall act as lead counsel in all
matters pertaining to the defense or settlement of such claim, suit or
proceeding. An indemnified party shall not make any settlement with respect to
any such claim, suit or proceeding without the prior consent of the
indemnifying party. In the event that an indemnified party determines to
settle any such claim, suit or proceeding without the prior consent of the
indemnifying party, the indemnifying party shall have no indemnification
obligations under this Section 10 with respect to such claim, suit or
proceeding.
(f) Sole Remedy. The provision of this Section 10 shall constitute
the sole remedy for Losses arising out of the transactions contemplated by this
Agreement.
(g) Escrow. Seller's indemnification obligation shall be paid and
secured through an Escrow Account in the amount of two million dollars
($2,000,000) which shall be governed by the provisions of the Escrow Agreement
substantially in the form attached hereto as Exhibit E.
SECTION 11. Termination; Modification or Waiver.
(a) Termination. This Agreement may be terminated at any time prior
to the Closing:
(i) by mutual written agreement of Buyer and Sellers;
(ii) by Buyer or either Seller, by notice to the other parties,
if the Closing shall not have taken place prior to March 31, 1998 (or such
later date as agreed to by all parties in writing), subject to any rights
accruing to the date of such notice on account of any breach of this Agreement
by the opposite party hereto; provided, however, that if on March 31, 1998 the
Buyer shall not have received the audited financial statements as set forth in
Section 7(k) of this Agreement then such termination date shall be extended from
March 31, 1998 to April 5, 1998 and provided further that the conditions to
Closing set forth in Sections 7(g) and 8(f) of this Agreement shall not have
been fulfilled, then such termination date shall be extended from March 31,
1998 to April 30, 1998; or
<PAGE> 12
(iii) by Buyer or either Seller, if an order is issued by any
court, agency, governmental body or public authority to restrain, enjoin or
prohibit the consummation of the transactions contemplated by this Agreement,
or a proceeding for any such order occurs.
(b) Modification. This Agreement may be amended, modified or
supplemented only by written agreement of all parties hereto.
(c) Waiver. Any failure of Sellers, on the one hand, or Buyer, on
the other, to comply with any obligation, covenant, agreement or condition
contained herein may be expressly waived in writing by Buyer in the case of any
such failure by Sellers or by Sellers in the case of any such failure by Buyer,
but such waiver or failure to insist upon strict compliance shall not operate
as a waiver of, or estoppel with respect to, any subsequent or other failure.
Whenever this Agreement requires or permits consent by or on behalf of any
party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
11(c).
SECTION 12. Costs Incident to Preparation of Agreement.
Each of the parties hereto shall pay, without right or reimbursement
from the others, all costs incurred by it incident to the preparation,
execution and delivery of this Agreement and the performance of its obligations
hereunder, whether or not the transactions contemplated by this Agreement shall
be consummated, including, without limitation, fees and disbursements of legal
counsel, accountants, investment bankers and consultants employed by the
respective parties hereto in connection with the transactions contemplated by
this Agreement.
SECTION 13. Parties in Interest and Assignment.
(a) This Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and permitted assigns.
This Agreement is not made for the benefit of any person, firm, corporation or
other entity not a party hereto, and nothing in this Agreement will be
construed as giving any person, firm, corporation or other entity, other than
the parties hereto and their respective successors and permitted assigns, any
right, remedy or claim under or in respect of this Agreement, or any provision
hereof.
(b) This Agreement may not be assigned by any party hereto without
the prior written consent of all of the other parties hereto.
SECTION 14. Investigation by Buyer; Confidentiality.
(a) Until the Closing Date or the date this Agreement is terminated
pursuant to Section 11 hereof, if earlier, Buyer, through its agents and
employees, may conduct an investigation of the Business and the financial
condition of the Business. During the course of such investigation, Sellers
agree to cause the facilities, books, records, personnel and accountants of the
Company and the Subsidiaries to be made available for review (or interviews in
the case of personnel) by such agents and employees and to cause to be provided
to Buyer such other information as it shall reasonably request, at reasonable
times and upon reasonable notice. In the event that the transactions
contemplated by this Agreement are not consummated, Buyer shall return to the
Company all copies of documents furnished to or obtained by them in the course
of such investigation.
(b) Any information provided or obtained pursuant to clause (a) above
shall be held by Buyer in accordance with, and shall be subject to, that
certain letter with respect to confidentiality entered into with respect to the
transaction set forth in this Agreement between Buyer and the Company.
SECTION 15. Miscellaneous.
(a) Any notice, request, consent, waiver or other communication
required or permitted to be given hereunder shall be effective only if in
writing and shall be deemed sufficiently given only if delivered in person or
sent by telegram, cable, telecopy or certified or registered mail, postage
prepaid, return receipt requested, addressed as follows:
<PAGE> 13
If to Sellers: Robert Cunniffe
505 Silvermine Road
New Canaan, CT 06846
Sheldon Zaslansky
20 Pine Drive
Pound Ridge, New York, NY 10576
AO Capital Corp.
80 Field Point Road
Greenwich, CT 06830
Attention: William D. Cotter
Vice President and General Counsel
If to Buyer: American Business Information, Inc.
5711 South 86 Circle
Omaha, NE 68127
Attention: Steven Purcell, Chief Financial Officer
With a copy to: Michael C. Pallesen
Corporate Counsel
American Business Information, Inc.
5711 South 86 Circle
Omaha, NE 68127
or to such other person or address as any such party may have specified in a
notice duly given to the sender as provided herein. Such notice or
communication shall be deemed to have been given as of the date so delivered,
telegraphed, telecopied or cabled or, if mailed, three days after being mailed.
(b) This Agreement (including the Exhibits and Schedules attached
hereto) and the documents referred to herein as having been entered into by any
of the parties hereto or delivered by a party hereto to another party hereto
constitute the entire agreement and understanding of the parties relating to
the subject matter hereof and supersede all prior and contemporaneous
agreements and understandings, representations and warranties, whether oral or
written, relating to the subject matter hereof. The terms of this Agreement
cannot be changed, modified, released or discharged orally.
(c) No delay or failure on the part of any party in exercising any
rights hereunder, and no partial or single exercise thereof, will constitute a
waiver of such rights or of any other rights hereunder.
(d) THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
(e) The unenforceability or invalidity of any Section or subsection
or provision of this Agreement shall not affect the enforceability or validity
of the balance of this Agreement.
(f) The headings of the Sections and subsections contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning, interpretation, enforceability or validity of this Agreement.
(g) This Agreement may be executed in any number of counterparts,
each of which so executed will be deemed to be an original, but all of which
together will constitute one and the same agreement.
(h) No public disclosure pertaining to this Agreement or the
transaction contemplated hereby shall be made by any party unless approved by
the other party prior to release.
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
SELLER: BUYER:
AMERICAN BUSINESS INFORMATION, INC.
By:
Robert Cunniffe
Sheldon Zaslansky
AO Capital Corp.
By
<PAGE> 15
Schedules
I - Ownership of Shares
II - Certain Key Executives
2(a) - Restrictions on Transfer
3(b) - Rights to Acquire Capital Stock
3(e) - Consents/Approvals Required
3(f) - Financial Statements
3(g) - Machinery, Equipment and Vehicles
3(i)(1) - Contracts and Other Agreements
3(i)(2) - Consents Under Existing Contracts
3(j) - Litigation, Orders and Judgments
3(k) - Defaults in Tax Filings
3(1) - Patents, Copyrights, Trademarks, Etc.
3(m)(1) - Employee Benefit Plans
3(m)(2) - Employment and Related Agreements
3(o) - Insurance Policies
3(q) - Environmental Matters
9(1) - Additional Absolute or Contingent Liability
9(4) - Compensation Changes
Exhibits
A - Form of Opinion of Sellers' Counsel
B - Form of Employment Agreements and Noncompete
Agreements
C - Form of Opinion of Buyer's Counsel
D - Price Schedule
E - Form of Escrow Agreement
<PAGE> 16
Exhibit D
Transaction Value Allocation
<TABLE>
<S> <C>
Enterprise Value 19,000,000
Plus: September Cash Balance 366,964
19,366,964
Liabilities to be paid at closing:
Note to AO Capital Corp. $ 2,684,667
Interest and Fees Due AO Capital Corp. 788,902
Liabilities Paid at Closing (3,473,569)
(estimate)
Non-Working Capital Liabilities Assumed:
Net Pension Liability $ 87,620
State of Connecticut Note 450,000
Accumulated Interest State of Connecticut
Note 99,302
Total Non-Working Capital Liabilities Assumed (636,922)
Proceeds to Equity Holders (estimate) $15,256,473
Amounts due from Shareholders
Cunniffe (estimate) (211,459)
Zaslansky (estimate) (251,310)
(462,769)
</TABLE>
Represents the amount due through December 31, 1997, which amount will be
increased $1,014 per day thereafter until the date it is paid, except to the
extent actually paid prior to Closing. The amount due through September 30,
1997 was $748,372.
Represents the amount due through December 31, 1997, which amount will be
increased $75 per day thereafter until the date it is paid, except to the
extent actually paid prior to Closing.
Represents the amount due through December 31, 1997, which amount will be
increased $42 per day for each Shareholder until the date it is paid, except to
the extent actually paid prior to Closing.
<PAGE> 1
EXHIBIT 99.2
EXHIBIT E
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement") is made to be effective
as of [March ], 1998, by and among Robert Cunniffe and Sheldon
Zaslansky ("Shareholders"), AO Capital Corp. ("AO"), American Business
Information, Inc., a Delaware corporation ("Buyer") and [ ] (the
"Escrow Agent"), as contemplated by that certain Stock Purchase Agreement,
dated to be effective as of February [ ], 1998, by and among Shareholders, AO
and Buyer (the "Stock Purchase Agreement"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Stock Purchase
Agreement. Shareholders and AO are sometimes collectively referred to herein
as "Sellers".
WHEREAS, Buyer and Sellers have entered into the Stock Purchase
Agreement to provide for the purchase of all of the outstanding common stock,
no par value, and warrants to purchase 74 shares of said common stock (together
referred to hereinafter as the "Shares"), of Armonk List Companies Corp., a New
York corporation (the "Company") (the "Acquisition");
WHEREAS, the Shareholders and AO have agreed to indemnify Buyer in
certain circumstances pursuant to Section 10 of the Stock Purchase Agreement;
WHEREAS, the closing of the transactions contemplated by the Stock
Purchase Agreement are taking place as of the date hereof and the execution of
this Escrow Agreement by the parties is an express condition thereto; and
WHEREAS, Buyer has relied upon the representations, warranties and
covenants of Sellers provided in the Stock Purchase Agreement and in schedules,
certificates and other documents delivered pursuant to the Stock Purchase
Agreement;
NOW, THEREFORE, to induce Buyer to proceed with the Closing and the
Acquisition and in consideration of such Closing and Acquisition, and in
further consideration of the mutual covenants and agreements contained herein
and in the Stock Purchase Agreement, and intending to be legally bound, the
parties hereto do hereby agree as follows:
<PAGE> 2
ARTICLE I
ESCROW FUND
SECTION 1.1. Contemporaneous with the execution of this Escrow
Agreement, Buyer shall deposit at Closing, by wire transfer of immediately
available funds, $2,000,000 of the Purchase Price (the "Escrow Amount") with
the Escrow Agent, such deposit to constitute an escrow fund (the "Escrow Fund")
to be governed by the terms set forth herein. The Escrow Agent shall invest
the Escrow Amount in interest bearing United States government securities or
mutual funds rated at least "AAA" by Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., consisting of United States
government securities and repurchase agreements having a maturity not exceeding
the Escrow Period. Upon compliance with the terms hereof, Buyer shall be
entitled to receive payment from the Escrow Fund for all Losses for which Buyer
is entitled to indemnification under Section 10 of the Stock Purchase
Agreement.
SECTION 1.2. The Escrow Agent shall hold, safeguard and dispose of
the Escrow Fund in accordance with the terms hereof and shall treat such Escrow
Fund as an escrow fund in accordance with the terms hereof and not as the
property of Buyer or Sellers.
ARTICLE II
ESCROW PERIOD
The Escrow Fund shall remain in existence for a period ending on March
[ ], 1999 (the "Escrow Period"); provided, however, that the Escrow Fund shall
continue to be maintained beyond the Escrow Period to the extent set forth in
Article V hereof, in the event that there exists any Claim (as defined in
Article III hereof) that is pending or not yet resolved pursuant to Article IV
hereof.
ARTICLE III
CLAIMS AGAINST ESCROW FUND
SECTION 3.1. Upon receipt by the Escrow Agent on or before the last
day the Escrow Fund remains in existence of a certificate signed by the Chief
Executive Officer or Chief Financial Officer of Buyer and by any Vice President
of AO and each of the Shareholders ("Officer's Certificate"):
(a) stating that Buyer has a Loss and that Buyer is
entitled to indemnification out of the Escrow Fund pursuant to this
Escrow Agreement and the Stock Purchase Agreement; and
2
<PAGE> 3
(b) specifying in reasonable detail (i) the amount of the
Loss; (ii) the individual items of Losses included in the amount so
stated; (iii) the basis for the Loss and (iv) the section of the Stock
Purchase Agreement to which such claim relates;
the Escrow Agent shall, subject to the provisions of Article IV hereof, deliver
to Buyer, as promptly as practicable, out of the Escrow Fund, such amount out
of the Escrow Fund having a value equal to the amount of such Losses. The
Escrow Agent shall make no delivery out of the Escrow Fund pursuant to this
Article III unless the Escrow Agent shall have received the Officer's
Certificate signed by each of the parties specified in this Section 3.1 to make
such delivery.
SECTION 3.2. Any claim by Buyer against the Escrow Fund made in an
Officer's Certificate pursuant to this Article III shall be referred to herein
as a "Claim" or, if multiple, "Claims."
ARTICLE IV
RESOLUTION OF DISPUTES
SECTION 4.1. If AO or either of the Shareholders shall not have
consented to the delivery to Buyer of that portion of the Escrow Fund equal to
the amount of Losses in respect of any Claim made in an Officer's Certificate
pursuant to Article III, AO, Shareholders and Buyer shall attempt in good faith
to agree upon the rights of the respective parties with respect to each such
Claim. If AO, Shareholders and Buyer so agree, a memorandum setting forth such
agreement shall be prepared and signed by Buyer, AO and Shareholders and shall
be furnished to each of them and a Officer's Certificate will be presented to
the Escrow Agent.
SECTION 4.2. If no such agreement can be reached after good faith
negotiation, but in any event after 30 days after AO or either Shareholder
refuses to consent to the delivery of a portion of the Escrow Fund for the
amount of a Loss in respect of any Claim made by Buyer (a "Dispute"), such
Dispute shall be submitted to mandatory and binding arbitration. The
arbitration shall be pursuant to the Commercial Arbitration Rules of the
American Arbitration Association (the "AAA"). The arbitration hearing shall be
held in such neutral location as the parties may mutually agree. The
arbitration panel will have no power or authority, under the Commercial
Arbitration Rules of the AAA or otherwise, to relieve the parties from their
agreement hereunder to arbitrate or otherwise to amend or disregard any
provision of this Agreement, including, without limitation, the provisions of
this Section 4.2. Any award rendered by the arbitration panel will be final,
conclusive and binding upon the parties and any judgment hereon may be entered
and enforced in any court of competent jurisdiction.
SECTION 4.3. If at any time there shall arise a dispute between AO
and Shareholders concerning which of them shall be liable for payment of a
Claim or Claims, AO and Shareholders each hereby expressly acknowledge and
agree that: (i) such dispute will not in any way whatsoever delay the delivery,
in the ordinary course, to Buyer of any amount out of the Escrow Fund pursuant
to Article III hereof; (ii) AO and Shareholders shall attempt in good faith to
agree upon their rights with respect to each such Claim; (iii) if AO and
Shareholders so agree, a memorandum setting forth
3
<PAGE> 4
such agreement shall be prepared and signed by AO and Shareholders and shall be
furnished to the Escrow Agent and Buyer; and (iv) if no such agreement can be
reached after good faith negotiation, but in any event after 30 days after
either AO or Shareholders, as the case may be, raises a dispute as referenced
in this Section 4.3, then the dispute shall be submitted to binding arbitration
before a single arbitrator, who shall be George A. Sirignano, Jr. Esq. or such
other arbitrator or arbitrators mutually agreed to by AO and the Shareholders.
ARTICLE V
EXPIRATION OF ESCROW PERIOD
If, upon expiration of the Escrow Period, Buyer shall have asserted a
Claim and such Claim is pending or unresolved at the time of such expiration,
the Escrow Agent shall retain in the Escrow Fund that portion of the Escrow
Amount, net of any distributions made or to be made with respect to other
Claims, equal in value to the Loss asserted in such Claim until such matter is
resolved. If it is determined that Buyer is entitled to recovery on account of
such Claim, the Escrow Agent shall deliver or cause to be delivered to Buyer
the Escrow Amount having a value equal to the amount due and payable with
respect to such Claim. The first $1,000,000, net of any amounts for which AO
is liable under Section 10 of the Stock Purchase Agreement, of the remainder of
the Escrow Fund (if there is more than $1,000,000 remaining following any
delivery of that portion of the Escrow Fund in accordance with this Article V),
shall be delivered to AO pursuant to this Escrow Agreement. If there is less
than $1,000,000 remaining, all such remainder,net of any amounts for which AO
is liable under Section 10 of the Stock Purchase Agreement, shall be delivered
to AO pursuant to this Escrow Agreement. The remainder of the Escrow Fund, if
any, following any delivery to AO, shall be delivered to Shareholders pursuant
to this Escrow Agreement. If any amount is paid by the Escrow Agent pursuant
to a Claim and the actual Losses with respect to such Claim are at any time
determined to be less than such payment, Buyer shall promptly return such
excess to the Escrow Agent to be deposited into the Escrow Fund, if this Escrow
Agreement is then in effect, or to AO or Shareholders, as the case may be in
accordance with the provisions of this Article V, if this Escrow Agreement is
no longer in effect. Notwithstanding any other provision of this Escrow
Agreement, any interest earned on the Escrow Amount will not be considered part
of the Escrow Amount and will not be distributed to Buyer. Upon expiration of
the Escrow Period, an amount equal to fifty percent of any such interest earned
will be distributed to AO and the remaining fifty percent of any such interest
earned will be distributed equally between each of the Shareholders.
ARTICLE VI
ESCROW AGENT'S RIGHTS AND RESPONSIBILITIES
To induce the Escrow Agent to act hereunder, it is further agreed
that:
(a) Any recitals contained in this Escrow Agreement shall
be deemed to be those of the principals and not those of the Escrow
Agent.
4
<PAGE> 5
(b) The Escrow Agent shall not be under any duty to give
the property held hereunder any greater degree of care than it gives
its own similar property.
(c) The Escrow Agent may engage legal counsel who may be
counsel for any party to the Escrow Agreement and may act upon advice
of counsel in reference to any matter connected herewith and shall not
be liable for any acts or omissions taken or suffered pursuant to the
opinion of such counsel. The fees and expenses of such counsel shall
be deemed to be a proper expense for which the Escrow Agent will have
a lien against the Escrow Fund.
(d) The Escrow Agent shall not be liable in any respect
on account of the identity, authority or rights of the parties
executing or delivering or purporting to execute or deliver this
Escrow Agreement or any documents or papers deposited or called for
hereunder. The Escrow Agent shall be protected in acting upon any
notice, request, consent, certificate, order, affidavit, letter,
telegram or other paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or
persons.
(e) The Escrow Agent shall not be liable for the
outlawing of any rights under any statute of limitations with respect
to this Escrow Agreement or any documents deposited with the Escrow
Agent.
(f) The Escrow Agent is hereby expressly authorized to
disregard any and all warnings given by any of the parties hereto or
by any other person, excepting only orders or process of courts of
law, and is hereby expressly authorized to comply with and obey
orders, judgments or decrees of any court. In case the Escrow Agent
obeys or complies with any such order, judgment or decree of any
court, the Escrow Agent shall not be liable to any of the parties
hereto or to any other person by reason of such compliance,
notwithstanding any such order, judgment or decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been
entered without jurisdiction.
(g) The Escrow Agent is authorized to rely on the written
instructions of AO or Shareholders as being the acts, respectively, of
AO and Shareholders, and the written instructions of the Chief
Executive Officer of Buyer as being the act of Buyer.
(h) The duties of the Escrow Agent shall be as expressed
under this Escrow Agreement, and the Escrow Agent shall have no
implied duties. The permissive right or power to take any action
shall not be construed as a duty to take action under any
circumstances, and the Escrow Agent shall not be liable except in the
event of its gross negligence or willful misconduct.
(i) The Escrow Agent shall not be called upon to advise
any party as to its rights and obligations hereunder.
5
<PAGE> 6
(j) In consideration of its acceptance of the appointment
as the Escrow Agent, and except with respect to the Escrow Agent's own
gross negligence or willful misconduct or acts or omissions by the
Escrow Agent not in good faith, the other parties hereto agree,
jointly and severally, to indemnify and hold the Escrow Agent harmless
as to any loss or liability incurred by it to any person, firm or
corporation by reason of its having accepted the same or in carrying
out any of the terms hereof, and to reimburse the Escrow Agent for all
its expenses, including attorneys' fees, incurred by reason of its
position hereunder or actions taken pursuant hereto. The Escrow Agent
shall have no liability under, or duty to inquire into, the terms and
provisions of this Escrow Agreement, and it is agreed that its duties
are purely ministerial in nature and that the Escrow Agent shall incur
no liability whatsoever except for willful misconduct or gross
negligence so long as it has acted in good faith. This paragraph (j)
shall survive the termination of the Escrow Agreement.
(k) The Escrow Agent may execute any of the duties under
this Escrow Agreement by or through agents or receivers.
(l) Unless specifically required by this Escrow
Agreement, the Escrow Agent shall not be required to give any bond or
surety or report to any court despite any statute, custom or rule to
the contrary.
(m) In the event the Escrow Agent becomes involved in
litigation by reason hereof, it is hereby authorized to deposit with
the clerk of the court in which the litigation is pending any and all
funds, securities or other property held by it pursuant hereto, less
its fees, expenses and advances, and thereupon shall stand fully
relieved and discharged of any further duties hereunder. Also, in the
event the Escrow Agent is threatened with litigation by reason hereof,
it is hereby authorized to implead all interested parties in any court
of competent jurisdiction and to deposit with the clerk of such court
any such funds, securities or other property held by it pursuant
hereto, less its fees, expenses and advances, and thereupon shall
stand fully relieved and discharged of any further duties hereunder.
(n) The Escrow Agent shall not be obligated to risk its
own funds in the administration of the Escrow Fund and shall have a
lien against any funds, securities or other property in its possession
or control for its fees, expenses and advancements. The Escrow Agent
need not take any action under this Escrow Agreement which may involve
it in any expense or liability until indemnified to its satisfaction
for any expense or liability it reasonably believes it may occur.
6
<PAGE> 7
ARTICLE VII
RECORDS
The Escrow Agent shall maintain a record of all Claims against the
Escrow Fund filed with it pursuant to Article III, a record of all such Claims
which shall become payable as provided in Article III or IV and a record of all
payments from the Escrow Fund to Buyer.
ARTICLE VIII
RESIGNATION OF ESCROW AGENT
The Escrow Agent, or any successor, may resign as Escrow Agent
hereunder by giving 30 days' written notice thereof to Buyer, AO and
Shareholders by registered or certified mail. Such resignation shall become
effective following such written notice upon the earlier of the appointment by
Buyer, AO and Shareholders of a successor Escrow Agent that accepts the
appointment and agrees to be bound by the provisions of this Agreement or the
expiration of 30 days thereafter. Upon the effectiveness of such resignation,
all duties of the Escrow Agent so resigning shall cease, other than the duty to
account in accordance with Article VII. Buyer, AO and Shareholders shall have
the right to terminate the appointment of the Escrow Agent hereunder by giving
written notice thereof to the Escrow Agent, specifying the date upon which such
termination shall take effect. A condition precedent to such termination shall
be the designation of a successor Escrow Agent that has accepted the
appointment and agreed to be bound by the provisions of this Agreement. In
event of such termination, the Escrow Agent shall turn over and deliver to such
successor Escrow Agent the Escrow Fund, and any other sums and the records and
instruments held by it under this Escrow Agreement and render the accounting
required by Article VII.
ARTICLE IX
NOTICES
All notices and other communications pursuant to this Escrow Agreement
shall be in writing and shall be deemed given if delivered personally, sent by
a nationally recognized overnight courier, or mailed by registered or certified
mail (return receipt requested), postage prepaid, or sent by facsimile
(followed with a copy sent by courier or registered or certified mail) to the
parties at the following addresses (or at such other address for a party as
shall be specified by notice hereunder):
To Buyer: American Business Information, Inc.
5711 South 86 Circle
Omaha, NE 68127
Attention: Steven Purcell, Chief
Financial Officer Telephone: (402)
593-4632 Fax: (402) 537-6197
7
<PAGE> 8
with a copy to: Michael C. Pallesen
Corporate Counsel
American Business Information, Inc.
5711 South 86 Circle
Omaha, NE 68127
Telephone: (402) 537-6743
Fax: (402) 339-0265
and with a copy to: Kutak Rock
1650 Farnam Street
Omaha, NE 68102
Attention: Steven W. Seline
Telephone: (402) 346-6000
Fax: (402) 346-1148
To AO: AO Capital Corp.
80 Field Point Road
Greenwich, CT 06830
Attention: William D. Cotter
Telephone: (203) 622-6600
Fax: (203) 622-1292
To Shareholders: Robert Cunniffe
[Home address ]
Sheldon Zaslansky
[Home address]
To Escrow Agent: [Name and address]
with a copy to: [ ]
All such notices and other communications shall be deemed to have been received
(a) in the case of personal delivery, on the date of such delivery, (b) in the
case of delivery by nationally recognized overnight courier, on the business
day following dispatch, (c) in the case of mailing, on the third business day
following such mailing, and (d) in the case of a facsimile, when the party
receiving such facsimile shall have confirmed receipt of the communication (or
when the copy sent by courier or registered or certified mail shall have been
deemed to have been received pursuant to clause (a), (b) or (c)).
8
<PAGE> 9
ARTICLE X
SUCCESSORS AND ASSIGNS
This Escrow Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the parties hereto.
ARTICLE XI
GOVERNING LAW
This Escrow Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York without regard to the choice
of law principles thereof.
ARTICLE XII
ESCROW FEES
It is agreed that the fees to be paid to the Escrow Agent in
connection with the Escrow Fund, will be paid by Buyer.
ARTICLE XIII
EXPENSES
In the event of any dispute that results in a suit or other legal
proceeding to construe or enforce any provision of this Agreement or because of
an alleged breach, default or misrepresentation in connection with any of the
provisions of this Escrow Agreement, the parties agree that each party shall be
responsible for its own attorneys' fees and other costs incurred in any action
or proceeding.
ARTICLE XIV
COUNTERPARTS
This Escrow Agreement may be executed in any number of counterparts,
each of which when so executed shall constitute an original hereof, but all of
which together shall constitute one agreement.
9
<PAGE> 10
IN WITNESS WHEREOF, the undersigned have executed this Escrow
Agreement to be effective as of the day and year first above written.
SELLERS: BUYER:
AMERICAN BUSINESS INFORMATION, INC.
By:
- ---------------------------------- -----------------------------------
Robert Cunniffe
- ---------------------------------- -----------------------------------
Sheldon Zaslansky
AO CAPITAL CORP. ESCROW AGENT
[ ]
By: By:
------------------------------- -----------------------------------
10
<PAGE> 1
EXHIBIT 99.3
EXHIBIT B-2
CONFIDENTIALITY AND NONCOMPETE AGREEMENT
American Business Information, Inc., a Delaware corporation, (the
"Company") and AO Capital Corp. agree as follows:
1. In consideration of the Company entering into the Stock
Purchase Agreement dated of even date hereto by and among the Company, Robert
Cunniffe, Sheldon Zaslansky and AO Capital Corp. (the "Stock Purchase
Agreement"), AO Capital Corp. hereby agrees to adhere to the following terms
and conditions:
AO Capital Corp. expressly covenants and agrees that at no time for a
period of five years after the date of this Agreement will AO Capital
Corp. or any of its subsidiaries or affiliates (collectively, "AO
Capital") for themselves or on behalf of any other person,
partnership, firm, association or corporation in any territory in
which the Company presently has an active business or gives written
notice to AO Capital that it has established an active business (1)
open or operate a business which would be a competitor of the business
being acquired by the Company pursuant to the Stock Purchase Agreement
(the "Business"), (2) act as an employee, agent, advisor or consultant
of any then existing competitor of the Business in a manner relevant
to competition with the Business, (3) solicit or accept business
relating to competition with the Business from any of the Company's
competitors in a manner relevant to competition with the Business,
unless authorized by the Company, (4) divert any business from the
Company by influencing or attempting to influence any present
customers or the Company or (5) attempt to attract any supplier away
from the Company or use its information regarding the Company's
suppliers in any way which would detrimentally affect the Company.
2. By signing this agreement, AO Capital expressly acknowledges
that the territorial limitations, duration and scope of this agreement are fair
and reasonable.
3. AO Capital hereby covenants and agrees that until [March ],
2000, it shall not disclose any Confidential Information (as hereinafter
defined) and (i) shall not permit any third party access to the Confidential
Information and (ii) shall use the same degree of care to protect the
Confidential Information as the Company uses to protect its confidential
information. The foregoing confidentiality obligation shall not apply to
information that (i) is or becomes part of the public domain other than as a
result of a breach of this Agreement, or (ii) is required to be disclosed by
law or regulation or pursuant to an order by any court or tribunal of competent
jurisdiction. "Confidential Information" shall be defined as customer lists,
trade secrets, business plans, financial reports and any other information, in
each case relating to the Business, which was in the possession of AO Capital
on the Closing Date (as defined in the Stock Purchase Agreement) and would be
detrimental to the Company if disclosed to competitors or to any other third
party.
4. AO Capital further agrees that the Company shall be entitled
to maintain proceedings in any court of competent jurisdiction, either at law
or in equity, for any breach of this agreement by AO Capital to enforce the
specific performance of this agreement and/or to obtain damages for any breach
thereof, and without regard to any or all remedies sought by the Company.
<PAGE> 2
5. This agreement supersedes any prior agreement between AO
Capital and the Company pertaining to the subject hereof. In the event that any
portion of this agreement is declared invalid or illegal by final judgment of
any court of competent jurisdiction, the remainder of this agreement shall
remain in full force and effect, notwithstanding the invalidity or illegality
of the other portion.
6. This agreement shall be governed by the laws of the State of
Nebraska.
7. This agreement may be executed in duplicate counterparts, each
of which shall be deemed to be an original, and all of which shall constitute
one in the same agreement.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed as of the day of [March], 1998.
AMERICAN BUSINESS INFORMATION,
INC., a Delaware corporation
By
----------------------------------
Printed Name
------------------------
Its
---------------------------------
AO CAPITAL CORP.
By
----------------------------------
Printed Name
------------------------
Its
---------------------------------
3
<PAGE> 1
EXHIBIT 99.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Employment Agreement") is entered into
as of the day of March, 1998 between Robert Cunniffe (the "Employee") and
American Business Information, Inc. (the "Company").
The Company wishes to employ the Employee as Co-President of the
Armonk List Companies Corp. ("Armonk") on the terms set forth in this
Employment Agreement, and the Employee wishes to accept such employment on such
terms.
THEREFORE, in consideration of the mutual promises set forth herein,
it is mutually agreed between the parties as follows:
Section 1. EMPLOYMENT AND TERM. The Company hereby employs the
Employee and the Employee hereby accepts employment as Co-President of Armonk
on the terms of this Employment Agreement, commencing as of [March ], 1998,
and continuing until [March ,] 2000, unless terminated earlier in accordance
with the provisions of Section 5 hereof or extended by mutual agreement of the
parties.
Section 2. DUTIES AND AUTHORITY. The Employee shall have the normal
duties, responsibilities and authority of a president; provided that such
duties and responsibilities shall not be greater than those currently being
performed by the Employee as an officer of the Walter Karl Companies. The
Employee will engage in such business travel related to the Company's and
Armonk's business as is reasonably necessary to perform the functions and
duties and carry out the responsibilities of the position of president of
Armonk in the same manner as those duties and responsibilities are currently
performed by the Employee. The Employee will devote his full business time and
attention to the business and affairs of Armonk.
Section 3. COMPENSATION.
(a) Base Salary. The Employee will receive a base salary
during the term of this Employment Agreement of $200,000 per year
("Base Salary"), which shall be payable in approximately equal monthly
installments.
(b) Bonus. The Employee shall receive (i) an annual bonus
for the year 1998 in the amount of $60,000, which shall be payable in
approximately equal monthly installments; (ii) an annual bonus for the
year 1999 in the amount of $60,000, which shall be payable in
approximately equal monthly installments; and (iii) a performance
bonus, as determined by the Company's Chief Executive Officer or the
President of Database America Companies, Inc., in such Chief Executive
Officer or President's sole discretion, in an amount not to exceed
$60,000 in 1998 and in an amount not to exceed $120,000 in 1999.
(c) Additional Benefits. The Employee will also receive
such additional employee benefits as the Company may from time to time
make available to its executive officers, including paid vacations,
pension benefits, qualified profit-sharing plans, employee group
health and life insurance and disability insurance. Notwithstanding
the foregoing, the Employee will receive at least five weeks paid
vacation each calendar year
<PAGE> 2
in accordance with the vacation policies of the Company in effect for
its executive officers from time to time and will be entitled to a
carryforward of any unused vacation for calendar years 1997 and 1998.
During the term of this Employment Agreement, an automobile will be
provided to the Employee; provided however, that the aggregate
expenses to be paid by the Company, Armonk or its subsidiaries in
connection therewith shall not exceed $850 per month plus insurance,
gas, maintenance and mileage.
(d) Withholdings. All payments made to the Employee
pursuant to this Employment Agreement shall be reduced by all required
federal, state and local withholdings for taxes and similar charges
and by all contributions or payments required to be made by the
Employee in connection with any employee benefit plan maintained by
the Company.
(e) Options. The Employee will be granted options to
purchase a total of 50,000 shares of Company's Class A common stock at
the closing price of such stock on the date of this Employment
Agreement and the Employee will be considered for a grant of
additional options for the year 1999 in the discretion of the
Company's Board of Directors. Such options will be granted and will
vest under the terms of the Parent's 1997 Stock Purchase Plan;
provided, however, such options will vest (i) if the Employee is
terminated without cause during the term of this Employment Agreement;
(ii) at the termination of this Employment Agreement as set forth in
Section 1 if employment is not extended by mutual agreement of the
parties; or (iii) the Employee dies or is disabled prior to the
termination of this Employment Agreement. The options will be
incentive stock options to the extent allowable.
Section 4. REIMBURSEMENT FOR EXPENSES. The Employee is expected to
incur certain expenses on behalf of the Company for travel, promotion,
telephone, entertainment and similar items. The Company will reimburse the
Employee for all ordinary, necessary and reasonable amounts of such expenses
incurred by the Employee, which amounts shall be payable promptly upon receipt
of reasonable written documentation signed by the Employee itemizing such
expenses. The Employee shall retain use, for business purposes of Armonk, of
the corporate credit cards currently provided to him by Armonk and the Walter
Karl Companies; however, the Employee shall submit the written documentation
required by this Section 4 in connection therewith.
Section 5. EARLY TERMINATION OF TERM; SEVERANCE PAYMENT. This
Employment Agreement shall terminate for "cause" prior to the date of
termination set forth in Section 1 above upon the first to occur of:
(a) the determination by the Board of Directors in its
discretion reasonably applied that the Employee has become disabled
and shall not be able to continue his service to the Company;
provided, however, that the Company shall pay the compensation to the
Employee for the balance of the original term of this Employment
Agreement to the extent not covered by disability insurance;
(b) the Employee's death; provided that the Company has
maintained life insurance in the sum of at least $1,000,000 on the
Employee's life which is payable to a beneficiary designated by the
Employee;
2
<PAGE> 3
(c) the Employment Agreement is terminated by the Company
by reason of the Employee's continuing willful neglect of his duties
under this Employment Agreement, including substantial and continuing
willful refusal of the Employee to perform the duties required of him
hereunder, the theft or misappropriation of the Company's assets by
the Employee, fraud of the Employee under the Company or the
conviction of Employee of a criminal act involving fraud, dishonesty
or moral turpitude relating to or materially adversely affecting the
business of the Company or Armonk, other than minor traffic
violations; or
(d) the Employee's willful refusal to perform his duties
under this Employment Agreement at the principal executive offices of
Armonk if Armonk's principal executive offices are relocated to a
location not more than 25 miles from Greenwich, Connecticut.
Upon termination for any reason other than "cause" Employee
will be entitled to receive a payment equal to the discounted present
value of all remaining salary payments under the original term of the
Employment Agreement. (The discount rate shall be fixed at 8% for
determining the present value.) After any termination, the
Confidentiality and Noncompete Agreement shall remain in effect.
Section 6. RESTRICTIVE COVENANT. The Employee shall execute,
concurrently with this Employment Agreement, a Confidentiality and Noncompete
Agreement in the form attached hereto as Exhibit A.
Section 7. AMENDMENTS. No change, modification, waiver, discharge,
amendment or addition to this Employment Agreement shall be binding unless it
is in writing and signed by the Company and the Employee.
Section 8. ENTIRE AGREEMENT. This Employment Agreement contains the
entire understanding and agreement between the Company and the Employee and
supersedes any prior agreements between them pertaining to the Employee's
employment with the Company. There are no representations, warranties,
promises, covenants or understandings between the Company and the Employee with
respect to such employment other than those expressly set forth in this
Employment Agreement.
Section 9. GOVERNING LAW. This Employment Agreement shall be governed
by the substantive laws of the State of Nebraska.
Section 10. NONASSIGNABILITY; SUCCESSORS. The obligations of the
Employee under this Employment Agreement are not assignable by him. Except as
provided in the immediately preceding sentence, this Employment Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
successors.
Section 11. NOTICES. Any notice required to be given in writing by any
party to this Employment Agreement may be personally delivered or mailed by
registered or certified mail to the last known address of the party to be
notified. Any such notice personally delivered shall be effective upon
delivery and any such notice mailed shall be effective four business days after
the date of mailing, by registered or certified mail with postage prepaid to
the last known address of the party to be notified.
3
<PAGE> 4
Section 12. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Employment Agreement shall not affect the other
provisions of this Employment Agreement, and this Employment Agreement shall be
construed in all respects as if such invalid or unenforceable provision were
omitted.
Section 13. HEADINGS. The section and other headings contained in this
Employment Agreement are for reference purposes only and shall not affect the
interpretation of this Employment Agreement.
Section 14. CONSTRUCTION. Whenever required by the context, references
to the singular shall include the plural, and the masculine gender shall
include the feminine gender.
Section 15. RESIDENCE. The parties mutually agree that Employee may
retain his residence in Fairfield County, Connecticut or Westchester County,
New York during the term of this Employment Agreement even if the principal
executive offices of Armonk are relocated to a location more than 25 miles from
Greenwich, Connecticut, so long as Employee takes such actions as are
reasonably necessary to complete his responsibility as set forth in this
Employment Agreement.
IN WITNESS WHEREOF, the Company has caused this Employment Agreement
to be executed on its behalf and the Employee has signed his name hereto,
effective as of the date first written above.
AMERICAN BUSINESS INFORMATION, INC.,
a Delaware corporation
By
---------------------------------
Printed Name
-----------------------
Its
--------------------------------
-----------------------------------
Robert Cunniffe, Employee
4
<PAGE> 5
EXHIBIT A
CONFIDENTIALITY AND NONCOMPETE AGREEMENT
American Business Information, Inc., a Delaware corporation, (the
"Company") and Robert Cunniffe ("Employee") agree as follows:
1. In consideration of the Company employing Employee as set
forth in that certain Employment Agreement (the "Agreement") of even date
hereto executed by and among the Company and Employee and of the Company
purchasing from Employee all of the shares of common stock of Armonk List
Companies Corp. owned by him pursuant to the Stock Purchase Agreement dated of
even date hereto by and among the Company, Employee, Sheldon Zaslansky, and AO
Capital Corp., Employee hereby agrees to adhere to the following terms and
conditions:
Employee expressly covenants and agrees that at no time during the
effective time of the Agreement and for a period of five years after
termination of the Agreement will he for himself or on behalf of any
other person, partnership, firm, association or corporation in any
territory in which the Company presently has an active business or
gives written notice to Employee that it has established an active
business (1) open or operate a business which would be a competitor of
the business being acquired by the Company pursuant to the Stock
Purchase Agreement (the "Business"), (2) act as an employee, agent,
advisor or consultant of any then existing competitor of the Business
in a manner relevant to competition with the Business, (3) solicit or
accept business relating to competition with the Business from any of
the Company's competitors in a manner relevant to competition with the
Business, unless authorized by the Company, (4) divert any business
from the Company by influencing or attempting to influence any present
customers of the Company or (5) attempt to attract any supplier away
from the Company or use its information regarding the Company's
suppliers in any way which would detrimentally affect the Company.
2. By signing this agreement, Employee expressly acknowledges
that the territorial limitations, duration and scope of this agreement are fair
and reasonable. This Noncompete Agreement shall survive the termination of the
Agreement.
3. Employee hereby covenants and agrees that during the time of
the Agreement and for a period of two years after its termination that he shall
not disclose any Confidential Information (as hereinafter defined) and (i)
shall not permit any third party access to the Confidential Information, (ii)
shall use the same degree of care to protect the Confidential Information as
the Company uses to protect its confidential information, and (iii) shall take
any other actions that are reasonable, necessary or appropriate to ensure the
continued confidentiality and protection of the Confidential Information. The
foregoing confidentiality obligation shall not apply to information that (i) is
or becomes part of the public domain other than as a result of a breach of this
agreement, or (ii) is required to be disclosed by law or regulation or pursuant
to an order by any court or tribunal of competent jurisdiction. "Confidential
Information" shall be defined as customer lists, trade secrets, business plans,
financial reports and any other information, in each case relating to the
Business, which would be detrimental to the Company if disclosed to competitors
or to any other third party.
<PAGE> 6
4. Employee further agrees that the Company shall be entitled to
maintain proceedings in any court of competent jurisdiction, either at law or
in equity, for any breach of this agreement by Employee to enforce the specific
performance of this agreement and/or to obtain damages for any breach thereof,
and without regard to any or all remedies sought by the Company.
5. This agreement supersedes any prior agreement between the
Employee and the Company pertaining to the subject hereof. In the event that
any portion of this agreement is declared invalid or illegal by final judgment
of any court of competent jurisdiction, the remainder of this agreement shall
remain in full force and effect, notwithstanding the invalidity or illegality
of the other portion.
6. This agreement shall be governed by the laws of the State of
Nebraska.
7. This agreement may be executed in duplicate counterparts, each
of which shall be deemed to be an original, and all of which shall constitute
one in the same agreement.
A-2
<PAGE> 7
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed as of the day of , 1998.
AMERICAN BUSINESS INFORMATION, INC.,
a Delaware corporation
By
---------------------------------
Printed Name
-----------------------
Its
--------------------------------
-----------------------------------
Robert Cunniffe, Employee
A-3
<PAGE> 1
EXHIBIT 99.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Employment Agreement") is entered into
as of the day of March, 1998 between Sheldon Zaslansky (the
"Employee") and American Business Information, Inc. (the "Company").
The Company wishes to employ the Employee as Co-President of the
Armonk List Companies Corp. ("Armonk") on the terms set forth in this
Employment Agreement, and the Employee wishes to accept such employment on such
terms.
THEREFORE, in consideration of the mutual promises set forth herein,
it is mutually agreed between the parties as follows:
Section 1. EMPLOYMENT AND TERM. The Company hereby employs the
Employee and the Employee hereby accepts employment as Co-President of Armonk
on the terms of this Employment Agreement, commencing as of [March ], 1998,
and continuing until [March ], 2000, unless terminated earlier in accordance
with the provisions of Section 5 hereof or extended by mutual agreement of the
parties.
Section 2. DUTIES AND AUTHORITY. The Employee shall have the normal
duties, responsibilities and authority of a president; provided that such
duties and responsibilities shall not be greater than those currently being
performed by the Employee as an officer of the Walter Karl Companies. The
Employee will engage in such business travel related to the Company's and
Armonk's business as is reasonably necessary to perform the functions and
duties and carry out the responsibilities of the position of president of
Armonk in the same manner as those duties and responsibilities are currently
performed by the Employee. The Employee will devote his full business time and
attention to the business and affairs of Armonk.
Section 3. COMPENSATION.
(a) Base Salary. The Employee will receive a base salary
during the term of this Employment Agreement of $200,000 per year
("Base Salary"), which shall be payable in approximately equal monthly
installments.
(b) Bonus. The Employee shall receive (i) an annual
bonus for the year 1998 in the amount of $60,000, which shall be
payable in approximately equal monthly installments; (ii) an annual
bonus for the year 1999 in the amount of $60,000, which shall be
payable in approximately equal monthly installments; and (iii) a
performance bonus, as determined by the Company's Chief Executive
Officer or the President of Database America Companies, Inc., in such
Chief Executive Officer or President's sole discretion, in an amount
not to exceed $60,000 in 1998 and in an amount not to exceed $120,000
in 1999.
(c) Additional Benefits. The Employee will also receive
such additional employee benefits as the Company may from time to time
make available to its executive officers, including paid vacations,
pension benefits, qualified profit-sharing plans, employee group
health and life insurance and disability insurance. Notwithstanding
the foregoing, the Employee will receive at least five weeks paid
vacation each calendar year
<PAGE> 2
in accordance with the vacation policies of the Company in effect for
its executive officers from time to time and will be entitled to a
carryforward of any unused vacation for calendar years 1997 and 1998.
During the term of this Employment Agreement, an automobile will be
provided to the Employee; provided however, that the aggregate
expenses to be paid by the Company, Armonk or its subsidiaries in
connection therewith shall not exceed $850 per month plus insurance,
gas, maintenance and mileage.
(d) Withholdings. All payments made to the Employee
pursuant to this Employment Agreement shall be reduced by all required
federal, state and local withholdings for taxes and similar charges
and by all contributions or payments required to be made by the
Employee in connection with any employee benefit plan maintained by
the Company.
(e) Options. The Employee will be granted options to
purchase a total of 50,000 shares of Company's Class A common stock at
the closing price of such stock on the date of this Employment
Agreement and the Employee will be considered for a grant of
additional options for the year 1999 in the discretion of the
Company's Board of Directors. Such options will be granted and will
vest under the terms of the Company's 1997 Stock Purchase Plan;
provided, however, such options will vest (i) if the Employee is
terminated without cause during the term of this Employment Agreement;
(ii) at the termination of this Employment Agreement as set forth in
Section 1 if employment is not extended by mutual agreement of the
parties; or (iii) the Employee dies or is disabled prior to the
termination of this Employment Agreement The options will be
incentive stock options to the extent allowable.
Section 4. REIMBURSEMENT FOR EXPENSES. The Employee is expected to
incur certain expenses on behalf of the Company for travel, promotion,
telephone, entertainment and similar items. The Company will reimburse the
Employee for all ordinary, necessary and reasonable amounts of such expenses
incurred by the Employee, which amounts shall be payable promptly upon receipt
of reasonable written documentation signed by the Employee itemizing such
expenses. The Employee shall retain use, for business purposes of Armonk, of
the corporate credit cards currently provided to him by Armonk and the Walter
Karl Companies; however, the Employee shall submit the written documentation
required by this Section 4 in connection therewith.
Section 5. EARLY TERMINATION OF TERM; SEVERANCE PAYMENT. This
Employment Agreement shall terminate for "cause" prior to the date of
termination set forth in Section 1 above upon the first to occur of:
(a) the determination by the Board of Directors in its
discretion reasonably applied that the Employee has become disabled
and shall not be able to continue his service to the Company;
provided, however, that the Company shall pay the compensation to the
Employee for the balance of the original term of this Employment
Agreement to the extent not covered by disability insurance;
(b) the Employee's death; provided the Company has
maintained life insurance in the sum of at least $1,000,000 on the
Employee's life which is payable to a beneficiary designated by the
Employee;
2
<PAGE> 3
(c) the Employment Agreement is terminated by the Company
by reason of the Employee's continuing willful neglect of his duties
under this Employment Agreement, including substantial and continuing
willful refusal of the Employee to perform the duties required of him
hereunder, the theft or misappropriation of the Company's assets by
the Employee, fraud of the Employee under the Company or the
conviction of Employee of a criminal act involving fraud, dishonesty
or moral turpitude relating to or materially adversely affecting the
business of the Company or Armonk, other than minor traffic
violations; or
(d) the Employee's willful refusal to perform his duties
under this Employment Agreement at the principal executive offices of
Armonk if Armonk's principal executive offices are relocated to a
location not more than 25 miles from Greenwich, Connecticut.
Upon termination for any reason other than "cause" Employee
will be entitled to receive a payment equal to the discounted present
value of all remaining salary payments under the original term of the
Employment Agreement. (The discount rate shall be fixed at 8% for
determining the present value.) After any termination, the
Confidentiality and Noncompete Agreement shall remain in effect.
Section 6. RESTRICTIVE COVENANT. The Employee shall execute,
concurrently with this Employment Agreement, a Confidentiality and Noncompete
Agreement in the form attached hereto as Exhibit A.
Section 7. AMENDMENTS. No change, modification, waiver, discharge,
amendment or addition to this Employment Agreement shall be binding unless it
is in writing and signed by the Company and the Employee.
Section 8. ENTIRE AGREEMENT. This Employment Agreement contains the
entire understanding and agreement between the Company and the Employee and
supersedes any prior agreements between them pertaining to the Employee's
employment with the Company. There are no representations, warranties,
promises, covenants or understandings between the Company and the Employee with
respect to such employment other than those expressly set forth in this
Employment Agreement.
Section 9. GOVERNING LAW. This Employment Agreement shall be
governed by the substantive laws of the State of Nebraska.
Section 10. NONASSIGNABILITY; SUCCESSORS. The obligations of the
Employee under this Employment Agreement are not assignable by him. Except as
provided in the immediately preceding sentence, this Employment Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
successors.
Section 11. NOTICES. Any notice required to be given in writing by
any party to this Employment Agreement may be personally delivered or mailed by
registered or certified mail to the last known address of the party to be
notified. Any such notice personally delivered shall be effective upon
delivery and any such notice mailed shall be effective four business days after
the date of mailing, by registered or certified mail with postage prepaid to
the last known address of the party to be notified.
3
<PAGE> 4
Section 12. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Employment Agreement shall not affect the other
provisions of this Employment Agreement, and this Employment Agreement shall be
construed in all respects as if such invalid or unenforceable provision were
omitted.
Section 13. HEADINGS. The section and other headings contained in
this Employment Agreement are for reference purposes only and shall not affect
the interpretation of this Employment Agreement.
Section 14. CONSTRUCTION. Whenever required by the context,
references to the singular shall include the plural, and the masculine gender
shall include the feminine gender.
Section 15. RESIDENCE. The parties mutually agree that Employee may
retain his residence in Fairfield County, Connecticut or Westchester County,
New York during the term of this Employment Agreement even if the principal
executive offices of Armonk are relocated to a location more than 25 miles from
Greenwich, Connecticut, so long as Employee takes such actions as are
reasonably necessary to complete his responsibility as set forth in this
Employment Agreement.
IN WITNESS WHEREOF, the Company has caused this Employment Agreement
to be executed on its behalf and the Employee has signed his name hereto,
effective as of the date first written above.
AMERICAN BUSINESS INFORMATION, INC.,
a Delaware corporation
By
---------------------------------
Printed Name
-----------------------
Its
--------------------------------
-----------------------------------
Sheldon Zaslansky, Employee
4
<PAGE> 5
EXHIBIT A
CONFIDENTIALITY AND NONCOMPETE AGREEMENT
American Business Information, Inc., a Delaware corporation, (the
"Company") and Sheldon Zaslansky ("Employee") agree as follows:
1. In consideration of the Company employing Employee as set
forth in that certain Employment Agreement (the "Agreement") of even date
hereto executed by and among the Company and Employee and of the Company
purchasing from Employee all of the shares of common stock of Armonk List
Companies Corp. owned by him pursuant to the Stock Purchase Agreement dated of
even date hereto by and among the Company, Employee, Robert Cunniffe and AO
Capital Corp., Employee hereby agrees to adhere to the following terms and
conditions:
Employee expressly covenants and agrees that at no time during the
effective time of the Agreement and for a period of five years after
termination of the Agreement will he for himself or on behalf of any
other person, partnership, firm, association or corporation in any
territory in which the Company presently has an active business or
gives written notice to Employee that it has established an active
business (1) open or operate a business which would be a competitor of
the business being acquired by the Company pursuant to the Stock
Purchase Agreement (the "Business"), (2) act as an employee, agent,
advisor or consultant of any then existing competitor of the Business
in a manner relevant to competition with the Business, (3) solicit or
accept business relating to competition with the Business from any of
the Company's competitors in a manner relevant to competition with the
Business, unless authorized by the Company, (4) divert any business
from the Company by influencing or attempting to influence any present
customers of the Company or (5) attempt to attract any supplier away
from the Company or use its information regarding the Company's
suppliers in any way which would detrimentally affect the Company.
2. By signing this agreement, Employee expressly acknowledges
that the territorial limitations, duration and scope of this agreement are fair
and reasonable. This Noncompete Agreement shall survive the termination of the
Agreement.
3. Employee hereby covenants and agrees that during the time of
the Agreement and for a period of two years after its termination that he shall
not disclose any Confidential Information (as hereinafter defined) and (i)
shall not permit any third party access to the Confidential Information, (ii)
shall use the same degree of care to protect the Confidential Information as
the Company uses to protect its confidential information, and (iii) shall take
any other actions that are reasonable, necessary or appropriate to ensure the
continued confidentiality and protection of the Confidential Information. The
foregoing confidentiality obligation shall not apply to information that (i) is
or becomes part of the public domain other than as a result of a breach of this
agreement, or (ii) is required to be disclosed by law or regulation or pursuant
to an order by any court or tribunal of competent jurisdiction. "Confidential
Information" shall be defined as customer lists, trade secrets, business plans,
financial reports and any other information, in each case relating to the
Business, which would be detrimental to the Company if disclosed to competitors
or to any other third party.
4. Employee further agrees that the Company shall be entitled to
maintain proceedings in any court of competent jurisdiction, either at law or
in equity, for any breach of
<PAGE> 6
this agreement by Employee to enforce the specific performance of this
agreement and/or to obtain damages for any breach thereof, and without regard
to any or all remedies sought by the Company.
5. This agreement supersedes any prior agreement between the
Employee and the Company pertaining to the subject hereof. In the event that
any portion of this agreement is declared invalid or illegal by final judgment
of any court of competent jurisdiction, the remainder of this agreement shall
remain in full force and effect, notwithstanding the invalidity or illegality
of the other portion.
6. This agreement shall be governed by the laws of the State of
Nebraska.
7. This agreement may be executed in duplicate counterparts, each
of which shall be deemed to be an original, and all of which shall constitute
one in the same agreement.
A-2
<PAGE> 7
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed as of the day of , 1998.
AMERICAN BUSINESS INFORMATION, INC.,
a Delaware corporation
By
---------------------------------
Printed Name
-----------------------
Its
--------------------------------
-----------------------------------
Sheldon Zaslansky, Employee
A-3
<PAGE> 1
EXHIBIT 99.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Employment Agreement") is entered into
as of the day of March, 1998 between Marla Maisner (the "Employee") and
American Business Information, Inc., a Delaware corporation (the "Company").
The Company wishes to employ the Employee as General Manager of the
Armonk List Companies Corp. ("Armonk") on the terms set forth in this
Employment Agreement, and the Employee wishes to accept such employment on such
terms.
THEREFORE, in consideration of the mutual promises set forth herein,
it is mutually agreed between the parties as follows:
Section 1. EMPLOYMENT AND TERM. The Company hereby employs the
Employee and the Employee hereby accepts employment as General Manager of
Armonk on the terms of this Employment Agreement, commencing as of [March ],
1998, and continuing until June 30, 1998, unless terminated earlier in
accordance with the provisions of Section 5 hereof or extended by mutual
agreement of the parties.
Section 2. DUTIES AND AUTHORITY. The Employee's duties shall be as
determined by the Co-Presidents of Armonk consistent with the Employee's title
described above; provided, that such duties and responsibilities shall not be
greater than those currently being performed by the Employee with the Walter
Karl Companies and shall be conducted in Armonk's principal executive offices
in Greenwich, Connecticut. The Employee will report to the Co-Presidents of
Armonk. The Employee will engage in such business travel related to Armonk's
business as is reasonably necessary to perform the functions and duties and
carry out the responsibilities of the position of General Manager of Armonk in
the same manner as those duties and responsibilities are currently performed by
the Employee. The Employee will devote three business days per week to the
business and affairs of Armonk and the performance of her duties as General
Manager.
Section 3. COMPENSATION.
(a) Base Salary. The Employee will receive a base salary
during the term of this Employment Agreement of $40,000 ("Base
Salary"), which shall be payable in approximately equal monthly
installments.
(b) Bonus. The Employee shall receive a bonus for the
year 1998 in the amount of $20,000 payable upon the termination of
this Employment Agreement.
(c) Additional Benefits. The Employee will also receive
such additional employee benefits as the Company may from time to time
make available to its executive officers, including paid vacations, a
carryforward of accrued vacation time, pension benefits, qualified
profit-sharing plans, employee group health and life insurance and
disability insurance.
(d) Withholdings. All payments made to the Employee
pursuant to this Employment Agreement shall be reduced by all required
federal, state and local
<PAGE> 2
withholdings for taxes and similar charges and by all contributions or
payments required to be made by the Employee in connection with any
employee benefit plan maintained by Armonk.
(e) Severance Payment. The Employee shall be paid a
severance bonus in the amount of $50,000 at the termination of this
Employment Agreement.
Section 4. REIMBURSEMENT FOR EXPENSES. The Employee is expected to
incur certain expenses on behalf of Armonk for travel, promotion, telephone,
entertainment and similar items. Armonk will reimburse the Employee for all
ordinary, necessary and reasonable amounts of such expenses incurred by the
Employee, which amounts shall be payable promptly upon receipt of reasonable
written documentation signed by the Employee itemizing such expenses.
Section 5. EARLY TERMINATION OF TERM; SEVERANCE PAYMENT. This
Employment Agreement shall terminate for "cause" prior to the date of
termination set forth in Section 1 above upon the first to occur of:
(a) the determination by the Board of Directors in its
discretion reasonably applied that the Employee has become disabled,
other than by reason of pregnancy, and shall not be able to continue
her service to Armonk;
(b) the Employee's death; or
(c) the Employment Agreement is terminated by the Company
by reason of the Employee's continuing willful neglect of her duties
under this Employment Agreement, including substantial and continuing
willful refusal of Employee to perform the duties required of her
hereunder and excluding failure to perform such duties due to her
pregnancy, the theft or misappropriation of the Company's assets by
the Employee, fraud of the Employee under the Company or the
conviction of Employee of a criminal act involving fraud, dishonesty
or moral turpitude relating to or materially adversely affecting the
business of the Company or Armonk other than minor traffic violations.
This Employment Agreement will not be terminated for any
reason other than "cause." After any termination, the Confidentiality
and Noncompete Agreement shall remain in effect.
Section 6. RESTRICTIVE COVENANT. The Employee shall execute,
concurrently with this Employment Agreement, a Confidentiality and Noncompete
Agreement in the form attached hereto as Exhibit A.
Section 7. AMENDMENTS. No change, modification, waiver, discharge,
amendment or addition to this Employment Agreement shall be binding unless it
is in writing and signed by the Company and the Employee.
Section 8. ENTIRE AGREEMENT. This Employment Agreement contains the
entire understanding and agreement between the Company and the Employee and
supersedes any prior agreements between them pertaining to the Employee's
employment with the Company. There are no representations, warranties,
promises, covenants or understandings between the Company
2
<PAGE> 3
and the Employee with respect to such employment other than those expressly set
forth in this Employment Agreement.
Section 9. GOVERNING LAW. This Employment Agreement shall be
governed by the substantive laws of the State of Nebraska.
Section 10. NONASSIGNABILITY; SUCCESSORS. The obligations of the
Employee under this Employment Agreement are not assignable by her. Except as
provided in the immediately preceding sentence, this Employment Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
successors.
Section 11. NOTICES. Any notice required to be given in writing by
any party to this Employment Agreement may be personally delivered or mailed by
registered or certified mail to the last known address of the party to be
notified. Any such notice personally delivered shall be effective upon
delivery and any such notice mailed shall be effective four business days after
the date of mailing, by registered or certified mail with postage prepaid to
the last known address of the party to be notified.
Section 12. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Employment Agreement shall not affect the other
provisions of this Employment Agreement, and this Employment Agreement shall be
construed in all respects as if such invalid or unenforceable provision were
omitted.
Section 13. HEADINGS. The section and other headings contained in
this Employment Agreement are for reference purposes only and shall not affect
the interpretation of this Employment Agreement.
Section 14. CONSTRUCTION. Whenever required by the context,
references to the singular shall include the plural, and the masculine gender
shall include the feminine gender.
Section 15. RESIDENCE. The parties mutually agree that Employee may
retain her residence in Fairfield County, Connecticut or Westchester County,
New York during the term of this Employment Agreement even if the principal
executive offices of Armonk are relocated to a location more than 25 miles from
Greenwich, Connecticut, so long as Employee takes such actions as are
reasonably necessary to complete her responsibility as set forth in this
Employment Agreement.
IN WITNESS WHEREOF, the Company has caused this Employment Agreement
to be executed on its behalf and the Employee has signed her name hereto,
effective as of the date first written above.
AMERICAN BUSINESS INFORMATION,
INC., a Delaware corporation
By
-------------------------------
Printed Name
---------------------
Its
------------------------------
---------------------------------
Marla Maisner, Employee
3
<PAGE> 4
EXHIBIT A
CONFIDENTIALITY AND NONCOMPETE AGREEMENT
American Business Information, Inc., a Delaware corporation (the
"Company"),
and Marla Maisner ("Employee") agree as follows:
1. In consideration of the Company employing Employee as set
forth in that certain Employment Agreement (the "Agreement") of even date
hereto executed by and among the Company and Employee, Employee hereby agrees
to adhere to the following terms and conditions:
Employee expressly covenants and agrees that at no time during the
effective time of the Agreement and for a period of two years after
termination of the Agreement will she for herself or on behalf of any
other person, partnership, firm, association or corporation in any
territory in which the Company presently has an active business or
gives written notice to Employee that it has established an active
business (1) open or operate a business which would be a competitor of
the business being acquired by the Company pursuant to the Stock
Purchase Agreement (the "Business"), (2) act as an employee, agent,
advisor or consultant of any then existing competitor of the Business
in a manner relevant to competition with the Business, (3) solicit or
accept business relating to competition with the Business from any of
the Company's competitors in a manner relevant to competition with the
Business, unless authorized by the Company, (4) divert any business
from the Company by influencing or attempting to influence any present
customers or the Company or (5) attempt to attract any supplier away
from the Company or use its information regarding the Company's
suppliers in any way which would detrimentally affect the Company.
2. By signing this agreement, Employee expressly acknowledges
that the territorial limitations, duration and scope of this agreement are fair
and reasonable. This Noncompete Agreement shall survive the termination of the
Agreement.
3. Employee hereby covenants and agrees that during the time of
the Agreement and for a period of two years after its termination that she
shall not disclose any Confidential Information (as hereinafter defined) and
(i) shall not permit any third party access to the Confidential Information,
(ii) shall use the same degree of care to protect the Confidential Information
as the Company uses to protect its confidential information, and (iii) shall
take any other actions that are reasonable, necessary or appropriate to ensure
the continued confidentiality and protection of the Confidential Information.
The foregoing confidentiality obligation shall not apply to information that
(i) is or becomes part of the public domain other than as a result of a breach
of this agreement, or (ii) is required to be disclosed by law or regulation or
pursuant to an order by any court or tribunal of competent jurisdiction.
"Confidential Information" shall be defined as customer lists, trade secrets,
business plans, financial reports and any other information, in each case
relating to the Business, which would be detrimental to the Company if
disclosed to competitors or to any other third party.
4. In consideration of the Employee entering into this Agreement
and performing her duties and obligations hereunder, the Company agrees to pay
the Employee $50,000 per year for each year that this Agreement remains in
effect and during which the Employee has not breached the terms of this
Agreement, which amount will be payable in approximately equal quarterly
installments.
<PAGE> 5
4. Employee further agrees that the Company shall be entitled to
maintain proceedings in any court of competent jurisdiction, either at law or
in equity, for any breach of this agreement by Employee to enforce the specific
performance of this agreement and/or to obtain damages for any breach thereof,
and without regard to any or all remedies sought by the Company.
5. This agreement supersedes any prior agreement between the
Employee and the Company pertaining to the subject hereof. In the event that
any portion of this agreement is declared invalid or illegal by final judgment
of any court of competent jurisdiction, the remainder of this agreement shall
remain in full force and effect, notwithstanding the invalidity or illegality
of the other portion.
6. This agreement shall be governed by the laws of the State of
Nebraska.
7. This agreement may be executed in duplicate counterparts, each
of which shall be deemed to be an original, and all of which shall constitute
one in the same agreement.
A-2
<PAGE> 6
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed as of the day of , 1998.
AMERICAN BUSINESS INFORMATION,
INC., a Delaware corporation
By
-------------------------------
Printed Name
---------------------
Its
------------------------------
---------------------------------
Marla Maisner, Employee
A-3
<PAGE> 1
EXHIBIT 99.8
FOR IMMEDIATE RELEASE
TUESDAY, FEBRUARY 24, 1998
CONTACTS:
SCOTT DAHNKE - CHIEF EXECUTIVE OFFICER
Phone: (402) 593-4511 o Fax: (402) 339-0265
E-Mail: [email protected]
STEVE PURCELL - CHIEF FINANCIAL OFFICER
Phone: (402) 593-4632 o Fax: (402) 537-6197
E-Mail: [email protected]
AMERICAN BUSINESS INFORMATION, INC.(R) ANNOUNCES
ACQUISITION OF WALTER KARL, INC.
(OMAHA, NE) - American Business Information, Inc.(R) (NASDAQ: ABIIA/ABIIB)
today announced the execution of a definitive agreement for the acquisition of
Walter Karl, Inc., a leading national direct marketing service firm that
provides list management, list brokerage, database marketing and direct
marketing services to a wide array of customers. The company was founded in
1957 by Mr. Walter Karl and is headquartered in Greenwich, CT.
"Walter Karl is an old-line blue chip company which provides direct marketing
and data processing services to businesses. The Company also provides valuable
database marketing, statistical analysis, list brokerage, data enhancements,
and management services - all of which complement the services provided by
Database America, which ABI acquired in early 1997. Additionally, the
acquisition of Walter Karl provides additional capabilities in the list
brokerage and list management arenas of the direct mail industry," announced
Mr. Vinod Gupta, Chairman of American Business Information.
"ABI's distribution strength will provide Walter Karl with great growth
potential. Additionally, the breadth of Database America's and ABI's business
and consumer databases and direct marketing services will enable us to better
serve Walter Karl's existing customers," added Scott Dahnke, Chief Executive
Officer of American Business Information.
This press release contains forward-looking statements within the meaning of
Section 21E of the Securities and Exchange Act of 1934 and Section 27A of the
Securities Act of 1933, which are subject to the "safe harbor" created by those
sections. Investors are cautioned that such statements are only predictions and
speak only as of the date of this release. Actual results may differ
materially due to risks and uncertainties including, but not limited to, the
successful integration of recent and future acquisitions, fluctuation of
operating results, failure to achieve anticipated growth, risk of product
returns, changes in technology, continued acceptance of the Company's products
and services in the marketplace, and competitive factors.
American Business Information, Inc.(R) is a leading provider of business and
consumer marketing information products and data processing services in the
United States and Canada. Over 1.6 million businesses and consumers use ABI
products and services for sales leads, direct mail, market research, credit
reference, and general household applications. Founded in 1972, the Company is
headquartered at 5711 South 86th Circle, P.O. Box 27347, Omaha, NE 68127-0347.
American Business Information(R) can be contacted at (402) 593-4500 or on the
World Wide Web at www.SalesLeadsUSA.com.
# # #
