-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FwqtauCp20Q8DBJDPsFeTgQEqUHYCO4ALSr0UX3+m6t4EtpB0nxsjti9KMkrEDkd moG+mFYZ1W+GSHGpwiqATQ== 0000950103-98-000763.txt : 19980810 0000950103-98-000763.hdr.sgml : 19980810 ACCESSION NUMBER: 0000950103-98-000763 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 23 FILED AS OF DATE: 19980807 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DONNELLEY R H INC CENTRAL INDEX KEY: 0001065310 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS PUBLISHING [2741] FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-59287 FILM NUMBER: 98679971 BUSINESS ADDRESS: STREET 1: 1 MANHATTANVILLE ROAD CITY: PURCHASE STATE: NY ZIP: 10577 MAIL ADDRESS: STREET 1: 1 MANHATTANVILLE ROAD CITY: PURCHASE STATE: NY ZIP: 10577 FILER: COMPANY DATA: COMPANY CONFORMED NAME: R H DONNELLEY CORP CENTRAL INDEX KEY: 0000030419 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 132740040 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-59287-01 FILM NUMBER: 98679972 BUSINESS ADDRESS: STREET 1: ONE MANHATTANVILLE ROAD CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9086655000 MAIL ADDRESS: STREET 1: 1 DIAMOND HILL RD CITY: MURRAY HILL STATE: NJ ZIP: 07974 FORMER COMPANY: FORMER CONFORMED NAME: DUN & BRADSTREET CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DUN & BRADSTREET COMPANIES INC DATE OF NAME CHANGE: 19790429 S-4/A 1 As filed with the Securities and Exchange Commission on August 7, 1998 Registration No. 333-59287 ============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT No. 1 to FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 R.H. DONNELLEY INC. (Exact name of Registrant as specified in its charter) Delaware 2741 36-2467635 (State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.) R.H. DONNELLEY CORPORATION (Exact name of Registrant as specified in its charter) Delaware 2741 13-2740040 (State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.) One Manhattanville Road Purchase, New York 10577 (914) 933-6400 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) Stephen B. Wiznitzer R.H. Donnelley Inc. One Manhattanville Road Purchase, New York 10577 (914) 933-6400 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Julia K. Cowles Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 (212) 450-4000
Approximate date of commencement of proposed sale to the public: As soon as practicable after the Registration Statement becomes effective. If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:[ ] The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. ============================================================================== This Amendment No. 1 to the registration statement contains certain exhibits not previously filed with the registration statement filed with the Securities and Exchange Commission on July 17, 1998. PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 20. Indemnification of Directors and Officers Reference is made to Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL"), which enables a corporation in its original certificate of incorporation or as an amendment thereto to eliminate or limit the personal liability of a director for violations of the director's fiduciary duty, except (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing for liability of directors for the unlawful payment of dividends or unlawful stock purchases or redemptions) or (iv) for any transaction from which a director derived an improper personal benefit. Section 145 of the DGCL empowers the Company and Donnelley Corp. to indemnify, subject to the standards set forth therein, any person in connection with any action, suit or proceeding brought before or threatened by reason of the fact that the person was a director, officer, employee or agent of such company, or is or was serving as such with respect to another entity at the request of such company. The DGCL also provides that the Company and Donnelley Corp. may purchase insurance on behalf of any such director, officer, employee or agent. Each of the Company's and Donnelley Corp.'s Certificate of Incorporation provides in effect for the indemnification by the such corporation of each director and officer of such corporation to the fullest extent permitted by applicable law. Item 21. Exhibits and Financial Statement Schedules (a) Exhibits
Exhibit No. Document - ------- -------- 3.1 Certificate of Incorporation of the Company *3.2 By-laws of the Company 3.3 Certificate of Incorporation of Donnelley Corp. *3.4 By-laws of Donnelley Corp. *4.1 Indenture dated as of June 5, 1998 between Donnelley, as Issuer, Donnelley Corp., as Guarantor and the Bank of New York, as Trustee, with respect to the 9(1)/(8)% Senior Subordinated Notes due 2008 *4.2 Form of the 9(1)/(8)% Senior Subordinated Notes due 2008 (included in Exhibit 4.1) *4.3 Donnelley Corp. Guarantee (included in Exhibit 4.1) *4.4 Exchange and Registration Rights Agreement dated as of June 5, 1998, among the Company, The Dun & Bradstreet Corporation, and Goldman, Sachs & Co. and Chase Securities Inc., as initial purchasers 4.5 Rights Agreement, dated as of October 19, 1998, between The Dun & Bradstreet Corporation and Morgan Shareholder Services Trust Company 5.1 Legal Opinion *10.1 Form of Distribution Agreement between The Dun & Bradstreet Corporation and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.2 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.2 Form of Tax Allocation Agreement between The Dun & Bradstreet Corporation and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.3 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.3 Form of Employee Benefits Agreement between The Dun & Bradstreet Corporation and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.4 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.4 Form of Intellectual Property Agreement between The Dun & Bradstreet Corporation and the New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.5 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.5 Form of Shared Transaction Services Agreement between The Dun & Bradstreet Corporation and the New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.6 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.6 Form of Data Services Agreement between The Dun & Bradstreet Corporation and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.7 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.7 Form of Transition Services Agreement between The Dun & Bradstreet Corporation and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.8 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.8 Form of Amended and Restated Transition Services Agreement between The Dun & Bradstreet Corporation, The New Dun & Bradstreet Corporation, Cognizant Corporation, IMS Health Incorporated, AC Nielsen Corporation and Gartner Group, Inc. (incorporated by reference to Exhibit 99.9 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.9 Credit Agreement, dated as of June 5, 1998, among the Company, Donnelley Corp., the Chase Manhattan Bank, Chase Securities Inc. and Goldman Sachs Credit Partners L.P. 10.10 DonTech II Partnership Agreement, effective August 19, 1997, by and between The Reuben H. Donnelley Corporation and Ameritech Publishing of Illinois, Inc. 10.11 Master Agreement, executed August 19, 1997, by and among The Reuben H. Donnelley Corporation, The Dun & Bradstreet Corporation, The Am-Don Partnership a/k/a DonTech, DonTech II, Ameritech Publishing, Inc., Ameritech Publishing of Illinois, Inc., Ameritech Corporation, DonTech I Publishing Company LLC and the APIL Partnerships Partnership 10.12 Revenue Participation Agreement, dated as of August 17, 1997, by and between APIL Partners Partnership and the Reuben H. Donnelley Corporation 10.13 Exclusive Sales Agency Agreement, effective August 19, 1997, between APIL Partners Partnership and DonTech II *12.1 Statement regarding Computation of Earnings Ratio to Fixed Charges *21.1 List of Subsidiaries *23.1 Consent of PricewaterhouseCoopers with respect to R.H. Donnelley Corporation and DonTech *24.1 Power of Attorney (included on the signature page of this Registration Statement) 25.1 Statement of Eligibility of Trustee 27.1 Financial Data Schedule of the Company/12-Months Ended December 31, 1995 27.2 Financial Data Schedule of the Company/For 1996 27.3 Financial Data Schedule of the Company/For 1997 27.4 Financial Data Schedule of the Company/For 3-Months Ended March 31, 1998 27.5 Financial Data Schedule of Donnelley Corp./12-Months Ended December 31, 1995 27.6 Financial Data Schedule of Donnelley Corp./For 1996 27.7 Financial Data Schedule of Donnelley Corp./For 1997 27.8 Financial Data Schedule of Donnelley Corp./For 3-Months Ended March 31, 1998 99.1 Form of Letter of Transmittal to 9(1)/(8)% Senior Subordinated Notes due 2008 of the Company 99.2 Form of Notice of Guaranteed Delivery 99.3 Form of Letter to Record Holders 99.4 Form of Letter to Beneficial Holders 99.5 Form of Instruction from Owner of 9(1)/(8)% Senior Subordinated Notes due 2008 of the Company
- --------------- * Previously filed. Item 22. Undertakings Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, office ro controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matters has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning transaction, and the company being acquired involved therein, that was not the subject of an included in the registration statement when it became effective. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Purchase, New York, on this 7th day of August, 1998. R.H. DONNELLEY INC. By: /s/ Frank R. Noonan -------------------------------- Pursuant to the requirements of the Securities Act of 1933, this amendment to the registration statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ Frank R. Noonan Director, President and August 7, 1998 - ----------------------------- Chief Executive Officer Frank R. Noonan /s/ Philip C. Danford Senior Vice President and August 7, 1998 - ----------------------------- Chief Financial Officer Philip C. Danford /s/ Stephen B. Wiznitzer Director August 7, 1998 - ----------------------------- Stephen B. Wiznitzer /s/ Anna Patruno Vice President and Controller August 7, 1998 - ----------------------------- Anna Patruno SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Purchase, New York, on this 7th day of August, 1998. R.H. DONNELLEY CORPORATION By: /s/ Frank R. Noonan ------------------------- Pursuant to the requirements of the Securities Act of 1933, this amendment to the registration statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ Frank R. Noonan Chairman of the Board of Directors, August 7, 1998 - ------------------------- resident and Chief Executive Office Frank R. Noonan /s/ Philip C. Danford Senior Vice President and August 7, 1998 - ------------------------- Chief Financial Officer Philip C. Danford /s/ Diane P. Baker Director August 7, 1998 - ------------------------- Diane P. Baker /s/ William G. Jacobi Director August 7, 1998 - ------------------------- William G. Jacobi /s/ Robert J. Kamerschen Director August 7, 1998 - ------------------------- Robert J. Kamerschen /s/ Carol J. Parry Director August 7, 1998 - ------------------------- Carol J. Parry /s/ Barry L. Williams Director August 7, 1998 - ------------------------- Barry L. Williams /s/ Anna Patruno Vice President and Controller August 7, 1998 - ------------------------- Anna Patruno
EXHIBIT INDEX
Exhibit No. Document - ------- -------- 3.1 Certificate of Incorporation of the Company *3.2 By-laws of the Company 3.3 Certificate of Incorporation of Donnelley Corp. *3.4 By-laws of Donnelley Corp. *4.1 Indenture dated as of June 5, 1998 between Donnelley, as Issuer, Donnelley Corp., as Guarantor and the Bank of New York, as Trustee, with respect to the 9(1)/(8)% Senior Subordinated Notes due 2008 *4.2 Form of the 9(1)/(8)% Senior Subordinated Notes due 2008 (included in Exhibit 4.1) *4.3 Donnelley Corp. Guarantee (included in Exhibit 4.1) *4.4 Exchange and Registration Rights Agreement dated as of June 5, 1998, among the Company, The Dun & Bradstreet Corporation Parent Company, and Goldman, Sachs & Co. and Chase Securities Inc., as initial purchasers 4.5 Rights Agreement, dated as of October 19, 1998, between The Dun & Bradstreet Corporation and Morgan Shareholder Services Trust Company 5.1 Legal Opinion *10.1 Form of Distribution Agreement between The Dun & Bradstreet Corporation and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.2 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.2 Form of Tax Allocation Agreement between The Dun & Bradstreet Corporation and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.3 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.3 Form of Employee Benefits Agreement between The Dun & Bradstreet Corporation and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.4 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.4 Form of Intellectual Property Agreement between The Dun & Bradstreet Corporation and the New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.5 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.5 Form of Shared Transaction Services Agreement between The Dun & Bradstreet Corporation and the New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.6 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.6 Form of Data Services Agreement between The Dun & Bradstreet Corporation and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.7 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.7 Form of Transition Services Agreement between The Dun & Bradstreet Corporation and The New Dun & Bradstreet Corporation (incorporated by reference to Exhibit 99.8 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.8 Form of Amended and Restated Transition Services Agreement between The Dun & Bradstreet Corporation, The New Dun & Bradstreet Corporation, Cognizant Corporation, IMS Health Incorporated, AC Nielsen Corporation and Gartner Group, Inc. (incorporated by reference to Exhibit 99.9 to the Form 8-K of The Dun & Bradstreet Corporation, filed on June 30, 1998) *10.9 Credit Agreement, dated as of June 5, 1998, among the Company, Donnelley Corp., the Chase Manhattan Bank, Chase Securities Inc. and Goldman Sachs Credit Partners L.P. 10.10 DonTech II Partnership Agreement, effective August 19, 1997, by and between The Reuben H. Donnelley Corporation and Ameritech Publishing of Illinois, Inc. 10.11 Master Agreement, executed August 19, 1997, by and among The Reuben H. Donnelley Corporation, The Dun & Bradstreet Corporation, The Am-Don Partnership a/k/a DonTech, DonTech II, Ameritech Publishing, Inc., Ameritech Publishing of Illinois, Inc., Ameritech Corporation, DonTech I Publishing Company LLC and the APIL Partnerships Partnership 10.12 Revenue Participation Agreement, dated as of August 17, 1997, by and between APIL Partners Partnership and the Reuben H. Donnelley Corporation 10.13 Exclusive Sales Agency Agreement, effective August 19, 1997, between APIL Partners Partnership and DonTech II *12.1 Statement regarding Computation of Earnings Ratio to Fixed Charges *21.1 List of Subsidiaries *23.1 Consent of PricewaterhouseCoopers with respect to R.H. Donnelley Corporation and DonTech *24.1 Power of Attorney (included on the signature page of this Registration Statement) 25.1 Statement of Eligibility of Trustee 27.1 Financial Data Schedule of the Company/12-Months Ended December 31, 1995 27.2 Financial Data Schedule of the Company/For 1996 27.3 Financial Data Schedule of the Company/For 1997 27.4 Financial Data Schedule of the Company/For 3-Months Ended March 31, 1998 27.5 Financial Data Schedule of Donnelley Corp./12-Months Ended December 31, 1995 27.6 Financial Data Schedule of Donnelley Corp./For 1996 27.7 Financial Data Schedule of Donnelley Corp./For 1997 27.8 Financial Data Schedule of Donnelley Corp./For 3-Months Ended March 31, 1998 99.1 Form of Letter of Transmittal to 9(1)/(8)% Senior Subordinated Notes due 2008 of the Company 99.2 Form of Notice of Guaranteed Delivery 99.3 Form of Letter to Record Holders 99.4 Form of Letter to Beneficial Holders 99.5 Form of Instruction from Owner of 9(1)/(8)% Senior Subordinated Notes due 2008 of the Company
- --------------- * Previously filed. EX-3.1 2 EXHIBIT 3.1 CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF THE REUBEN H. DONNELLEY CORPORATION The undersigned, being the duly elected President of The Reuben H. Donnelley Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, as amended (the "Corporation"), DOES HEREBY CERTIFY: FIRST: That the Board of Directors of the Corporation by resolutions duly adopted by unanimous written consent, declared it advisable that the Restated Certificate of Incorporation of the Corporation filed with the Secretary of State of the State of Delaware on March 26, 1968 be amended by amending Article First to read in its entirety as follows: "FIRST: The name of the corporation is R.H. Donnelley Inc." SECOND: That such amendment was duly adopted by the shareholders of the Corporation entitled to vote therein in accordance with Section 228 of the General Corporation Law of the State of Delaware, as amended (the "DOCL"). THIRD: That such amendment was duly adopted in accordance with the provisions of Section 242 of the DOCL. IN WITNESS WHEREOF, the Corporation has issued this Certificate of Amendment to be executed this 18th day of May, 1998. THE REUBEN H. DONNELLEY CORPORATION By: __________________________________ Name: Frank R. Noonan Title: President Attest: _____________________________ Name: Brenda Ginsberg Title: Assistant to President RESTATED CERTIFICATE OF INCORPORATION OF THE REUBEN H. DONNELLEY CORPORATION The original Certificate of Incorporation of The Reuben H. Donnelley Corporation was filed with the Secretary of State of Delaware on August 9, 1961. The following Restated Certificate of Incorporation restates and integrates and also further amends the Certificate of Incorporation as heretofore amended or supplemented: FIRST: The name of the corporation is The Reuben H. Donnelley Corporation. SECOND: The registered office of the corporation in the State of Delaware is located at No. 100 West 10th Street, in the City of Wilmington, County of New Castle; and the name of its registered agent at such address is The Corporation Trust Company. THIRD: The purposes of the corporation are to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: The total number of shares of stock which the corporation shall have authority to issue is 100 shares of common stock without par value. The holder of each share of common stock shall at all times have one vote for each such share held by him, for all corporate purposes. No holder of shares of stock of the corporation of any class now or hereafter authorized shall be entitled as such, as a matter right, to subscribe for or purchase any part of any new or additional issue of stock of any class whatsoever, or of securities convertible into stock of any class whatsoever, whether now or hereafter authorized, or whether issued for cash or otherwise. FIFTH: The business of the corporation shall be managed by the Board of Directors except as otherwise provided by law. None of the directors need be a stockholder of the corporation or a resident of the State of Delaware. Subject to any limitations that may be imposed by the stockholders, the Board of Directors may make by-laws and from time to time may alter, amend or repeal any by-laws, but any by-laws made by the Board of Directors or the stockholders may be altered, amended or repealed by the stockholders at any annual meeting or at any special meeting, provided that notice of such proposed alteration, amendment or repeal is included in the notice of such meeting. A director of the corporation shall not, in the absence of fraud, be disqualified by his office from dealing or contracting with the corporation either as vendor, purchaser or otherwise, nor in the absence of fraud, shall any transaction or contract of the corporation be void or voidable or affected by reason of the fact that any director or any firm of which any director is a member, or any corporation of which the director is an officer, director or stockholder, is in any way interested in such transaction or contract, provided that, at the meeting of the Board of Directors or of a committee thereof having authority in the premises to authorize or confirm said contract or transaction, the interest of such director, firm or corporation therein and the material facts with respect thereto are disclosed or known, and there shall be present a quorum of directors or of the directors constituting such committee not so interested or connected, and such contract shall be approved by a majority of such quorum, which majority shall consist of directors not so interested or connected. Nor shall such contract or transaction be void or voidable or affected by reason of the fact that the vote of such director or directors, who have or may have interests therein which are or might be adverse to the interests of the corporation, shall have been necessary to obligate the corporation upon such contract or transaction, nor shall any director or directors having such adverse interest be liable to the corporation or to any stockholder or creditor thereof, or to any other person, for any loss incurred by it under or by reason of any such contract or transaction nor shall any such director or directors be accountable for any gains or profits realized thereon; always provided, however, that such contract or transaction shall, at the time it was entered into, have been a reasonable one to have been entered into and shall have been upon terms that at the time were fair. Any contract, transaction or act of the corporation or the Board of Directors or of the Executive Committee which shall be ratified by a majority vote of the stockholders of the corporation having voting power present at any annual meeting or any special meeting called for such purpose and to whom the material facts with respect thereto are disclosed or known, shall be as valid and as binding as though ratified by every stockholder of the corporation, provided, however, that any failure of the stockholders to approve or ratify such contract, transaction or act, when and if submitted, shall not be deemed in any way to invalidate the same or to deprive the corporation, its directors or officers, of their right to proceed with such contract, transaction or action. Any director of the corporation may vote upon any contract or other transaction between the corporation and any subsidiary or affiliated corporation without regard to the fact that he is also a director of such subsidiary or affiliated corporation. SIXTH: The corporation shall indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of the corporation. The corporation may indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was an employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The indemnification provided by this Article SIXTH shall not be deemed exclusive of any other rights to which any person indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be such director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article SIXTH or otherwise. This Restated Certificate of Incorporation was duly adopted by the sole stockholder in accordance with the provisions of Section 245 of the General Corporation Law of Delaware. Written consent for the adoption of this Restated Certificate of Incorporation has been given by the sole stockholder in accordance with the provisions of Section 228 of the General Corporation Law of Delaware. IN WITNESS WHEREOF, The Reuben H. Donnelley Corporation has caused its corporate seal to be hereunto affixed and this certificate to be signed by Hamilton B. Mitchell, its President, and attested by Robert F. Fuller, its Secretary this 21st day of March, 1968. The Reuben H. Donnelley Corporation THE REUBEN H. DONNELLEY CORPORATION SEAL 1961 DELAWARE By /s/ Hamilton B. Mitchell --------------------------------- President Attest: By: /s/ Robert F. Fuller ------------------------- Secretary State of New York ) ) ss.: County of New York ) Be It Remembered that on this 21st day of March, 1968 personally came before me, a Notary Public in and for the County and State aforesaid, Hamilton B. Mitchell, President of The Reuben H. Donnelley Corporation, a corporation of the State of Delaware, and he duly executed said certificate before me and acknowledged and said certificate to be the act and deed of said corporation and that the facts stated therein are true; and that the seal affixed to said certificate is the common or corporate seal of said corporation. In Witness Whereof, I have hereunto set my hand and seal of office the day and year aforesaid. LILLIAN VALIN _______________________________ NOTARY PUBLIC Notary Public STATE OF NEW YORK LILLIAN VALIN Notary Public, State of New York No. 03-4064125 Qualified in Bronx County Certificate filed in New York County Commission expires March 30, 1969 EX-3.3 3 EXHIBIT 3.3 CERTIFICATE OF OWNERSHIP AND MERGER MERGING RHD CORPORATION INTO THE DUN & BRADSTREET CORPORATION (PURSUANT TO Section 253 OF THE GENERAL CORPORATION LAW OF DELAWARE) The Dun & Bradstreet Corporation, a Delaware corporation (the "Corporation"), does hereby certify: FIRST: That the Corporation is incorporated pursuant to the General Corporation Law of the State of Delaware. SECOND: That the Corporation owns all of the outstanding shares of each class of the capital stock of RHD Corporation, a Delaware corporation. THIRD: That the Corporation by the following resolutions of its Board of Directors, duly adopted on the third day of June, 1998, determined to merge into itself RHD Corporation (the "Merger") on the conditions set forth in such resolutions: RESOLVED: That The Dun & Bradstreet Corporation merge into itself its subsidiary, RHD Corporation, and assume all of said subsidiary's liabilities and obligations; and FURTHER RESOLVED: That upon the filing of the certificate of ownership and merger contemplated by these resolutions, and effective at the time specified in such certificate, the name of the Corporation shall be changed to R.H. Donnelley Corporation; and FURTHER RESOLVED: That the President and the Secretary of this Corporation be and they hereby are directed to make, execute and acknowledge a certificate of ownership and merger setting forth a copy of the resolution to merge said RHD Corporation into this corporation and to assume said subsidiary's liabilities and obligations and the date of adoption thereof and to file the same in the office of the Secretary of State of Delaware and a certified copy thereof to the Office of the Recorder of Deeds of New Castle County. FOURTH: that the Merger shall be effective at 5:30 p.m., Eastern Standard Time, on June 30, 1998. IN WITNESS WHEREOF, said The Dun & Bradstreet Corporation caused its corporate seal to be affixed and this certificate to be signed by Mitchell C. Sussis, its authorized officer, this 29th day of June, 1998. ------------------------------ BY: Mitchell C. Sussis Secretary RESTATED CERTIFICATE OF INCORPORATION OF THE DUN & BRADSTREET CORPORATION The name of the corporation is The Dun & Bradstreet Corporation (the "corporation"). The corporation was originally incorporated under the name of DUN & BRADSTREET COMPANIES, INC.; the original Certificate of Incorporation was filed with the Secretary of State of Delaware on February 6, 1973. The following Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation as heretofore amended or supplemented and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation. "FIRST: The name of the corporation is The Dun & Bradstreet Corporation. SECOND: The registered office of the corporation in the State of Delaware is located at No. 1209 Orange Street, in the City of Wilmington, County of New Castle; and the name of its registered agent at such address is The Corporation Trust Company. THIRD: The purposes of the corporation are to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware, and without limiting the foregoing to hold the securities of other corporations and to gather, interpret, publish and/or communicate information of all kinds, and to develop, produce, manufacture, buy, sell and generally deal in products, goods, wares, merchandise and services of all kinds. FOURTH: (1) The total number of shares of stock which the corporation shall have authority to issue is 400,000,000 shares of common stock, par value $1 per share, and 10,000,000 shares of preferred stock, par value $1 per share. (2) (a) Shares of preferred stock may be issued from time to time in one or more series, each such series to have distinctive serial designations, as shall hereafter be determined in the resolution or resolutions providing for the issue of such series from time to time adopted by the Board of Directors pursuant to authority so to do which is hereby vested in the Board of Directors. (b) Each series of preferred stock (i) may have such number of shares; (ii) may have such voting powers, full or limited, or may be without voting powers; (iii) may be subject to redemption at such time or times and at such prices; (iv) may be entitled to receive dividends (which may be cumulative or noncumulative) at such rate or rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or series of stock; (v) may have such rights upon the dissolution of, or upon any distribution of the assets of, the corporation; (vi) may be made convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the corporation at such price or prices or at such rates of exchange, and with such adjustments; (vii) may be entitled to the benefit of a sinking fund or purchase fund to be applied to the purchase or redemption of shares of such series in such amount or amounts; (viii) may be entitled to the benefit of conditions and restrictions upon the creation of indebtedness of the corporation of any subsidiary, upon the issue of any additional stock (including additional shares of such series or of any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the corporation or any subsidiary of any outstanding stock of the corporation; and (ix) may have such other relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof; all as shall be stated in said resolution or resolutions providing for the issue of such preferred stock. Except where otherwise set forth in the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of preferred stock, the number of shares comprising such series may be increased or decreased (but not below the number of shares then outstanding) from time to time by like action of the Board of Directors. (c) Shares of any series of preferred stock which have been redeemed (whether through the operation of a sinking fund or otherwise) or purchased by the corporation, or which, if convertible or exchangeable, have been converted into or exchanged for shares of stock of any other class or classes shall have the status of authorized and unissued shares of preferred stock and may be reissued as a part of the series of which they were originally a part or may be reclassified and reissued as part of a new series of preferred stock to be created by resolution or resolutions of the Board of Directors or as part of any other series of preferred stock, all subject to the conditions or restrictions on issuance set forth in the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of preferred stock and to any filing required by law. (3) (a) Except as otherwise provided by law or by the resolution or resolutions of the Board of Directors providing for the issue of any series of the preferred stock, the common stock shall have the exclusive right to vote for the election of directors and for all other purposes, each holder of the common stock being entitled to one vote for each share held. (b) Subject to all of the rights of the preferred stock or any series thereof, the holders of the common stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available therefor, dividends payable in cash, stock or otherwise. (c) Upon any liquidation, dissolution or winding-up of the corporation, whether voluntary or involuntary, and after the holders of the preferred stock or each series shall have been paid in full the amounts to which they respectively shall be entitled, or a sum sufficient for such payment in full shall have been set aside, the remaining net assets of the corporation shall be distributed pro rata to the holders of the common stock in accordance with their respective rights and interests, to the exclusion of the holders of the preferred stock. (4) No holder of shares of stock of the corporation of any class now or hereafter authorized shall be entitled as such as a matter of right, to subscribe for or purchase any part of any new or additional issue of stock of any class whatsoever, or of securities convertible into stock of any class whatsoever, whether nor or hereafter authorized, or whether issued for cash or otherwise. FIFTH: The business of the corporation shall be managed by the Board of Directors except as otherwise provided by law. None of the directors need be a stockholder of the corporation or a resident of the State of Delaware. Subject to any limitations that may be imposed by the stockholders, the Board of Directors may make by-laws and from time to time may alter, amend or repeal any by-laws, but any by-laws made by the Board of Directors or the stockholders may be altered, amended or repealed by the stockholders at any annual meeting or at any special meeting, provided that notice of such proposed alteration, amendment or repeal is included in the notice of such meeting. A director of the corporation shall not, in the absence of fraud, be disqualified by his office from dealing or contracting with the corporation either as vendor, purchaser or otherwise, nor in the absence of fraud, shall any transaction or contract of the corporation be void or voidable or affected by reason of the fact that any director or any firm of which any director is a member, or any corporation of which the director is an officer, director or stockholder, is in any way interested in such transaction or contract, provided that, at the meeting of the Board of Directors or of a committee thereof having authority in the premises to authorize or confirm said contract or transaction, the interest of such director, firm, or corporation therein and the material facts with respect thereto are disclosed or known, and there shall be present a quorum of directors or of the directors constituting such committee not so interested or connected, and such contract or transaction shall be approved by a majority of such quorum, which majority shall consist of directors not so interested or connected. Nor shall such contract or transaction be void or voidable or affected by reason of the fact that the vote of such director or directors, who have or may have interests therein which are or might be adverse to the interests of the corporation, shall have been necessary to obligate the corporation upon such contract or transaction, nor shall any director or directors having such adverse interest be liable to the corporation or to any stockholder or creditor thereof, or to any other person, for any loss incurred by it under or by reason of any such contract or transaction nor shall any such director or directors be accountable for any gains or profits realized thereon; always provided, however, that such contract or transaction shall, at the time it was entered into, have been a reasonable one to have been entered into and shall have been upon terms that at the time were fair. Any contract, transaction or act of the corporation or of the Board of Directors or of the Executive Committee which shall be ratified by a majority vote of the stockholders of the corporation having voting power present at any annual meeting or any special meeting called for such purpose and to whom the material facts with respect thereto are disclosed or known, shall be as valid and as binding as though ratified by every stockholder of the corporation, provided, however, that any failure of the stockholders to approve or ratify such contract, transaction or act, when and if submitted, shall not be deemed in any way to invalidate the same or to deprive the corporation, its directors or officers, of their right to proceed with such contract, transaction or action. Any director of the corporation may vote upon any contract or other transaction between the corporation and any subsidiary or affiliated corporation without regard to the fact that he is also a director of such subsidiary or affiliated corporation. No more than one-fourth of the corporation's issued capital stock shall be owned of record or voted by aliens or their representatives or by a foreign corporation or representative thereof or by any corporation organized under the laws of a foreign country. The corporation shall not be owned or controlled directly or indirectly by any other corporation of which any officer or more than one-fourth of the directors are aliens, or of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country. The By-Laws of the corporation may contain provisions to implement this provision and to avoid the prohibition of Section 310(a) of the Federal Communications Act as now in effect or as it may hereafter from time to time be amended. SIXTH: (1) The corporation shall indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any threatened, pending or completed action, sit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact he is or was a director or officer of the corporation. The corporation may indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person made or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was an employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The indemnification provided by this Article SIXTH shall not be deemed exclusive of any other rights to which any person indemnified may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be such director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article SIXTH or otherwise. (2) A director of the corporation shall have no personal liability to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, to the full extent that such liability may be eliminated under the Delaware General Corporation Law as in effect from time to time. SEVENTH: The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors consisting of not less than three directors, the exact number of directors to be determined from time to time by resolution adopted by affirmative vote of a majority of the entire Board of Directors. The directors shall be divided into three classes, designated Class I, Class II, and Class III. Each class shall consist, as nearly as possible, of one-third of the total number of directors constituting the entire Board of Directors. At the 1984 annual meeting of stockholders, four Class I directors shall be elected for a one-year term and five Class II directors for a two-year term and five Class III directors for a three-year term. At each succeeding annual meeting of stockholders beginning in 1985, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case shall a decease in the number of directors remove or shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the directors then in office, and any other vacancy occurring in the Board of Directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of preferred stock issued by the corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this certificate of incorporation applicable thereto, and such directors so elected shall not be divided into classes pursuant to this Article SEVENTH unless expressly provided by such terms. EIGHTH: No action shall be taken by stockholders of the corporation except at an annual or special meeting of stockholders of the corporation." This Restated Certificate of Incorporation was duly adopted by the Board of Directors in accordance with the provisions of Section 245 of the General Corporation Law of Delaware. IN WITNESS WHEREOF, THE DUN & BRADSTREET CORPORATION has caused its corporate seal to be hereunto affixed and this certificate to be signed by CHARLES W. MORITZ, its Chairman of the Board and Chief Executive Officer, and attested by WILLIAM H. BUCHANAN, JR., its Vice President and Secretary, this 15th day of June, 1988. THE DUN & BRADSTREET CORPORATION [Corporate Seal] By ___________________________ Chairman of the Board Attest: - --------------------------- Secretary State of New York ) County of New York )ss.: BE IT REMEMBERED that on this 15th day of June, 1998, personally came before me a Notary Public in and for the County and State aforesaid, CHARLES W. MORITZ, Chairman of the Board of THE DUN & BRADSTREET CORPORATION, a corporation of the State of Delaware, and he duly executed said certificate before me and acknowledged the said certificate to be his act and deed and the act and deed of said corporation and that the facts stated herein are true; and that the seal affixed to said certificate and attested by the Secretary of said corporation is the common or corporate seal of said corporation. IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the day and year aforesaid. _________________________ Notary Public [Notarial Seal] EX-4.5 4 EXHIBIT 4.5 CONFORMED COPY ============================================================================== THE DUN & BRADSTREET CORPORATION and MORGAN SHAREHOLDER SERVICES TRUST COMPANY Rights Agent Rights Agreement Dated as of October 19, 1988 ============================================================================== TABLE OF CONTENTS Page ---- Section 1. Certain Definitions................................ 1 Section 2. Appointment of Rights Agent........................ 4 Section 3. Issue of Rights Certificates....................... 4 Section 4. Form of Rights Certificates........................ 6 Section 5. Countersignature and Registration.................. 7 Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates......................... 7 Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights........................................... 8 Section 8. Cancellation and Destruction of Rights Certificates....................................... 10 Section 9. Reservation and Availability of Capital Stock...... 11 Section 10. Preferred Stock Record Date........................ 12 Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights......................... 13 Section 12. Certificate of Adjusted Purchase Price or Number of Shares............................................. 23 Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power................................... 24 Section 14. Fractional Rights and Fractional Shares............ 26 Section 15. Rights of Action................................... 28 Section 16. Agreement of Rights Holders........................ 28 Section 17. Rights Certificate Holder Not Deemed a Stockholder........................................ 29 Section 18. Concerning the Rights Agent........................ 29 Section 19. Merger or Consolidation or Change of Name of Rights Agent....................................... 30 Section 20. Duties of Rights Agent............................. 31 Section 21. Change of Rights Agent............................. 33 Section 22. Issuance of New Rights Certificates................ 34 Section 23. Redemption and Termination......................... 34 Section 24. Notice of Certain Events........................... 35 Section 25. Notices............................................ 36 Section 26. Supplements and Amendments......................... 37 Section 27. Successors......................................... 37 Section 28. Determinations and Actions by the Board of Directors, etc..................................... 37 Section 29. Benefits of this Agreement......................... 37 Section 30. Severability....................................... 35 Section 31. Governing Law...................................... 37 Section 32. Counterparts....................................... 89 Section 33. Descriptive Headings............................... 39 Exhibit A -- Certificate of Designation, Preferences and Rights Exhibit B -- Form of Rights Certificate Exhibit C -- Form of Summary of Rights RIGHTS AGREEMENT RIGHTS AGREEMENT, dated as of October 19, 1988 (the "'Agreement"), between The Dun & Bradstreet Corporation, a Delaware corporation (the "'Company"), and Morgan Shareholder Services Trust Company, a New York corporation (the "'Rights Agent"). W I T N E S S E T H WHEREAS, on October 19, 1988 (the "'Rights Dividend Declaration Date"), the Board of Directors of the Company authorized and declared a dividend distribution of one Right for each share of common stock, par value $1.00 per share, of the Company (the "'Common Stock") outstanding at the close of business on October 31, 1988 (the "'Record Date"), and has authorized the issuance of one Right (as such number may hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) for each share of Common Stock of the Company issued between the Record Date (whether originally issued or delivered from the Company's treasury) and the Distribution Date, each Right initially representing the right to purchase one one-hundredth of a share of Series A Participating Preferred Stock of the Company having the rights, powers and preferences set forth in the form of Certificate of Designation, Preferences and Rights attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth (the "'Rights"); NOW, THEREFORE, in consideration of the premises and the mutual "agreements herein set forth, the parties hereby agree as follows: Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated: (a) "Acquiring person" shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding, but shall not include the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan. (b) "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and in effect on the date of this Agreement (the "'Exchange Act"). (c) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own," any securities: (i) which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange, or (B) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event, or (C) securities issuable upon exercise of Rights from and after the occurrence of a Triggering Event which Rights were acquired by such Person or any of such Person's Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the "'Original Rights") or pursuant to Section 11(i) hereof in connection with an adjustment made with respect to any Original Rights; (ii) which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act), including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, however, that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any security under this subparagraph (ii) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (A) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act, and (B) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or (iii) which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person's Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso to subparagraph (ii) of this paragraph (c)) or disposing of any voting securities of the Company; provided however, that nothing in this paragraph (c) shall cause a person engaged in business as an underwriter of securities to be the "Beneficial Owner" of, or to "beneficially own," any securities acquired through such person's participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition. (d) "Business Day", shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. (e) "Close of business" on any given date shall mean 5:00 P.M., New York City time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day. (f) "Common Stock" shall mean the common stock, par value $1.00 per share, of the Company, except that "Common Stock" when used with reference to any Person other than the Company shall mean the capital stock of such Person with the greatest voting power, or the equity securities or other equity interest having power to control or direct the management of such Person. (g) "Person" shall mean any individual, firm, corporation, partnership or other entity. (h) "Preferred Stock" shall mean shares of Series A Participating Preferred Stock, par value $1.00 per share, of the Company, and, to the extent that there are not a sufficient number of shares of Series A Participating Preferred Stock authorized to permit the full exercise of the Rights, any other series of preferred stock, par value $1.00 per share, of the Company designated for such purpose containing terms substantially similar to the terms of the Series A Participating Preferred Stock. (i) "Section 11(a)(ii) Event" shall mean any event described in Section 11(a)(ii) (A), (B) or (C) hereof. (j) "Section 13 Event" shall mean any event described in clauses (x), (y) or (z) of Section 13(a) hereof. (k) "Stock Acquisition Date" shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such. (l) "Subsidiary" shall mean, with reference to any Person, any corporation of which an amount of voting securities sufficient to elect at least a majority of the directors of such corporation is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person. (m) "Triggering Event" shall mean any Section 11(a)(ii) Event or any Section 13 Event. Section 2. Appointment of Rights Agent The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Stock) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such Co-Rights Agents as it may deem necessary or desirable. Section 3. Issue of Rights Certificates. (a) Until the earlier of (i) the close of business on the tenth day after the Stock Acquisition Date (or, if the tenth day after the Stock Acquisition Date occurs before the Record Date, the close of business on the Record Date), or (ii) the close of business on the tenth Business Day (or such later date as may be determined by the Company's Board of Directors) after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan) is first published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person would be the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding (the earlier of (i) and (ii) being herein referred to as the "'Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the certificates for the Common Stock registered in the names of the holders of the Common Stock (which certificates for Common Stock shall be deemed also to be certificates for Rights) and not by separate certificates, and (y) the Rights will be transferable only in connection with the transfer of the underlying shares of Common Stock (including a transfer to the Company). As soon as practicable after the Distribution Date, the Rights Agent will send by first-class, insured, postage prepaid mail, to each record holder of the Common Stock as of the close of business on the Distribution Date, at the address of such holder shown on the records of the Company, one or more rights certificates, in substantially the form of Exhibit B hereto (the "'Rights Certificates"), evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in the number of Rights per share of Common Stock has been made pursuant to Section 11(p) hereof, at the time of distribution of the Rights Certificates, the Company shall make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates. (b) As promptly as practicable, the Company will send a copy of a Summary of Rights to each holder of the Common Stock as of Record Date, in substantially the form attached hereto as Exhibit C (the "Summary of Rights"), by first-class, postage prepaid mail, at the address of such holder shown on the records of the Company. With respect to certificates for the Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates for the Common Stock and the registered holders of the Common Stock shall also be the registered holders of the associated Rights. Until the earlier of the Distribution Date or the Expiration Date (as such term is defined in Section 7 hereof), the transfer of any certificates representing shares of Common Stock in respect of which Rights have been issued shall also constitute the transfer of the Rights associated with such shares of Common Stock. (c) Rights shall be issued in respect of all shares of Common Stock which are issued (whether originally issued or from the Company's treasury) after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date. Certificates representing such shares of Common Stock shall also be deemed to be certificates for Rights, and shall bear the following legend: This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement between The Dun & Bradstreet Corporation (the "'Company") and Morgan Shareholder Services Trust Company (the "'Rights Agent") dated as of October 19, 1988, as may be amended from time to time (the "'Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written request therefor. Under certain circumstances set forth in the Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null and void. With respect to such certificates containing the foregoing legend, until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated with the Common Stock represented by such certificates shall be evidenced by such certificates alone and registered holders of Common Stock shall also be the registered holders of the associated Rights, and the transfer of any of such certificates shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates. Section 4. Form of Rights Certificates. (a) The Rights Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated as of the Record Date and on their face shall entitle the holders thereof to purchase such number of one one-hundredths of a share of Preferred Stock as shall be set forth therein at the price set forth therein (such exercise price per one one-hundredth of a share, the "'Purchase Price"), but the amount and type of securities purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein. (b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom such Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain (to the extent feasible) the following legend: The Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement). Accordingly, this Rights Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of such Agreement. Section 5. Countersignature and Registration. (a) The Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board, its President, any Vice President or the Treasurer, either manually or by facsimile signature, and shall have affixed thereto the Company's seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Rights Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature, and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Rights Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Rights Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this Rights Agreement any such person was not such an officer. (b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office or offices designated as the appropriate place for surrender of Rights Certificates upon exercise or transfer, books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Rights Certificates, the number of Rights evidenced on its face by each of the Rights Certificates, the Certificate numbers and the date of each of the Rights Certificates. Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any time after the close of business on the Distribution Date, and at or prior to the close of business on the Expiration Date, any Rights Certificate or Certificates may be transferred, split up, combined or exchanged for another Rights Certificate or Certificates, entitling the registered holder to purchase a like number of one one-hundredths of a share of Preferred Stock (or, following a Triggering Event, Common Stock, other securities, cash or other assets, as the case may be) as the Rights Certificate or Certificates surrendered then entitled such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate or Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Certificates to be transferred, split up, combined or exchanged at the principal office or offices of the Rights Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have completed and signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights Certificates. (b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate if mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated. Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) Subject to Section 7(e) hereof, the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein including, without limitation, the restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part at any time after the Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase and the certificate on the reverse side thereof duly executed, to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of one one-hundredths of a share (or other securities, cash or other assets, as the case may be) as to which such surrendered Rights are then exercisable, at or prior to the earlier of (i) the close of business on October 31, 1998 (the "'Final Expiration Date"), or (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the earlier of (i) and (ii) being herein referred to as the "'Expiration Date"). (b) The Purchase Price for each one one-hundredth of a share of Preferred Stock pursuant to the exercise of a Right shall initially be $230, and shall be subject to adjustment from time to time as provided in Sections 11 and 13(a) hereof and shall be payable in accordance with paragraph (c) below. (c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of election to purchase and the certificate duly executed, accompanied by payment, with respect to each Right so exercised, of the Purchase Price per one one-hundredth of a share of Preferred Stock (or other shares, securities, cash or other assets, as the case may be) to be purchased as set forth below and an amount equal to any applicable transfer tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates for the total number of one one-hundredths of a share of Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company shall have elected to deposit the total number of shares of Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number of one one-hundredths of a share of Preferred Stock as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company will direct the depositary agent to comply with such request, (ii) requisition from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights Certificate. The payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified bank check or bank draft payable to the order of the Company. In the event that the Company is obligated to issue other securities (including Common Stock) of the Company, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent, if and when appropriate. (d) In case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, subject to the provisions of Section 14 hereof. (e) Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 7(e), shall become null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The Company shall use all reasonable efforts to insure that the provisions of this Section 7(e) and Section 4(b) hereof are complied with, but shall have no liability to any holder of Rights Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. (f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported exercise as set forth in this Section unless such registered holder shall have (i) completed and signed the certificate contained in the form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise, and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Section 8. Cancellation and Destruction of Rights Certificates. All Rights Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company, or shall, at the written request of the Company, destroy such cancelled Rights Certificates, and in such case shall deliver a certificate of destruction thereof to the Company. Section 9. Reservation and Availability of Capital Stock. (a) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Preferred Stock (and, following the occurrence of a Triggering Event, out of its authorized and unissued shares of Common Stock and/or other securities or out of its authorized and issued shares held in its treasury), the number of shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) that, as provided in this Agreement including Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of all outstanding Rights. (b) So long as the shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) issuable and deliverable upon the exercise of the Rights may be listed on any national securities exchange, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed on such exchange upon official notice of issuance upon such exercise. (c) The Company shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first occurrence of a Section 11(a)(ii) Event on which the consideration to be delivered by the Company upon exercise of the Rights has been determined in accordance with Section 11(a)(iii) hereof, a registration statement under the Securities Act of 1933 (the "Act"), with respect to the securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration statement to become effective as soon as practicable after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities, and (B) the date of the expiration of the Rights. The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or "blue sky" laws of the various states in connection with the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. In addition, if the Company shall determine that a registration statement is required following the Distribution Date, the Company may temporarily suspend the exercisability of the Rights until such time as a registration statement has been declared effective. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, the exercise thereof shall not be permitted under applicable law or a registration statement shall not have been declared effective. (d) The Company covenants and agrees that it will take all such action as may be necessary to ensure that all one one-hundredths of a share of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable. (e) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Rights Certificates and of any certificates for a number of one one- hundredths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of a number of one one- hundredths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) in respect of a name other than that of, the registered holder of the Rights Certificates evidencing Rights surrendered for exercise or to issue or deliver any certificates for a number of one one-hundredths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) in a name other than that of the registered holder upon the exercise of any Rights until such tax shall have been paid (any such tax being payable by the holder of such Rights Certificate at the time of surrender) or until it has been established to the Company's satisfaction that no such tax is due. Section 10. Preferred Stock Record Date. Each person in whose name any certificate for a number of one one-hundredths of a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of such fractional shares of Preferred Stock (or Common Stock and/or other securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable transfer taxes) was made; provided, however, that if the date of such surrender and payment is a date upon which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares (fractional or otherwise) on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a shareholder of the Company with respect to shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. (a) (i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-division, combination or reclassification, and the number and kind of shares of Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof. (ii) In the event: (A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and unchanged, (2) shall, in one transaction or a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for shares of Common Stock, for shares of other equity securities of the Company, or for securities exercisable for or convertible into shares of equity securities of the Company (Common Stock or otherwise) or otherwise obtain from the Company, with or without consideration, any additional shares of such equity securities or securities exercisable for or convertible into shares of such equity securities (other than pursuant to a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with (as the case may be) the Company or any of its Subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third party, other than pursuant to a transaction set forth in Section 13(a) hereof, (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of in one transaction or a series of transactions, to, from or with (as the case may be) the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date hereof between the Company and such Acquiring Person or Associate or Affiliate) assets having an aggregate fair market value of more than 3% of the total assets of the Company, other than pursuant to a transaction set forth in Section 13(a) hereof, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full-time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) shall receive the benefit, directly or indirectly (except proportionately as a shareholder and except if resulting from a requirement of law or governmental regulation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries, or (B) any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, become the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding, unless the event causing the 20% threshold to be crossed is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company and who are not representatives, nominees, Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to shareholders (taking into account all factors which such members of the Board deem relevant including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company and its shareholders, or (C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) apply (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries which is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following the occurrence of any event described in Section 11(a)(ii) (A), (B) or (C) hereof, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-hundredths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-hundredths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the current market price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "'Adjustment Shares"). (iii) In the event that the number of shares of Common Stock which are authorized by the Company's certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have the same value as shares of Common Stock (such shares of preferred stock, "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Stock shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date. (b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within forty-five (45) calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase ( or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. (c) In case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed. (d) (i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "current market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "current market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "current market price" shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board of Directors of the Company shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, "current market price" per share shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. (ii) For the purpose of any computation hereunder, the "current market price" per share of Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in clause (i) of this Section 11(d) (other than the last sentence thereof). If the current market price per share of Preferred Stock cannot be determined in the manner provided above or if the Preferred Stock is not publicly held or listed or traded in a manner described in clause (i) of this Section 11(d), the "current market price" per share of Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as such number may be appropriately adjusted for such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Agreement) multiplied by the current market price per share of the Common Stock. If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded, "current market price" per share of the Preferred Stock shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. For all purposes of this Agreement, the "current market price" of one one-hundredth of a share of Preferred Stock shall be equal to the "current market price" of one share of Preferred Stock divided by 100. (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest ten- thousandth of a share of Common Stock or other share or one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three (3) years from the date of the transaction which mandates such adjustment, or (ii) the Expiration Date. (f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock other than Preferred Stock, thereafter the number of such other shares so receivable upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like terms to any such other shares. (g) All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one- hundredths of a share of Preferred Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths of a share of Preferred Stock (calculated to the nearest one-millionth) obtained by (i) multiplying (x) the number of one one-hundredths of a share covered by a Right immediately prior to this adjustment, by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. (i) The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment in the number of one one-hundredths of a share of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of one one-hundredths of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one-ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record of Rights Certificates on the record date specified in the public announcement. (j) Irrespective of any adjustment or change in the Purchase Price or the number of one one-hundredths of a share of Preferred Stock issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price per one one-hundredth of a share and the number of one one-hundredth of a share which were expressed in the initial Rights Certificates issued hereunder. (k) Before taking any action that would cause an adjustment reducing the Purchase Price below the then stated value, if any, of the number of one one-hundredths of a share of Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable such number of one one-hundredths of a share of Preferred Stock at such adjusted Purchase Price. (l) In any case in which this Section 11 shall require that an adjustment in the Purchase Price be. made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of one one-hundredths of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the number of one one-hundredths of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment. (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that in their good faith judgment the Board of Directors of the Company shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less than the current market price, (iii) issuance wholly for cash of shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders. (n) The Company covenants and agrees that it shall not, at any time after the Distribution Date, (i) consolidate with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), if (x) at the time of or immediately after such consolidation, merger or sale there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger or sale, the shareholders of the Person who constitutes, or would constitute, the "Principal Party" for purposes of Section 13(a) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates and Associates. (o) The Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by Section 23 or Section 26 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights. (p) Anything in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the Rights Dividend Declaration Date and prior to the Distribution Date (i) declare a dividend on the outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, the number of Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter but prior to the Distribution Date, shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Common Stock following any such event shall equal the result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction the numerator which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence of such event. Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11 and Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the Preferred Stock and the Common Stock, a copy of such certificate, and (c) mail a brief summary thereof to each holder of a Rights Certificate (or, if prior to the Distribution Date, to each holder of a certificate representing shares of Common Stock) in accordance with Section 25 hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained. Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. (a) In the event that, following the Stock Acquisition Date, directly or indirectly, (x) the Company shall consolidate with, or merge with and into, any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), and the Company shall not be the continuing or surviving corporation of such consolidation or merger, (y) any Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof) shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such consolidation or merger, all or part of the outstanding shares of Common Stock shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, or (z) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one transaction or a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons (other than the Company or any Subsidiary of the Company in one or more transactions each of which complies with Section 11(o) hereof), then, and in each such case (except as may be contemplated by Section 13(d) hereof), proper provision shall be made so that: (i) each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive, upon the exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, such number of validly authorized and issued, fully paid, non-assessable and freely tradeable shares of Common Stock of the Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the result obtained by (1) multiplying the then current Purchase Price by the number of one one-hundredth of a share of Preferred Stock for which a Right is exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section 13 Event, multiplying the number of such one one-hundredths of a share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to such first occurrence), and dividing that product (which, following the first occurrence of a Section 13 Event, shall be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by (2) 50% of the current market price (determined pursuant to Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party on the date of consummation of such Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section 13 Event; (iv) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its Common Stock) in connection with the consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the provisions of Section 11(d)(ii) hereof shall be of no effect following the first occurrence of any Section 13 Event. (b) "Principal Party" shall mean (i) in the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a), the Person that is the issuer of any securities into which shares of Common Stock of the Company are converted in such merger or consolidation, and if no securities are so issued, the Person that is the other party to such merger or consolidation; and (ii) in the case of any transaction described in clause (z) of the first sentence of Section 13(a), the Person that is or controls the party or related parties receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions; provided, however, that in any such case, (1) if the Common Stock of such Person is not at such time and has not been continuously over the preceding twelve (12) month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, "Principal Party" shall refer to such other Person; and (2) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Stocks of two or more of which are and have been so registered, "Principal Party" shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value. (c) The Company shall not consummate such consolidation, merger, sale or transfer unless the Principal Party shall have a sufficient number of authorized shares of its Common Stock which have not been issued or reserved for issuance to permit the exercise in. full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further providing that, as soon as practicable after the date of any consolidation, merger or sale of assets mentioned in paragraph (a) of this Section 13, the Principal Party will (i) prepare and file a registration statement under the Act, with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, and will use its best efforts to cause such registration statement to (A) become effective as soon as practicable after such filing and (B) remain effective (with a prospectus at all times meeting the requirements of the Act) until the Expiration Date; and (ii) will deliver to holders of any the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all respects with the requirements for registration on Form 10 under the Exchange Act. The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised shall thereafter become exercisable in the manner described in Section 13(a). (d) Notwithstanding anything in this Agreement to the contrary, Section 13 shall not be applicable to a transaction described in subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is consummated with a Person or Persons who acquired shares of Common Stock pursuant to a tender offer or exchange offer for all outstanding shares of Common Stock which complies with the provisions of Section 11(d)(ii) (B) hereof (or a wholly owned subsidiary of any such Person or Persons), (ii) the price per share of Common Stock offered in such transaction is not less than the price per share of Common Stock paid to all holders of shares of Common Stock whose shares were purchased pursuant to such tender offer or exchange offer and (iii) the form of consideration being offered to the remaining holders of shares of Common Stock pursuant to such transaction is the same as the form of consideration paid pursuant to such cash tender offer. Upon consummation of any such transaction contemplated by this Section 13(d), all Rights hereunder shall expire. Section 14. Fractional Rights and Fractional Shares. (a) The Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(p) hereof, or to distribute Rights Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price of the Rights for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading, or if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If on any such date no such market maker is making a market in the Rights the fair value of the Rights on such date as determined in good faith by the Board of Directors of the Company shall be used. (b) The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples of one one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are integral multiples of one one-hundredth of a share of Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral multiples of one one-hundredth of a share of Preferred Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one one-hundredth of a share of Preferred Stock. For purposes of this Section 14(b), the current market value of one one-hundredth of a share of Preferred Stock shall be one one-hundredth of the closing price of a share of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of such exercise. (c) Following the occurrence of a Triggering Event, the Company shall not be required to issue fractions of shares of Common Stock upon exercise of the Rights or to distribute certificates which evidence fractional shares of Common Stock. In lieu of fractional shares of Common Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one (1) share of Common Stock. For purposes of this Section 14(c), the current market value of one share of Common Stock shall be the closing price of one share of Common Stock (as determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise. (d) The holder of a Right by the acceptance of the Right expressly waives his right to receive any fractional Rights or any fractional shares upon exercise of a Right, except as permitted by this Section 14. Section 15. Rights of Action. All rights of action in respect of this Agreement are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Rights Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and shall be entitled to specific performance of the obligations hereunder and injunctive relief against actual or threatened violations of the obligations hereunder of any Person subject to this Agreement. Section 16. Agreement of Rights Holders. Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: (a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of Common Stock; (b) after the Distribution Date, the Rights Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal office or offices of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms and certificates fully executed; (c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the person in whose name a Rights Certificate (or, prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates or the associated Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be required to be affected by any notice to the contrary; and (d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, the Company must use its best efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as possible. Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the number of one one-hundredths of a share of Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 24 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance with the provisions hereof. Section 18. Concerning the Rights Agent. (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense, incurred without negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability in the premises. (b) The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any Rights Certificate or certificate for Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons. Section 19. Merger or Consolidation or Change of Name of Rights Agent. (a) Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the corporate trust or stock transfer business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided, however, that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Rights Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. (b) In case at any time the name of the Rights Agent shall be changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be bound: (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of "current market price") be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the Board, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. (c) The Rights Agent shall be liable hereunder only for its own negligence, bad faith or willful misconduct. (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Rights Certificates or be required to verify the same (except as to its countersignature on such Rights Certificates), but all such statements and recitals are and shall be deemed to have been made by the Company only. (e) The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Rights Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible for any adjustment required under the provisions of Section 11 or Section 13 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after actual notice of any such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock or Preferred Stock to be issued pursuant to this Agreement or any Rights Certificate or as to whether any shares of Common Stock or Preferred Stock will, when so issued, be validly authorized and issued, fully paid and nonassessable. (f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer. (h) The Rights Agent and any shareholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity. (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct; provided, however, reasonable care was exercised in the selection and continued employment thereof. (j) No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it. (k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise of transfer without first consulting with the Company. Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon thirty (30) days' notice in writing mailed to the Company, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and to the holders of the Rights Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and to the holders of the Rights Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by the Company), then any registered holder of any Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a corporation organized and doing business under the laws of the United States or of the State of New York (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in the State of New York), in good standing, having a principal office in the State of New York, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $100,000,000 or (b) an affiliate of a corporation described in clause (a) of this sentence. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. Section 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the redemption or expiration of the Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement, or upon the exercise, conversion or exchange of securities hereinafter issued by the Company, and (b) may, in any other case, if deemed necessary or appropriate by the Board of Directors of the Company, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided, however, that (i) no such Rights Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or the Person to whom such Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof. Section 23. Redemption and Termination. (a) The Board of Directors of the Company may, at its option, at any time prior to the earlier of (i) the close of business on the tenth day following the Stock Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to the Record Date, the close of business on the tenth day following the Record Date), or (ii) the Final Expiration Date, redeem all but not less than all the then outstanding Rights at a redemption price of $.01 per Right, as such amount may be appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the "Redemption Price"); provided, however, that if, following the occurrence of a Stock Acquisition Date and following the expiration of the right of redemption here under but prior to any Triggering Event, (i) a Person who is an Acquiring Person shall have transferred or otherwise disposed of a number of shares of Common Stock in one transaction or series of transactions, not directly or indirectly involving the Company or any of its Subsidiaries which did not result in the occurrence of a Triggering Event such that such Person is thereafter a Beneficial Owner of 10% or less of the outstanding shares of Common Stock, and (ii) there are no other Persons, immediately following the occurrence of the event described in clause (i), who are Acquiring Persons, then the right of redemption shall be reinstated and thereafter be subject to the provisions of this Section 23. Notwithstanding anything contained in this Agreement to the contrary, the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the Company's right of redemption hereunder has expired. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the "current market price", as defined in Section 11(d)(i) hereof, of the Common Stock at the time of redemption) or any other form of consideration deemed appropriate by the Board of Directors. (b) Immediately upon the action of the Board of Directors of the Company ordering the redemption of the Rights, evidence of which shall have been filed with the Rights Agent and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly after the action of the Board of Directors ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at each holder's last address as it appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the Transfer Agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. Section 24. Notice of Certain Events. (a) In case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a regular quarterly cash dividend out of earnings or retained earnings of the Company), or (ii) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options, or (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or merger into or with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series of related transactions, of more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to each holder of a Rights Certificate, to the extent feasible and in accordance with Section 25 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the shares of Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least twenty (20) days prior to the record date for determining holders of the shares of Preferred Stock for purposes of such action, and in the case of any such other action, at least twenty (20) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Preferred Stock whichever shall be the earlier. (b) In case any of the events set forth in Section 11(a)(ii) hereof shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter give to each holder of a Rights Certificate, to the extent feasible and in accordance with Section 25 hereof, a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if appropriate, other securities. Section 25. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows: The Dun & Bradstreet Corporation 299 Park Avenue New York, New York 10171 Attention: General Counsel Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows: Morgan Shareholder Services Trust Company 30 West Broadway New York, New York 10007-2192 Attention: Tenders and Exchanges Administration Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the holder of certificates representing shares of Common Stock) shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. Section 26. Supplements and Amendments. Prior to the Distribution Date, the Company and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement without the approval of any holders of certificates representing shares of Common Stock. From and after the Distribution Date, the Company and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision herein, (iii) to shorten or lengthen any time period hereunder or (iv) to change or supplement the provisions hereunder in any manner which the Company may deem necessary or desirable and which shall not adversely affect the interests of the holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided, this Agreement may not be supplemented or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating to when the Rights may be redeemed at such time as the Rights are not then redeemable, or (B) any other time period, unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon the delivery of a certificate from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 26, the Rights Agent shall execute such supplement or amendment. Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of Common Stock. Section 27. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. Section 28. Determinations and Actions by the Board of Directors, etc. For all purposes of this Agreement, any calculation of the number of shares of Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The Board of Directors of the Company shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement, and (ii) make all determinations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend the Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board (with, where specifically provided for herein, the concurrence of the Continuing Directors) in good faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties, and (y) not subject the Board to any liability to the holders of the Rights. Section 29. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock). Section 30. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, void or unenforceable and the Board of Directors of the Company determines in its good faith judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and shall not expire until the close of business on the tenth day following the date of such determination by the Board of Directors. Section 31. Governing Law. This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such State. Section 32. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Section 33. Descriptive Headings. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. Attest: THE DUN & BRADSTREET CORPORATION By /s/ William H. Buchana Jr. By /s/ Charles F. G. Raikes -------------------------- ------------------------------- (Corporate Name: William H. Buchana Jr. Name: Charles F. G. Raikes Seal) Title: Secretary Title: Senior Vice President Attest: MORGAN SHAREHOLDER SERVICES TRUST COMPANY, as Rights Agent By /s/ S. Russo By /s/ John Bamback -------------------------- ------------------------------- (Corporate Name: Sal Russo Name: John Bamback Seal) Title: Assistant Vice Title: Vice President President Exhibit A FORM OF CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF SERIES A PARTICIPATING PREFERRED STOCK of THE DUN & BRADSTREET CORPORATION Pursuant to Section 151 of the General Corporation Law of the State of Delaware We, Charles W. Moritz, Chairman of the Board and Chief Executive Officer, and William H. Buchanan, Jr., Secretary and Associate General Counsel, of The Dun & Bradstreet Corporation, a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY: That pursuant to the authority conferred upon the Board of Directors by the Restated Certificate of Incorporation of the said Corporation, the said Board of Directors on October 19, 1988, adopted the following resolution creating a series of 2,000,000 shares of Preferred Stock designated as Series A Participating Preferred Stock: RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Restated Certificate of Incorporation, a series of Preferred Stock of the Corporation be and it hereby is created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows: Section 1. Designation and Amount. The shares of such series shall be designated as "Series A Participating Preferred Stock" and the number of shares constituting such series shall be 2,000,000. Section 2. Dividends and Distributions. The holders of shares of Series A Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the tenth day of March, June, September and December in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $0.10 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $1.00 per share, of the Corporation (the "Common Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Participating Preferred Stock. In the event the Corporation shall at any time after October 19, 1988 (the "Rights Declaration Date") (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on the Series A Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $0.10 per share on the Series A Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. Section 3. Voting Rights. The holders of shares of Series A Participating Preferred Stock shall have the following voting rights: (a) Subject to the provision for adjustment hereinafter set forth, each share of Series A Participating Preferred Stock shall entitle the holder thereof to 108 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series A Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (b) Except as otherwise provided herein or by law, the holders of shares of Series A Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. (c) (i) If at any time dividends on any Series A Participating Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon the occurrence of such contingency shall mark the beginning of a period (herein called a "default period") which shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series A Participating Preferred Stock then outstanding shall have been declared and paid or set apart for payment, During each default period, all holders of Preferred Stock (including holders of the Series A Participating Preferred Stock) with dividends in arrears in an amount equal to six (6) quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to elect two (2) Directors. (ii) During any default period, such voting right of the holders of Series A Participating Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that neither such voting right nor the right of the holders of any other series of Preferred Stock, if any are then outstanding, to increase, in certain cases, the authorized number of Directors shall be exercised unless the holders of ten percent (10%) in number of shares of Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at which the holders of Preferred Stock shall exercise such voting right initially during an existing default period, they shalt have the right, voting as a class, to elect Directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) Directors or, if such right is exercised at an annual meeting, to elect two (2) Directors. If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the number of Directors as shall be necessary to permit the election by them of the required number. After the holders of the Preferred Stock shall have exercised their right to elect Directors in any default period and during the continuance of such period, the number of Directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series A Participating Preferred Stock. (iii) Unless the holders of Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders of Preferred Stock, which meeting shall thereupon be called by the President, a Vice-President or the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this paragraph (C) (iii) shall be given to each holder of record of Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding. Notwithstanding the provisions of this paragraph (C)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders. (iv) In any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of Directors until the holders of Preferred Stock shall have exercised their right to elect two (2) Directors voting as a class, after the exercise of which right (x) the Directors so elected by the holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the remaining Directors theretofore elected by the holders of the class of stock which elected the Director whose office shall have become vacant. References in this paragraph (C) to Directors elected by the holders of a particular class of stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence. (v) Immediately upon the expiration of a default period, (x) the right of the holders of Preferred Stock as a class to elect Directors shall cease, (y) the term of any Directors elected by the holders of Preferred Stock as a class shall terminate, and (z) the number of Directors shall be such number as us be provided for in the certificate of incorporation or by-laws irrespective of any increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the certificate of incorporation or bylaws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors. (d) Except as set forth herein, holders of Series A Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. Section 4. Certain Restrictions. (a) Whenever quarterly dividends or other dividends or distributions payable on the Series A Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Participating Preferred Stock; (ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Participating Preferred Stock, except dividends paid ratably on the Series A Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of an stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Participating Preferred Stock; (iv) purchase or otherwise acquire for consideration any shares of Series A Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (b) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any shares of Series A Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. Section 6. Liquidation, Dissolution or Winding up. (a) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Participating Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series A Liquidation Preference"). Following the payment of the lull amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph C below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number"). Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Participating Preferred Stock and Common Stock, respectively, holders of Series A Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively. (b) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series A Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock. (c) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, Etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 8. No Redemption. The shares of Series A Participating Preferred Stock shall not be redeemable. Section 9. Ranking. The Series A Participating Preferred Stock shall rank on a parity with all other series of the Corporation's Preferred Stock, if any, as to the payment of dividends and the distribution of assets unless the terms of any such series shall provide otherwise. Section 10. Amendment. The Restated Certificate of Incorporation of the Corporation shall not be further amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series A Participating Preferred Stock, voting separately as a class. Section 11. Fractional Shares. Series A Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holders fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Participating Preferred Stock. IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm the foregoing as true under the penalties of perjury this _____ day of October, 1988. __________________________________ Chairman of the Board Attest: __________________________________ Secretary Exhibit B Form of Rights Certificate Certificate No. R- _______________ Rights NOT EXERCISABLE AFTER OCTOBER 31, 1998 OR EARLIER IF REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.](1) - --------------- (1) The portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding sentence. Rights Certificate THE DUN & BRADSTREET CORPORATION This certifies that , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of October 19, 1988 (the "Rights Agreement"), between The Dun & Bradstreet Corporation, a Delaware corporation (the "Company"), and Morgan Shareholder Services Trust Company, a New York corporation (the "Rights Agent"), to purchase from the Company at any time prior to 5:00 P.M. (New York City time) on October 31, 1998 at the office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent, one one-hundredth of a fully paid, non-assessable share of Series A Participating Preferred Stock (the "Preferred Stock") of the Company, at a purchase price of $230 per one one-hundredth of a share (the "Purchase Price"), upon presentation and surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed. The number of Rights evidenced by this Rights Certificate (and the number of shares which may be purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as of October 31, 1988, based on the Preferred Stock as constituted at such date. Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances specified in the Rights Agreement, a transferee of a person who, after such transfer, became an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such Rights shall become null and void and no holder hereof shall have any right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event. As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of Preferred Stock or other securities, which may be purchased upon the exercise of the Rights evidenced by this Rights Certificate are subject to modification and adjustment upon the happening of certain events, including Triggering Events. This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and are also available upon written request to the Company. This Rights Certificate, with or without other Rights Certificates, upon surrender at the principal office or offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of one one-hundredths of a share of Preferred Stock as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate or Rights Certificates for the number of whole Rights not exercised. Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption price of $.01 per Right at any time prior to the earlier of the close of business on (i) the tenth day following the Stock Acquisition Date (as such time period may be extended pursuant to the Rights Agreement), and (ii) the Final Expiration Date. After the expiration of the redemption period, the Company's right of redemption may be reinstated if an Acquiring Person reduces his beneficial ownership to 10% or less of the outstanding shares of Common Stock in a transaction or series of transactions not involving the Company. No fractional shares of Preferred Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. No holder of this Rights Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of shares of Preferred Stock or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or, to receive notice of meetings or other actions affecting shareholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights Agreement. This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent. WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of __________, 19__ ATTEST: THE DUN & BRADSTREET CORPORATION _________________________________ By_______________________________ Secretary Title: Countersigned: MORGAN SHAREHOLDER SERVICES TRUST COMPANY, as Rights Agent By_______________________________ Authorized Signature [Form of Reverse Side of Rights Certificate] FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the Rights Certificate.) FOR VALUE RECEIVED ____________________________________________ hereby sells, assigns and transfers unto ___________________________________ __________________________________________________________________ (Please print name and address of transferee) this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ____________________ Attorney, to transfer the within Rights Certificate on the books of the within-named Company, with full power of substitution. Dated: _________________, 19__ _______________________________ Signature Signature Guaranteed: Certificate The undersigned hereby certifies by checking the appropriate boxes that: (1) this Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement); (2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person. Dated: _______________, 19__ ___________________________________ Signature Signature Guaranteed: NOTICE The signature to the foregoing Assignment and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever. FORM OF ELECTION TO PURCHASE (To be executed if holder desires to exercise Rights represented by the Rights Certificate.) To: THE DUN & BRADSTREET CORPORATION: The undersigned hereby irrevocably elects to exercise __________ Rights represented by this Rights Certificate to purchase the shares of Preferred Stock issuable upon the exercise of the Rights (or such other securities of the Company or of any other person which may be issuable upon the exercise of the Rights) and requests that certificates for such shares be issued in the name of and delivered to: Please insert social security or other identifying number ______________________________________________________________________________ (Please print name and address) ______________________________________________________________________________ If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to: Please insert social security or other identifying number ______________________________________________________________________________ (Please print name and address) ______________________________________________________________________________ ______________________________________________________________________________ Dated: _______________, 19__ ____________________________________ Signature Signature Guaranteed: Certificate The undersigned hereby certifies by checking the appropriate boxes that: (1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement); (2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person. Dated: _______________, 19__ ________________________________ Signature Signature Guaranteed: NOTICE The signature to the foregoing Election to Purchase and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever. Exhibit C SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK On October 19, 1988, the Board of Directors of The Dun & Bradstreet Corporation (the "Company") declared a dividend distribution of one Right for each outstanding share of Company Common Stock to shareholders of record at the close of business on October 31, 1988. Each Right entitles the registered holder to purchase from the Company a unit consisting of one one-hundredth of a share (a "Unit") of Series A Participating Preferred Stock, par value $1.00 per share (the "Preferred Stock"), at a Purchase Price of $230 per Unit, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement") between the Company and Morgan Shareholder Services Trust Company as Rights Agent. Initially, the Rights will be attached to all Common Stock certificates representing shares then outstanding, and no separate Rights Certificates will be distributed. The Rights will separate from the Common Stock and Rights Certificates will be distributed as soon as practicable after a date (the "Distribution Date") which will be the earlier of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired, or obtained the right to acquire, beneficial ownership of 20% or more of the outstanding shares of Common Stock (the "Stock Acquisition Date"), or (ii) 10 business days (or such later date as may be determined by the Board) following the commencement of a tender offer or exchange offer that would result in a person or group beneficially owning 20% or more of such outstanding shares of Common Stock. Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates and will be transferred with and only with such Common Stock certificates, (ii) new Common Stock certificates issued after October 31, 1988 will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate. The Rights are not exercisable until the Distribution Date and will expire at the close of business on October 31, 1998, unless earlier redeemed by the Company as described below. As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will represent the Rights. Except for shares of Common Stock issued pursuant to the exercise of stock options or under any employee plan or arrangement or upon the exercise, conversion or exchange of securities issued by the Company after the date of the Rights Agreement, and except as otherwise determined by the Board of Directors, only shares of Common Stock issued prior to the Distribution Date will be issued with Rights. In the event that, at any time following the Distribution Date, (i) the Company is the surviving corporation in a merger with an Acquiring Person and its Common Stock is not changed or exchanged, (ii) a Person becomes the beneficial owner of 20% or more of the then outstanding shares of Common Stock (except pursuant to an offer for all outstanding shares of Common Stock which the independent directors determine to be fair to and otherwise in the best interests of the Company and its shareholders), (iii) an Acquiring Person engages in one or more "self-dealing" transactions as set forth in the Rights Agreement, or (iv) during such time as there is an Acquiring Person, an event occurs which results in such Acquiring Person's ownership interest being increased by more than 1% (e.g., a reverse stock split), each holder of a Right will thereafter have the right to receive, upon exercise, Common Stock (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the exercise price of the Right. Notwithstanding any of the foregoing, following the occurrence of any of the events set forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. However, Rights are not exercisable following the occurrence of any of the events set forth above until such time as the Rights are no longer redeemable by the Company as set forth below. For example, at an exercise price of $230 per Right, each Right not owned by an Acquiring Person (or by certain related parties) following an event set forth in the preceding paragraph would entitle its holder to purchase $460 worth of Common Stock (or other consideration, as noted above) for $230. Assuming that the Common Stock had a per share value of $57.50 at such time, the holder of each valid Right would be entitled to purchase 8 shares of Common Stock for $230. In the event that, at any time following the Stock Acquisition Date, (i) the Company is acquired in a merger or other business combination transaction in which the Company is not the surviving corporation (other than a merger described in the second preceding paragraph or a merger which follows an offer described in the second preceding paragraph), or (ii) 50% or more of the Company's assets or earning power is sold or transferred in a single transaction or a series of transactions, each holder of a Right (except Rights which previously have been voided as set forth above) shall thereafter have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Right. The events set forth in this paragraph and in the second preceding paragraph are referred to as the "Triggering Events." The Purchase Price payable, and the number of Units of Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) if holders of the Preferred Stock are granted certain rights or warrants to subscribe for Preferred Stock or convertible securities at less than the current market price of the Preferred Stock, or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of subscription rights or warrants (other than those referred to above). With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price. No fractional Units will be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading date prior to the date of exercise. At any time until ten days following the Stock Acquisition Date, the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (payable in cash, Common Stock or other consideration deemed appropriate by the Board of Directors). After the redemption period has expired, the Company's right of redemption may be reinstated if an Acquiring Person reduces his beneficial ownership to 10% or less of the outstanding shares of Common Stock in a transaction or series of transactions not involving the Company. Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $.01 redemption price. Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends. While the distribution of the Rights will not be taxable to shareholders or to the Company, shareholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for Common Stock (or other consideration) of the Company or for common stock of the acquiring company as set forth above. Any of the provisions of the Rights Agreement may be amended by the Board of Directors of the Company prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended by the Board in order to cure any ambiguity, to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person), or to shorten or lengthen any time period under the Rights Agreement. However, no amendment adjusting the time period in which the Rights may be redeemed may be adopted after such time as the Rights have become non-redeemable. A copy of the Rights Agreement has been or will be filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A in respect of the Rights. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which is incorporated herein by reference. EX-5.1 5 EXHIBIT 5.1 [ ], 1998 R.H. Donnelley Inc. R.H. Donnelley Corporation One Manhattanville Road Purchase, New York 10577 Ladies and Gentlemen: We have acted as special counsel to R.H. Donnelley Inc. (the "Company") and R.H. Donnelley Corporation (the "Parent") , both Delaware companies (the "Companies"), in connection with the preparation of a Registration Statement on Form S-4 (the "Registration Statement") filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), relating to the proposed exchange of 9 1/8 % Senior Subordinated Notes due 2008 of the Company (the "Exchange Notes") for any and all of the Company's issued and outstanding 9 1/8% Senior Subordinated Notes due 2008 (the "Old Notes"). Capitalized terms used herein have the meanings set forth in the Registration Statement, unless otherwise defined herein. We have examined the originals, or certified, conformed or reproduction copies, of all such records, agreements, instruments and documents as we have deemed relevant or necessary as the basis for the opinions hereinafter expressed. In all such examinations, we have relied upon the genuineness of all signatures, the authenticity of all original or certified copies and the conformity to original or certified copies of all copies submitted to us as conformed or reproduction copies. We also have assumed, with respect to all parties to agreements or instruments relevant hereto other than the Companies, that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver and perform such agreements or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), executed and delivered by such parties and that such agreements or instruments are the valid, binding and enforceable obligations of such parties. As to various questions of fact relevant to such opinions, we have relied upon, and have assumed the accuracy of, certificates and oral or written statements and other information of or from public officials, officers or representatives of the Companies and others. Based upon the foregoing and subject to the other limitations, qualifications and assumptions set forth herein, we are of the opinion that, (i) the Company has duly authorized the Exchange Notes, (ii) the Parent has duly authorized the Guarantee of the Exchange Notes (the "Guarantee") as described in the Registration Statement and (iii) when the Guarantee has been duly executed and delivered by the Parent and when the Exchange Notes have been duly executed and delivered by the Company and have been duly authenticated by the Trustee in accordance with the terms of the Indenture and delivered in exchange for the Old Notes in accordance with the terms of the Indenture, the Exchange Notes and the Guarantee will constitute valid and binding obligations of the Company and the Parent, respectively, enforceable in accordance with their respective terms and entitled to the benefits of the Indenture, except (A) as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally, and (B) as such enforcement may be limited by general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity. We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, the General Corporation Law of the State of Delaware and the federal laws of the United States of America. We hereby consent to the filing of this opinion as an Exhibit to the Registration Statement and to the reference to this firm under the caption "Validity of the Notes" in the Prospectus that is included in the Registration Statement. The opinions expressed herein are solely for your benefit and may not be relied upon for any purpose except as specifically provided for herein, or relied upon by any other person, firm or corporation for any purpose, without our prior written consent. Very truly yours, EX-10.10 6 EXHIBIT 10.10 DONTECH II PARTNERSHIP AGREEMENT This DonTech II Partnership Agreement ("Agreement") is effective as of this 19th day of August, 1997, by and between THE REUBEN H. DONNELLEY CORPORATION, a Delaware corporation ("Donnelley"), and AMERITECH PUBLISHING OF ILLINOIS, INC., a Delaware corporation ("API/IL"). Donnelley and API/IL are hereafter sometimes referred to individually or collectively as a "Partner" or the "Partners." W I T N E S S E T H: WHEREAS, the Partnership intends to enter into the Exclusive Sales Agency Agreement; WHEREAS, each of the Partners desires to contribute certain assets and liabilities to the Partnership subject to the terms and conditions of this Partnership Agreement; WHEREAS, the execution and delivery of this Agreement is a condition to the execution and delivery of the Exclusive Sales Agency Agreement; and WHEREAS, the Partners wish to adopt this Agreement as the Partnership's Articles of Partnership as of the Effective Date. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and benefits herein set forth and contemplated, the Partners agree as follows: ARTICLE 1 Definitions Section 1.1. "Accountants" means the firm of recognized independent certified public accountants for the Partnership that is appointed pursuant to this Agreement. Section 1.2. "Advisory Director" has the meaning set forth in Section 8.1(b). Section 1.3. "Affiliate" of any Person means any other Person directly or indirectly Controlling, directly or indirectly Controlled by, or under common direct or indirect Control with, such Person. "Control" in this Section has the same meaning as "control" in Rule 12b-2 under the Securities Exchange Act of 1934 as in effect on the Effective Date. Section 1.4. "Ameritech" means Ameritech Corporation, a Delaware corporation. Section 1.5. "Board of Directors" has the meaning set forth in Section 8.1(a). Section 1.6. "Book Value" has the meaning set forth in Section 4.6(f)(ii). Section 1.7. "Breaching Partner" has the meaning set forth in Section 9.2(b). Section 1.8. "Business Day" means Monday, Tuesday, Wednesday, Thursday, or Friday, unless the day is a federal or Illinois legal holiday. Section 1.9. "Business Plan" means a business plan (including an operating budget and a capital budget) for the Partnership for the three succeeding Fiscal Years, as amended in accordance with this Agreement. Section 1.10. "Capital Account" has the meaning set forth in Section 4.5. Section 1.11. "Code" means the Internal Revenue Code of 1986, as amended. Section 1.12. "Confidential Information" has the meaning set forth in Section 12.2(a). Section 1.13. "D&B" means The Dun & Bradstreet Corporation, a Delaware corporation. Section 1.14. "Debt" of any Person means (a) obligations of such Person for borrowed money, (b) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) obligations of such Person to pay the deferred purchase price of property or services, (d) obligations of such Person as lessee under capital leases, (e) Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person, and (f) Debt of others guaranteed directly or indirectly by such Person or as to which such Person has an obligation substantially the economic equivalent of a guarantee. Section 1.15. "Donnelley Revenue Participation Interests" means the Revenue Participation Interests as defined in the Revenue Participation Agreement between APIL Partners Partnership and Donnelley dated August 19, 1997, which have not been transferred by Donnelley prior to its Change of Control. Section 1.16. "Effective Date" means August 19, 1997. Section 1.17. "Exclusive Sales Agency Agreement" means the agreement by that title between APIL Partners Partnership and the Partnership dated August 19, 1997. Section 1.18. "Fiscal Year" has the meaning set forth in Section 3.2. Section 1.19. "GAAP" means generally accepted accounting principles, consistently applied. Section 1.20. "Governmental Authority" means any federal, state, local or foreign governmental Person, authority or agency, court, regulatory commission, stock exchange or other body, whether governmental or private, and any arbitrator acting within the scope of his authority. Section 1.21. "Governmental Rule" means any statute, law, treaty, rule, code, ordinance, regulation, permit, certificate or order of any Governmental Authority or any judgment, decree, injunction, writ, order or like action of any court, arbitrator or other judicial or quasijudicial tribunal. Section 1.22. "Impasse" has the meaning set forth in Section 8.6(a). Section 1.23. "Interest" has the meaning set forth in Section 4.1. Section 1.24. "IRS" means the Internal Revenue Service. Section 1.25. "Lien" means any lien, mortgage, encumbrance, pledge, charge, lease restriction, easement, servitude, right of others or security interest of any kind, including any thereof arising under conditional sales or other title retention agreements. Section 1.26. "Losses" has the meaning set forth in Section 4.6(a). Section 1.27. "Net Loss" has the meaning set forth in Section 4.6(a). Section 1.28. "Net Profit" has the meaning set forth in Section 4.6(a). Section 1.29. "Parent" means Ameritech in the case of API/IL and D&B in the case of Donnelley. Section 1.30. "Partner" means API/IL or Donnelley. "Partners" means API/IL and Donnelley. Section 1.31. "Partnership" means the general partnership formed pursuant to this Agreement. Section 1.32. "Person" means any individual; corporation; partnership; joint venture; association; joint-stock company; trust; limited liability company; unincorporated organization; federal, state, local or foreign governmental agency, authority, court, or regulatory commission; or other regulatory body, whether governmental or private. Section 1.33. "Profits" has the meaning set forth in Section 4.6(a). Section 1.34. "Proprietary Rights" means patents, patent applications, patent disclosures and inventions, and any reissue, continuation, continuation-in-part, division, extension, or reexamination thereof; trademarks, service marks, trade dress, logos, trade names, business names, and corporate names, and all goodwill associated therewith; copyrights; mask works; and any registrations or applications with respect to the foregoing; trade secrets and confidential business information (including ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial, business and marketing plans and customer and supplier lists and information); computer software, data and documentation; other proprietary rights; licenses or other agreements to or from third parties regarding the foregoing, and all copies and tangible embodiments of the foregoing (in whatever form or medium). Section 1.35. "Seconded Employee" means an employee of a Partner or any of its Affiliates made available to the Partnership while remaining an employee of such Partner or Affiliate. Section 1.36. "Subsidiary" of any Person means a corporation, limited liability company, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than 50% of whose ownership interest representing the right to make decisions for such other entity is, now or hereafter owned or controlled, directly or indirectly, by such Person, but such corporation, company or other entity is a Subsidiary only so long as such ownership or control exists. Section 1.37. "Tax Matters Partner" has the meaning set forth in Section 3.5(b)(i). Section 1.38. "Transfer" means to transfer, sell, assign, convey, license, sublicense or deliver. Section 1.39. "Treas. Reg." has the meaning set forth in Section 4.6(f)(i). Section 1.40. "Voting Director" has the meaning set forth in Section 8.1(b). ARTICLE 2 Organization of the Partnership Section 2.1. Formation. The Partnership has been formed as a general partnership under the Illinois Uniform Partnership Act for the purposes and scope set forth herein, and the Partners hereby adopt this Agreement as the Partnership's Articles of Partnership. Section 2.2. Illinois Uniform Partnership Act. Except to the extent otherwise provided herein, the rights and liabilities of the Partners and the conduct and termination of the Partnership shall be governed by the Illinois Uniform Partnership Act. Section 2.3. Execution of Documents. The Partners will promptly execute all certificates and other documents, and make all such filings and recordings and perform such other acts as may now or hereafter be necessary or desirable, to comply with the requirements of Illinois law for the organization and formation of the Partnership and the carrying on of its business. Section 2.4. General Partner Status. Subject to the limitations on each Partner's authority contained in Section 7.2, each Partner shall be a general partner. Section 2.5. Name; Qualification of Partners. The Partnership's name is "DonTech II." The Partnership may also do business under other names agreed to by both Partners. If required by an applicable Governmental Rule, (a) the Partnership shall cause appropriate partnership certificates or fictitious business name certificates to be filed with the appropriate Governmental Authorities and (b) each Partner shall as expeditiously as possible qualify to do business as a foreign corporation in all appropriate jurisdictions. Section 2.6. Principal Office. The principal office and place of business of the Partnership shall be 205 North Michigan Avenue, Chicago, Illinois, or such other location within Illinois as the Partnership may designate. Section 2.7. Purpose and Scope. (a) The purposes of the Partnership shall be to engage in certain activities, including activities required by the Exclusive Sales Agency Agreement, any other businesses which the Partners agree to undertake, and disbursing profits relating to such businesses. (b) The Partnership shall have the right, authority, and power to do any act to accomplish, and to enter into any contract incidental to attain, the purposes of the Partnership specified in this Agreement and to manage the business of the Partnership. (c) The Partners agree that they will conduct the business of the Partnership to maximize the profitability of the Partnership and will cooperate in sharing information and resources with each other to further that objective. Unless the Partners otherwise agree, each member of the Board of Directors and each Seconded Employee must prefer the interests of the Partnership over the interests of a Partner or any of its Affiliates. ARTICLE 3 Tax Accounting Method, Tax Elections, and Tax Year Section 3.1. Reporting Income. The Partnership shall report its income for income tax purposes on the accrual method on a calendar-year basis. The Partnership shall elect to treat any research and development expenses incurred by the Partnership as current expenses. Section 3.2. Fiscal Year. The fiscal year of the Partnership shall be the calendar year. Section 3.3. Books and Records. The Partnership shall cause to be prepared and maintained in Illinois complete books and records, on an accrual basis, regarding all phases of its business including, without limitation, construction, lease acquisition and maintenance, marketing, procurement and purchasing, contract administration, financial planning, accounting, reporting, legal expenditures, capital expenditures, taxes, royalties and other operating expenses, capital and operating budgets, and other reporting procedures. Each Partner shall have the right (at its own expense) to inspect, audit, and copy any and all such books and records at all reasonable times, which right may be exercised through any agent or employee of such Partner designated by such Partner or by an independent certified public accountant designated by such Partner. Section 3.4. Financial Statements. (a) Annual Statements. As soon as practicable following the end of each Fiscal Year (and in any event not later than 90 days after the end of such Fiscal Year), the Partnership shall prepare and deliver to each Partner and the Board of Directors, a balance sheet of the Partnership as of the end of such Fiscal Year and the related statements of operations, changes in Partners' equity and cash flow of the Partnership for such Fiscal Year, together with appropriate notes to such financial statements, all of which shall be prepared in accordance with GAAP and certified by the Accountants. At the same time, the Partnership shall deliver (at its sole expense) to each Partner a report indicating such Partner's share of all items of income, gain, loss, deduction, and credit of the Partnership for such Fiscal Year and any other financial information related to the Partnership which is requested by either Partner for federal, state, local or foreign income or franchise tax purposes. (b) Quarterly Statements. As soon as practicable following the end of each fiscal quarter (and in any event not later than 20 Business Days after the end of such fiscal quarter), the Partnership shall prepare and deliver to each Partner and the Board of Directors a balance sheet of the Partnership as of the end of such fiscal quarter and the related statements of operations and cash flow of the Partnership for such fiscal quarter and for the Fiscal Year to date and an estimate of each Partner's share of all items of income, gain, loss, deduction, and credit of the Partnership for such fiscal quarter and for the Fiscal Year to date for federal income tax purposes, in each case together with (i) a certificate of the Chief Financial Officer to the effect that such financial statements have been prepared under such officer's supervision and that, although such financial statements do not contain the footnotes and other disclosures required by GAAP, such financial statements, in such officer's judgment, fairly present the interim financial position and results of operations of the Partnership as of the date and for the periods indicated, subject to normal recurring year-end audit adjustments, and (ii) a report of the Accountants with respect thereto based on a limited review not constituting an audit pursuant to Statement of Auditing Standards No. 36. Section 3.5. Taxation. (a) Characterization. The Partners intend that the Partnership shall be treated as a partnership for federal, state, local, and foreign income and franchise tax purposes and shall take all reasonable action, including the amendment of this Agreement and the execution of other documents, as may be required to qualify for and receive treatment as a partnership for federal income tax purposes. (b) Tax Matters Partner. (i) The Board of Directors shall designate from time to time one of the Partners to serve as the Tax Matters Partner of the Partnership under Section 6231(a)(7) of the Code and in any similar capacity under state, local, or foreign law (the "Tax Matters Partner"). The Tax Matters Partner shall take no action (other than ministerial action) without the prior approval of the Board of Directors. The Tax Matters Partner shall not be required to take any action or incur any expenses for the prosecution of any administrative or judicial remedies in its capacity as the Tax Matters Partner unless both Partners agree on a method of sharing expenses incurred in connection with the prosecution of such remedies and on appropriate tax counsel or other tax advisors to represent the Partnership in connection with such matters. As long as the Tax Matters Partner is not grossly negligent and acts in good faith pursuant to instructions it receives from the Board of Directors, (A) the Tax Matters Partner shall be fully protected in acting as such and (B) the Partnership shall indemnify and hold harmless the Tax Matters Partner from and against any and all expenses incurred by the Tax Matters Partner in connection with any activities or undertakings taken by it in its capacity as the Tax Matters Partner. If the other Partner enters into a settlement or closing agreement with the IRS or any comparable Governmental Authorities with respect to any Partnership tax item, then the other Partner shall notify the Tax Matters Partner of such agreement and its terms within 30 days of the execution of such agreement. (ii) The Tax Matters Partner shall take such action as may be reasonably necessary to constitute the other Partner a "notice partner" within the meaning of Section 6231(a)(8) of the Code. The Tax Matters Partner shall notify the other Partner of all material matters that come to its attention in its capacity as Tax Matters Partner, and the other Partner and the Partnership shall notify the Tax Matters Partner of all material matters that come to their attention relevant to the Tax Matters Partner's acting as such. This Section 3.5(b) is not intended to authorize the Tax Matters Partner to exercise or limit any right that is exercisable by the other Partner under Sections 6222 through 6233 of the Code. (c) Tax Returns. The Tax Matters Partner shall cause the Accountants to prepare and file on a timely basis the federal tax returns of the Partnership for each fiscal year for which such Tax Matters Partner is responsible. On or before the earliest of (i) July 1, (ii) 45 days before the due date (determined with regard to any extension) of each such return, and (iii) such date as is requested by either Partner, the Tax Matters Partner shall transmit copies thereof to the other Partner for review. The Tax Matters Partner shall not cause any such tax return to be filed by or on behalf of the Partnership unless the other Partner has consented to its filing; provided, however, that if the other Partner does not consent to the filing of any such tax return at least 15 days before the due date, the Tax Matters Partner (a) shall promptly submit any disputed issues to the Accountants for resolution, such resolution to be binding upon the Partners and (b) may, in the event that the Accountants are unable to resolve such dispute at least five days before the due date, (1) file such return after making a good faith effort to incorporate in such return any comments previously received from such Partner and (2) incorporate the Accountants' resolution into an amended return within a reasonable time after the Accountants resolve such dispute. The Tax Matters Partner shall cause state, local, and any other required tax returns of the Partnership to be prepared and filed on a timely basis. To the extent appropriate in connection with such preparation and filing, (i) the Accountants or other accounting firms shall assist and (ii) the Partners shall be consulted. Section 3.6. Deposit of Funds. All funds of the Partnership not otherwise employed shall be (a) deposited from time to time to its credit in such banks or trust companies or other depositories or (b) invested in such other short-term investments as the Board of Directors shall select, or as may be selected by any authorized officer or agent of the Partnership. The funds of the Partnership shall not be commingled with the funds of either Partner or any Affiliate of either Partner. Section 3.7. Independent Accountants. The Board of Directors shall select the Accountants for the Partnership from a recognized firm of public accountants to provide general outside accounting services to the Partnership and to perform the annual audit of the Partnership. In the event such firm resigns or is otherwise unable to continue to serve as the Partnership's outside Accountants, then the Board of Directors shall select successor Accountants. Nothing in this section shall be construed to preclude the Board of Directors from selecting a nationally recognized accounting firm performing services for either Partner. ARTICLE 4 Initial Capital, Contributions, Distributions, and Allocations Section 4.1. Partnership Interest. Each Partner's interest ("Interest") is fifty percent (50%). Section 4.2. Initial Capital Contribution. The initial capital of the Partnership shall consist of the contributions set forth in the Initial Capital Schedule. All non-cash contributions to the Partnership shall be valued at their net book value as determined by the Board of Directors. The Partners agree that the fair market value of the contributed assets is as set forth in the Initial Capital Schedule hereto. Section 4.3. Additional Capital Contributions. From time to time during the term of the Partnership, the Board of Directors may call for additional capital contributions in equal amounts or otherwise from each of the Partners if, in the opinion of the Board of Directors, additional capital is required for the operation of the Partnership. Notice of any capital call shall be delivered to each Partner not less than five Business Days prior to the date payment is required to be made pursuant to the capital call. Section 4.4. Distributions. Periodically, as determined by the Board of Directors, the Partnership, whether from Partnership operations or otherwise, shall distribute to the Partners in proportion to their respective Interests or otherwise (a) the Partnership's net profits for the period completed reduced by any funds which the Board of Directors determines to be necessary to satisfy existing or future obligations of the Partnership and (b) other assets. Section 4.5. Partner Capital Accounts. The term "Capital Account" means the account maintained for each Partner in accordance with the following provisions: (a) To each Partner's Capital Account there shall be credited such Partner's capital contributions pursuant to Article 4 (with any property contributed in kind valued at the net book value thereof as determined by the Board of Directors net of any Partner liabilities assumed or taken subject to by the Partnership), such Partner's allocation of Net Profits, and the amount of any Partnership liabilities assumed by such Partner (excluding guarantees and loans made by such Partner); (b) From each Partner's Capital Account there shall be debited the amount of cash and the fair market value of any property of the Partnership distributed to such Partner (as determined by the Board of Directors) pursuant to any provision of this Agreement net of Partnership liabilities retained or assumed by the Partner, such Partner's allocation of Net Losses, and the amount of any liabilities of such Partner assumed by the Partnership; (c) If any interest in the Partnership is Transferred in accordance with the terms of this Agreement, the Transferee shall succeed to the Capital Account of the Transferor to the extent it relates to the Transferred interest in the Partnership; and (d) The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with the requirements of Treas. Reg. Section 1.704-1(b) and shall be interpreted and applied in a manner consistent therewith. Section 4.6. Allocations of Partnership Profit and Loss. (a) "Profits" means items of Partnership income and gain determined according to Section 4.6(b). "Losses" means items of Partnership loss and deduction determined according to Section 4.6(b). The "Net Profit" of the Partnership for a fiscal period shall mean the excess of Partnership Profits over Partnership Losses. The "Net Loss" of the Partnership for a fiscal period shall mean the excess of Partnership Losses over Partnership Profits. (b) For purposes of computing the amount of any item of Partnership income, gain, loss or deduction the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes except that: (i) items of income and gain exempt from federal income tax shall be included; (ii) Partnership expenditures not deductible for federal income tax purposes and not chargeable to Capital Accounts (including any losses on Partnership property sold to a related person that are disallowed for federal income tax purposes) shall be included as items of loss or deduction; (iii) items of income, gain, loss or deduction attributable to the disposition of Partnership property having a Book Value that differs from its adjusted basis for federal income tax purposes shall be computed by reference to the Book Value of such property; (iv) items of depreciation, amortization and other cost recovery deductions with respect to Partnership property having a Book Value that differs from its adjusted tax basis for federal income tax purposes shall be computed by applying the same method and rate or depreciable life used to recover adjusted tax basis for federal income tax purposes to the property's Book Value; and (v) if Partnership property is distributed to a Partner, such property shall be treated as if it were sold for amount equal to its net book value. (c) Except as otherwise provided in Section 4.6(e), the Net Profit of the Partnership for any fiscal period shall be allocated to all Partners in proportion to their Interests. (d) Except as otherwise provided in Section 4.6(e), the Net Loss of the Partnership for any fiscal period shall be allocated to all Partners in proportion to their Interests. (e) The following special allocations shall be made: (i) If there is a net decrease in the partnership minimum gain (as defined by Treas. Reg. Section 1.704-2(d)) or partner nonrecourse debt minimum gain (as defined by Treas. Reg. Section 1.704-2(i)(2)) during any taxable year, each Partner shall be allocated Profits for such taxable year (and, if necessary, for subsequent taxable years) in the amounts and of such character as determined according to Treas. Reg. Section Section 1.704-2(f) or 1.704-2(i)(4). This Section 4.6(e)(i) is intended to be a minimum gain chargeback and partner nonrecourse debt minimum gain chargeback that complies with the requirements of Treas. Reg. Section 1.704-2, and shall be interpreted in a manner consistent therewith. (ii) Subject to Section 4.6(b), organizational expenses (as defined in Treas. Reg. Section 1.709-2(a)) shall be allocated to the Partners to whom such expenses are attributable, in such proportion as the Partners reasonably determine. (iii) If, and to the extent that, any Partner is deemed to recognize any item of income, gain, loss, deduction or credit as a result of any transaction between such Partner and the Partnership pursuant to Code Section Section 1272-1274, 7872, 483, 482, 83 or any similar provision, any corresponding item of Profit or Loss shall be allocated to the Partner who recognized such item. (iv) Any gain or loss described in Section 9.4(e) shall be allocated to each Partner in accordance with Section 4.6(c) and 4.6(d). (f) The following definitions shall apply for purposes of this Agreement: (i) "Treas. Reg." means the federal income tax regulations promulgated under the Code before the Effective Date. To the extent that such regulations are subsequently amended, the Partners shall discuss at such time whether any amendments to this Agreement are necessary or desirable. (ii) "Book Value" means with respect to any Partnership property, the Partnership's adjusted tax basis for federal income tax purposes, except that the Book Value of any property contributed to the Partnership in kind by a Partner shall be the property's fair market value as determined by the Board of Directors as of the date of contribution adjusted by the Partnership's subsequent depreciation, amortization or other cost recovery with respect to such property computed under Section 4.6(b)(iv). (g) Except as provided by Section 4.6(e), an allocation of Net Profit or Net Loss to a Partner shall be deemed to consist proportionately of each item of Partnership income, gain, loss or deduction determined according to Section 4.5(b) making up such Net Profit or Net Loss. (h) For purposes of determining the Partners' share of excess nonrecourse liabilities under Treasury Reg. Section 1.752-3(a)(3), each Partner shall be treated as having a 50 percent interest in profits. Section 4.7. Tax Allocation. (a) Except as otherwise provided in Section 4.7(b), items of Partnership taxable income, gain, loss and deduction shall be determined according to Code Section 703 and allocated to the Partners according to their respective shares of Net Profit and Net Loss to which such items relate. (b) Items of Partnership taxable income, gain, loss and deduction with respect to any property contributed to the capital of the Partnership by a Partner shall be allocated between the Partners according to Code Section 704(c) so as to take account of any variation between its Book Value and the adjusted tax basis of such property to the Partnership for federal income tax purposes using such method as determined by the Board of Directors. (c) Allocations pursuant to this Section 4.7 are solely for purposes of federal, state and local income taxes and shall not affect or be taken into account in computing any Partner's Capital Account or share of Profits, Losses, distributions or other Partnership items. Section 4.8. Curative Allocations. If the Partners determine, after consultation with competent tax counsel, that the allocation of any item of Partnership income, gain, loss, deduction or credit is not specified in this Article 4 (an "unallocated item"), or that the allocation of any item of Partnership income, gain, loss, deduction or credit hereunder is clearly inconsistent with the Partners' economic interests in the Partnership (determined by reference to the general principles of Treas. Reg. Section Section 1.704-1(b) and 1.704-2(b) and the factors set forth in Treas. Reg. Section 1.704-1(b)(3)(ii)) (a "misallocated item"), then the Partners shall allocate such unallocated items, or reallocate such misallocated items, to reflect such economic interests. In the event of disagreement between the Partners as to a curative allocation, the matter shall be referred for resolution to competent tax counsel designated by the Board of Directors. Section 4.9. Indemnification and Reimbursement for Payments on Behalf of a Partner. If the Partnership is required by law to make any payment on behalf of any Partner in its capacity as such or as a result of such Partner's status (including federal withholding taxes, state personal property taxes, and state unincorporated business taxes), then such Partner shall indemnify the Partnership in full for the entire amount paid (including interest, penalties and related expenses). The Partnership may offset distributions to which a Partner is otherwise entitled hereunder against such Partner's obligation to indemnify the Partnership under this Section 4.9. Section 4.10. No Interest. No interest shall be payable to the Partners on their capital contributions or otherwise in respect of the capital of the Partnership. Section 4.11. Payroll Taxes. The Partners and the Partnership agree that responsibilities for payroll taxes shall be assigned under the Alternative Procedure described in Section 5 of Rev. Proc. 83-66, to the extent applicable. ARTICLE 5 Partnership Expenses The Partnership shall take whatever steps are necessary to pay the expenses related to conducting its business, including, but not limited to, performing all of its obligations under the Exclusive Sales Agency Agreement, borrowing funds, and making capital calls on the Partners. ARTICLE 6 Business Operations Section 6.1. Business Dealings with the Partnership. A Partner or any Affiliate thereof may enter into contracts or agreements, including loans, with the Partnership and otherwise enter into transactions or dealings with the Partnership on an arm's-length or other reasonable basis and derive and retain profits therefrom, provided that any such contract or agreement or other transaction or dealing is approved by the Board of Directors in accordance with this Agreement. The Board of Directors may cause the Partnership to enter into contracts or agreements with a Partner with or without competitive bidding. The validity of any such contract, agreement, transaction, or dealing or any payment or profit related thereto or derived therefrom shall not be affected by any relationship between the Partnership and such Partner or any of its Affiliates. All loans from one Partner to the Partnership shall be made with full recourse to each Partner. Section 6.2. Conflicts of Interest. The Partners agree that if a conflict of interests arises, each conflicted Partner, member of the Board of Directors ("Board Member"), or Seconded Employee may act inconsistently with the Partnership's interests only after (i) the Partner that has the conflict of interest or the Partner that appointed the conflicted Board Member or conflicted Seconded Employee fully discloses the conflict to the other Partner and (ii) the other Partner explicitly waives the conflict in writing. ARTICLE 7 Actions by Partners of by the Board of Directors Section 7.1. Matters Requiring the Consent of the Board of Directors. The Partnership may not act in connection with any of the following matters without the Board of Directors' consent expressed in a formal resolution: (a) any change in the amount of capital contributions provided in Sections 4.2 or 4.3 or in the allocation of profits, losses, deductions, or credits between the Partners; (b) the sale, lease, exchange, or other disposition (including by license) of substantially all of the assets or properties of the Partnership; (c) the release of either Partner from any of its obligations under this Agreement; (d) the sale or license of any of the Partnership's Proprietary Rights; (e) (i) the filing of a petition in bankruptcy or for reorganization or rehabilitation under the federal bankruptcy law or any state law for the relief of debtors, having an order for relief entered against it under the federal bankruptcy law or otherwise having the Partnership adjudicated bankrupt or insolvent, the making of an assignment for the benefit of creditors, or the suffering of the appointment of a receiver, trustee, or custodian for a substantial portion of its business or properties by virtue of an allegation of insolvency or (ii) any similar action under any foreign law; (f) the dissolution or liquidation of the Partnership; (g) any change in or departure from the purposes of the Partnership; (h) an incurrence of (i) obligations for borrowed money (whether secured or unsecured), (ii) obligations exceeding $250,000 at any time that represent the deferred purchase price of property or services other than accounts payable arising in the ordinary course of business, (iii) obligations that would be shown as a liability on a balance sheet of the Partnership under GAAP in respect of leases of property that would be capitalized on such balance sheet, (iv) obligations evidenced by any bond, note, debenture, or other evidence of Debt, and (v) guarantees (direct or indirect and however named) in respect of any obligations of third parties referred to in clauses (i) through (iv); provided, however, that the authorization called for by this Section 7.1 shall not be required in respect of the Partnership actions referred to in clauses (i), (iii), (iv), and (v) if (A) the aggregate amount outstanding at any time under all such clauses does not exceed $250,000 and (B) such obligations are incurred under banking arrangements previously authorized; (i) the making of any loan or advance to any Person, except for loans and advances to employees and consultants in the ordinary course of business at any time not exceeding $250,000 outstanding in the aggregate to all employees and consultants, excluding salespersons' commission overdrafts; (j) other than in the ordinary course of business, (i) the sale, lease, exchange, or other disposition (including by license) of less than substantially all of the assets or properties of the Partnership or (ii) the acquisition of any assets or properties (including by license), in each case if it has a value to or effect on the Partnership of $100,000 or more; (k) the entering into or the amendment or termination (other than automatic termination pursuant to the terms thereof) of any (i) agreement, contract, or commitment between the Partnership and either Partner or any Affiliate of either Partner or (ii) any agreement, contract, or commitment between the Partnership and any third party that benefits either Partner (other than in its capacity as a Partner) or any Affiliate of either Partner (other than by benefiting such Affiliate by benefiting such Partner in its capacity as a Partner), in each case if it has a value to or effect on the Partnership in excess of $50,000; (l) any capital expenditure (including research and development expenditures), or any related group of capital expenditures, in excess of $125,000 or the making of any capital expenditures in any one year aggregating in excess of the approved capital budget; (m) the appointment or removal of the Accountants; (n) the commencement (including the filing of a counterclaim) or settlement of any claim or litigation, regulatory proceeding, or arbitration to which the Partnership is, or is to be, a party, if the claim or litigation, regulatory proceeding, or arbitration has a value to or effect on the Partnership of more than $100,000; (o) the creation of any Liens upon any assets or properties of the Partnership, other than (i) any imperfections of title or other Liens that, individually or in the aggregate, are not substantial in character or amount and do not materially impair the value of or materially interfere with the use of any of the assets or properties subject thereto, (ii) Liens relating to obligations approved under this Section 7.1, and (iii) software escrows in the ordinary course of business and for ordinary purposes if the Partnership's general form therefor has been previously approved by the Board of Directors and the particular software escrow does not materially differ from such form; (p) the entering into of any partnership or formal joint venture, or the acquisition of any capital stock of or other ownership interest in any Person, other than investments in marketable securities that are held as cash equivalents; (q) any merger or consolidation of the Partnership; (r) any declaration or payment of any distribution to either Partner; (s) the delegation of authority to any Person to approve the taking of any action set forth in this Section 7.1; (t) (i) the hiring or firing of any officer or (ii) the hiring of any individual who was an employee of any Partner or Affiliate thereof within two years of his leaving any Partner's or Partner Affiliate's employ; (u) other than matters in the ordinary course of business, any delegation of authority to the President or any other officer of the Partnership; (v) the setting or changing of the annual compensation of any officer; (w) the adoption or amendment of any long-range plans of the Partnership, including the Business Plan; (x) the creation of any Subsidiary or material business alliance; (y) the creation of any committee of the Board of Directors; (z) the adoption, amendment, or termination of any (i) collective bargaining agreement, (ii) plan, policy, arrangement, or understanding providing any of the following benefits to any current or former employee of the Partnership or any Subsidiary of the Partnership; bonuses, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, equity or quasi-equity purchase, equity or quasi-equity option, equity or quasi-equity appreciation rights, phantom equity or quasi-equity, retirement, vacation, severance, disability, death benefit, hospitalization, or insurance, or (iii) other material personnel practices or policies of the Partnership; provided, however, that the approval otherwise required by clause (ii) of this Section 7.1(z) does not apply to an ad hoc grant of cash bonuses, vacation leave, and the like to individual employees that otherwise does not violate this Agreement; (aa) the entering into or amendment or termination (other than automatic termination pursuant to the terms thereof) of any agreement, contract, or commitment (i) pursuant to the approved Business Plan (A) having a duration of one year or more and representing a value to or commitment of the Partnership of $1,000,000 or more, other than as otherwise contemplated by this Section 7.1, or (B) representing a value to or commitment of the Partnership of $3,000,000 or more and (ii) if not pursuant to the approved Business Plan, having a value to or commitment of the Partnership of $200,000 or more; (bb) any public announcement (including in interviews) (i) of any new Partnership product (as opposed to any minor modification of or improvement to any existing product) or (ii) describing either Partner's or any of its Affiliates' relationship with the Partnership in other than previously approved general terms; (cc) the setting or changing of the royalties to be charged under any license agreement of or for Proprietary Rights; (dd) any filings with or public comments to be made to any Governmental Authority; (ee) any change in the Partnership's fiscal year; (ff) the entering into of any agreement or commitment to take any action set forth in Sections 7.1(a) through 7.1(ae), unless such agreement or commitment and each counterparty thereto acknowledges in writing that it is subject to approval and failure to receive such approval does not result in a penalty or adverse effect (other than loss of the promise of the counterparty's performance) to the Partnership; or (gg) the (i) taking of any action set forth in Sections 7.1(a) through 7.1(ae) by the Partnership as owner of any Subsidiary, or otherwise with respect to any Subsidiary, assuming for this purpose that references to the Partnership in such clauses include a reference to any Subsidiary of the Partnership, (ii) amendment of the charter, by-laws, or other governing document of any Subsidiary, or (iii) causing or permitting of the Partnership's direct or indirect ownership of any of its Subsidiaries to change. Section 7.2. Restrictions on Partners. Neither Partner may, without the consent of the other Partner: (a) confess a judgment against the Partnership; (b) make any agreement on behalf of or otherwise purport to bind the other Partner or (except as required by Governmental Rule) the Partnership; (c) do any act in contravention of this Agreement; (d) do any act that would make it impossible to carry on the business of the Partnership; (e) dispose of the goodwill or the business of the Partnership; (f) assign the property of the Partnership in trust for creditors or on the assignee's promise to pay the Debts of the Partnership; or (g) release a Partner or any of its Affiliates from any obligation under this Agreement or any obligation that a Partner or any of its Affiliates owes with respect to the Partnership. Each partner agrees that it will indemnify the Partnership and the other Partner against any and all claim, loss, or damage to which the Partnership or such other Partner may be or become subject arising or resulting from the breach by such Partner of this Section 7.2. ARTICLE 8 Management and Operation of the Partnership Section 8.1. The Board of Directors. (a) General. The Partnership shall have a board of directors consisting of six individuals appointed by the Partners (the "Board of Directors"). The Board of Directors shall direct the Partnership in accordance with this Agreement. (b) Members, Voting, etc. (i) Each Partner shall appoint two members of the Board of Directors, one of whom shall be entitled to cast one vote on all matters (the "Voting Director") and the other of whom may advise the Board of Directors but shall have no vote (the "Advisory Director"). In addition, the Chief Executive Officer and a financial officer shall serve on the Board of Directors as non-voting members. Each Partner shall be entitled to name an alternate member to serve in the place of any member appointed by such Partner should any such member not be able to attend a meeting or meetings. Each Voting Director and Advisory Director shall serve at the pleasure of the designating Partner. (ii) If a member should die, resign, or be removed, the Partner that appointed him or her shall have the right to designate his or her successor in a writing delivered to the other Partner. Each Partner shall bear the cost incurred by any individual designated by it to serve on the Board of Directors, and no such individual shall be entitled to compensation from the Partnership for serving in such capacity. (iii) Each Partner shall notify the Partnership and the other Partner of the name, business address, and business telephone and telecopier numbers of each member and each alternate member that such Partner has appointed to the Board of Directors. Each Partner shall promptly notify the Partnership and the other Partner of any change in such Partner's appointments or of any change in any such address or number. (iv) The Board of Directors may take action only by the affirmative vote of both Voting Directors. The quorum necessary for any meeting of the Board of Directors shall be the number of members needed to approve any action. (v) Any action taken by a member of the Board of Directors shall, so far as the other Partner is concerned, be deemed to have been duly authorized by the Partner appointing him or her. Each appointment by a Partner to the Board of Directors shall remain in effect until the Partner making such appointment notifies the Partnership and the other Partner of a change in such appointment. The resignation or removal of a member of the Board of Directors shall not invalidate any act of such member taken before the giving of written notice of his or her removal or resignation. (c) Meetings, etc. (i) Meetings of the Board of Directors shall be held at the principal offices of the Partnership or at such other place as may be determined by the Board of Directors. Regular meetings of the Board of Directors shall be held quarterly on such dates and at such times as shall be determined by the Board of Directors. (ii) Special meetings of the Board of Directors may be called by either Partner on at least five days' notice to each member thereof, which notice shall state the purpose or purposes for which such meeting is being called. (iii) The actions taken by the Board of Directors at any meeting, however called and noticed, shall be as valid as if taken at a meeting duly held after regular call and notice if (but not until) at any time the member as to whom it was improperly held signs a written waiver of notice or a consent to the holding of such meeting or an approval of the minutes thereof. A vote of the Board of Directors may be taken either in a meeting of the members thereof or by written consent. (iv) A meeting of the Board of Directors may be held by conference telephone or similar communications equipment by means of which all individuals participating in the meeting can be heard. (v) The Board of Directors may establish reasonable rules and regulations to (i) require officers to call meetings and perform other administrative duties, (ii) limit the number and participation of observers and to require them to observe confidentiality obligations, and (iii) otherwise provide for the keeping of minutes and other internal Board of Directors governance. (d) Partners May Act. Nothing in this Section 8.1 derogates from the power of the Partners to agree in writing to cause the Partnership to act. Section 8.2. Officers. (a) General. The officers of the Partnership shall be a Chief Executive Officer, Chief Financial Officer, and such other officers as may be designated by the Board of Directors from time to time to be necessary or advisable in the conduct of the business and affairs of the Partnership. Subject to the provisions of Section 7.1, the officers of the Partnership shall be appointed and shall be subject to removal without cause by the Board of Directors. Any individual may hold more than one office. Any officer of the Partnership may also serve as an officer, employee, or agent of a Partner or any of its Affiliates. All officers of the Partnership shall (i) report to the Chief Executive Officer (except that he or she shall report to the Board of Directors), (ii) have the powers and duties set forth in this Section 8.2 or as otherwise prescribed by the Board of Directors, (iii) serve for the term designated by the Board of Directors, subject to removal as provided above, and (iv) attend meetings of the Board of Directors as requested. (b) Chief Executive Officer. The Chief Executive Officer shall (i) be the chief executive officer of the Partnership who shall have the usual powers, duties, and responsibilities incident thereto, subject to additions, modifications, and deletions thereof from time to time by the Board of Directors and those powers and responsibilities specifically reserved hereunder to the Partners and the Board of Directors, (ii) manage the conduct of the business and affairs of the Partnership, and (iii) see that all orders and resolutions of the Board of Directors are carried into effect. (c) Chief Financial Officer. The Chief Financial Officer shall, subject to the authority of the Chief Executive officer, keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Partnership, and shall send or cause to be sent to the Partners such financial statements and reports as required by law or this Agreement to be sent to the Partners or as may be reasonably requested by a Partner. Subject to the authority of the Chief Executive Officer and the Board of Directors, the Chief Financial Officer shall have general and active management of the Partnership's finances. The Chief Financial Officer shall have such other powers and perform such other duties as may be prescribed by the Board of Directors. Section 8.3. Nomination Procedures. All candidates for Chief Executive Officer and Chief Financial Officer shall be nominated and confirmed by the Board of Directors. Section 8.4. Management. The Chief Executive Officer and his designees shall manage the Partnership's affairs subject to the control of the Board of Directors. The Board of Directors shall annually approve the Business Plan. The Chief Executive Officer shall manage the Partnership's business in accordance with the Business Plan, which he shall annually update and propose to the Board of Directors. Section 8.5. Dispute Resolution. (a) Accounting Matters. In the event of a dispute between the Partners with respect to Partnership accounting and/or federal or state income tax matters or the time, manner, or allocation of a distribution under this Agreement, the Partners shall select an independent accounting firm to resolve the dispute. In the event the Partners cannot agree upon an accounting firm, each of the Partners shall select an independent accounting firm. The firms thus selected shall then select a single independent accounting firm not then engaged by either of the Partners, or any of their Affiliates, to resolve the dispute. The decision of the accounting firm selected in accordance with the foregoing procedure is to be made within 60 days of the firm's selection and shall be final and binding upon the Partners and not subject to appeal. (b) Other Matters. Whenever a member of the Board of Directors proposes in good faith that the Board of Directors consent to an action described in Section 7.1 and the Board of Directors does not so consent, the following shall apply: (i) When the matter arises at the level of the Board of Directors or in other dealings between Partners, such dispute shall be submitted, for discussion and possible resolution, to the President of API/IL (or such senior officer of API/IL designated by the chief executive officer of API/IL) and the President of Donnelley (or such senior officer of Donnelley designated by the chief executive officer of Donnelley). (ii) In the event that such senior officers fail to resolve the dispute within 45 days, the dispute shall be submitted, for discussion and resolution, to the chief executive officer of the Parent of each Partner or the designee of the chief executive officer. Each Partner shall negotiate in good faith to resolve the dispute. Section 8.6. Unresolved Disputes. (a) In the event that the chief executive officers of the Partner's Parents fail to resolve a dispute pursuant to Section 8.5(b)(ii) within 30 days, either Partner may declare an impasse (an "Impasse") by written notice to the other Partner. Following declaration of an Impasse the Partners shall, for a period of 90 days, negotiate in good faith to resolve the Impasse. During such negotiations and until a resolution through arbitration or otherwise, the Partnership shall conduct its business in the ordinary course. (b) If the Impasse is not resolved by negotiation pursuant to (a) above, the Partners shall submit all disputes, except those disputes that include a demand for emergency equitable relief, arising out of this Agreement to arbitration in accordance with the Commercial Rules of the American Arbitration Association ("AAA") then in effect. Unless otherwise agreed by the Partners, the dispute shall be resolved by the AAA within sixty (60) days of submission, and the AAA shall be informed of the sixty (60) day resolution requirement when the submission is made to the AAA. Judgment on the award may be entered in any court having jurisdiction. The location of the arbitration proceeding shall be in the greater metropolitan area of Chicago, Illinois. (c) Notwithstanding the procedures set forth in Sections 8.5(b) and 8.6(a) and (b), any dispute that includes a demand for emergency equitable relief shall be brought in a court of competent jurisdiction in the State of Illinois, and each Partner hereby submits to the jurisdiction of such courts for the purpose of any such suit, action, or proceeding. Section 8.7. Insurance. The Partnership shall at its expense maintain insurance against such liabilities and other risks associated with the conduct by the Partnership of its operations and in such amounts as is generally maintained by companies engaged in a business similar to that of the Partnership. In addition, the Partnership may, to the fullest extent permitted by law, purchase and maintain insurance against any liability that may be asserted against any Person entitled to indemnity pursuant to Section 10.1. Section 8.8. Employee and Other Confidentiality Agreements. The Partnership shall enter into confidentiality agreements with each of its officers and each Seconded Employee sufficient to enable the Partnership to fully comply with its obligations of confidentiality set forth in Article 12. ARTICLE 9 Term, Dissolution, and Termination Section 9.1. Effective Date and Term. The Partnership shall exist as of the Effective Date and shall continue in perpetuity until dissolved by the occurrence of an event described and in accordance with the provisions of this Article. No Partner shall have the right to, and each Partner agrees not to, dissolve, terminate or liquidate, or to petition a court for the dissolution, termination, or liquidation of, the Partnership, except as provided in this Agreement. Each Partner agrees that dissolution, termination, or liquidation of the Partnership or the filing of a petition to put the Partnership in bankruptcy are not matters subject to the impasse and arbitration provisions of Article 8 of this Agreement. Neither Partner shall permit to exist any event of dissolution hereunder or under any applicable law within its control (other than a technical dissolution caused by a transfer to an Affiliate pursuant to Section 11.2 or after an Impasse pursuant to Section 8.6). Section 9.2. Events of Dissolution. (a) The Partnership shall be dissolved upon the earliest of any of the following events to occur: (i) The unanimous written agreement of the Partners to dissolve the Partnership; or (ii) If (A) a Partner or its Parent shall (1) apply for or consent to the appointment of a receiver, trustee, or liquidator, of its Partner or its Parent, or of all or a substantial part of the Partner's or its Parent's assets, (2) have been adjudicated a bankrupt or insolvent, or file a voluntary petition in bankruptcy, or admit its inability to pay its debts as they come due, (3) make a general assignment for the benefit of creditors, (4) file a petition or answer seeking reorganization or arrangement with creditors or otherwise take advantage of any insolvency law, or (5) file an answer admitting the material allegations, or consent to, or default in answering the petition filed against the Partner or its Parent in any bankruptcy, reorganization, or insolvency proceedings; or (B) an order, judgment, or decree shall be entered by any court of competent jurisdiction approving a petition seeking reorganization of a Partner or its Parent or an arrangement with creditors (or any call of creditors) of a Partner or its Parent or appointing a receiver, trustee, or liquidator of a Partner or its Parent or of all or a substantial part of the assets of a Partner or its Parent, and such order, judgment, or decree shall continue unstayed and in effect for any period of 60 consecutive days; or (iii) The acquisition by one Partner of the entire Interest of the other Partner in the Partnership; (iv) A Transfer of a Partner's Interest in contravention of Article 11 of this Agreement; (v) A decision by the Board of Directors, in the exercise of their business judgment, to dissolve the Partnership because they have determined in good faith that (A) changes in any applicable law or regulation would have a material adverse effect on the continuation of the Partnership or (B) such action is necessary in order for the Partnership not to be in material violation of any material law or regulation; (vi) By either Partner, upon thirty (30) days prior written notice to the other Partner, if such other Partner is in material breach of any of its obligations under this Agreement which breach is not cured to the reasonable satisfaction of the non-breaching Partner within such thirty day period or, if such breach is not capable of being cured within thirty (30) days, then the failure to commence immediately and to proceed with diligence to cure such breach, or if such breach is incapable of being cured, then any subsequent repetition of such breach; or (vii) Occurrence of any act (whether or not in contravention of this Agreement) that would, under provisions of the Illinois Uniform Partnership Act, cause a dissolution of the Partnership. Without limitation on, but subject to, the other provisions hereof, the Transfer or assignment of all or any part of a Partner's Interest permitted hereunder will not result in the dissolution of the Partnership. Except as specifically provided in this Agreement, each Partner agrees that, without the consent of the other Partner, no Partner may withdraw from or cause a voluntary dissolution of the Partnership. In the event any Partner withdraws from or causes a voluntary dissolution of this Agreement, such withdrawal or the causing of a voluntary dissolution shall not affect such Partner's liability for obligations to the Partnership. (b) (i) If the Partnership is dissolved pursuant to Section 9.2(a)(ii), (iv) or (vi), then the Partner whose breach gave rise to such dissolution (the "Breaching Partner") shall immediately cease to be a Partner, and the other Partner (the "Non-Breaching Partner") may elect either (A) to purchase the Interest of the Breaching Partner for an amount equal to the positive Capital Account of the Breaching Partner (or in the case of a Parent causing dissolution under Section 9.2(a)(ii), for an amount equal to the Interest's fair market value) at the time of the dissolution and continue the business of the Partnership as provided in Section 9.2(c) hereof, or (B) to liquidate the Partnership in the manner described in Section 9.4, in which case the Breaching Partner shall continue to receive allocations of Net Profit and Net Loss and shall continue to be obligated to restore any deficit Capital Account under Section 9.4(d) and pay its share of any shortfall under Section 9.4(c). (ii) If the Partnership is dissolved under Sections 9.2(a)(i), (v), or (vii) of this Agreement, the provisions contained in Section 9.4 hereof shall apply. (c) In the event of a dissolution pursuant to either Section 9.2(a)(ii), (iv), or (vi) and the remaining Partner or the Non-Breaching Partner, as the case may be, elects to reconstitute and continue the business of the Partnership, it shall take all necessary actions to cancel this Agreement and form a new partnership (the "Reconstituted Partnership") on the same terms and conditions as are set forth in this Agreement by entering into a new Partnership Agreement with a successor partner (the "Successor Partner") approved by the remaining partner or the Non-Breaching Partner, as the case may be, to continue the business and operations of the Partnership; provided, however, that upon such approval of the Successor Partner (i) the remaining Partner or the Non-Breaching Partner, as the case may be, and the Successor Partner shall have the same general liability in the Reconstituted Partnership pursuant to Illinois Uniform Partnership Act as the Partners in the Partnership, and (ii) neither the Partnership nor the Reconstituted Partnership will be treated as a corporation, an association taxable as a corporation or on a similar basis for federal income tax purposes. The Reconstituted Partnership shall have the right to continue the business and affairs of the Partnership with the property of the Partnership and under the same Partnership name and subject to the same terms and conditions of this Agreement. Section 9.3. Buyout of a Partner. When one Partner acquires the Interest of the other Partner or when the Partnership acquires the Interest of one of the Partners: (a) the Partner whose Interest is purchased shall have no further right, title and interest in, to or under this Agreement or the Partnership other than the right to receive any purchase price for such Interest; and (b) the continuing Partner shall have the following rights: (i) the continuing Partner shall have the right at all times, after complying with any requirement of law, to continue the business and affairs of the Partnership with the property of the Partnership and under the same Partnership name and subject to the terms and conditions, of this Agreement; (ii) the continuing Partner may send such notices of the termination or dissolution of the Partnership as it may deem appropriate and necessary under the circumstances; and (iii) the goodwill of the Partnership (including the name, records and files) shall belong to and remain solely vested in the continuing Partner. Section 9.4. Liquidation of the Partnership. (a) If the Partnership is dissolved by agreement pursuant to Section 9.2 the Board of Directors shall proceed with the winding up of the Partnership, and the assets of the Partnership shall be applied and distributed as provided in this Section 9.4 If the Partnership is dissolved at the election of one of the Partners pursuant to Section 9.2, the electing Partner shall control the winding up and distribution of the assets of the Partnership. (b) (i) The assets of the Partnership shall first be applied to the payment of the liabilities of the Partnership, including, without limitation, any loan to the Partnership by a Partner. A reasonable time shall be allowed for the orderly liquidation of the assets of the Partnership and the discharge of liabilities to creditors so as to enable the Board of Directors to minimize the normal losses attendant upon a liquidation. The Partnership may set aside assets of the Partnership to establish reasonable reserves to provide for any contingent liabilities of the Partnership; any assets remaining after the discharge of such contingent liabilities shall be distributed pursuant to (ii) of this subsection. (ii) The assets of the Partnership remaining after the payments provided in (i) are made shall be distributed to the Partners in accordance with the Partners' Capital Accounts. Any assets distributed in kind shall be valued at fair market value. Prior to any distribution under this Section 9.4(b)(ii), if the Partners' Capital Accounts are not equal, the Partner having the lesser Capital Account must pay to the Partnership an amount sufficient to cause the Partners' Capital Accounts to be equal. (c) If the Partnership's assets are insufficient to make the payments required under (b)(i), the Partners shall make up any shortfall in proportion to their relative Interests. Such payments shall be considered capital contributions to the Partnership. Any Partner that pays more than its proportionate amount of Partnership liabilities shall have a right of contribution against the other Partner. (d) If any Partner's Capital Account has a deficit balance (after giving effect to all contributions, distributions and allocations for all taxable years, including the year during which the Partnership liquidated), such Partner shall contribute to the capital of the Partnership the amount necessary to restore such deficit balance to zero in the manner and within the time provided in Treas. Reg. Section 1.704- 1(b). (e) Gain or loss on any Partnership assets transferred to creditors, sold or distributed to the Partners in the liquidation shall be allocated in accordance with Section 4.6. (f) Each Partner (and any Breaching Partner) shall be furnished with a statement certified by the Partnership's independent public accountant, which shall set forth the assets and liabilities of the Partnership as of the date of complete liquidation. Upon compliance with the foregoing distribution plan, the Partnership shall terminate, and the Partners shall execute any and all documents necessary with respect to termination and cancellation. ARTICLE 10 Indemnification Section 10.1. Indemnification. The Partnership shall, to the fullest extent permitted by applicable law, indemnify any individual made, or threatened to be made, a party to an action or proceeding whether civil or criminal, by reason of the fact that such individual or such individual's testator or intestate was a member of the Board of Directors or officer of the Partnership, against judgments, fines, amounts paid in settlement, and reasonable expenses, including attorneys' fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, in each case except to the extent that such individual's actions or inactions constituted gross negligence or willful misconduct. Such indemnification shall be a contract right and shall include the right to be paid advances of any expenses incurred by such individual in connection with such action, suit, or proceeding, consistent with the provisions of applicable law in effect at any time. Indemnification shall be deemed to be "permitted" within the meaning of the first sentence of this Section 10.1 if it is not expressly prohibited by applicable law. Section 10.2. Indemnification of Partners. (a) Each Partner agrees to, and does hereby, indemnify and hold harmless the other Partner, and, to the extent set forth below, each Affiliate of the other Partner, from and against all claims, causes of action, liabilities, payments, obligations, expenses (including without limitation reasonable fees and disbursements of counsel) or losses (collectively "claims, liabilities, and losses") arising out of a liability or obligation of the Partnership to the extent necessary to accomplish the result that neither Partner (together with its Affiliates) shall bear any portion of a liability or obligation of the Partnership in excess of such Partner's Interest. (b) Without limiting the generality of the foregoing, a claim, loss, or liability shall be deemed to arise out of a Partnership liability or obligation if it arises out of or is based upon the conduct of the business of the Partnership or the ownership of the property of the Partnership. (c) The foregoing indemnification shall be available to an Affiliate of either Partner with respect to a claim, liability, or loss arising out of a Partnership liability or obligation which is paid or incurred by such Affiliate as a result of such Affiliate directly or indirectly owning or controlling a Partner or as a result of the fact that an individual employed or engaged by the Partnership is also a director, officer, or employee of such Affiliate. (d) The foregoing indemnification shall not inure to the benefit of either Partner (or any Affiliate of either Partner) in respect of any claim, liability, or loss which (i) arises out of or is based upon the gross negligence or willful misconduct of such Partner (or an Affiliate of such Partner) or (ii) is a tax, levy, or similar governmental charge not imposed upon the Partnership or on its property. For the purposes of this subsection, no claim, liability, or loss shall be deemed to arise out of or be based upon the gross negligence or willful misconduct of any Partner (or any of its Affiliates) solely because it arises out of or is based upon the gross negligence or willful misconduct of a director, officer, or employee of such Partner or such Affiliate if at the time of such negligence or misconduct such director, officer, or employee was a Seconded Employee or was a member of the Board of Directors. ARTICLE 11 Transfer of or Liens on Assets Section 11.1. General Rule. Subject to Section 11.2, a Partner may not Transfer, or subject to or suffer to exist any Lien on, all or any part of its Interest except with the consent of the other Partner (which may be withheld at that Partner's sole discretion) or as otherwise permitted by this Agreement, and any attempt to do so shall be null and void. If any Partner purports to Transfer its Interest in violation of the previous sentence, the other Partner shall, in addition to all other remedies available to it, have the right to equitable relief and the right by written notice to the Transferring Partner to treat such Partner as a Breaching Partner under Section 9.2(b)(i). Section 11.2. Exception. Notwithstanding Section 11.1, (a) a Partner may Transfer its Interest to the other Partner on such terms and conditions as each Partner may mutually agree upon, and (b) a Partner may, with the approval of the Board of Directors, Transfer all of its Interest to an Affiliate that assumes, and agrees to pay, perform, and discharge, all the obligations of the Transferring Partner under this Agreement. ARTICLE 12 Non-competition and Confidentiality Section 12.1. Non-Competition. During the term of this Agreement, neither Partner may compete directly against the business of the Partnership without the consent of the Board of Directors. Section 12.2. Confidentiality. (a) Except to the extent compelled by court order or as may be otherwise required by applicable law: (i) Members of the Board of Directors, Partnership employees, and Seconded Employees shall not be obligated to reveal confidential or proprietary information belonging to either Partner (or either Partner's Affiliates) without the consent of such Partner. (ii) Each of the Partners in the performance of its duties hereunder will communicate or otherwise make known to the other Partner and the Partnership information, materials, data and other matter that is not otherwise known to the recipient Partner or the Partnership and is not generally known by third parties ("Confidential Information"). It is generally acknowledged that such Confidential Information would be of value to each Partner's and the Partnership's competitors and to others were this Confidential Information known to them. Confidential Information is considered to be trade secret information, and the Partners shall treat it as such. Neither the Partner nor the Partnership may disclose Confidential Information without the written authorization of the non-disclosing Partner. (iii) The Partners shall keep the terms, conditions and other material provisions of this Agreement confidential. (b) Each Partner shall cause the Partnership to obtain from each of its officers, members of the Board of Directors, and employees who will be given access to all or any portion of the Confidential Information, prior to such access, a non-disclosure agreement in form and substance mutually satisfactory to each Partner. The non-disclosure agreement shall state, among other things, that it is for the benefit of the Partnership and each Partner and may be enforced by the Partnership, each Partner, and their Affiliates. ARTICLE 13 Miscellaneous Section 13.1. Change of Control. (a) In the event of a Change of Control, as hereinafter defined, of a Partner (the "Change Partner") without the prior written consent of the other Partner, the Partner not suffering the Change of Control (the "Option Partner") may exercise the Purchase Option as provided for in Section 13.2. For the purposes of this Section a Change of Control shall be deemed to occur in the following circumstances: (i) The Transfer or Transfers to a non-Affiliate or non-Affiliates of such Partner of an aggregate of 20% or more of the stock of a Partner. (ii) The Transfer or Transfers to a non-Affiliate or non-Affiliates of such Partner of an aggregate of 20% or more of the stock of a direct or indirect holding company of a Partner with respect to which the revenues attributable to such Partner's Interest would constitute more than 50% of the revenues of such holding company (the "Requisite Percentage") determined on a consolidated basis in accordance with generally accepted accounting principles as of the end of the fiscal quarter of the Partner occurring immediately prior to the date as of which the determination is to be made. (iii) The Transfer to a non-Affiliate of such Partner by merger, consolidation or sale of all or substantially all of the assets of a direct or indirect holding company of which the revenues attributable to the Partner's Interest constitute the Requisite Percentage. (b) Notwithstanding Section 13.1(a) above the term "Change of Control" shall not be deemed to include the following: (i) The Transfer by sale of shares, merger, consolidation or sale of all or substantially all of the assets of (a) the ultimate parent company of a Partner or (b) any intermediary holding company of which the revenues attributable to the Partner's Interest constitute less than the Requisite Percentage. (ii) A spinoff to holders of capital stock of the ultimate parent company of all of the stock of a Partner then held or all of the stock then held of any intermediary holding company of which the revenues attributable to the Partner's Interest constitute the Requisite Percentage. Section 13.2. Change of Control Option. In the event of a Change of Control as defined in Section 13.1(a), the Change Partner shall promptly deliver written notice of such event (the "Change of Control Notice") to the Option Partner. The Option Partner shall determine within 20 days of receipt of such notice whether it may wish to exercise its rights to purchase the Change Partner's Interest and the Donnelley Revenue Participation Interests, if applicable (the "Purchase Option") and, if so, may have the fair market value (as determined pursuant to Section 13.3) of the Change Partner's Interest and the Donnelley Revenue Participation Interests, if applicable, determined by delivering a notice to cause such determination (the "Determination Notice") to the Change Partner. If no Determination Notice is received by the Change Partner within such time period, the Purchase Option will be deemed to have lapsed with respect to the specified Change of Control and thereafter a subsequent Change of Control shall be determined with respect to the state of facts existing after giving effect to the Change of Control specified in the change of Control Notice. Delivery of the Determination Notice will obligate the Option Partner, in case Donnelley is the Option Partner, either to (a) purchase API/IL's Interest for an amount equal to the higher of (i) the value attributed to API/IL's Interest in the sale or other event that triggered the Change of Control or (ii) the fair market value of API/IL's Interest as hereinafter determined or (b) be responsible for 100% of the fees of the investment banker referred to in Section 13.3 and all expenses incurred by the Change Partner as a result of the delivery of the Determination Notice. Delivery of the Determination Notice will obligate the Option Partner, in case API/IL is the Option Partner, either to (i) purchase Donnelley's Interest and Donnelley's Revenue Participation Interests for an amount equal to the higher of (A) the value attributed to Donnelley's Interest and Donnelley's Revenue Participation Interests in the sale or other event that triggered the Change of Control or (B) the fair market value of Donnelley's Interest and Donnelley's Revenue Participation Interests as hereinafter determined or (ii) be responsible for 100% of the fees of the investment banker referred to in Section 13.3 and all expenses incurred by the Change Partner as a result of the delivery of the Determination Notice. Section 13.3. Determination of Fair Market Value. Fair market value shall be determined by a nationally recognized investment banker selected by mutual agreement of the Partners within 10 days (the "Mutual Selection Period") of the Determination Notice. In the event that an investment banker is not selected by the Partners within the Mutual Selection Period, then each Partner shall select an investment banker from the list of three investment bankers (or their successors) attached hereto as Exhibit A. Each Partner shall simultaneously deliver to the other Partner such Partner's selection of an investment banker on the fifth day after the termination of the Mutual Selection Period. If both Partners select the same investment banker, the investment banker so selected shall serve as the investment banker for the purpose of determining fair market value. If each Partner selects a different investment banker, then the investment banker listed on Exhibit A, which neither of the Partners selected, shall serve as the investment banker to determine fair market value. The selected investment banker shall (i) value the Interest of the Change Partner at its fair private market value by valuing the Partnership in the context of an auction process and then applying to such value the percentage interest represented by the Interest of the Change Partner, taking into account such other factors as the investment banker deems relevant to such analysis; and (ii) if Donnelley is the Change Partner, value the Donnelley Revenue Participation Interests in the context of an auction process, taking into account such other factors as the investment banker deems relevant to such process. The valuation shall be completed within 60 days of the selection of the investment banker and promptly communicated in writing to each Partner. The fair market value so determined shall be final and binding on the Partners and the Option Partner must, within 10 days of the delivery of the investment banker's valuation, indicate whether it will exercise the Purchase Option. If the Option Partner elects to exercise the Purchase Option, the Option Partner must consummate the purchase of the Change Partner's Interest and, if applicable, Donnelley's Revenue Participation Interests, on the terms set forth in Section 13.2 within 10 days after any requisite regulatory approval has been obtained. If the Purchase Option is exercised, the Partners agree that all fees of such investment banker for making such evaluation shall be borne one-half by each Partner. Section 13.4. Notices. All notices, demands, or requests required or permitted to be given pursuant to this Agreement shall be in writing and shall be deemed to have been given when delivered personally or when deposited in the United States mail, postage prepaid, by registered or certified mail, with return receipt requested, addressed as follows: (a) If to API/IL, to: Ameritech Publishing of Illinois, Inc. 100 E. Big Beaver 15th Floor Troy, Michigan 48083 Attention: President With a copy to: Ameritech Publishing of Illinois, Inc. 100 E. Big Beaver 15th Floor Troy, Michigan 48083 Attention: General Counsel or at such other address as API/IL may have furnished Donnelley by notice. (b) If to Donnelley: The Reuben H. Donnelley Corporation One Manhattanville Road Purchase, New York 10577 Attention: President With a copy to: The Reuben H. Donnelley Corporation One Manhattanville Road Purchase, New York 10577 Attention: General Counsel or at such other address as Donnelley may have furnished API/IL by notice. Section 13.5. Amendment. This Agreement may not be amended except by a written instrument executed by both Partners. Section 13.6. Applicable Law. This Agreement and the performance of the Partners hereunder shall be interpreted, construed, and enforced in accordance with the laws of the State of Illinois. Section 13.7. Entire Agreement. This Agreement constitutes the entire agreement between the Partners hereto relative to the formation of the Partnership for the purposes herein contemplated and there are no other understandings, representations, or warranties, oral or written, relating to the subject matter of this Agreement, which shall be deemed to exist or bind either of the Partners hereto, their respective successors or assigns. Section 13.8. Further Assurances. Each of the Partners shall from time to time and at all times do such other and further acts as may reasonably be necessary in order fully to perform and carry out the terms and intent of this Agreement. Section 13.9. Admission of Additional Partners. No additional Partners may be admitted to the Partnership except upon the unanimous consent of the Partners and upon such terms and conditions to which they may agree. Section 13.10. Severability. To the extent permitted by applicable law, the Partners waive any provision of law that renders any provision hereof prohibited or unenforceable in any respect. Any provision of this Agreement that is nonetheless unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Notwithstanding the foregoing, if any provision is so unenforceable, the Partners shall, to the extent lawful and practicable, use their best efforts to enter into arrangements to reinstate the rights and duties arising from that provision. Section 13.11. Headings. The headings of Sections in this Agreement are for convenience only and are not a part of this Agreement. Section 13.12. No Third Party Beneficiaries. The terms of this Agreement shall be binding upon and inure to the benefit of the Partners and their successors and assigns. Except for Section 10.1, nothing in this Agreement, whether express or implied, shall be construed to give any Person (other than the Partners and their successors and assigns and as expressly provided herein) any legal or equitable right, remedy, or claim under or in respect of this Agreement or any covenants, conditions, or provisions contained herein. Section 13.13. Counterparts. This Agreement may be executed by the Partners in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same document. Section 13.14. Waiver of Rights of Partition and Dissolution. Each Partner waives all rights it may have at any time to maintain any action for partition or sale of any Partnership assets as now or hereafter permitted under applicable law. Each Partner waives its rights to seek a court decree of dissolution or to seek the appointment of a court receiver for the Partnership as now or hereafter permitted under applicable law. IN WITNESS WHEREOF, the Partners have executed this DonTech II Partnership Agreement on the date and year first above written. THE REUBEN H. DONNELLEY CORPORATION By: ____________________________________ Frank R. Noonan Its: President and Chief Executive Officer Witness: ___________________________________ AMERITECH PUBLISHING OF ILLINOIS, INC. By: ____________________________________ Peter J. McDonald Its: President Witness: ___________________________________ INITIAL CAPITAL SCHEDULE The Initial Capital of the Partnership shall consist of the amounts set forth below, and each Partner shall make such Initial Capital contributions on the dates indicated. Date API/IL Donnelley - ---- ------ --------- September 1, 1997 $ 4,500,000 $ 4,500,000 October 1, 1997 $ 4,500,000 $ 4,500,000 December 1, 1997 $ 4,500,000 $ 4,500,000 February 1, 1998 $ 4,500,000 $ 4,500,000 April 1, 1998 $ 1,000,000 $ 1,000,000 ----------- ----------- $19,000,000 $19,000,000 EXHIBIT A LIST OF INVESTMENT BANKERS Goldman, Sachs & Company J. P. Morgan & Co. Incorporated CS First Boston Corporation EX-10.11 7 EXHIBIT 10.11 REVENUE PARTICIPATION AGREEMENT This Revenue Participation Agreement (this "Agreement"), dated as of August 19, 1997, by and between APIL PARTNERS PARTNERSHIP, an Illinois general partnership ("APIL Partners"), and THE REUBEN H. DONNELLEY CORPORATION, a Delaware corporation ("Donnelley"), (collectively, the "Parties"; individually, a "Party"). RECITALS A. APIL Partners owns a forty-seven percent (47%) membership interest (the "APIL Partners Membership Interest") in DonTech I Publishing Company, LLC, a Delaware limited liability company (the "Company"). B. Donnelley owns a fifty-three percent (53%) membership interest (the "Donnelley Membership Interest") in the Company which, together with the APIL Partners Membership Interest, represents one hundred percent (100%) of the membership interests of the Company. C. Donnelley desires to contribute to APIL Partners, and APIL Partners desires to accept from Donnelley, the Donnelley Membership Interest. D. In exchange for the contribution of the Donnelley Membership Interest, APIL Partners desires to grant to Donnelley, in perpetuity, the Revenue Participation Interests (as hereinafter defined) and Donnelley desires to accept and acquire the Revenue Participation Interests. Accordingly, the Parties hereto hereby agree as follows: I. DEFINITIONS 1.1. "Advertiser Contract Amount" means the monthly dollar amount of advertising contracts sold by Agency for advertisements in the Directories multiplied by the number of months in each Directory's issue life. 1.2. "Affiliate" of any Person means any other Person directly or indirectly Controlling, directly or indirectly Controlled by, or under common direct or indirect Control with such Person. "Control" in this definition has the same meaning as "control" in Rule 12b-2(f) promulgated under the Securities Exchange Act of 1934, as in effect on the effective date of this Agreement. 1.3. "Agency" means the DonTech II Partnership. 1.4. "Ameritech" means Ameritech Corporation, a Delaware Corporation. 1.5. "Directories" means the directories published on or after January 1, 1998 identified on the attached Schedules 1 and 2 and any other alphabetical or classified print directories published on or after January 1, 1998 by Publisher for primary distribution either (i) in whole or in part in Illinois or (ii) in the geographical area where the Northwest Indiana Directories are published for primary distribution on this Agreement's effective date; provided, however, that Directories shall not include Publisher's Illinois/Wisconsin or Indiana Industrial Purchasing Guide[Trademark] or any substantially similar successor publication. 1.6. "1997 Directory Revenue Participation Interest" means the dollar amount equal to 43.7% of the Advertiser Contract Amount for advertiser contracts submitted to Publisher in 1997 less allowances for (i) claims, (ii) bad debt and disconnects, and (iii) commissions payable to Agency under the Exclusive Sales Agency Agreement for sale of advertising. 1.7. "1998 Directory Revenue Participation Interest" means the dollar amount equal to 34.8% of the Advertiser Contract Amount for advertiser contracts submitted to Publisher in 1998 less allowances for (i) claims, (ii) bad debt and disconnects, and (iii) commissions payable to Agency under the Exclusive Sales Agency Agreement for sale of advertising. 1.8. "1999 & Beyond Directory Revenue Participation Interest" means the dollar amount equal to 35.9% of the Advertiser Contract Amount for advertiser contracts submitted to Publisher in 1999 or beyond less allowances for (i) claims, (ii) bad debt and disconnects, and (iii) commissions payable to Agency under the Exclusive Sales Agency Agreement for sale of advertising. 1.9. "Exclusive Sales Agency Agreement" means the Exclusive Sales Agency Agreement between APIL Partners Partnership and the DonTech II Partnership dated August 19, 1997. 1.10. "Monthly Advertiser Contract Amount" means the dollar amount payable in a given month by advertisers for advertising in all the Directories, without any adjustment for claims. 1.11. "Monthly Street Address Directory Contract Amount" means the dollar amount payable in a given month by purchasers or lessees of Street Address Directories, net of actual claims and returns relating to purchases or leases. 1.12. "Northwest Indiana Directories" means the directories listed on Schedule 2 attached to the Exclusive Sales Agency Agreement. 1.13. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or any governmental agency or authority. 1.14. "Publisher" means the APIL Partners Partnership. 1.15. "Revenue Participation Interests" means collectively the 1997, 1998, and 1999 & Beyond Directory Revenue Participation Interests and the 1997, 1998, and 1999 & Beyond Street Address Directory Revenue Participation Interests. 1.16. "Sales Cycle Year" is the period between the publication of the first Directory in a calendar year and the publication of the last-published Directory (i.e. each Directory scheduled to be published during such Sale Cycle Year having been published once). 1.17. "Street Address Directories" means the (i) street address directories published on or after January 1, 1998 identified on Schedule 3 and (ii) any other street address directories of Publisher published on or after January 1, 1998 covering in whole or in part the geographic area covered by the Street Address Directories on the attached Schedule 3 on this Agreement's effective date. 1.18. "Street Address Directory Contract Amount" means the monthly dollar amount payable on Street Address Directory lease or purchase contracts sold by Agency, net of actual claims and returns relating to such contracts, multiplied by the number of months in each such contract's term. 1.19. "1997 Street Address Directory Revenue Participation Interest" means the dollar amount equal to 43.7% of the Street Address Directory Contract Amount for sale or lease contracts submitted to Publisher in 1997 less the commission payable to Agency under the Exclusive Sales Agency Agreement for sale or lease of Street Address Directories. 1.20. "1998 Street Address Directory Revenue Participation Interest" means the dollar amount equal to 34.8% of the Street Address Directory Contract Amount for sale or lease contracts submitted to Publisher in 1998 less the commission payable to Agency under the Exclusive Sales Agency Agreement for sale or lease of Street Address Directories. 1.21. "1999 and Beyond Street Address Directory Revenue Participation Interest" means the dollar amount equal to 35.9% of the Street Address Directory Contract Amount for sale or lease contracts submitted to Publisher in 1999 or beyond less the commission payable to Agency under the Exclusive Sales Agency Agreement for sale or lease of Street Address Directories. II. CONTRIBUTION AND EXCHANGE 2.1. Contribution of Donnelley Membership Interest. Donnelley hereby contributes, assigns, transfers, conveys and delivers to APIL Partners all of Donnelley's right, title and interest in and to the Donnelley Membership Interest. Donnelley represents and warrants that it is the sole and unconditional owner of, and has good title to, the Donnelley Membership Interest, free and clear of all liabilities, obligations, pledges, security interests, liens, contractual commitments, claims, defenses, set offs, equities, encumbrances or charges (collectively "Liens"). 2.2. Grant of the Revenue Participation Interests. In exchange for the contribution of the Donnelley Membership Interest, APIL Partners hereby unconditionally and irrevocably grants to Donnelley the Revenue Participation Interests in perpetuity. Beginning on this Agreement's effective date, Donnelley has an unconditional and irrevocable right to: (a) the 1997, 1998, and 1999 & Beyond Directory Revenue Participation Interests upon submission by Agency (pursuant to the Exclusive Sales Agency Agreement) to Publisher, or its designee, of an advertising contract meeting Publisher's rates, terms, publishing, and credit standards for placement of an advertisement in the Directories; and (b) the 1997, 1998, and 1999 & Beyond Street Address Directory Revenue Participation Interests upon submission by Agency (pursuant to the Exclusive Sales Agency Agreement) to Publisher of a purchase or lease contract meeting Publisher's rates, terms, and credit policy for purchase or lease of Street Address Directories. 2.3. Calculation and Payment of the Directory Revenue Participation Interest. (a) Beginning in January 1998 and continuing each month thereafter, APIL Partners shall calculate the 1997, 1998, and 1999 & Beyond Directory Revenue Participation Interests payable to Donnelley based on the Monthly Advertiser Contract Amount as follows: (i) On the last day of each month, APIL Partners or its designee shall determine the Monthly Advertiser Contract Amount; (ii) On the last day of each month, APIL Partners shall also determine that portion of the Monthly Advertiser Contract Amount that is payable on advertiser contracts submitted to Publisher during 1997 (the "1997 Monthly Advertiser Contract Amount"); (iii) On the last day of each month, APIL Partners shall also determine that portion of the Monthly Advertiser Contract Amount that is payable on advertiser contracts submitted to Publisher during 1998 (the "1998 Monthly Advertiser Contract Amount"); (iv) On the last day of each month, APIL Partners shall also determine that portion of the Monthly Advertiser Contract Amount that is payable on advertiser contracts submitted to Publisher during 1999 and beyond (the "1999 & Beyond Monthly Advertiser Contract Amount"); (v) APIL Partners shall then multiply the 1997, 1998 and 1999 & Beyond Monthly Advertiser Contract Amounts by .024, representing the allowance for claims, and respectively subtract the amounts equal to the products of such multiplication from the 1997, 1998, and 1999 & Beyond Monthly Advertiser Contract Amounts; (vi) APIL Partners shall also multiply the 1997, 1998, and 1999 & Beyond Monthly Advertiser Contract Amounts by .037, representing the allowance for bad debt and disconnects, and respectively subtract the amounts equal to the products of such multiplication from the 1997, 1998, and 1999 & Beyond Monthly Advertiser Contract Amounts; (vii) APIL Partners shall then subtract from the 1997, 1998, 1999 & Beyond Monthly Advertiser Contract Amounts the commission payable to Agency under the Exclusive Sales Agency Agreement for sale of advertising in the Directories; (viii) After determining the net 1997, 1998, and 1999 & Beyond Monthly Advertiser Contract Amounts derived from the calculations in Section 2.3(a)(ii) - (vii) above, APIL Partners shall multiply the net 1997 Monthly Advertiser Contract Amount by 43.7%, the net 1998 Monthly Advertiser Contract Amount by 34.8%, and the net 1999 & Beyond Monthly Advertiser Contract Amount by 35.9%, and remit the sum of the amounts equal to the products of these calculations to Donnelley by wire transfer no later than the 20th day of the month following the determination of the Monthly Advertiser Contract Amount as set forth in Section 2.3(a)(i). (b) Schedule 4 attached hereto illustrates the calculations to be made pursuant to Section 2.3(a). (c) To the extent Agency sells advertising for a Directory or Directories that Publisher does not publish within six months of the publication date scheduled in the Annual Business Plan, as described in the Exclusive Sales Agency Agreement, and the advertisements are not published in other Directories within such six month period, APIL Partners shall pay Donnelley and Donnelley has an unconditional and irrevocable right to 1997, 1998, 1999 & Beyond Directory Revenue Participation Interests for each non-published advertisement. APIL Partners shall calculate the 1997, 1998, 1999 & Beyond Directory Revenue Participation Interests for each non-published advertisement in a manner analogous to that provided in Section 2.3(a), and as shown on Schedule 4 attached hereto, and shall pay Donnelley on the 10th day of the seventh month following the publication date for the Directory scheduled in the Annual Business Plan. (d) The Parties agree that a true-up of (i) claims and (ii) bad debt and disconnects will be made for the Directories on a Sales Cycle Year basis for claims and a calendar-year basis for bad debts and disconnects beginning with the Directories published in 1998 and for the Directories published in each succeeding year. At this true-up, the dollar amount of actual (i) claims and (ii) bad debt and disconnects will be compared to the allowances of 2.4% and 3.7% referred to in Section 2.3(a) above. If the respective actual dollar value of either actual (i) claims or (ii) bad debt and disconnects is less than the respective allowance, APIL Partners shall remit the amount equal to the difference multiplied by .359 to Donnelley within 30 days of such determination. If (i) actual claims or (ii) bad debt and disconnects exceed their respective 2.4% and 3.7% allowances, Donnelley does not owe any payment. This true-up calculation will be made within 30 days following the end of the Sales Cycle Year, in the case of claims, and the calendar year, in the case of bad debts and disconnects, during which the actual claims and bad debts and disconnects occur. This computation will be made by a method and with data analogous to the method and data reflected on the spreadsheets attached to the Exclusive Sales Agency Agreement as Schedule 4. (e) For purposes of calculating the amount to be remitted to Donnelley pursuant to Section 2.3(a) by February 20, 1999, and by February 20 each year thereafter, APIL Partners shall determine the dollar amount, if any, that Agency has paid to Publisher pursuant to Section 13(b) of the Exclusive Sales Agency Agreement during the preceding calendar year and shall then determine the respective amounts Agency has paid to Publisher in connection with advertiser contracts submitted in 1997, 1998 and 1999. APIL Partners shall: (i) multiply the amount paid in connection with contracts submitted in 1997 by 43.7%; (ii) multiply the amount paid in connection with contracts submitted in 1998 by 34.8%; (iii) multiply the amount paid in connection with advertiser contracts submitted in 1999 and beyond by 35.9%; and (iv) then subtract the amounts equal to the products of these calculations from the January 1999 Monthly Advertiser Contract Amount and from the January Monthly Advertiser Contract Amount for each year thereafter. 2.4. Calculation and Payment of the Street Address Directory Revenue Participation Interest. (a) Beginning in January 1998 and continuing each month thereafter, APIL Partners shall calculate the 1997, 1998, and 1999 & Beyond Street Address Directory Revenue Participation Interests payable to Donnelley based on the Monthly Street Address Directory Contract Amount as follows: (i) On the last day of each month, APIL Partners or its designee shall determine the Monthly Street Address Directory Contract Amount; (ii) On the last day of each month, APIL Partners shall also determine that portion of the Monthly Street Address Directory Contract Amount that is payable on lease or purchase contracts submitted to Publisher during 1997 (the "1997 Monthly Street Address Directory Contract Amount"); (iii) On the last day of each month, APIL Partners shall also determine that portion of the Monthly Street Address Directory Contract Amount that is payable on lease or purchase contracts submitted to Publisher during 1998 (the "1998 Monthly Street Address Directory Contract Amount"); (iv) On the last day of each month, APIL Partners shall also determine that portion of the Monthly Street Address Directory Contract Amount that is payable on lease or purchase contracts submitted to Publisher during 1999 (the "1999 & Beyond Monthly Street Address Directory Contract Amount"); (v) APIL Partners shall then subtract from the 1997, 1998, 1999 & Beyond Monthly Street Address Directory Contract Amounts the commission payable to Agency under the Exclusive Sales Agency Agreement for sale or lease of Street Address Directories; and (vi) After determining the net 1997, 1998, and 1999 & Beyond Monthly Street Address Directory Contract Amounts derived from the calculation in Section 2.4(a)(i) - (v), APIL Partners shall then multiply the net 1997 Monthly Street Address Directory Contract Amount by 43.7%, the net 1998 Monthly Street Address Directory Contract Amount by 34.8%, and the net 1999 & Beyond Monthly Street Address Directory Contract Amount by 35.9%. APIL Partners shall remit the sum of the amounts equal to the products of the multiplications described in this Section 2.4(a)(vi) to Donnelley by wire transfer no later than the 20th day of the month following determination of the Monthly Street Address Directory Contract Amount. (b) Schedule 5 attached hereto illustrates the calculations made pursuant to Section 2.4(a). (c) To the extent Agency procures a purchase or lease of a Street Address Directory that Publisher does not publish or update within six months of the publication date scheduled in the Annual Business Plan, as described in the Exclusive Sales Agency Agreement, APIL Publishers shall pay Donnelley and Donnelley has an unconditional and irrevocable right to, the 1997, 1998, 1999 & Beyond Street Address Directory Revenue Participation Interests for each non-published or -updated Street Address Directory. APIL Partners shall calculate the 1997, 1998, 1999 & Beyond Street Address Directory Revenue Participation Interests based on the Street Address Directory Contract Amount for each non-published or -updated Street Address Directory in manner analogous to that provided in Section 2.4(a), and as shown in Schedule 5 attached hereto, and shall pay Donnelley on the 10th day of the seventh month following the publication or update date scheduled in the Annual Business Plan. 2.5. Exclusion of New Directories and Street Address Directories. Notwithstanding anything contained herein to the contrary, it is expressly agreed that in determining the Revenue Participation Interests and the payments thereof pursuant to Sections 2.2, 2.3, and 2.4 hereof, the Advertiser Contract Amount, the Monthly Advertiser Contract Amount, the Street Address Directory Contract Amount, and the Monthly Street Address Directory Contract Amount shall not apply to Directories published on or after January 1, 1998 by APIL Partners, Ameritech or any of their respective Affiliates for primary distribution in areas where Directories are not published for primary distribution on this Agreement's effective date or Street Address Directories published on or after January 1, 1998 by APIL Partners, Ameritech or any of their respective Affiliates in geographic areas not covered by the Street Address Directories on this Agreement's effective date. 2.6. Interest for Non-Payment. In the event that any Revenue Participation Interests payment is not paid within five (5) business days when due the overdue amount shall bear interest from the original due date to the payment date at the prime rate of interest as reported by Citibank, N.A. (the "Rate") plus two (2%) percent until paid. III. MAINTENANCE OF BOOKS AND RECORDS; AUDITS 3.1. Maintenance of Books and Records; Audits. (a) APIL Partners shall prepare and shall cause the Company to maintain complete and accurate books of account and records (specifically including, without limitation, the originals or copies of documents supporting entries in the books of account) covering all transactions arising out of or relating to this Agreement, except such books and records as may be maintained by Donnelley and DonTech II, in such manner as will allow Donnelley's accountants to audit such books of account and records at Donnelley's expense in accordance with generally accepted auditing standards. Upon written request to APIL Partners, Donnelley and its duly authorized representatives shall have the right, during mutually agreeable regular business hours, for the duration of this Agreement, to audit APIL Partners' and the Company's books of account and records and examine all other documents and material in the possession or under the control of APIL Partners or the Company with respect to the subject matter and the terms of this Agreement, including, without limitation, invoices, credits and collections documents. All such books of account, records and documents shall be kept available by APIL Partners for inspection for a period of not less than six (6) years after the end of the each applicable year to which such records relate. Donnelley's right to inspect and audit shall lapse and Donnelley shall be deemed to have waived the same and acknowledged the accuracy of payments made with respect to any year of this Agreement, unless such inspection and audit is commenced within two (2) years following the expiration of such year. (b) If any audit of the Company's or APIL Partners' books and records discloses that the Company's and APIL Partners' payments were less than the amount which should have been paid by an amount equal to five (5%) percent or more of the payments actually made with respect to the Revenue Participation Interests occurring during the period in question, APIL Partners shall reimburse Donnelley for the cost of such audit and shall make all payments required to be made to eliminate any discrepancy revealed by such audit within fifteen (15) days after Donnelley's demand therefor, together with interest from the original due date to the payment date at the Rate plus two (2%) percent. (c) If any such audit discloses that APIL Partners' payments were less than the amount which should have been paid by an amount equal to less than five (5%) percent or less of the payments actually made during the period in question, APIL Partners shall make all payments required to be made to eliminate any discrepancy revealed by such audit within fifteen (15) days after Donnelley's demand therefor together with interest from the original due date to the payment date at the Rate. (d) If any such audit discloses that APIL Partners' payments were more than the amount which should have been paid during the period in question, APIL Partners shall be entitled to offset such amount, together with interest at the Rate from the date such audit discloses such overpayment, against the next month's payment of the Revenue Participation Interests. IV. COVENANTS OF APIL PARTNERS AND THE COMPANY 4.1. Notice of Event of Default. For as long as this Agreement remains in effect, APIL Partners shall give prompt written notice to Donnelley of the occurrence of any Event of Default hereunder; provided, however, that if any such Event of Default has been promptly remedied or APIL Partners is diligently attempting to remedy such Event of Default (including the securing of waivers thereof), then the failure to give notice hereunder shall not in and of itself constitute an Event of Default hereunder. 4.2. Mergers, Consolidations, Liquidation. For as long as this Agreement remains in effect, neither APIL Partners nor the Company shall, without the prior written consent of Donnelley, permit the Company to (a) be merged or consolidated with or into any other entity, except any merger or consolidation where the Company is the surviving entity of such merger or consolidation or (b) be liquidated, wound up or dissolved, unless immediately thereafter APIL Partners establishes or employs another entity as a successor publisher to the Company and provides Donnelley with evidence, satisfactory to Donnelley, that such other entity will be bound by all of the terms and provisions of this Agreement. V. EVENTS OF DEFAULT 5.1. Events of Default. (a) Each of the following shall constitute a "Default" hereunder and the occurrence of any one or more of the following events (regardless of the reason therefor) shall constitute an "Event of Default" hereunder: (i) failure by APIL Partners to pay any Revenue Participation Interests payment after the same shall be due and payable under the terms of this Agreement and which continues unpaid for a period of thirty (30) days after notice of such default is given by Donnelley to APIL Partners and the Company; (ii) any material default by APIL Partners in the due and punctual performance or observance of any of the covenants and agreements of APIL Partners contained in this Agreement which continues unremedied for a period of thirty (30) days after notice of such default is given by Donnelley to APIL Partners; or (iii) if (A) APIL Partners shall (1) apply for or consent to the appointment of a receiver, trustee, or liquidator, of all or a substantial part of APIL Partners' assets, (2) have been adjudicated a bankrupt or insolvent, or file a voluntary petition in bankruptcy, or admit its inability to pay its debts as they come due, (3) make a general assignment for the benefit of creditors, (4) file a petition or answer seeking reorganization or arrangement with creditors or otherwise take advantage of any insolvency law, or (5) file an answer admitting the material allegations, or consent to, or default in answering the petition filed against APIL Partners in any bankruptcy, reorganization, or insolvency proceedings; or (B) an order, judgment, or decree shall be entered by any court of competent jurisdiction approving a petition seeking reorganization of APIL Partners or an arrangement with creditors (or any call of creditors) of APIL Partners or appointing a receiver, trustee, or liquidator of APIL Partners or of all or a substantial part of the assets of APIL Partners, and such order, judgment, or decree shall continue unstayed and in effect for any period of 60 consecutive days. (b) Upon the occurrence of any such Event of Default, Donnelley may, at any time after the expiration of any cure periods applicable thereto, terminate this Agreement by written notice to APIL Partners, and upon payment of the sum of $100, reacquire all of its right, title and interest in and to the Donnelley Membership Interest. VI. MISCELLANEOUS 6.1. Assignment. This Agreement is binding upon and will inure to the benefit of the successors and assigns of the Parties. Neither Party may assign its rights and obligations under this Agreement without the other Party's consent, which may be granted in the sole discretion of such other Party; provided, however, that Donnelley, in its sole discretion, may assign its rights under this Agreement to a third party and that such assignee will have all of the rights of Donnelley under this Agreement and that certain Master Agreement, dated August 19, 1997, by and among Donnelley, The Dun & Bradstreet Corporation, the AM-DON Partnership, a/k/a DonTech, DonTech II, Ameritech Publishing, Inc., Ameritech Publishing of Illinois, Inc., Ameritech, the Company and APIL Partners (the "Master Agreement"), including the right to bring an action directly against the other Parties and their respective Affiliates for breach of their obligations under this Agreement and the Master Agreement. 6.2. Amendments. No amendment to this Agreement shall be effective unless it is in writing and signed by each of the Parties hereto. No waiver of any term or condition hereunder shall be effective unless it is in writing and signed by the Party against whom such waiver is to be enforced. 6.3. Notices. The Parties shall send all notices or consents that are required or permitted under this Agreement as follows (unless such addresses are modified by any of the Parties). Notices, consents, or communications shall have been deemed duly given if delivered in person, by facsimile or mailed by certified or registered mail, return receipt requested and postage prepaid, as follows: (a) if to APIL Partners, to President Ameritech Publishing, Inc. 100 E. Big Beaver Troy, Michigan 48083 FAX (248) 534-7227 with a copy to: General Counsel Ameritech Publishing, Inc. 100 E. Big Beaver Troy, Michigan 48083 FAX (248) 534-7227 (b) If to Donnelley, to: Chief Executive Officer The Reuben H. Donnelley Corporation One Manhattanville Road Purchase, New York 10577 FAX (914) 933-6899 General Counsel The Reuben H. Donnelley Corporation One Manhattanville Road Purchase, New York 10577 FAX (914) 933-6844 6.4. Counterparts. This Agreement may be executed in one or more counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts shall constitute but one agreement. 6.5. Entire Agreement. This Agreement, including the attached Schedules 1 through 5, and the Master Agreement constitute the entire agreement and understanding among the Parties concerning the subject matter of this Agreement and supersede all prior negotiations and proposed agreements or understandings. 6.6. Validity. The invalidity or unenforceability of any term or provision of this Agreement does not affect the validity or enforceability of any of the remaining terms or provisions of this Agreement unless the provision found to be invalid is essential to the primary purposes of this Agreement. 6.7. Specific Performance. APIL Partners and the Company acknowledge and agree that Donnelley could be irreparably harmed in the event that the provisions of Section 5.1 hereof are not performed in accordance with their specific terms. Accordingly, APIL Partners and the Company agree that Donnelley is entitled to an injunction or injunctions to enforce specifically the provisions of Section 5.1 hereof in any action instituted in any court of competent jurisdiction, in addition to any other remedy to which Donnelley may be entitled at law or in equity. 6.8. No Waiver. Any of the terms and conditions of this Agreement may be waived at any time and from time to time in writing by the Party entitled to the benefit thereof without affecting any other terms and conditions of this Agreement. The waiver by either Party of a breach of any provision of this Agreement will not operate or be construed as a waiver of any subsequent breach. Any waiver must be made in writing and may not be inferred from a failure to assert any right that could have been asserted. 6.9. Costs of Collection. If Donnelley is required to commence suit under this Agreement following an Event of Default, Donnelley shall be entitled to collect from APIL Partners and the Company reimbursement of its reasonable attorneys' fees and expenses including, without limitation, expenses as may be incurred by Donnelley in collecting or attempting to collect any amount due hereunder. 6.10. No Set-Off. The obligations of APIL Partners and the Company under this Agreement are absolute and not subject to any right of set-off, counterclaim, recoupment or defenses against Donnelley of any kind whatsoever. 6.11. Governing Law. This Agreement shall be deemed to have been executed and delivered within the State of Illinois, and shall in all respects be interpreted, enforced and governed by the laws of the State of Illinois, irrespective of choice of law principles to the contrary. 6.12. Interpretation. (a) The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (b) No provision of this Agreement shall be interpreted in favor of, or against, any of the Parties hereto by reason of the extent to which any such Party or its counsel participated in the drafting thereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof or thereof. (c) All references to "$" or dollar amounts shall be to lawful currency of the United States of America. IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the date first written above. APIL PARTNERS PARTNERSHIP By: _______________________________________ Peter J. McDonald Title: President, Ameritech Publishing of Illinois, Inc. By: _________________________________________ Peter J. McDonald Title: President, Ameritech Publishing, Inc. THE REUBEN H. DONNELLEY CORPORATION By: _________________________________________ Name: Frank R. Noonan Title: President and Chief Executive Officer EXECUTED AND DELIVERED IN RESPECT OF THOSE OBLIGATIONS SET FORTH IN SECTION 4.2 DONTECH I PUBLISHING COMPANY, LLC By: _______________________________ Name: Bruce Disbrow Title: President EX-10.12 8 EXHIBIT 10.12 MASTER AGREEMENT This Master Agreement ("Master Agreement"), executed as of August 19, 1997, is entered into by and among THE REUBEN H. DONNELLEY CORPORATION, a Delaware corporation ("Donnelley"), THE DUN & BRADSTREET CORPORATION, a Delaware corporation ("D&B"), THE AM-DON PARTNERSHIP, a/k/a DONTECH, a general partnership organized under the Illinois Uniform Partnership Act ("DonTech I"), DONTECH II, a general partnership organized under the Illinois Uniform Partnership Act, AMERITECH PUBLISHING, INC., a Delaware corporation ("API"), AMERITECH PUBLISHING OF ILLINOIS, INC., a Delaware corporation ("API/IL"), AMERITECH CORPORATION, a Delaware corporation ("Ameritech"), DONTECH I PUBLISHING COMPANY LLC, a Delaware limited liability company ("LLC"), and THE APIL PARTNERS PARTNERSHIP, a general partnership organized under the Illinois Uniform Partnership Act ("APIL Partners"), (collectively, the "Parties"; individually, a "Party"). RECITALS WHEREAS, DonTech I is a general partnership between API/IL and Donnelley organized under the Illinois Uniform Partnership Act that now publishes and until December 31, 1997 will publish for distribution classified telephone directories in the areas served by Ameritech Illinois and the Northwest Indiana Directories; and WHEREAS, API/IL and Donnelley have formed DonTech II, a general partnership organized under the Illinois Uniform Partnership Act, to engage in, among other things, the business of directory advertising sales for the Directories; and WHEREAS, APIL Partners and DonTech II have entered into an Exclusive Sales Agency Agreement, and the parties thereto desire the term of such Exclusive Sales Agency Agreement to be perpetual; and WHEREAS, DonTech I has formed LLC and contributed to LLC certain rights and assets relating to its activities as the publisher of directories (collectively, the "Publishing Rights Assets") in exchange for all of the membership interest of LLC; and WHEREAS, DonTech I has distributed its membership interest in LLC to API/IL and to Donnelley; and WHEREAS, APIL Partners and Donnelley have entered into a Revenue Participation Agreement pursuant to which Donnelley has contributed its membership interest in LLC to APIL Partners in exchange for the Revenue Participation Interests in perpetuity; and WHEREAS, as a result of the transactions contemplated by this Master Agreement and the separate agreements, assignments and other documents attached hereto, Donnelley and API/IL have amended the Amended and Restated Am-Don Partnership Agreement dated September 20, 1990 (the "DonTech I Partnership Agreement"); and WHEREAS, the Parties to this Master Agreement desire to enter into this Master Agreement and the agreements, assignments, and other documents referenced herein because the Parties believe that this Master Agreement and the referenced agreements, assignments, and other documents are for the benefit of the Parties; and NOW, THEREFORE, in accordance with the foregoing recitals, and in consideration of the mutual covenants and obligations set forth herein and other good and valuable consideration, including the execution of the various agreements, assignments and other documents referenced herein, the receipt and sufficiency of which are hereby acknowledged by each of the Parties to this Master Agreement, the Parties agree as follows: 1. Definitions (a) For purposes of this Master Agreement, the Parties incorporate by reference the definitions and other defined terms in the DonTech II Partnership Agreement, the Exclusive Sales Agency Agreement between APIL Partners and DonTech II dated August 19, 1997, and in the Revenue Participation Agreement between APIL Partners and Donnelley dated August 19, 1997. (b) "Directory Assets" means: (i) Accounts Receivable. All accounts receivable relating to the Directories and Street Address Directories. (ii) Information and Records. All books, records, files, databases, plans, specifications, technical information, confidential information, price lists, promotional materials, advertising copy and data, marketing research and information, competitive analysis, customer impact analysis, sales records, service records, customer lists and files (including customer credit, collection, deposit and complaint information) customer profiles, customer telephone number lists, other customer information and all other proprietary information that is used or held for use in, or relates to, in whole or in part, the Directories or Street Address Directories, and all financial records and files; (iii) Intellectual Property. All intellectual property that relates to, in whole or in part, or is used or held for use in, or relates to, in whole or in part, the Directories of Street Address Directories; and (iv) Other Assets. All customer relationships and goodwill; customer contact, service and other telephone numbers; telephone directory advertisements; and other intangible assets that relate to, in whole or in part, the Directories and the Street Address Directories. (c) "Directory Business" means the business of APIL Partners of publishing the Directories, the Street Address Directories and products, whether in electronic or print form, that replace in whole or in part the Directories and the Street Address Directories. (d) "Operative Agreements" means the documents identified in Section 3 of this Agreement and attached as exhibits hereto. 2. Representations and Warranties 2.1 Representations and Warranties of Ameritech, API, API/IL and APIL Partners. Ameritech, API, API/IL, and APIL Partners represent and warrant to Donnelley, D&B, DonTech I, and DonTech II as follows: (a) Due Formation, Incorporation, and Qualification. APIL Partners is an Illinois general partnership, duly formed, validly existing and in good standing under the laws of its state of formation, and has full partnership power and authority necessary to own, operate, lease or otherwise hold its properties and assets and to carry on its business as currently conducted. Each of Ameritech, API, and API/IL is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and is duly qualified to do business in those jurisdictions where the nature of its businesses or the property owned or leased by it requires such qualification, except where failure so to qualify would not have a material adverse effect on its ability to consummate the transactions contemplated herein. (b) Authority APIL Partners has all requisite partnership power and authority to enter into this Agreement and all Operative Agreements to which APIL Partners is a party and to consummate the transactions contemplated hereby or thereby. All partnership acts and other proceedings required to be taken by APIL Partners to authorize the execution, delivery and performance of this Agreement and the Operative Agreements to which APIL Partners is a party and the consummation of the transactions contemplated hereby or thereby have been duly and properly taken. This Agreement and the Operative Agreements to which APIL Partners is a party have been duly executed and delivered by APIL Partners and constitute valid and binding obligations of APIL Partners, enforceable against APIL Partners in accordance with their respective terms. Each of Ameritech, API, and API/IL has all requisite corporate power and authority to enter into this Agreement and the Operative Agreements to which it is a party and to consummate the transactions contemplated hereby or thereby. All corporate acts and other proceedings required to be taken by each of Ameritech, API, or API/IL to authorize the execution, delivery and performance of this Agreement and the Operative Agreements to which it is a party and the consummation of the transactions contemplated hereby or thereby have been duly and properly taken. This Agreement and the Operative Agreements to which any of Ameritech, API, or API/IL is a Party have been duly executed and delivered by each of Ameritech, API, or API/IL and constitute valid and binding obligations of such Party, enforceable against it in accordance with their respective terms. (c) No Conflicts. The execution and delivery of this Agreement and the Operative Agreements do not, and the consummation of the transactions contemplated hereby or thereby and compliance with the terms hereof will not (i) conflict with, or result in any violation of, (A) any provision of the organizational documents of Ameritech, API, API/IL, or APIL Partners, or (B) any judgment, order or decree, or statute, law, ordinance, rule or regulation applicable to Ameritech, API, API/IL, or APIL Partners or their assets, or (ii) violate or conflict with or result in a breach under, or require any consent or approval to be obtained from any party to, any contract to which Ameritech, API, API/IL, or APIL Partners is subject or is bound. Subject to the requirements of the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and the rules and regulations promulgated thereunder (the "HSR Act"), no consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency, commission or other governmental authority or instrumentality, domestic or foreign, is required to be obtained or made by or with respect to Ameritech, API, API/IL, or APIL Partners in connection with the execution and delivery of this Agreement or the Operative Agreements or the consummation by Ameritech, API, API/IL, or APIL Partners of the transactions contemplated hereby or thereby. 2.2 Representations and Warranties of D&B and Donnelley. D&B and Donnelley hereby represent and warrant to Ameritech, API, API/IL, LLC, APIL Partners, DonTech I and DonTech II as follows: (a) Due Formation, Incorporation and Qualification. Each of D&B and Donnelley is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware and is qualified to do business in those jurisdictions where the nature of its businesses or the property owned or leased by it requires such qualification, except where failure so to qualify would not have a material adverse effect on its ability to consummate the transactions contemplated herein. (b) Authority. Each of D&B and Donnelley has all requisite corporate power and authority to enter into this Agreement and the Operative Agreements to which it is a party and to consummate the transactions contemplated hereby or thereby. All corporate acts and other proceedings required to be taken by each of D&B and Donnelley to authorize the execution, delivery and performance of this Agreement and the Operative Agreements to which it is a party and the consummation of the transactions contemplated hereby or thereby have been duly and properly taken. This Agreement and the Operative Agreements to which either of D&B and Donnelley is a Party have been duly executed and delivered by each of D&B and Donnelley and constitute valid and binding obligations of such Party, enforceable against it in accordance with their respective terms. (c) No Conflicts. The execution and delivery of this Agreement and the Operative Agreements do not, and the consummation of the transactions contemplated hereby and thereby and in compliance with the terms hereof and thereof will not (i) conflict with, or result in any violation of, (A) any provision of the organizational documents of D&B or Donnelley or (B) any judgment, order or decree, or statute, law, ordinance, rule or regulation applicable to D&B or Donnelley or their assets, or (ii) violate or conflict with or result in a breach under, or require any consent or approval to be obtained from any party to, any contract to which D&B or Donnelley is subject or is bound. Subject to the requirements of the HSR Act, no consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency, commission or other governmental authority or instrumentality, domestic or foreign, is required to be obtained or made by or with respect to D&B or Donnelley in connection with the execution and delivery of this Agreement or the Operative Agreements or the consummation by D&B or Donnelley of the transactions contemplated hereby or thereby. 2.3 Representations and Warranties of DonTech I and DonTech II. DonTech I and DonTech II represent and warrant to Ameritech, API, API/IL, LLC, APIL Partners, D&B and Donnelley as follows: (a) Due Formation, Incorporation, and Qualification. Each of DonTech I and DonTech II is an Illinois general partnership, duly formed, validly existing and in good standing under the laws of its state of formation, and has full partnership power and authority necessary to own, operate, lease or otherwise hold its properties and assets and to carry on its business as currently conducted. (b) Authority Each of DonTech I and DonTech II has all requisite partnership power and authority to enter into this Agreement and all Operative Agreements to which it is a party and to consummate the transactions contemplated hereby or thereby. All partnership acts and other proceedings required to be taken by each of DonTech I and DonTech II to authorize the execution, delivery and performance of this Agreement and the Operative Agreements to which each of DonTech I and DonTech II is a party and the consummation of the transactions contemplated hereby or thereby have been duly and properly taken. This Agreement and the Operative Agreements to which each of DonTech I and DonTech II is a party have been duly executed and delivered by such Party and constitute valid and binding obligations of such Party, enforceable against it in accordance with their terms. (c) No Conflicts. The execution and delivery of this Agreement and the Operative Agreements do not, and the consummation of the transactions contemplated hereby or thereby and in compliance with the terms hereof will not (i) conflict with, or result in any violation of, (A) any provision of the organizational documents of DonTech I or DonTech II, or (B) any judgment, order or decree, or statute, law, ordinance, rule or regulation applicable to DonTech I or DonTech II or their assets, or (ii) violate or conflict with or result in a breach under, or require any consent or approval to be obtained from any party to, any contract to which DonTech I or DonTech II is subject or is bound. Subject to the requirements of the HSR Act, no consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency, commission or other governmental authority or instrumentality, domestic or foreign, is required to be obtained or made by or with respect to DonTech I or DonTech II in connection with the execution and delivery of this Agreement or the Operative Agreements or the consummation by DonTech I or DonTech II of the transactions contemplated hereby or thereby. 2.4 Representations and Warranties of LLC. LLC warrants to Ameritech, API, API/IL, APIL Partners, Donnelley, D&B, DonTech I, and DonTech II as follows: (a) Due Formation, Incorporation, and Qualification. LLC is a Delaware limited liability company, duly formed, validly existing and in good standing under the laws of its state of formation, and has full limited liability company power and authority necessary to own, operate, lease or otherwise hold its properties and assets and to carry on its business as currently conducted. (b) Authority LLC has all requisite limited liability company power and authority to enter into this Agreement and all Operative Agreements to which LLC is a party and to consummate the transactions contemplated hereby or thereby. All limited liability company acts and other proceedings required to be taken by LLC to authorize the execution, delivery and performance of this Agreement and the Operative Agreements to which LLC is a party and the consummation of the transactions contemplated hereby or thereby have been duly and properly taken. This Agreement and the Operative Agreements to which LLC is a party have been duly executed and delivered by LLC and constitute valid and binding obligations of LLC, enforceable against LLC in accordance with their terms. (c) No Conflicts. The execution and delivery of this Agreement and the Operative Agreements do not, and the consummation of the transactions contemplated hereby or thereby and in compliance with the terms hereof will not (i) conflict with, or result in any violation of, (A) any provision of the organizational documents of LLC, or (B) any judgment, order or decree, or statute, law, ordinance, rule or regulation applicable to LLC or its assets, or (ii) violate or conflict with or result in a breach under, or require any consent or approval to be obtained from any party to, any contract to which LLC is subject or is bound. Subject to the requirements of the HSR Act, no consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, is required to be obtained or made by or with respect to LLC in connection with the execution and delivery of this Agreement or the Operative Agreements or the consummation by LLC of the transactions contemplated hereby or thereby. 3. Operative Agreements Simultaneously with the execution and delivery of this Agreement, the applicable Parties shall deliver or cause to be delivered, the following: (a) the DonTech II Partnership Agreement in the form of Exhibit A executed and delivered by the Parties thereto; (b) the Exclusive Sales Agency Agreement in the form of Exhibit B executed and delivered by the Parties thereto; (c) evidence of the formation and organization of LLC by DonTech I; (d) evidence of the contribution by DonTech I of its right, title and interest in and to the Publishing Rights Assets to LLC; (e) evidence of the formation and organization of APIL Partners; (f) evidence of the distribution by DonTech I of its membership interests in LLC to API/IL and to Donnelley; (g) the Revenue Participation Agreement in the form of Exhibit C duly executed and delivered by the Parties thereto. All proceedings that shall be taken and all documents that shall be executed and delivered by the Parties on the date hereof shall be deemed to have been taken and executed simultaneously, and no proceeding shall be deemed taken nor any document executed and delivered until all have been taken, executed and delivered. 4. HSR Matters (a) Each of the Parties hereto agrees to prepare its respective Notification and Report Forms under the HSR Act (the "Forms") with respect to the transactions contemplated by this Agreement and the Operative Agreements, to cooperate with the other Parties in the preparation of such Parties' Forms and to file such Forms as promptly as possible after the date hereof and in any event not later than five business days following the date hereof. The Parties further agree to respond as promptly as practicable to any request for additional information made pursuant to the HSR Act. (b) The consummation of the transactions contemplated by this Agreement and the Operative Agreements is subject to the expiration of the applicable waiting period under the HSR Act, including any extension thereof. In the event that the expiration of such waiting period does not occur within 90 days following the date hereof, any Party shall have the right to terminate this Agreement and the Operative Agreements without any further liability or obligations to the other Parties hereof. 5. Grant of Exclusive Status (a) During the term of the Exclusive Sales Agency Agreement, Ameritech, on behalf of itself and its Affiliates, grants to DonTech II the exclusive right in perpetuity pursuant to the terms of the Exclusive Sales Agency Agreement, as it may be amended: (a) to solicit and sell local advertising for directories published on or after January 1, 1998 identified on Schedules 1 and 2 attached to the Exclusive Sales Agency Agreement and any other alphabetical or classified print directories published on or after January 1, 1998 by Ameritech or its Affiliates for primary distribution either (i) in whole or in part in Illinois or (ii) in the geographical area where the Northwest Indiana Directories are published for primary distribution on the effective date of the Exclusive Sales Agency Agreement; and (b) to sell or lease street address directories published on or after January 1, 1998 identified on Schedule 3 attached to the Exclusive Sales Agency Agreement and any other street address directories of Ameritech or its Affiliates published on or after January 1, 1998 covering in whole or in part the geographic area covered by the Street Address Directories identified in Schedule 3 attached to the Exclusive Sales Agency Agreement. Upon termination of the Exclusive Sales Agency Agreement, the obligations of Ameritech and its Affiliates under this Section 5(a) are of no further force and effect. (b) If, during the term of the Exclusive Sales Agency Agreement, Ameritech or an Affiliate of Ameritech, other than APIL Partners, publishes on or after January 1, 1998 any of the directories identified on Schedule 1 and 2 attached to the Exclusive Sales Agency Agreement or any other alphabetical or classified print directories published on or after January 1, 1998 for primary distribution (i) in whole or in part in Illinois or (ii) in the geographical area where the Northwest Indiana Directories are published for primary distribution on the effective date of the Sales Agency Agreement or publishes on or after January 1, 1998 the street address directories identified in Schedule 3 attached to the Exclusive Sales Agency Agreement or any other street address directories published on or after January 1, 1998 covering in whole or in part the geographic area covered by the street address directories identified on Schedule 3 attached to the Exclusive Sales Agency Agreement, upon either event, Ameritech or its Affiliate publishing such directories or street address directories shall assume the obligations of APIL Partners with respect to such directories or street address directories under the Exclusive Sales Agency Agreement, as it may be amended, with DonTech II. (c) During the term of the Revenue Participation Agreement, Ameritech, on behalf of itself and its Affiliates, grants to Donnelley the Revenue Participation Interests in perpetuity pursuant to the terms of the Revenue Participation Agreement, as it may be amended. Upon the termination of the Revenue Participation Agreement, the obligations of Ameritech and its Affiliates under this Section 5(c) are of no further force and effect. (d) If, during the term of the Exclusive Sales Agency Agreement, Ameritech or an Affiliate of Ameritech, other than APIL Partners, publishes on or after January 1, 1998 any of the directories identified on Schedule 1 and 2 attached to the Exclusive Sales Agency Agreement or any other alphabetical or classified print directories published on or after January 1, 1998 for primary distribution (i) in whole or in part in Illinois or (ii) in the geographical area where the Northwest Indiana Directories are published for primary distribution on the effective date of the Sales Agency Agreement or publishes on or after January 1, 1998 the street address directories identified in Schedule 3 attached to the Exclusive Sales Agency Agreement or any other street address directories published on or after January 1, 1998 covering in whole or in part the geographic area covered by the street address directories identified on Schedule 3 attached to the Exclusive Sales Agency Agreement, upon either event, Ameritech or its Affiliate publishing such directories or street address directories shall assume the obligations of APIL Partners with respect to such directories or street address directories under the Revenue Participation Agreement, as it may be amended, with Donnelley. 6. Non-Compete (a) During the term of the Exclusive Sales Agency Agreement, neither D&B nor its Affiliates will undertake to solicit, sell, market or publish an alphabetical or classified print directory or directories, other than the Directories, for primary distribution in any area where the Directories are primarily distributed or where the directories on Schedule 5 attached to the Exclusive Sales Agency Agreement are primarily distributed on the effective date of the Exclusive Sales Agency Agreement. (b) During the term of the Exclusive Sales Agency Agreement, neither D&B nor its Affiliates will undertake to solicit, market, sell, publish, or lease a street address directory or directories, other than the Street Address Directories, covering in whole or in part the geographic areas covered by the Street Address Directories. (c) Upon the earlier of (i) the termination of the Exclusive Sales Agency Agreement or (ii) Donnelley ceasing to be an Affiliate of D&B, this non-compete provision shall be considered terminated and of no further force and effect. (d) Notwithstanding Section 6(c)(ii) above, in the event that Donnelley ceases to be an Affiliate of D&B, the non-compete provisions in Sections 6(a) and 6(b) shall remain binding upon Donnelley and its Affiliates. 7. Good Faith of Ameritech and its Affiliates (a) APIL Partners and Ameritech on behalf of themselves and their respective Affiliates shall take no action with respect to marketing (which includes without limitation pricing, scoping, design, branding, and scheduling), manufacturing, and distributing the Directories, the Street Address Directories, and any products, whether in electronic or print form, that replace in whole or in part the Directories or the Street Address Directories (collectively "Publishing Activities") that favors the interests of Ameritech and its Affiliates over the interests of the Directory Business. APIL Partners and Ameritech, on behalf of themselves and their respective Affiliates, acknowledge that damages are not an adequate remedy for the breach of the fiduciary duties in this Section 7 and that Donnelley and DonTech II are entitled to equitable relief to enforce their respective rights under this Section. Unless specifically prohibited in the DonTech II Partnership Agreement, the Exclusive Sales Agency Agreement, or the Revenue Participation Agreement, nothing in this Section is meant to prohibit Ameritech or any of its Affiliates from selling its assets to non-Affiliates or to prohibit the merger, sale or consolidation of Ameritech or its Affiliates, subject to Donnelley's rights under Section 9 hereof. (b) APIL Partners and Ameritech, on behalf of themselves and their respective Affiliates, hereby covenant and agree that during the term of the Revenue Participation Agreement executed and delivered in accordance with Section 3 hereof, they will maintain LLC as a separate entity and will not cause LLC to (i) merge or consolidate with any other entity, unless LLC is the surviving entity of such merger or consolidation or (ii) dissolve, liquidate or wind-up LLC. 8. Payment Warranties (a) Ameritech warrants that APIL Partners, any successor in interest to APIL Partners under the Revenue Participation Agreement, or any Affiliate of Ameritech that assumes the obligations in the Revenue Participation Agreement, as it may be amended, will pay Donnelley or its assignee (such assignment being in Donnelley's sole discretion) the Revenue Participation Interests and Ameritech assumes such payment obligations if and to the extent that APIL Partners, any successor in interest to APIL Partners, or any Affiliate of Ameritech that assumes the obligations in the Revenue Participation Agreement, as it may be amended, fails to pay the Revenue Participation Interests as required by the Revenue Participation Agreement to Donnelley or its assignee. It is further agreed that Donnelley, in its sole discretion, may assign its rights under this Section 8(a) and that such assignee may bring an action directly against APIL Partners, Ameritech, or any of their respective Affiliates that breaches the obligations in this Section 8(a). (b) Ameritech further warrants that APIL Partners, any successor in interest to APIL Partners under the Exclusive Sales Agency Agreement, or any Affiliate of Ameritech that assumes the obligations in the Exclusive Sales Agency Agreement, as it may be amended, will pay DonTech II its commissions for sale of advertising in the Directories and sale or lease of Street Address Directories as provided in the Exclusive Sales Agency Agreement and Ameritech assumes such payment obligations if and to the extent that APIL Partners, any successor in interest to APIL Partners, or any Affiliate of Ameritech that assumes the obligations in the Exclusive Sales Agency Agreement, as it may be amended, fails to pay the commissions as required by the Exclusive Sales Agency Agreement. 9. Asset Disposition (a) In the event that APIL Partners, Ameritech or any of their respective Affiliates discontinues publication of any of the Directories or Street Address Directories as a result of any sale, exchange, lease, transfer or other disposition of any of the Directories, Street Address Directories or Directory Assets, other than to an Affiliate of APIL Partners or Ameritech, (such event, an "Asset Disposition"), then APIL Partners and Ameritech, on behalf of themselves and their respective Affiliates, will cause to be paid to Donnelley an amount equal to fifty percent (50%) of the proceeds received by APIL Partners, Ameritech or any of their respective Affiliates (the "Ameritech Disposition Party") in connection with such Asset Disposition. The Ameritech Disposition Party causing such Asset Disposition, as defined in this Section 9(a), shall notify Donnelley of the Asset Disposition upon the execution of documents causing such Asset Disposition and provide a copy of such documents to Donnelley within five (5) days of their execution and make such payment to Donnelley within ten (10) days of the closing on such Asset Disposition. (b) In the event that an Asset Disposition also involves the sale of other assets, then APIL Partners and Ameritech, on behalf of themselves and their respective Affiliates, will cause to be paid to Donnelley an amount equal to fifty percent (50%) of the fair market value of the Directories, Street Address Directories, and Directory Assets included in such Asset Disposition, as determined pursuant to Sections 9(d) and (e). (c) In the event that APIL Partners, Ameritech or any of their respective Affiliates enters into an agreement with a third party pursuant to which APIL Partners, Ameritech or any of their respective Affiliates agrees to cease publication of one or more Directories or Street Address Directories for a period of 24 months or more, then such agreement shall be deemed to be an "Asset Disposition" of such Directories, Street Address Directories, and the Directory Assets associated therewith and upon cessation of publication thereof, APIL Partners and Ameritech, on behalf of themselves and their respective Affiliates, will cause to be paid to Donnelley an amount equal to fifty percent (50%) of the fair market value of such Directories, Street Address Directories, and the Directory Assets associated therewith, as determined pursuant to Sections 9(d) and (e). (d) (i) In the event that an Asset Disposition as defined in Sections 9(b) or (c) occurs, the Ameritech Disposition Party shall notify Donnelley of the Asset Disposition upon the execution of documents causing such Asset Disposition and provide a copy of such documents to Donnelley within five (5) days of their execution. At the same time such documents are sent to Donnelley, the Ameritech Disposition Party shall describe the assets subject to the Asset Disposition with reasonable particularity and state the fair market value of the assets subject to the Asset Disposition (the "FMV Notice"). (ii) Following Donnelley's receipt of such documents and the FMV Notice, Donnelley and the Ameritech Disposition Party shall attempt to agree upon the fair market value in connection with such Asset Disposition. If no agreement is reached on the fair market value within 20 days of Donnelley's receipt of the FMV Notice, Donnelley may have the fair market value (as determined pursuant to Section 9(e)) of the assets subject to the Asset Disposition determined by delivering a Notice to cause such determination (the "Determination Notice") to the Ameritech Asset Disposition Party within twenty-five (25) days of Donnelley's receipt of the FMV Notice. If no Determination Notice is received by the Ameritech Asset Disposition Party within such time period, the Ameritech Disposition Party shall pay to Donnelley an amount equal to fifty percent (50%) of the fair market value of the assets subject to the Asset Disposition, as stated in the FMV Notice, within thirty days (30) days of Donnelley's receipt of the FMV Notice. (iii) Delivery of the Determination Notice will obligate the Ameritech Disposition Party to pay Donnelley the amount equal to the higher of either (a) an amount equal to fifty percent (50%) of the fair market value of the assets subject to the Asset Disposition as stated in the FMV Notice or (b) an amount equal to fifty percent (50%) of the fair market value of such assets subject to the Asset Disposition as determined pursuant to Section 9(e). (iv) If the fair market value of the assets subject to the Asset Disposition, as determined pursuant to Section 9(e), is higher than the fair market value stated in the FMV Notice, the Ameritech Asset Disposition Party shall be responsible for 100% of the fees of the investment banker referred to in Section 9(e). If the fair market value of the assets subject to the Asset Disposition, as determined pursuant to Section 9(e), is lower than the fair market value stated in the FMV Notice, Donnelley shall be responsible for 100% of the fees of the investment banker referred to in Section 9(e). (e) (i) Fair market value shall be determined by a nationally recognized investment banker selected by mutual agreement of Donnelley and the Ameritech Disposition Party within 10 days (the "Mutual Selection Period") of the Determination Notice. In the event that an investment banker is not selected by the Ameritech Disposition Party and Donnelley within the Mutual Selection Period, then the Ameritech Disposition Party and Donnelley shall each select an investment banker from the list of three investment bankers (or their successors) attached hereto as Exhibit D. The Ameritech Disposition Party and Donnelley shall simultaneously deliver to the other party its selection of an investment banker on the fifth day after the termination of the Mutual Selection Period. If both the Ameritech Disposition Party and Donnelley select the same investment banker, the investment banker so selected shall serve as the investment banker for the purpose of determining fair market value. If Donnelley and the Ameritech Disposition Party select a different investment banker, then the investment banker listed on Exhibit D, which neither selected, shall serve as the investment banker to determine fair market value. (ii) The selected investment banker shall value the Assets subject to the Asset Disposition at their fair private market value by valuing such assets in the context of an auction process taking into account such other factors as the investment banker deems relevant to such analysis. The valuation shall be completed within sixty (60) days of the selection of the investment banker and promptly communicated in writing to the Ameritech Disposition Party and Donnelley. The fair market value so determined shall be final and binding on the Ameritech Disposition Party and Donnelley. Within 10 days of the delivery of the investment banker's valuation, the Ameritech Disposition Party shall pay Donnelley the amount equal to the higher of (a) an amount equal to fifty percent (50%) of the fair market value of the assets subject to the Asset Disposition as stated in the FMV Notice or (b) an amount equal to fifty percent (50%) of the fair market value of the assets subject to the Asset Disposition as determined under Section 9(e). (f) In the event that APIL Partners, Ameritech or any of its respective Affiliates enters into an agreement with a third party pursuant to which APIL Partners, Ameritech or one of their respective Affiliates agrees to cease publication of one or more Directories or Street Address Directories for a period less than 24 months (such period, the "Non-Compete Period"), then, during the Non-Compete Period, APIL Partners and Ameritech, on behalf of themselves and their respective Affiliates, will add to the Monthly Advertiser Contract Amount and Monthly Street Address Directory Contract Amount an amount equal to the average Monthly Advertiser Contract Amount and Monthly Street Address Directory Contract Amount with respect to such Directories or Street Address Directories over the 12 month period immediately prior to the commencement of the Non-Compete Period. (g) Notwithstanding anything herein contained to the contrary, it is expressly agreed that the provisions of Section 9 shall not apply to Directories (or the Directory Assets associated therewith) published on or after January 1, 1998 by APIL Partners, Ameritech or any of their respective Affiliates for primary distribution in areas where the Directories are not published for primary distribution on this Agreement's effective date or Street Address Directories (or the Directory Assets associated therewith) published on or after January 1, 1998 by APIL Partners, Ameritech or any of their respective Affiliates in geographic areas not covered by the Street Address Directories on this Agreement's effective date. 10. DonTech II's Rights with Respect to Internet and Replacement Products Advertising (a) APIL Partners and Ameritech, on behalf of themselves and their respective Affiliates, hereby grant to DonTech II in perpetuity the right, subject to DonTech II's acceptance or rejection as provided in Section 10(b): (a) to be the exclusive sales agency to solicit and sell local internet yellow pages advertising in Illinois and in the geographic area where the Directories listed in Schedule 2 attached to the Exclusive Sales Agency Agreement are primarily distributed and (b) to be the exclusive sales agency (i) to solicit and sell local advertising for any products, whether in electronic or print form, that replace in whole or in part the Directories and (ii) to sell or lease any products, whether in electronic or print form, that replace in whole or in part the Street Address Directories. For purposes of this Section 10(a), to solicit and sell "local" advertising means to solicit and sell to Persons residing exclusively in Illinois or residing exclusively in the geographic area where the Directories on Schedule 2 attached to the Exclusive Sales Agency Agreement are primarily distributed. (b) When an opportunity accrues for DonTech II under Section 10(a), APIL Partners, Ameritech or the Ameritech Affiliate offering the opportunity to DonTech II must make a presentation which includes the exact nature of the business opportunity, the forecasted revenues for the next twelve (12) months as best as can be determined, the geographic area in which the business is to be performed, the manner, if any, in which the business would affect or compete with the Directories and the Street Address Directories, and such other information as would assist DonTech II in making an informed judgment of whether it should engage in such business. Within thirty (30) days from such presentation, DonTech II must either: (i) accept the opportunity; (ii) reasonably request additional information regarding the business opportunity in which case the additional information is to be provided within thirty (30) days from receipt of the request, after which time DonTech II has an additional thirty (30) days to accept or reject the business opportunity; or (iii) reject the business opportunity. For purposes of this Section 10, Ameritech and API/IL represent and warrant that the vote cast by APIL/IL's Voting Director as a member of the DonTech II Board of Directors will be the same vote as cast by Donnelley's Voting Director on the DonTech II Board of Directors concerning whether to (i) accept the opportunity; (ii) reasonably request additional information regarding the opportunity; or (iii) reject the opportunity. 11. Entire Agreement This Agreement and the Operative Agreements constitute the entire agreement and understanding among the Parties concerning the subject matter of this Agreement and the Operative Agreements and supersede all prior negotiations and proposed agreements or understandings. 12. Governing Law This Agreement shall be deemed to have been executed and delivered within the State of Illinois, and shall in all respects be interpreted, enforced and governed by the laws of the State of Illinois, irrespective of choice of law principles to the contrary. 13. Counterparts This Agreement may be executed in one or more counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts shall constitute but one agreement. 14. Waiver Any of the terms and conditions of this Agreement may be waived at any time and from time to time in writing by the Party entitled to the benefit thereof without affecting any other terms and conditions of this Agreement. The waiver by either Party of a breach of any provision of this Agreement will not operate or be construed as a waiver of any subsequent breach. Any waiver must be made in writing and may not be inferred from a failure to assert any right that could have been asserted. 15. Validity The invalidity or unenforceability of any term or provision of this Agreement does not affect the validity or enforceability of any of the remaining terms or provisions of this Agreement unless the provision found to be invalid is essential to the primary purposes of this Agreement. 16. Confidentiality Except to the extent compelled by court order or as may be otherwise required by applicable law, the Parties shall keep the terms, conditions and other material provisions of this Agreement confidential. 17. Successors and Assigns This Agreement is binding upon and will inure to the benefit of the successors and assigns of the Parties. Except as may be permitted herein, no Party may assign its rights and obligations under this Agreement without all other Parties' consent, which may be granted in the sole discretion of each Party. 18. Amendments No amendment to this Agreement shall be effective unless it is in writing and signed by each of the Parties hereto. No waiver of any term or condition hereunder shall be effective unless it is in writing and signed by the Party against whom such waiver is to be enforced. 19. Notices The Parties shall send all notices or consents that are required or permitted under this Agreement as follows (unless such addresses are modified by any of the Parties). Notices, consents, or communications shall have been deemed duly given if delivered in person, by facsimile or mailed by certified or registered mail, return receipt requested and postage prepaid, as follows: If to Ameritech, to: Chief Executive Officer Ameritech Corporation 30 South Wacker Drive Chicago, Illinois 60606 FAX (312) 207-0892 with a copy to: General Counsel Ameritech Corporation 30 South Wacker Drive Chicago, Illinois 60606 FAX (312) 207-1540 If to API, API/IL, APIL Partners or LLC, to: President Ameritech Publishing, Inc. 100 E. Big Beaver Troy, Michigan 48083 FAX (248) 534-7227 with a copy to: General Counsel Ameritech Publishing, Inc. 100 E. Big Beaver Troy, Michigan 48083 FAX (248) 534-7227 If to D&B, to: Chief Executive Officer The Dun & Bradstreet Corporation One Diamond Hill Road Murray Hill, New Jersey 07974-1218 FAX (908) 665-5827 with a copy to: General Counsel The Dun & Bradstreet Corporation One Diamond Hill Road Murray Hill, New Jersey 07974-1218 FAX (908) 665-5827 If to Donnelley, to: Chief Executive Officer The Reuben H. Donnelley Corporation One Manhattanville Road Purchase, New York 10577 FAX (914) 933-6899 General Counsel The Reuben H. Donnelley Corporation One Manhattanville Road Purchase, New York 10577 FAX (914) 933-6844 If to DonTech I or DonTech II, to: Chief Executive Officer DonTech II Boulevard Towers South 205 North Michigan Avenue Chicago, Illinois 60601-5968 FAX (312) 240-2012 with copies to: General Counsel The Reuben H. Donnelley Corporation One Manhattanville Road Purchase, New York 10577 FAX (914) 933-6844 General Counsel Ameritech Publishing of Illinois, Inc. 100 E. Big Beaver Troy, Michigan 48083 FAX (248) 534-7227 20. Interpretation (a) The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (b) No provision of this Agreement shall be interpreted in favor of, or against, any of the parties hereto by reason of the extent to which any such party or its counsel participated in the drafting thereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof or thereof. (c) All references to "$" or dollar amounts shall be to lawful currency of the United States of America. IN WITNESS WHEREOF, the Parties have executed this Master Agreement as of the date first indicated above. The Reuben H. Donnelley Corporation By: __________________________________ Date:_____________________________ Frank R. Noonan Title: President and Chief Executive Officer The Dun & Bradstreet Corporation By:__________________________________ Date:_____________________________ Title:_______________________________ The AM/DON Partnership, a/k/a DonTech (DonTech I) Ameritech Publishing of The Reuben H. Donnelley Illinois, Inc. Corporation By:__________________________________ By:_______________________________ Peter J. McDonald Frank R. Noonan Title: President Title: President and Chief Executive Officer Date:________________________________ Date:_____________________________ DonTech II Ameritech Publishing of The Reuben H. Donnelley Illinois, Inc. Corporation By:__________________________________ By:_______________________________ Peter J. McDonald Frank R. Noonan Title: President Title: President and Chief Executive Officer Date:________________________________ Date:_____________________________ Ameritech Publishing, Inc. By:_________________________________ Date:_____________________________ Peter J. McDonald Title: President Ameritech Publishing of Illinois, Inc. By:__________________________________ Date:_____________________________ Peter J. McDonald Title: President Ameritech Corporation By:__________________________________ Date:_____________________________ Thomas E. Richards Title: Executive Vice President DonTech I Publishing Company, LLC By:__________________________________ Date:_____________________________ Bruce Disbrow Title: President The APIL Partners Partnership Ameritech Publishing, Inc. Ameritech Publishing of Illinois, Inc. By:__________________________________ Date:_____________________________ Peter J. McDonald Peter J. McDonald Title: President Title: President Date:________________________________ Date:_____________________________ EX-10.13 9 EXHIBIT 10.13 EXCLUSIVE SALES AGENCY AGREEMENT This Exclusive Sales Agency Agreement (this "Agreement") is effective as of this 19th day of August, 1997 between APIL Partners Partnership (the "Publisher"), an Illinois partnership formed between Ameritech Publishing of Illinois, Inc., a Delaware corporation, and Ameritech Publishing, Inc., a Delaware corporation, pursuant to an agreement dated July 1, 1997, and DonTech II (the "Agency"), an Illinois general partnership formed between The Reuben H. Donnelley Corporation, a Delaware corporation, and Ameritech Publishing of Illinois, Inc., a Delaware corporation, pursuant to an agreement dated August 19, 1997, (collectively the "Parties" and individually a "Party"). WHEREAS, the Publisher is in the business of publishing telephone directories and related products and services and is the publisher of alphabetical and classified print directories in Illinois, and in Gary, Hammond, East Chicago, Crown Point, Lowell and Highland, Indiana (collectively the "Northwest Indiana Directories") and is the publisher of certain street address directories (the "Street Address Directories"); WHEREAS, the Agency is in the business of providing sales and sales-related services and sells classified advertising for alphabetical and classified print directories and for other classified advertising media; and WHEREAS, the Publisher desires to engage the Agency as its exclusive sales agent in perpetuity for the Directories and the Street Address Directories, and the Agency desires to act as the Publisher's agent for these purposes; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows: 1. Definitions 1.1. "Advertiser Contract Amount" means the monthly dollar amount of advertising contracts sold by Agency for advertisements in the Directories multiplied by the number of months in each Directory's issue life. 1.2. "Affiliate" of any Person means any other Person directly or indirectly Controlling, directly or indirectly Controlled by, or under common direct or indirect Control with such Person. "Control" in this definition has the same meaning as "control" in Rule 12b-2(f) promulgated under the Securities Exchange Act of 1934, as in effect on the effective date of this Agreement. 1.3. "Directories" means the directories published on or after January 1, 1998 identified on the attached Schedules 1 and 2 and any other alphabetical or classified print directories published on or after January 1, 1998 by Publisher for primary distribution either (i) in whole or in part in Illinois or (ii) in the geographical area where the Northwest Indiana Directories are published for primary distribution on this Agreement's effective date; provided however, that Directories shall not include Publisher's Illinois/Wisconsin or Indiana Industrial Purchasing Guide[Trademark] or any substantially similar successor publication. 1.4. "Directory" means any one of the Directories. 1.5. "Monthly Advertiser Contract Amount" means the dollar amount payable in a given month by advertisers for advertising in all the Directories, without any adjustment for claims. 1.6. "Monthly Street Address Directory Contract Amount" means the dollar amount payable in a given month by purchasers or lessees of Street Address Directories, net of actual claims and returns relating to purchases or leases. 1.7. "National Yellow Pages Advertising" means advertising for the Directories that is not local or foreign advertising and is sold by Yellow Pages Publishers Association-certified marketing representatives or by other marketing representatives approved by Publisher. 1.8. "Northwest Indiana Directories" means the directories listed on Schedule 2. 1.9. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or any governmental agency or authority. 1.10. "Sales Cycle Year" is the period between the publication of the first Directory in a calendar year and the publication of the last-published Directory, each Directory scheduled in the Annual Business Plan having been published once. 1.11. "Street Address Directories" means the (i) street address directories published on or after January 1, 1998 identified on Schedule 3 and (ii) any other street address directories of Publisher published on or after January 1, 1998 covering in whole or in part the geographic area covered by the Street Address Directories on the attached Schedule 3 on this Agreement's effective date. 1.12. "Street Address Directory Contract Amount" means the monthly dollar amount payable on Street Address Directory lease or purchase contracts sold by Agency, net of actual claims and returns relating to such contracts, multiplied by the number of months in each such contract's term. 1.13. "White Pages Listings" means additional lines and additional, alternate, foreign, enhanced, or vanity listings in an alphabetical directory. 2. Publisher of the Directories (a) Publisher is the publisher of the Directories and the Street Address Directories. Publisher is solely responsible for marketing (which includes without limitation pricing, scoping, design, branding, and scheduling), manufacturing, and distributing the Directories and Street Address Directories. Provided, however, that after the date for commencement of the local sales campaign for a Directory, as set forth in the Annual Business Plan, Publisher shall not shorten the number of months in such Directory's issue life without the consent of Agency, which consent will not be unreasonably withheld. Publisher is solely responsible for all costs, fees, and other expenses for publishing the Directories and the Street Address Directories, including without limitation any and all fees paid to telephone companies. (b) Publisher shall provide Agency with product descriptions, directory publishing cycles, price lists, terms and conditions, publishing standards, and credit policy. Publisher shall provide the information described in this subsection in a sufficiently timely fashion to facilitate Agency's performance under this Agreement. (c) Publisher shall obtain accurate and timely service orders, or other similar information, reflecting the necessary information regarding additions, changes and deletions affecting any listings in the alphabetical and classified sections of the Directories and in the Street Address Directories covered by this Agreement and shall provide such information to Agency in a sufficiently timely fashion to facilitate Agency's performance under this Agreement 3. Appointment of Exclusive Agent (a) For the term of this Agreement, Publisher grants to Agency the exclusive right to sell or lease Street Address Directories and solicit and sell all advertising for the Directories other than National Yellow Pages Advertising, White Pages Listings, and advertising sold with the Agency's consent pursuant to cross-sell or similar agency agreements between Publisher and other publishers. (b) Publisher agrees that damages are not an adequate remedy for the breach of the exclusive agency rights provided by Section 3(a) herein, and that Agency is entitled to specific enforcement by injunction of those exclusive agency rights. (c) Agency acknowledges that customers who purchase advertising in the Directories or who purchase or lease Street Address Directories are customers of Publisher and not Agency. (d) The services and representation to be provided by Agency are on a non-exclusive basis, and Agency may, consistent with the terms of this Agreement, sell advertising for directories not encompassed by the terms of this Agreement or engage in any other business not inconsistent with this Agreement. 4. Term of Agreement This Agreement is effective as of the date of the Agreement and will remain in effect in perpetuity unless terminated as provided in Section 16 herein. 5. Agency Sales Services (a) Agency is solely responsible for the sales force, sales management, sales assignment, sales planning, sales training, sales support, preparation of speculative art, sales analysis and sales compensation, and all costs associated therewith. (b) Agency shall solicit and sell advertising for publication in the Directories and solicit and sell or lease Street Address Directories in accordance with Section 3 herein. (c) In performing services under this Agreement, Agency shall use the brands, tradenames and trademarks of Publisher in such manner and to such extent as is approved by Publisher. (d) Agency agrees to maintain a sales and sales-support organization adequate in Agency's sole judgment to fulfill the purposes of this Agreement and agrees to undertake to sell advertising in a business-like manner. 6. Advertiser Contracts (a) All applications and contracts for advertising and Street Address Directories will comply with Publisher's rates, terms, and conditions, including publishing and credit policy, and shall be submitted in a timely fashion by Agency to Publisher or its designee upon forms or by means of electronic transmission approved by Publisher. (b) Contracts for advertisements and Street Address Directories will be between Publisher and advertiser, and Publisher at its expense shall provide the contract forms, either in electronic or paper form, between Publisher and advertiser for use by Agency. (c) Publisher reserves the right to reject any contract, proposal or item of advertising, submitted by Agency or to condition its acceptance upon satisfying specified terms and conditions. Publisher shall promptly notify Agency of any such rejection or conditional acceptance. 7. Copyright and Intellectual Property Notwithstanding any creative efforts of Agency, Agency disclaims all copyright or other intellectual property interests in speculative art and advertising copy, artwork or other advertising submitted under this Agreement. 8. Business Plan Publisher and Agency shall jointly develop and approve an Annual Business Plan each year for the next year's sales campaign. The first such Annual Business Plan will be developed and approved by October 1, 1997, and each successive Annual Business Plan will be developed and approved no later than October 1 of each year. The Annual Business Plan may include sales analyses, directory publishing cycles, performance standards reviews, results of prior performance, as well as plans and programs for the next annual sales campaign and such other matters as agreed to by the Parties or as set forth herein. 9. Billing, Collections, Uncollectibles (a) Publisher is responsible for all credit, claim and collections functions for the Directories and the Street Address Directories, including arranging for local, foreign and national billing and establishing credit policies. (b) Agency shall provide Publisher with the data necessary for Publisher to perform the responsibilities described in Section 9(a). (c) Publisher, at its own cost, is responsible for all claims and litigation relating to advertising in the Directories, except as set forth in Section 13 herein. (d) Agency may not adjust or compromise any claim without the prior written consent of Publisher. Publisher shall notify Agency within 10 days of its disposition of any claim that may affect Agency's performance of its services under this Agreement. (e) Publisher shall advise Agency of the collection and credit status of local Directory advertisers and purchasers or lessees of Street Address Directories in a sufficiently timely fashion to facilitate Agency's performance under this Agreement. 10. Commissions, Allowances and Payments for Directory Advertisements (a) As compensation for the sales services performed by Agency, Agency will earn a commission of [27]% of the Advertiser Contract Amount less allowances for (i) claims and (ii) bad debt and disconnects. Beginning on this Agreement's effective date, Agency has an unconditional and irrevocable right to its commissions upon submission to Publisher, or its designee, of an advertising contract meeting Publisher's rates, terms, publishing, and credit standards for placement of an advertisement in the Directories. The allowance for claims will not exceed [2.4]% of the Advertiser Contract Amount and the allowance for bad debt and disconnects will not exceed [3.7]% of the Advertiser Contract Amount in any calendar year. (b) Beginning in January 1998 and continuing each month thereafter, Publisher shall calculate the commission payable to Agency based on the Monthly Advertiser Contract Amount as follows: (i) On the last day of each month, Agency shall determine the Monthly Advertiser Contract Amount and shall provide the Monthly Advertiser Contract Amount to Publisher; (ii) Publisher shall then multiply the Monthly Advertiser Contract Amount by [.024], representing the allowance for claims, and subtract the amount equal to the product of this multiplication from the total Monthly Advertiser Contract Amount; (iii) Publisher shall also multiply the Monthly Advertiser Contract Amount by [.037], representing the allowance for bad debt and disconnects, and subtract the amount equal to the product of this multiplication from the Monthly Advertiser Contract Amount; and (iv) After determining the sum derived from the calculations in Section 10 (b)(ii) and (b)(iii) above, Publisher shall then multiply this sum by [.27] and remit the amount equal to the product of this calculation to Agency by wire transfer no later than the 20th day of the month following the determination of the Monthly Advertiser Contract Amount as set forth in Section 10(b)(i). (c) The following example illustrates the calculations made pursuant to Section 10(b)(i-iv): (i) $10,000,000 = Monthly Advertiser Contract Amount (ii) $10,000,000 = Monthly Advertiser Contract Amount x [.024] = claims allowance ----------- $ [240,000] = value of claims allowance (iii) $10,000,000 = Monthly Advertiser Contract Amount x [.037] = bad debt and disconnects allowance ----------- $ [370,000] = value of bad debt and disconnects allowance (iv) $10,000,000 = Monthly Advertiser Contract Amount $[240,000] = value of claims allowance $[370,000] = value of bad debt and disconnects ------------ $[9,390,000] x [.27] = commission rate ------------ $[2,535,300] = commission payable (d) To the extent Agency sells advertising for a Directory or Directories that Publisher does not publish within six months of the publication date scheduled in the Annual Business Plan, and the advertisements are not published in other Directories within such six month period, Publisher shall pay Agency, and Agency has an unconditional and irrevocable right to, a commission on the Advertiser Contract Amount for each non-published advertisement. Publisher shall calculate this commission based on the Advertiser Contract Amount for each non-published advertisement in the same manner as provided in Section 10(b) and 10(c) and shall pay Agency on the 10th day of the seventh month following the publication date scheduled in the Annual Business Plan. (e) The following example illustrates the calculations made pursuant to Section 10(d): (i) $ 10,000,000 = Advertiser Contract Amount (ii) $ 10,000,000 = Advertiser Contract Amount x [.024] = claims allowance ------------ $ [240,000] = value of claims allowance (iii) $ 10,000,000 = Advertiser Contract Amount x [.037] = bad debt and disconnects allowance ------------ $ [370,000] = value of bad debt and disconnects allowance (iv) $10,000,000 = Advertiser Contract Amount $[240,000] = value of claims allowance $[370,000] = value of bad debt and disconnects ------------ $[9,390,000] x [.27] = commission rate ------------ $[2,535,300] = commission payable (f) The Parties agree that a true-up of (i) claims and (ii) bad debt and disconnects will be made for the Directories on a Sales Cycle Year basis for claims and a calendar-year basis for bad debts and disconnects beginning with the Directories published in 1998 and for the Directories published in each succeeding year. At this true-up, the dollar amount of actual (i) claims and (ii) bad debt and disconnects will be compared to the allowances of [2.4]% and [3.7]% referred to in Section 10(a) above. If the respective actual dollar value of either actual (i) claims or (ii) bad debt and disconnects is less than the respective allowance, Publisher shall remit the amount equal to the difference multiplied by [.27] to Agency within 30 days of such determination. If (i) actual claims or (ii) bad debt and disconnects exceed their respective [2.4]% and [3.7]% allowances, Agency does not owe Publisher any payment except as may be applicable under Section 13(b). This true-up calculation will be made within 30 days following the end of the Sales Cycle Year, in the case of claims, and the calendar year, in the case of bad debts and disconnects, during which the actual claims and bad debts and disconnects occur. This computation will be made by a method and with data analogous to the method and data reflected on the spreadsheets attached hereto as Schedule 4. (g) To protect Agency from excessive supersedures (movements of local advertising accounts to national advertising accounts), Publisher shall increase the Advertiser Contract Amount as follows. Within the 30 days following the end of the 1998 Sales Cycle Year, Publisher shall compute the supersedures and determine the amount, if any, by which the supersedures exceed 1% of the Advertiser Contract Amount for the 1998 Sales Cycle Year, and Publisher shall then increase the then-Monthly Advertiser Contract Amount by the dollar amount of supersedures in excess of one percent of the Advertiser Contract Amount. Thereafter, Publisher likewise shall compute and make the adjustment described in this Section within the 30 days following the end of each Sales Cycle Year based on the supersedures that occurred during that Sales Cycle Year. 11. Commissions for Sale or Lease of Street Address Directories (a) As compensation for the sales or leasing services performed by Agency for the Street Address Directories, Agency will earn a commission of [27]% of the Street Address Contract Amount. Agency has an unconditional and irrevocable right to its commission upon submission to Publisher of a purchase or lease contract meeting Publisher's rates, terms, and credit policy for purchase or lease of Street Address Directories. (b) Beginning in January 1998 and continuing each month thereafter, Publisher shall calculate the commission payable to Agency based on the Monthly Street Address Directory Contract Amount as follows: (i) On the last day of each month, Agency shall determine the Monthly Street Address Contract Amount and shall provide this amount to Publisher; (ii) Publisher shall then multiply this amount by [.27]. Publisher shall remit the amount equal to the product of this multiplication to Agency by wire transfer no later than the 20th day of the month following the determination of the Monthly Street Address Directory Contract Amount. (c) To the extent Agency procures a purchase or lease of a Street Address Directory that Publisher does not publish or update within six months of the publication date scheduled in the Annual Business Plan, Publisher shall pay Agency, and Agency has an unconditional and irrevocable right to, a commission on the Street Address Directory Contract Amount for each non-published or -updated Street Address Directory. Publisher shall calculate this commission based on the Street Address Directory Contract Amount for each non-published or -updated Street Address Directory in the same manner as provided in Section 11(a) and (b) and shall pay Agency on the 10th day of the seventh month following the publication or update date scheduled in the Annual Business Plan. 12. Reciprocals, Cross-Sell, and Other Advertising Arrangements Neither Party may enter into reciprocal, cross-sell, or other agreements covering the sale of "foreign in" or "foreign out" advertising relating to the Directories without the other Party's consent, which neither Party may unreasonably withhold. 13. Liability, Indemnification, Insurance (a) (i) Except as set forth in Section 13(b), Publisher shall defend, indemnify and save harmless Agency against [all claims and demands, including any action, cause of action or equitable proceeding, resulting from or relating in any way to advertisements or listings published in the Directories, from anything done or omitted by Publisher, its respective agents or employees in connection with this Agreement, including without limitation Publisher's failure to furnish Agency with accurate information] (collectively "Indemnifiable Claims"). (ii) Agency will not settle or compromise any Indemnifiable Claim without the prior written consent of Publisher. (iii) Publisher shall pay to Agency upon request the [full amount] of any loss or damage or expense which Agency may sustain, incur or become liable for, including [court costs and a reasonable amount of attorneys' fees], arising from Indemnifiable Claims. (b) (i) Notwithstanding the limitation on claims allowances provided in Section 10, Agency shall indemnify and save harmless Publisher against claims and demands (including actions, causes of action, or equitable proceedings) arising from or as a result of the following acts or omissions of Agency, its agents, or employees: [(A) actual fraud; (B) violation of credit or advertiser authorization policies agreed to by Publisher and Agency; (C) grossly negligent or willful failure to treat an advertiser's written and timely request to cancel or change advertising; (D) adjustments or compromises in violation of Section 13(a)(ii); and (E) grossly negligent or willful provision of incorrect phone numbers or advertiser names.] (ii) Within 10 days of receipt of a claim or demand described in Section 13(b)(i), Publisher shall notify Agency of such claim or demand and provide Agency a reasonable opportunity to adjust or defend the claim or demand before any settlement or payment on account thereof is made by Publisher. (iii) Agency shall pay to Publisher, upon request, the [full amount] of liability that Publisher may sustain, incur or become liable for, including [court costs and a reasonable amount of attorneys' fees], as a result of the acts listed in Section 13(b)(i). (c) The Parties shall carry mutually satisfactory public liability, property damage and such other insurance as may be deemed necessary to effectuate the Parties' rights and obligations under this Agreement. 14. Non-Compete (a) During the term of this Agreement, neither Agency nor its Affiliates will undertake to solicit, sell, market or publish an alphabetical or classified print directory or directories, other than the Directories, for primary distribution in any area where the Directories are primarily distributed. (b) During the term of this Agreement, neither Agency nor its Affiliates will undertake to solicit, market, sell, publish, or lease a street address directory or directories, other than the Street Address Directories, covering in whole or in part the geographic areas covered by the Street Address Directories. (c) During the term of this Agreement, neither Agency nor its Affiliates will undertake to solicit, sell, market or publish an alphabetical or classified print directory or directories, other than the Directories, for primary distribution in an area where the directories on schedule 5 are primarily distributed on this Agreement's effective date. For purposes of this subsection, Publisher and its Affiliates other than Agency shall not be considered an Affiliate of Agency. (d) Upon termination of this Agreement, this non-compete provision shall be considered terminated and of no further force and effect. 15. Dispute Resolution The Parties shall submit all disputes, except those disputes that include a demand for emergency equitable relief, arising out of this Agreement to arbitration in accordance with the Commercial Rules of the American Arbitration Association ("AAA") then in effect. Unless otherwise agreed by the Parties, the dispute shall be resolved by the AAA within sixty (60) days of submission, and the AAA shall be informed of the sixty (60) day resolution requirement when the submission is made to the AAA. Judgment on the award may be entered in any court having jurisdiction. The location of the arbitration proceeding shall be in the greater metropolitan area of Chicago, Illinois. Any court action including a demand for emergency equitable relief shall be brought in a court of competent jurisdiction in the State of Illinois. 16. Termination (a) This Agreement shall terminate: (i) Upon the unanimous written agreement of the Parties to terminate this Agreement; or (ii) Upon termination of DonTech II Partnership. (b) Upon termination pursuant to Section 16(a), Agency shall cooperate in the orderly return of information and data provided to Agency by Publisher. 17. Force Majeure (a) If any Party is prevented from performing any of its obligations under this Agreement because of any act of God, lockout, strike or other labor dispute, riot or civil commotion, act of public enemy, law, order or act of government, whether federal, state or local, or other similar event beyond the Party's control (a "Force Majeure Event"), then that Party will be excused from performing any of its obligations which are so prevented. However, the Party so excused is responsible for performing those obligations of which it had been relieved due to the Force Majeure Event as soon as the Force Majeure Event has ceased to prevent the Party's performance. (b) If a Force Majeure Event excuses Agency from performing its duties under this Agreement, Publisher may procure substitute performance; immediately upon Agency's providing notice to Publisher that the Force Majeure Event has ended, however, Agency is entitled to resume performance under this Agreement. 18. Notices The Parties shall send all notices or consents that are required or permitted under this Agreement as follows (unless such addresses are modified by any of the Parties). Notices, consents, or communication have been duly given if delivered in person, by facsimile or mailed by certified or registered mail, return receipt requested and postage prepaid, as follows: If to Agency: Chief Executive Officer DonTech II Boulevard Towers South 205 North Michigan Avenue Chicago, Illinois 60601-5968 FAX (312) 240-2012 with copies to: General Counsel The Reuben H. Donnelley Corporation One Manhattanville Road Purchase, New York 10577 FAX (914) 933-6844 General Counsel Ameritech Publishing of Illinois, Inc. 100 E. Big Beaver Troy, Michigan 48083 FAX (248) 534-7227 If to Publisher: President Ameritech Publishing, Inc. 100 E. Big Beaver Troy, Michigan 48083 FAX (248) 534-7227 with copy to: General Counsel Ameritech Publishing, Inc. 100 E. Big Beaver Troy, Michigan 48083 FAX (248) 534-7227 19. Entire Agreement This Agreement, including the attached Schedules 1 through 5, and the Master Agreement, dated August 19, 1997, constitute the entire agreement and understanding among the Parties concerning the subject matter of this Agreement and supersede all prior negotiations and proposed agreements or understandings. 20. Governing Law This Agreement shall be deemed to have been executed and delivered within the State of Illinois, and shall in all respects be interpreted, enforced and governed by the laws of the State of Illinois, irrespective of choice of law principles to the contrary. 21. Counterparts This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts shall constitute but one agreement. 22. Waiver Any of the terms and conditions of this Agreement may be waived at any time and from time to time in writing by the Party entitled to the benefit thereof without affecting any other terms and conditions of this Agreement. The waiver by either Party of a breach of any provision of this Agreement will not operate or be construed as a waiver of any subsequent breach. Any waiver must be made in writing and may not be inferred from a failure to assert any right that could have been asserted. 23. Validity The invalidity or unenforceability of any term or provision of this Agreement does not affect the validity or enforceability of any of the remaining terms or provisions of this Agreement unless the provision found to be invalid is essential to the primary purposes of this Agreement. 24. Confidentiality (a) Each of the Parties to this Agreement in the performance of their duties hereunder will communicate or otherwise make known to the other Party information, materials, data and other matter ("Information") that is not otherwise known to the recipient Party and is not generally known by third parties. It is generally acknowledged that such Information would be of value to each Party's competitors and to others were this Information known to them. Information is considered to be trade secret information, and the Parties shall treat it as such. Except to the extent compelled by court order or as may be otherwise required by applicable law, no Party may disclose Information without the written authorization of the non-disclosing Party. (b) Except to the extent compelled by court order or as may be otherwise required by applicable law, the Parties shall keep the terms, conditions and other material provisions of this Agreement confidential. 25. Successors and Assigns This Agreement is binding upon and will inure to the benefit of the successors and assigns of the Parties but may be assigned in whole or in part by either Party to a non-Affiliate only with the other Party's consent, which may be exercised in that Party's sole discretion. 26. Amendments No amendment to this Agreement shall be effective unless it is in writing and signed by each of the Parties hereto. No waiver of any term or condition hereunder shall be effective unless it is in writing and signed by the Party against whom such waiver is to be enforced. 27. Interpretation (a) The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (b) No provision of this Agreement shall be interpreted in favor of, or against, any of the Parties hereto by reason of the extent to which any such Party or its counsel participated in the drafting thereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof or thereof. (c) All references to "$" or dollar amounts shall be to lawful currency of the United States of America. IN WITNESS WHEREOF, the Parties have executed this Exclusive Sales Agency Agreement as of the date first indicated above. APIL Partners Partnership By:________________________________ Peter J. McDonald Title: President, Ameritech Publishing of Illinois, Inc. By:________________________________ Peter J. McDonald Title: President, Ameritech Publishing, Inc. "Publisher" DonTech II Partnership By:________________________________ Peter J. McDonald Title: President, Ameritech Publishing of Illinois, Inc. By:________________________________ Frank R. Noonan Title: President and Chief Executive Officer, The Reuben H. Donnelley Corporation "Agency" SCHEDULE 1 19633 GALENA 18603 CANTON 19567 FORREST 19717 GIBSON CITY 19733 GILMAN 20100 KANKAKEE 21665 STERLING 21923 WATSEKA 21382 ROCKFORD 21815 VANDALIA 19133 DANVILLE 19817 GREENVILLE 20800 MT VERNON 19300 DWIGHT 19583 FRANKFORT 20083 JOLIET 20216 LEMONT 20666 MORRIS 21532 SENECA 21955 WILMINGTON 19167 DEERFIELD 19450 EVANSTON 19767 GLENVIEW 19933 HIGHLND PK 20166 LK FOREST 21582 SKOKIE 21963 WINNETKA 21115 PEORIA 19150 DECATUR 20850 NASHVILLE 20183 LA SALLE 18570 CAIRO 19200 DELAVAN 20950 OLIVE BRCH 18503 BLUE ISLAND 18987 CHGO HTS 19083 CRETE 19467 EVERGRN PK _____ FIARVEY 19999 HOMEWOOD 20983 ORLAND PK 21299 RIVERDALE 21715 SUMMIT 21765 TINLEY PK 18312 ASHBURN 18345 AUSTIN 18461 BEVERLY 18430 BLMNT-CRGN 18525 BRIDGEPORT 18537 BRIGHTN PK 18833 CHATHAM 19442 ENGLEWOOD 18994 HEGWISCH E 20020 HYDE PARK 20042 JEFFRSN PK 20170 LAKE VIEW 18997 LINCOLN PK 20270 LINCOLN SQ 20292 LOGAN SQ 18889 LOOP-DOWNTOWN 19003 NORWOOD PK. 21407 ROGERS PK 21408 ROSELAND 21591 S SHORE 18453 BENSENVILLE 18471 BLOOMINGDALE 19138 DARIEN 19267 DOWNRS GRV 19417 ELMHURST 19750 GLEN ELLYN 19967 HINSDALE 20297 LOMBARD-VI 20833 NAPERVILLE 9867 HARVARD 2-333 MARENGO 20450 MCHENRY 21971 WOODSTOCK 19027 CICERO 0150 LA GRANGE 20433 MAYWOOD 20883 OAK PARK 21315 RVR GROVE 18287 ARL HTS 18370 BARRINGTON 18387 BARTLETT 19405 ELK GROVE 21010 PALATINE 21516 SCHAUMBURG 21947 WHEELING 18070 ALGONQUIN 18703 CARY 19100 CRYSTAL LK 19283 DUNDEE 19400 ELGIN 19833 HAMPSHIRE 18337 AURORA 18470 BIG ROCK 19383 ELBURN 19700 GENEVA 21987 YORKVILLE 18203 ALTON 18420 BELLEVILLE 19060 CLINTN CTY 19067 COLINSVILE 19333 E ST LOUIS 19350 EDWARDSVLE 19783 GRANIT CTY 21249 QUINCY 18770 CHAMPAIGN 26531 DAVENPORT 21242 IL QUD CTY 18403 BEARDSTOWN 21632 SPRINGFLD 18766 CHN O'LKS 20250 LIBRYVILE 21931 WAUKEGAN 21998 ZION 18582 CAL CITY 22770 CROWN PT 22887 E CHICAGO 23117 GARY 23267 HAMMOND 23325 HIGHLND, IN 20180 LANSING 23650 LOWELL 18886 CHGO ALPHA 18888 CHGO B-T-B 18887 CHGO CONS _____ PARK RIDGE SCHEDULE 2 23117 GARY 23267 HAMMOND 22887 EAST CHICAGO 22770 CROWN POINT 23650 LOWELL 23325 HIGHLAND SCHEDULE 3 ILLINOIS Near West Far West DuPage North DuPage South Fox Valley Near North Northwest Arlington Heights - Elk Grove Village Barrington - Palatine - Wheeling Bartlette - Roselle - Schaumburg Dundee - Elgin - Hampshire Champaign Far North McHenry Reverse Joliet Peoria Springfield Reverse Chicago North Chicago South South Suburban Metro East Illinois Quad Cities Reverse Calumet Kankakee MICHIGAN MaComb North Oakland South Oakland Easter Wayne Western Wayne Downriver Ann Arbor - Ypsilanti SCHEDULE 4 [ATTACHED TO BOB GROSS LETTER] SCHEDULE 5 Aas Directories and YPPA Codes YPPA Directory Name State Code - -------------- ----- ---- ALEXANDRIA IN 22070 ANDERSON IN 22203 ATTICA IN 22270 AUBURN IN 22287 BEDFORD IN 22320 BLACKFORD COUNTY IN 22361 BLOOMINGTON IN 22370 BLUFFTON IN 22387 SUCK CREEK IN 22503 CENTRAL INDIANA BUS SEARCH IN 23368 COLUMBUS IN 22703 CRAWFORDSVILLE IN 22753 CULVER IN 22787 EAST SUBURBAN IN 23372 ELWOOD IN 22970 EVANSVILLE IN 22987 FRANKFORT IN 23060 GREATER LAPORTE COUNTY IN 23750 HUNTINGTON IN 23333 INDIANAPOLIS IN 23367 JEFFERSONVILLE IN 24016 KENDALLVILLE IN 23433 KOKOMO IN 23483 LEBANON IN 23567 LINTON IN 23600 MARION IN 23700 MARTINSVILLE IN 23717 MOROCCO IN 23900 MUNCIE IN 23967 NEW CASTLE IN 24050 NORTH SUBURBAN IN 23374 PERU IN 24233 POSEY COUNTY IN 22994 ROCKPORT IN 24388 ROCKVILLE IN 24400 SHELBYVILLE IN 24484 SOUTH BEND IN 24532 SOUTH SUBURBAN IN 23376 TELL CITY IN 24616 VINCENNES IN 24712 WARRICK COUNTY IN 23001 WASHINGTON IN 24760 WEST SUBURBAN IN 23378 ALBION MI 34027 ANN ARBOR YPSILANTI MI 34115 ARENAC IOSCO OGEMAW COUNTIES MI 34957 BATTLE CREEK AREA MI 34217 BENTON HARBOR MI 34285 BEULAH FRANKFORT MI 34302 BIG RAPIDS AREA MI 34319 BIRMINGHAM NBHD MI 34326 BYRON MI 34438 CADILLAC MI 34455 CASNOVIA KENT CITY MI 34557 CEDAR SPRINGS MI 34574 CHARLEVOIX EMMET COUNTY MI 34605 CHARLOTTE AREA MI 34622 CHEBOYGAN ST IGNACE MACKINAC MI 34656 CLIO MT MORRIS FLG NBHD MI 34718 DETROIT MI 34829 DOWNRIVER AREA MI 34869 DOWNTOWN DETROIT NBHD MI 37390 EAST AREA MI 34923 ESCANABA MI 35008 FARMINGTON FARMINGTON HILLS MI 35056 FENTON HOLLY NBHD MI 35063 FLINT AREA MI 35076 FREMONT AREA MI 35220 GRAND HAVEN MI 35314 GRAND RAPIDS AREA MI 35348 GRAND TRAVERSE BAY MI 35385 GREATER JACKSON COUNTY MI 35722 GREATER THUMB AREA MI 34183 GREENVILLE AREA MI 35399 GROSSE POINTES NBHD MI 35401 HASTINGS BARRY COUNTY MI 35484 HILLSDALE JONESVILLE MI 35518 HOLLAND ZEELAND MI 35535 HOPKINS MARTIN WAYLD MI 37525 HOUGHTON KEWEENAW CO MI 35586 IONIA AREA MI 35654 IRON MOUNTAIN MI 35671 IRONWOOD MI HURLEY WI AREA MI 35688 KALAMAZOO PORTAGE AREA MI 35739 KALKASKA MANCELONA MI 35757 LANSING AREA MI 35858 LAPEER COUNTY AND SURR AREAS MI 35875 LIVINGSTON COUNTY MI 35968 LIVONIA NBHD MI 35970 MANISTEE AREA MI 36062 MARQUETTE ISHPEMING MI 36147 MENOMINEE MI 36215 METRO DET NORTH MACOMB COUNTY MI 36058 MID MICHIGAN MI 34673 MIDLAND MI 36249 MONROE CARLETON MI 38325 MT CLEMENS NBHD MI 36375 NEW BALTIMORE MI 36504 NEW BUFFALO THREE OAKS MI MI 36529 NEWBERRY MI 36521 NILES MI 36555 NORTH OAKLAND PONTIAC AREA MI 36870 NORTH WOODWARD AREA MI 36595 PLYMOUTH NBHD MI 36863 PORT HURON AREA MI 36904 PORTLAND MI 36921 ROCHESTER NBHD MI 36990 SAGINAW AREA MI 34233 SANILAC AREA MI 37175 SAULT STE MARIE MI 37236 SOUTH LYON MI 37321 SOUTHEASTERN MICH BUS SEARCH MI 37326 SOUTHFIELD NBHD MI 37299 STERLING HGTS NBHD MI 37348 TAYLOR NBHD MI 37385 TRENTON NBHD MI 37392 WEST NORTHWEST AREA MI 37569 WYANDOTTE NBHD MI 37650 AKRON OH 56027 ALLIANCE OH 56044 BARBERTON OH 56158 BRECKSVILLE OH 56298 CANTON OH 56429 CHAGRIN AREA OH 56497 CLEVELAND OH 56617 COLUMBUS NORTHEAST OH 57099 COLUMBUS NORTHWEST OH 56879 COLUMBUS SOUTHEAST OH 56240 COLUMBUS SOUTHWEST OH 57341 COLUMBUS WHITE PAGES OH 56667 COLUMBUS YELLOW PAGES OH 56668 COSHOCTON OH 56736 CUYAHOGA FALLS OH 56779 DAYTON OH 56786 DAYTON EAST OH 56784 DAYTON NORTH OH 56794 DAYTON SOUTH OH 56797 DAYTON SOUTHWEST OH 56801 EAST LIVERPOOL OH 56904 EASTERN OHIO RIVER AREA OH 56162 EUCLID OH 56955 FAIRBORN OH 56971 FAIRVIEWAREA OH 57010 FINDLAY OH 57027 FOSTORIA OH 57044 FREMONT OH 57088 GALUPOLIS OH 57122 GREATER LAKE GEAUGA COUNTIES OH 58214 GREATER SOUTHWEST COMMUNITIES OH 58231 GREATER WESTERN COMMUNITIES OH 57518 HEIGHTS AREA OH 56634 HILLSBORO OH 57386 IRONTON OH 57436 KENT RAVENNA OH 57502 LANCASTER OH 57535 LONDON OH 57654 LYNDHURST OH 57705 MARIETTA PARKERSBURG AND VIC OH 57755 MASSILLON OH 57806 MIDDLETOWN OH 57891 NELSONVILLE OH 58027 NORTHEASTERN OHIO BUS SEARCH OH 56618 PERRY COUNTY OH 58282 PIQUA OH 58299 RIPLEY OH 58384 SALEM LISBON OH 58452 SANDUSKY OH 58469 SOUTHEAST AREA OH 56179 SOUTHWEST AREA OH 56230 SPRINGFIELD OH 58554 STEUBENVILLE OH 58571 SW OHIO NORTHERN KY BUS SEARCH OH 56788 TIFFIN OH 58605 TOLEDO OH 58639 UHRICHSVILLE OH 58673 UPPER SANDUSKY OH 58690 WASHINGTON COURT HOUSE OH 58792 WINCHESTER OH 58877 XENIA OH 58918 YOUNGSTOWN WARREN REGIONAL OH 58935 ZANESVILLE OH 58952 ALGOMA WI 79010 ASHLAND WI 79146 BARABOO WI 79214 BEAVER DAM WI 79248 BELOIT WI 79282 BERLIN WI 79299 BROOKFIELD NHBD WI 81158 BURLINGTON WI 79486 CEDARBURG WI 79537 CORNELL WI 79724 EAU CLAIRE WI 70996 EVANSVILLE WI 80115 FOND DU LAC WI 80149 FORT ATKINSON WI 80200 FOX CITIES WI 79095 GREATER WISCONSIN BUS SEARCH WI 81161 GREEN DAY WI 80336 HARTFORD WI 80404 HUDSON WI 80540 HURLEY WI 80557 JANESVILL WI 80625 KENOSHA WI 80710 LADYSMITH WI 80761 LAKE GENEVA WI 80778 MADISON WI 80863 MANITOWOC WI 80897 MARINETTE WI 80931 MAYVILLE WI 81016 MAZOMANIE WI 81033 MENOMONEE FALLS WI 81084 MENOMONIE WI 81101 MILWAUKEE CONSUMER YELLOW PAGE WI 81160 MILWAUKEE WHITE PAGES WI 81159 NEW LONDON WI 81415 NORTH SHORE NBHD WI 81164 OCONOMOWOC WI 81483 OCONTO WI 81500 OSHKOSH WI 81602 PORT WASHINGTON WI 81772 RACINE WI 81857 SHEBOYGAN WI 82155 SOUTH SHORE NBHD WI 81170 SOUTHWEST NBHD WI 81173 STANLEY WI 82308 STEVENS POINT WI 82325 STOUGHTON WI 82359 STURGEON BAY WI 82375 SUPERIOR WI 82426 UNION GROVE WI 82543 WATERTOWN WI 82679 WAUKESHA WI 82696 WAUPACA WI 82730 WEST BEND WI 82815 WHITEWATER WI 82866 WRIGHTSTOWN WI 82951 EX-25.1 10 Exhibit 25.1 ============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) [ ] THE BANK OF NEW YORK (Exact name of Registrant as specified in its charter) New York 13-5160382 (State or jurisdiction if (I.R.S. Employer not a U.S. national bank) Identification No.) 48 Wall Street New York, NY 10286 (Address of principal executive offices) (Zip code) R. H. DONNELLEY INC. (Exact name of obligor as specified in its charter) Delaware 36-2467635 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) R. H. DONNELLEY CORPORATION (Exact name of obligor as specified in its charter) Delaware 13-2740040 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Manhattanville Road 10577 (Address of principal executive offices) (Zip code) 9 1/8% SENIOR SUBORDINATED NOTES DUE 2008 (Title of the indenture securities) ============================================================================== 1. General Information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. Name Address Superintendent of Banks of the State of 2 Rector Street, New York, of New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 15th day of July, 1998. THE BANK OF NEW YORK By: /s/MARY JANE SCHMALZEL ----------------------------- Name: MARY JANE SCHMALZEL Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1998, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS in Thousands
Dollar Amounts in Thousands ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................................... $6,397,993 Interest-bearing balances.................................................................... 1,138,362 Securities: Held-to-maturity securities.................................................................. 1,062,074 Available-for-sale securities................................................................ 4,167,240 Federal funds sold and Securities purchased under agreements to resell....................... 391,650 Loans and lease financing receivables: Loans and leases, net of unearned income..................................................... 36,538,242 LESS: Allowance for loan and lease losses.................................................... 631,725 LESS: Allocated transfer risk reserve........................................................ 0 Loans and leases, net of unearned income, allowance, and reserve............................. 35,906,517 Assets held in trading accounts.............................................................. 2,145,149 Premises and fixed assets (including capitalized leases)..................................... 663,928 Other real estate owned...................................................................... 10,895 Investments in unconsolidated subsidiaries and associated companies.......................... 237,991 Customers' liability to this bank on acceptances outstanding................................. 992,747 Intangible assets............................................................................ 1,072,517 Other assets................................................................................. 1,643,173 ----------- Total assets................................................................................. $55,830,236 =========== LIABILITIES Deposits: In domestic offices.......................................................................... $24,849,054 Noninterest-bearing.......................................................................... 10,011,422 Interest-bearing............................................................................. 14,837,632 In foreign offices, Edge and Agreement subsidiaries, and IBFs................................ 15,319,002 Noninterest-bearing.......................................................................... 707,820 Interest-bearing............................................................................. 14,611,182 Federal funds purchased and Securities sold under agreements to repurchase................... 1,906,066 Demand notes issued to the U.S. Treasury..................................................... 215,985 Trading liabilities.......................................................................... 1,591,288 Other borrowed money: With remaining maturity of one year or less.................................................. $1,991,119 With remaining maturity of more than one year through three years............................ 0 With remaining maturity of more than three years............................................. 25,574 Bank's liability on acceptances executed and outstanding..................................... 998,145 Subordinated notes and debentures............................................................ 1,314,000 Other liabilities............................................................................ 2,421,281 ----------- Total liabilities............................................................................ $50,631,514 =========== EQUITY CAPITAL Common stock.................................................................................. $1,135,284 Surplus....................................................................................... 731,319 Undivided profits and capital reserves........................................................ 3,328,050 Net unrealized holding gains (losses) on available-for-sale securities........................ 40,198 Cumulative foreign currency translation adjustments........................................... (36,129) Total equity capital.......................................................................... 5,198,722 ----------- Total liabilities and equity capital.......................................................... $55,830,236 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi Alan R. Griffith J. Carter Bacot Directors EX-27.1 11 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1065310 R. H. DONNELLEY INC. 12-MOS 31-Dec-95 31-Dec-95 1,444 1,327 196,115 (21,168) 0 38,419 71,192 (37,281) 520,214 80,875 0 0 0 12,002 411,767 520,214 0 312,940 0 130,145 0 0 0 182,795 (74,398) 108,397 0 0 0 108,397 0.64 0.64
EX-27.2 12 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1065310 R. H. DONNELLEY INC. 3-MOS 6-MOS 9-MOS 12-MOS 31-Dec-96 31-Dec-96 31-Dec-96 31-Dec-96 31-Mar-96 30-Jun-96 30-Sep-96 31-Dec-96 1,469 1,443 1,605 60 1,327 1,327 1,327 0 153,194 145,796 124,526 164,765 (18,216) (14,157) (10,262) (11,607) 0 0 0 0 16,587 48,685 48,909 30,931 68,153 61,848 64,774 58,297 (32,344) (32,352) (32,958) (27,545) 475,859 482,946 478,560 502,193 63,157 65,907 72,336 58,549 0 0 0 0 0 0 0 0 0 0 0 0 12,002 12,002 12,002 12,002 355,176 359,513 348,698 367,182 475,859 482,946 478,560 502,193 0 0 0 0 23,170 87,785 145,528 270,029 0 0 0 0 16,249 85,264 115,539 102,587 0 28,500 28,500 28,500 0 0 0 0 0 0 0 0 6,921 (25,979) 1,489 138,942 (3,032) 11,378 (653) (60,857) 3,889 (14,601) 836 78,085 0 0 0 0 0 0 0 0 0 0 0 0 3,889 (14,601) 836 78,085 0.02 (0.09) 0.00 0.46 0.02 (0.09) 0.00 0.46
EX-27.3 13 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1065310 R. H. DONNELLEY INC. 3-MOS 6-MOS 9-MOS 12-MOS 31-Dec-97 31-Dec-97 31-Dec-97 31-Dec-97 31-Mar-97 30-Jun-97 30-Sep-97 31-Dec-97 64 58 64 32 0 0 0 0 111,750 105,047 139,885 134,828 (10,212) (8,193) (8,002) (4,014) 0 0 0 0 55,893 56,251 57,748 11,894 64,194 65,644 66,588 55,585 (30,077) (33,116) (36,003) (30,125) 443,724 418,212 438,818 382,286 48,014 49,806 55,437 59,465 0 0 0 0 0 0 0 0 0 0 0 0 12,002 12,002 12,002 12,002 316,798 289,494 304,469 246,673 443,724 418,212 438,818 382,286 0 0 0 0 20,200 80,664 143,392 239,865 0 0 0 0 22,490 73,165 89,060 105,126 0 0 0 (9,412) 0 0 0 0 0 0 0 0 (2,290) 7,499 54,332 144,151 916 (3,000) (21,733) (59,246) (1,374) 4,499 32,599 84,905 0 0 0 0 0 0 0 0 0 0 0 0 (1,374) 4,499 32,599 84,905 (0.01) 0.02 0.18 0.50 (0.01) 0.02 0.18 0.50
EX-27.4 14 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1065310 R. H. DONNELLEY INC. 3-MOS 31-Dec-98 31-Mar-98 17 0 124,185 (5,657) 0 18,175 56,208 (32,601) 359,174 50,527 0 0 0 12,002 233,885 359,174 0 24,344 0 4,098 0 0 0 20,246 (8,098) 12,148 0 0 0 12,248 0.07 0.07
EX-27.5 15 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 30419 R. H. DONNELLEY CORP. 12-MOS 31-Dec-95 31-Dec-95 1,444 1,327 196,115 (21,168) 0 38,419 71,192 (37,281) 520,214 80,875 0 0 0 188,421 235,348 520,214 0 312,940 0 130,145 0 0 0 182,795 (74,398) 108,397 0 0 0 108,397 0.64 0.64
EX-27.6 16 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 30419 R. H. DONNELLEY CORP. 3-MOS 6-MOS 9-MOS 12-MOS 31-Dec-96 31-Dec-96 31-Dec-96 31-Dec-96 31-Mar-96 30-Jun-96 30-Sep-96 31-Dec-96 1,469 1,443 1,605 60 1,327 1,327 1,327 0 153,194 145,796 124,526 164,765 (18,216) (14,157) (10,262) (11,607) 0 0 0 0 16,587 48,685 48,909 30,931 68,153 61,848 64,774 58,297 (32,344) (32,352) (32,958) (27,545) 475,859 482,946 478,560 502,193 63,157 65,907 72,336 58,549 0 0 0 0 0 0 0 0 0 0 0 0 188,421 188,421 188,421 188,421 178,757 183,094 172,279 190,763 475,859 482,946 478,560 502,193 0 0 0 0 23,170 87,785 145,528 270,029 0 0 0 0 16,249 85,264 115,539 102,587 0 28,500 28,500 28,500 0 0 0 0 0 0 0 0 6,921 (25,979) 1,489 138,942 (3,032) 11,378 (653) (60,857) 3,889 (14,601) 836 78,085 0 0 0 0 0 0 0 0 0 0 0 0 3,889 (14,601) 836 78,085 0.02 (0.09) 0.00 0.46 0.02 (0.09) 0.00 0.46
EX-27.7 17 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 30419 R. H. DONNELLEY CORP. 3-MOS 6-MOS 9-MOS 12-MOS 31-Dec-97 31-Dec-97 31-Dec-97 31-Dec-97 31-Mar-97 30-Jun-97 30-Sep-97 31-Dec-97 64 58 64 32 0 0 0 0 111,750 105,047 139,885 134,828 (10,212) (8,193) (8,002) (4,014) 0 0 0 0 55,893 56,251 57,748 11,894 64,194 65,644 66,588 55,585 (30,077) (33,116) (36,003) (30,125) 443,724 418,212 438,818 382,286 48,014 49,806 55,437 59,465 0 0 0 0 0 0 0 0 0 0 0 0 188,421 188,421 188,421 188,421 140,379 113,075 128,050 70,254 443,724 418,212 438,818 382,286 0 0 0 0 20,200 80,664 143,392 239,865 0 0 0 0 22,490 73,165 89,060 105,126 0 0 0 (9,412) 0 0 0 0 0 0 0 0 (2,290) 7,499 54,332 144,151 916 (3,000) (21,733) (59,246) (1,374) 4,499 32,599 84,905 0 0 0 0 0 0 0 0 0 0 0 0 (1,374) 4,499 32,599 84,905 (0.01) 0.02 0.18 0.50 (0.01) 0.02 0.18 0.50
EX-27.8 18 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 30419 R. H. DONNELLEY CORP. 3-MOS 31-Dec-98 31-Mar-98 17 0 124,185 (5,657) 0 18,175 56,208 (32,601) 359,174 50,527 0 0 0 188,421 57,466 359,174 0 24,344 0 4,098 0 0 0 20,246 (8,098) 12,148 0 0 0 12,148 0.07 0.07
EX-99.1 19 EXHIBIT 99.1 LETTER OF TRANSMITTAL Offer to Exchange 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[________]) (Registered Under The Securities Act of 1933) For Any and All of Its Outstanding 9 1/8% Subordinated Discount Notes due 2008, Series A (CUSIP #[________]) of R.H. DONNELLEY INC. - ------------------------------------------------------------------------------ THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [ ], 1998 (THE "EXPIRATION DATE"), UNLESS EXTENDED BY R.H. DONNELLEY INC. - ------------------------------------------------------------------------------ EXCHANGE AGENT: The Bank of New York If you desire to accept the Exchange Offer, this Letter of Transmittal should be completed, signed, and submitted to the Exchange Agent: The Bank of New York By Registered or Certified Mail: By Registered or Certified Mail: The Bank of New York The Bank of New York 101 Barclay Street, (7 East) 101 Barclay Street New York, New York 10286 Corporate Trust Services Window Attention: ____________ Ground Level Reorganization Section New York, New York 10286 Attention: ____________ Reorganization Section By Facsimile for Eligible Institutions: (212) 815-______ Confirmed by Telephone: (212) 815-______ DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. The undersigned acknowledges receipt of the Prospectus dated [____], 1998 (the "Prospectus") of R. H. Donnelley Inc. (the "Company") and R.H. Donnelley Corporation (the "Parent Company") which, together with this Letter of Transmittal (the "Letter of Transmittal"), describes the Company's offer (the "Exchange Offer") to exchange $1,000 in principal amount of a new series of 9 1/8% Senior Subordinated Notes due 2008 (CUSIP # [________]) (the "Exchange Notes") for each $1,000 in principal amount of outstanding 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[_______]) (the "Old Notes"). The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Old Notes for which they may be exchanged pursuant to the Exchange Offer, except that the offering of the Exchange Notes will have been registered under the Securities Act of 1933, as amended and, therefore, the Exchange Notes will not bear legends restricting the transfer thereof. The undersigned has checked the appropriate boxes below and signed this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY BEFORE CHECKING ANY BOX BELOW. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT. List below the Old Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the Certificate Numbers and Principal Amounts should be listed on a separate signed schedule affixed hereto. - -------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF OLD NOTES TENDERED HEREWITH - -------------------------------------------------------------------------------------------------------------------- Name(s) and address(es) of Registered Holder(s) Aggregate Principal (Please fill in) Certificate Amount Represented Principal Amount Number(s)* by Old Notes* Tendered** --------------------------------------------------------------- --------------------------------------------------------------- Total - --------------------------------------------------------------------------------------------------------------------
* Need not be completed by book-entry holders. ** Unless otherwise indicated, the holder will be deemed to have tendered the full aggregate principal amount represented by the Old Notes. See Instruction 2. This Letter of Transmittal is to be used either if certificates for the Old Notes are to be forwarded herewith or if delivery of Old Notes is to be made by book-entry transfer to an account maintained by the Exchange Agent at The Depository Trust Company ("DTC"), pursuant to the procedures set forth in "The Exchange OfferBook-Entry Transfer" in the Prospectus. Delivery of documents to a book-entry transfer facility does not constitute delivery to the Exchange Agent. Unless the context requires otherwise, the term "Holder" for purposes of this Letter of Transmittal means any person in whose name Old Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered holder or any person whose Old Notes are held of record by DTC who desires to deliver such Old Notes by book-entry transfer at DTC. Holders whose Old Notes are not immediately available or who cannot deliver their Old Notes and all other documents required hereby to the Exchange Agent on or prior to the Expiration Date (as defined in the Prospectus) may tender their Old Notes according to the guaranteed delivery procedure set forth in the Prospectus under the caption "The Exchange OfferGuaranteed Delivery Procedures." [ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DEPOSITORY TRUST COMPANY AND COMPLETE THE FOLLOWING: Name of Tendering Institution __________________________________________ The Depository Trust Company __________________________________________ Account Number _________________________________________________________ Transaction Code Number ________________________________________________ [ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING: Name of Registered Holder(s) ___________________________________________ Name of Eligible Institution that Guaranteed Delivery __________________ DTC Account Number _____________________________________________________ If Delivered by Book-Entry Transfer: ___________________________________ Account Number _________________________________________________________ [ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name ___________________________________________________________________ Address ________________________________________________________________ ________________________________________________________________________
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the above-described principal amount of Old Notes. Subject to, and effective upon, the acceptance for exchange of the Old Notes tendered herewith, the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Old Notes. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that said Exchange Agent acts as the agent of the undersigned in connection with the Exchange Offer) to cause the Old Notes to be assigned, transferred and exchanged. The undersigned represents and warrants that it has full power and authority to tender, exchange, assign and transfer the Old Notes and to acquire Exchange Notes issuable upon the exchange of such tendered Old Notes, and that, when the same are accepted for exchange, the Company will acquire good and unencumbered title to the tendered Old Notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The undersigned also warrants that it will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of tendered Old Notes or transfer ownership of such Old Notes on the account books maintained by The Depository Trust Company. The Exchange Offer is subject to certain conditions as set forth in the Prospectus under the caption "The Exchange Offer." The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by the Company), as more particularly set forth in the Prospectus, the Company may not be required to exchange any of the Old Notes tendered hereby and, in such event, the Old Notes not exchanged will be returned to the undersigned at the address shown below the signature of the undersigned. BY TENDERING, EACH HOLDER OF OLD NOTES REPRESENTS TO THE COMPANY THAT (i) THE EXCHANGE NOTES ACQUIRED PURSUANT TO THE EXCHANGE OFFER ARE BEING OBTAINED IN THE ORDINARY COURSE OF BUSINESS OF THE PERSON RECEIVING SUCH EXCHANGE NOTES, WHETHER OR NOT SUCH PERSON IS SUCH HOLDER, (ii) NEITHER THE HOLDER OF OLD NOTES NOR ANY SUCH OTHER PERSON HAS AN ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN THE DISTRIBUTION OF SUCH EXCHANGE NOTES, (iii) IF THE HOLDER IS NOT A BROKER-DEALER OR IS A BROKER-DEALER BUT WILL NOT RECEIVE EXCHANGE NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR OLD NOTES, NEITHER THE HOLDER NOR ANY SUCH OTHER PERSON IS ENGAGED IN OR INTENDS TO PARTICIPATE IN A DISTRIBUTION OF THE EXCHANGE NOTES AND (iv) NEITHER THE HOLDER NOR ANY SUCH OTHER PERSON IS AN "AFFILIATE" OF THE COMPANY WITHIN THE MEANING OF RULE 405 UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). IF THE EXCHANGE OFFEREE IS A BROKER-DEALER (WHETHER OR NOT IT IS ALSO AN "AFFILIATE") HOLDING OLD NOTES FOR ITS OWN ACCOUNT ACQUIRED FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, IT WILL DELIVER A PROSPECTUS MEETING THE REQUIREMENTS OF THE ACT IN CONNECTION WITH ANY RESALE OF EXCHANGE NOTES RECEIVED IN RESPECT OF SUCH OLD NOTES PURSUANT TO THE EXCHANGE OFFER. BY ACKNOWLEDGING THAT IT WILL DELIVER AND BY DELIVERING A PROSPECTUS MEETING THE REQUIREMENTS OF THE ACT IN CONNECTION WITH ANY RESALE OF SUCH EXCHANGE NOTES, THE UNDERSIGNED IS NOT DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE ACT. All authority herein conferred or agreed to be conferred shall survive the death, bankruptcy or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Tendered Old Notes may be withdrawn at any time prior to the Expiration Date. Certificates for all Exchange Notes delivered in exchange for tendered Old Notes and any Old Notes delivered herewith but not exchanged, in each case registered in the name of the undersigned, shall be delivered to the undersigned at the address shown below the signature of the undersigned. TENDERING HOLDER(S) SIGN HERE - ------------------------------------------------------------------------------ (Signature(s) of Holder(s)) Date ____________________________________________________________________199__ (Must be signed by registered holder(s) exactly as name(s) appear(s) on certificate(s) for Old Notes or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith or, if the Old Notes are held of record by DTC, the person in whose name such Old Notes are registered on the books of DTC. If signature by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth the full title of such person.) See Instruction 3. Name(s) ______________________________________________________________________ ______________________________________________________________________________ (Please Print) Capacity _____________________________________________________________________ (Include Full Title) Address ______________________________________________________________________ ______________________________________________________________________________ (Include Zip Code) Area Code and Telephone Number _______________________________________________ ______________________________________________________________________________ (Tax Identification No.) GUARANTEE OF SIGNATURE(S) (If Required -- See Instructions 3) Authorized Signature__________________________________________________________ Name__________________________________________________________________________ Title_________________________________________________________________________ Address_______________________________________________________________________ Name of Firm__________________________________________________________________ Area Code and Telephone Number________________________________________________ Date____________________________________________________________________ 199__ INSTRUCTIONS Forming Part of the Terms and Conditions of the Exchange Offer 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES. Certificates for all physically delivered Old Notes or confirmation of any book-entry transfer to the Exchange Agent's account at The Depository Trust Company of Old Notes tendered by book-entry transfer, as well as a properly completed and duly executed copy of this Letter of Transmittal or facsimile thereof, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at any of its addresses set forth herein on or prior to the Expiration Date. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE OLD NOTES AND ANY OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF SUCH DELIVERY IS BY MAIL, IT IS SUGGESTED THAT REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, BE USED. Holders whose Old Notes are not immediately available or who cannot deliver their Old Notes and all other required documents to the Exchange Agent on or prior to the Expiration Date or comply with book-entry transfer procedures on a timely basis may tender their Old Notes pursuant to the guaranteed delivery procedure set forth in the Prospectus under "The Exchange OfferGuaranteed Delivery Procedures." Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution (as defined therein); (ii) on or prior to the Expiration Date the Exchange Agent must have received from such Eligible Institution, a letter, telegram or facsimile transmission setting forth the name and address of the tendering holder, the names in which such Old Notes are registered, and, if possible, the certificate numbers of the Old Notes to be tendered; and (iii) all tendered Old Notes (or a confirmation of any book-entry transfer of such Old Notes into the Exchange Agent's account at The Depository Trust Company) as well as this Letter of Transmittal and all other documents required by this Letter of Transmittal must be received by the Exchange Agent within five New York Stock Exchange trading days after the date of execution of such letter, telegram or facsimile transmission, all as provided in the Prospectus under the caption "The Exchange OfferGuaranteed Delivery Procedures." No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders, by execution of this Letter of Transmittal (or facsimile thereof), shall waive any right to receive notice of the acceptance of the Old Notes for exchange. 2. PARTIAL TENDERS; WITHDRAWALS. Tenders of Old Notes will be accepted in all denominations of $1,000 and integral multiples in excess thereof. If less than the entire principal amount of Old Notes evidenced by a submitted certificate is tendered, the tendering holder must fill in the principal amount tendered in the box entitled "Principal Amount Tendered." A newly issued certificate for the principal amount of Old Notes submitted but not tendered will be sent to such holder as soon as practicable after the Expiration Date. All Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. Tenders of Old Notes pursuant to the Exchange Offer are irrevocable, except that Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. To be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Exchange Agent. Any such notice of withdrawal must specify the person named in the Letter of Transmittal as having tendered Old Notes to be withdrawn, the certificate numbers of the Old Notes to be withdrawn, the principal amount of Old Notes delivered for exchange, a statement that such a holder is withdrawing its election to have such Old Notes exchanged, and the name of the registered holder of such Old Notes, and must be signed by the holder in the same manner as the original signature on the Letter of Transmittal (including any required signature guarantees) or be accompanied by evidence satisfactory to the Company that the person withdrawing the tender has succeeded to the beneficial ownership of the Old Notes being withdrawn. The Exchange Agent will return the properly withdrawn Old Notes promptly following receipt of notice of withdrawal. If Old Notes have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at The Depository Trust Company to be credited with the withdrawn Old Notes or otherwise comply with The Depository Trust Company's procedures. 3. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the registered holder(s) of the Old Notes tendered hereby, the signature must correspond with the name(s) as written on the face of certificates without alteration, enlargement or any change whatsoever. If any of the Old Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If a number of Old Notes registered in different names are tendered, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of Old Notes. When this Letter of Transmittal is signed by the registered holder or holders of Old Notes listed and tendered hereby, no endorsements of certificates or separate written instruments of transfer or exchange are required. If this Letter of Transmittal is signed by a person other than the registered holder or holders of the Old Notes listed, such Old Notes must be endorsed or accompanied by separate written instruments of transfer or exchange in form satisfactory to the Company and duly executed by the registered holder, in either case signed exactly as the name or names of the registered holder or holders appear(s) on the Old Notes. If this Letter of Transmittal, any certificates or separate written instruments of transfer or exchange are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority so to act must be submitted. Endorsements on certificates or signatures on separate written instruments of transfer or exchange required by this Instruction 3 must be guaranteed by an Eligible Institution. Signatures on this Letter of Transmittal need not be guaranteed by an Eligible Institution, provided the Old Notes are tendered: (i) by a registered holder of such Old Notes and the certificates for Exchange Notes to be issued in exchange therefor are to be issued (or any untendered amount of Old Notes are to be reissued) to the registered holder; or (ii) for the account of any Eligible Institution. 4. TRANSFER TAXES. The Company shall pay all transfer taxes, if any, applicable to the transfer and exchange of Old Notes to it or its order pursuant to the Exchange Offer. If, however, Exchange Notes are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Old Notes tendered hereby, or if a transfer tax is imposed for any reason other than the transfer of Old Notes to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exception therefrom is not submitted herewith the amount of such transfer taxes will be billed directly to such tendering holder. Except as provided in this Instruction 4, it will not be necessary for transfer tax stamps to be affixed to the Old Notes listed in this Letter of Transmittal. 5. WAIVER OF CONDITIONS. The Company reserves the absolute right to waive, in whole or in part, any of the conditions to the Exchange Offer set forth in the Prospectus. 6. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated below for further instructions. 7. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number set forth below. In addition, all questions relating to the Exchange Offer, as well as requests for assistance or additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Company at One Manhattenville Road, Purchase, New York 10577. Attention: [Adam F. Wergeles] (914) 933-6400. 8. IRREGULARITIES. All questions as to the validity, form, eligibility (including time of receipt), and acceptance of Letters of Transmittal or Old Notes will be resolved by the Company, whose determination will be final and binding. The Company reserves the absolute right to reject any or all Letters of Transmittal or tenders that are not in proper form or the acceptance of which would, in the opinion of the Company's counsel, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to the particular Old Notes covered by any Letter of Transmittal or tendered pursuant to such letter. None of the Company, the Parent Company, the Exchange Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Company's interpretation of the terms and conditions of the Exchange Offer shall be final and binding. 9. DEFINITIONS. Capitalized terms used in this Letter of Transmittal and not otherwise defined have the meanings given in the Prospectus. IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH CERTIFICATES FOR OLD NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE. EX-99.2 20 EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY Offer to Exchange 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[ ]) (Registered Under The Securities Act of 1933) For Any and All of Its Outstanding 9 1/8% Senior Notes due 2008 (CUSIP #[ ]) of R.H. DONNELLEY INC. This Notice of Guaranteed Delivery or one substantially equivalent hereto may be used to accept the Exchange Offer (as defined below) if (i) certificates for the 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[ ]) (the "Old Notes") of RH. Donnelley Inc., a Delaware corporation (the "Company"), are not immediately available, (ii) time will not permit the holder's Old Notes or other required documents to reach The Bank of New York (the "Exchange Agent") before the Expiration Date (as defined in the Prospectus referred to below) or (iii) the procedures for book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile transmission, overnight courier, telex, telegram or mail to the Exchange Agent. See "The Exchange Offer--Guaranteed Delivery Procedures" in the Prospectus dated July [ ], 1998 (which, together with the related Letter of Transmittal, constitutes the "Exchange Offer") of the Company. The Exchange Agent for the Exchange Offer is: THE BANK OF NEW YORK By Registered or Certified Mail: By Registered or Certified Mail: The Bank of New York The Bank of New York 101 Barclay Street, (7 East) 101 Barclay Street New York, New York 10286 Corporate Trust Services Window Attention: ____________ Ground Level Reorganization Section New York, New York 10286 Attention: ____________ Reorganization Section By Facsimile for Eligible Institutions: (212) 815-______ Confirmed by Telephone: (212) 815-______ DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED ON THE LETTER OF TRANSMITTAL. THE FOLLOWING GUARANTEE MUST BE COMPLETED GUARANTEE OF DELIVERY (Not to be used for Signature Guarantee) The undersigned, a firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States, hereby guarantees to deliver to the Exchange Agent, at one of its addresses set forth above, either the certificates for all physically tendered Old Notes, in proper form for transfer, or confirmation of the book-entry transfer of such Old Notes to the Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to the procedures for book-entry transfer set forth in the Prospectus, in either case together with one or more properly completed and duly executed Letter(s) of Transmittal (or facsimile thereof) and any other documents required by such Letter of Transmittal, within five New York Stock Exchange trading days after the date of execution of this Notice of Guaranteed Delivery. The undersigned acknowledges that it must deliver the Letter(s) of Transmittal and the Old Notes tendered hereby to the Exchange Agent within the time period set forth above and that failure to do so could result in a financial loss to the undersigned. Name of Firm:____________________________ ________________________________ (Authorized Signature) Address:_________________________________ Title:__________________________ _________________________________________ Name:___________________________ (Zip Code) (Please type or print) Area Code and Telephone Number: _________________________________________ Date:____________________________ Principal Amount of 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[ ]): $ ________________________________________ NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. ACTUAL SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND FULLY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS. EX-99.3 21 EXHIBIT 99.3 Offer to Exchange 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[ ]) (Registered under the Securities Act of 1933) For Any and All Outstanding 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[ ]) of R.H. DONNELLEY INC. To Registered Holders and The Depository Trust Company Participants: We are enclosing herewith the material listed below relating to the offer by R.H. Donnelley Inc., a Delaware corporation (the "Company"), to exchange its 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[ ]) (the "Exchange Notes") pursuant to an offering registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of its issued and outstanding 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[ ]) (the "Old Notes") upon the terms and subject to the conditions set forth in the Company's Prospectus, dated July [ ], 1998, and the related Letter of Transmittal (which together constitute the "Exchange Offer"). Enclosed herewith are copies of the following documents: 1. Prospectus dated July [ ], 1998; 2. Letter of Transmittal to the 9 1/8% Senior Subordinated Exchange Notes due 2008; 3. Notice of Guaranteed Delivery; 4. Instruction to Registered Holder and/or Book-Entry Transfer Participant from Owner; and 5. Letter which may be sent to your clients for whose account you hold Old Notes in your name or in the name of your nominee, to accompany the instruction form referred to above, for obtaining such client's instruction with regard to the Exchange Offer. We urge you to contact your clients promptly. Please note that the Exchange Offer will expire at 5:00 p.m., New York City time, on [ ], 1998, unless extended. The Exchange Offer is not conditioned upon any minimum number of Old Notes being tendered. Pursuant to the Letter of Transmittal, each holder of Old Notes will represent to the Company that (i) the holder is not an "affiliate" of the Company, (ii) any Exchange Notes acquired pursuant to the Exchange Offer are being acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the holder and (iii) neither the holder nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes. If the tendering holder is a broker-dealer that will receive Exchange Notes for its own account in exchange for Old Notes, you will represent on behalf of such broker-dealer that the Old Notes to be exchanged for the Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledge on behalf of such broker-dealer that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes. By acknowledging that it will deliver and by delivering a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes, such broker-dealer is not deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The enclosed Instruction to Registered Holder and/or Book-Entry Transfer Participant from Owner contains an authorization by the beneficial owners of the Old Notes for you to make the foregoing representations. The Company will not pay any fee or commission to any broker or dealer or to any other persons (other than the Exchange Agent) in connection with the solicitation of tenders of Old Notes pursuant to the Exchange Offer. The Company will pay or cause to be paid any transfer taxes payable on the transfer of Old Notes to it, except as otherwise provided in Instruction 4 of the enclosed Letter of Transmittal. Additional copies of the enclosed material may be obtained from the undersigned. Very truly yours, THE BANK OF NEW YORK NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE AGENT OF R.H. DONNELLEY INC. OR THE BANK OF NEW YORK OR AUTHORIZE YOU TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON THEIR BEHALF IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. EX-99.4 22 EXHIBIT 99.4 Offer to Exchange 9 1/8% Senior Subordinated Notes Due 2008 (CUSIP #[ ]) (Registered Under The Securities Act of 1933) For Any and All of Its Outstanding 9 1/8% Senior Subordinated Notes Due 2008 (CUSIP #[ ]) of R.H. DONNELLEY INC. To Our Clients: We are enclosing herewith a Prospectus, dated July [ ], 1998, of R.H. Donnelley Inc., a Delaware corporation (the "Company"), and a related Letter of Transmittal (which together constitute the "Exchange Offer") relating to the offer by the Company to exchange its 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[ ]) (the "Exchange Notes"), pursuant to an offering registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of its issued and outstanding 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[ ]) (the "Old Notes") upon the terms and subject to the conditions set forth in the Exchange Offer. Please note that the Exchange Offer will expire at 5:00 p.m., New York City time, on [ ], 1998, unless extended. The Exchange Offer is not conditioned upon any minimum number of Old Notes being tendered. We are the holder of record and/or participant in the book-entry transfer facility of Old Notes held by us for your account. A tender of such Old Notes can be made only by us as the record holder and/or participant in the book-entry transfer facility and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Old Notes held by us for your account. We request instructions as to whether you wish to tender any or all of the Old Notes held by us for your account pursuant to the terms and conditions of the Exchange Offer. We also request that you confirm that we may on your behalf make the representations contained in the Letter of Transmittal. Pursuant to the Letter of Transmittal, each holder of Old Notes will represent to the Company that (i) the holder is not an "affiliate" of the Company, (ii) any Exchange Notes acquired pursuant to the Exchange Offer are being acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the holder and (iii) neither the holder nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes. If the tendering holder is a broker-dealer that will receive Exchange Notes for its own account in exchange for Old Notes, we will represent on behalf of such broker-dealer that the Old Notes to be exchanged for the Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledge on behalf of such broker-dealer that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes. By acknowledging that it will deliver and by delivering a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes, such broker-dealer is not deemed to admit that it is an "underwriter" within the meaning of the Securities Act. Very truly yours, EX-99.5 23 EXHIBIT 99.5 INSTRUCTION TO REGISTERED HOLDER AND/OR BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM OWNER OF R.H. DONNELLEY INC. 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[________]) To Registered Holder and/or Participant of the Book-Entry Transfer Facility: The undersigned hereby acknowledges receipt of the Prospectus dated [______], 1998 (the "Prospectus") of R.H. Donnelley, Inc., a Delaware corporation (the "Company"), and R.H. Donnelley Corporation, a Delaware Corporation (the "Parent Company"), and the accompanying Letter of Transmittal (the "Letter of Transmittal"), that together constitute the Company's offer (the "Exchange Offer"). Capitalized terms used but not defined herein have the meaning as ascribed to them in the Prospectus. This will instruct you, the registered holder and/or book-entry transfer facility participant, as to the action to be taken by you relating to the Exchange Offer with respect to the Old Notes held by you for the account of the undersigned. The aggregate face amount of the Old Notes held by you for the account of the undersigned is (fill in amount): $___________ of the 9 1/8% Senior subordinated Notes due 2008 (CUSIP #[________]). With respect to the Exchange Offer, the undersigned hereby instructs you (check appropriate box): [ ] To TENDER the following Old Notes held by you for the account of the undersigned (insert principal amount of Old Notes to be tendered, if any): $___________ of the 9 1/8% Senior Subordinated Notes due 2008 (CUSIP #[________]). [ ] NOT to TENDER any Old Notes held by you for the account of the undersigned. If the undersigned instructs you to tender the Old Notes held by you for the account of the undersigned, it is understood that you are authorized to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations, that (i) the holder is not an "affiliate" of the Company, (ii) any Exchange Notes acquired pursuant to the Exchange Offer are being acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the holder and (iii) neither the holder nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Old Notes, it represents that such Old Notes were acquired as a result of market-making activities or other trading activities, and it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes. By acknowledging that it will deliver and by delivering a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes, such broker-dealer is not deemed to admit that it is an "underwriter" within the meaning of the Securities Act of 1933, as amended. SIGN HERE Name of beneficial owner(s):________________________________________ Signature(s):_______________________________________________________ Name(s) (please print):_____________________________________________ Address:____________________________________________________________ ____________________________________________________________________ Telephone Number:___________________________________________________ Taxpayer Identification or Social Security Number:__________________ ____________________________________________________________________ Date:_______________________________________________________________ -----END PRIVACY-ENHANCED MESSAGE-----