-----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, LXYo9hoC/1EghA2yTbVu8XJBy+MbY71aHgyn4HU4VC5zXB3k5FlrJ/Hn3ahdw79L pNYs7GIK+FU+bHb2iUgpdg== 0000950152-04-006664.txt : 20040903 0000950152-04-006664.hdr.sgml : 20040903 20040903170316 ACCESSION NUMBER: 0000950152-04-006664 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20040901 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20040903 DATE AS OF CHANGE: 20040903 FILER: COMPANY DATA: COMPANY CONFORMED NAME: R H DONNELLEY CORP CENTRAL INDEX KEY: 0000030419 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING [7310] IRS NUMBER: 132740040 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07155 FILM NUMBER: 041017374 BUSINESS ADDRESS: STREET 1: 1001 WINSTEAD DRIVE CITY: CARY STATE: NC ZIP: 27513 BUSINESS PHONE: 9198046000 MAIL ADDRESS: STREET 1: 1001 WINSTEAD DRIVE CITY: CARY STATE: NC ZIP: 27513 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 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DONNELLEY R H INC CENTRAL INDEX KEY: 0001065310 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS PUBLISHING [2741] IRS NUMBER: 362467635 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-59287 FILM NUMBER: 041017373 BUSINESS ADDRESS: STREET 1: 1001 WINSTEAD DRIVE CITY: CARY STATE: NC ZIP: 27513 BUSINESS PHONE: 9192971234 MAIL ADDRESS: STREET 1: 1001 WINSTEAD DRIVE CITY: CARY STATE: NC ZIP: 27513 8-K 1 l09401ae8vk.txt R.H. DONNELLEY 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): September 1, 2004 R.H. DONNELLEY CORPORATION -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) DELAWARE 1-07155 13-2740040 - ------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 1001 WINSTEAD DRIVE, CARY, NORTH CAROLINA 27513 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) R.H. DONNELLEY INC.* -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) DELAWARE 333-59287 36-2467635 - ------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 1001 WINSTEAD DRIVE, CARY, NORTH CAROLINA 27513 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrants' telephone number, including area code: (919) 297-1600 Not Applicable ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) *R.H. Donnelley Inc. is a wholly owned subsidiary of R.H. Donnelley Corporation. R.H. Donnelley Inc. became subject to the filing requirements of Section 15(d) on October 1, 1998 in connection with the public offer and sale of its 9 1/8% Senior Subordinated Notes, which Notes were redeemed in full on February 6, 2004. In addition, R.H. Donnelley Inc. is the obligor of 8 7/8% senior notes due 2010 and 10 7/8% senior subordinated notes due 2012 and is now subject to the filing requirements of Section 15(d) as a result of such notes. As of September 1, 2004, 100 shares of R.H. Donnelley Inc. common stock, no par value, were outstanding. ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. GENERAL. In connection with the completion of the acquisition (see Item 2.01 below for further details) by R.H. Donnelley Corporation (the "Company") on September 1, 2004 of SBC Communications Inc.'s ("SBC") directory publishing business (the "Directory Business") in Illinois and Northwest Indiana (the "Territory"), the Company entered into certain agreements with SBC and/or certain of its affiliates, including a Directory Services License Agreement, a Non-Competition Agreement, a SMARTpages Reseller Agreement and an Ameritech Directory Publishing Listing License Agreement (collectively, the "Transaction Agreements"). The Company and its wholly owned subsidiary R.H. Donnelley Inc. also entered into an Amended and Restated Credit Agreement to fund a portion of the purchase price. Prior to the acquisition of the Directory Business, the Company, through the DonTech II Partnership ("DonTech"), a partnership with an affiliate of SBC, sold advertising for 129 SBC-branded directories in the Territory. Pursuant to the partnership arrangements, the Company had a 50% interest in the net profits of DonTech and also received revenue participation income directly from SBC based on a percentage of DonTech advertising sales. As part of the acquisition, the Company acquired the remaining 50% of DonTech. DIRECTORY SERVICES LICENSE AGREEMENT. Under the Directory Services License Agreement among the Company, R.H. Donnelley Publishing & Advertising of Illinois Partnership (formerly known as The APIL Partners Partnership) ("APIL"), DonTech (collectively with APIL, the "Publisher"), Ameritech Corporation, a wholly owned subsidiary of SBC ("Ameritech"), SBC Directory Operations, Inc., a wholly owned subsidiary of SBC ("SBC Directory Operations"), and SBC Knowledge Ventures, L.P., a wholly owned subsidiary of SBC ("SBC Knowledge Ventures"), SBC Directory Operations has designated the Publisher as the official and exclusive provider of yellow pages directory services for SBC in the Territory and granted the Publisher the exclusive license to produce, publish and distribute white pages directories in the Territory as SBC's agent, in each case for an initial term of 50 years. The Publisher has also agreed to be responsible for all activities relating to the production, publication and distribution of the white and yellow pages directories in the Territory in accordance with certain performance standards for the same initial term of 50 years. The initial term is subject to early termination under certain circumstances and is also subject to automatic renewal for successive five-year terms, unless either party provides certain specified prior written notice. In addition, SBC Knowledge Ventures has granted to the Publisher a non-transferable, exclusive license to use the SBC brand and logo on print directories in the Territory and for related aspects of producing, publishing and distributing such directories and soliciting and selling advertising in connection therewith. The Publisher is obligated to include the SBC brand and logo on such directories and also has co-branding rights and obligations with respect thereto. Except as described below, this trademark license will terminate at the same time that the Directory Services License Agreement is terminated. The Directory Services License Agreement may be terminated early by SBC if (1) the Publisher fails to publish white pages directories as required by applicable legal and regulatory requirements, (2) an affiliate of the Company violates any applicable legal or regulatory requirement that results in the commencement of a formal action that is reasonably likely to have a material adverse effect on the SBC telephone companies in the Territory, (3) any affiliate of the Company provides certain enumerated telecommunications services in the Territory, (4) any affiliate of the Company breaches any Transaction 2 Agreement which has a material adverse effect on the licensed SBC marks in the Territory or (5) there are two or more substantially similar material breaches by the applicable Company entities within five years with respect to a particular service area or directory, in which case the Directory Service License Agreement may be terminated early only with respect to the impacted directory or service area. The Publisher may terminate the Directory Services License Agreement upon (1) any material breach of a Transaction Agreement by an SBC party or (2) two or more substantially similar material breaches by the applicable SBC entities within five years with respect to a particular service area or directory, in which case the Directory Services License Agreement may be terminated early only with respect to the impacted directory or service area. Subject to limited exceptions, upon the acquisition of the Company by a competitor of SBC, SBC will be permitted to either terminate the Publisher's trademark license (in which case the Publisher may elect to terminate the Transaction Agreements) or require the purchaser of the Company to become subject to the obligations of the Transaction Agreements. If SBC terminates the Publisher's trademark license (but the Publisher does not terminate the Transaction Agreements), the non-compete obligations described below will remain in effect. NON-COMPETITION AGREEMENT. Under the Non-Competition Agreement between the Company and SBC, SBC and its affiliates (with limited exceptions) have agreed not to engage in the business of (1) producing, publishing or distributing any yellow or white pages print directories in the Territory or selling or soliciting local or national yellow or white pages advertising for inclusion in any such directories or (2) soliciting or selling local internet yellow pages advertising for certain internet yellow pages directories or licensing certain SBC marks to a third party for that purpose. These non-compete restrictions will not apply to Cingular Wireless LLC ("Cingular"), except that Cingular will be subject to the non-competition obligations with respect to print directories if it becomes wholly owned by SBC, subject to limited exceptions. The term of the Non-Competition Agreement is generally concurrent with the term of the Directory Services License Agreement with certain limited exceptions. The Company's existing non-compete obligations in favor of Ameritech covering Indiana (other than areas in which the Company already operates), Michigan, Ohio and Wisconsin will remain in effect until the expiration of the Directory Services License Agreement. SMARTPAGES RESELLER AGREEMENT. Under the SMARTPages Reseller Agreement among SBC, Southwestern Bell Yellow Pages, Inc. ("Southwestern Bell"), SBC Knowledge Ventures, the Company and the Publisher, Southwestern Bell, a wholly owned subsidiary of SBC, has granted to the Publisher the exclusive right to sell local internet yellow pages advertising and the non-exclusive right to sell national internet yellow pages advertising to any advertiser physically located in the Territory for inclusion in SBC's SMARTpages.com internet yellow pages directory. For the five-year term of the SMARTpages Reseller Agreement, SBC and its subsidiaries may not sell any local internet yellow pages advertising in the Territory for any electronic directories, and the Publisher is obligated to provide all such advertising it sells in the Territory to SBC for posting on SMARTpages.com. AMERITECH DIRECTORY PUBLISHING LISTING LICENSE AGREEMENT. Under the Ameritech Directory Publishing Listing License Agreement between the Publisher and Ameritech Services Inc. ("Ameritech Services"), on behalf of, and as agent for, Illinois Bell Telephone Company and Indiana Bell Telephone Company, Incorporated, the Company has the right to purchase and use basic SBC subscriber listing information and updates for the purpose of publishing directories in any format and soliciting directory advertising during the term of the Directory Services License Agreement. 3 Ameritech and the Company have each agreed to guarantee the obligations of their respective affiliates under the Transaction Agreements. The Transaction Agreements are filed herewith as Exhibits 10.1 through 10.4. The foregoing descriptions of the Transaction Agreements are qualified in their entirety by the full text of such documents, which are incorporated by reference herein. AMENDMENT NO. 1 TO THE PURCHASE AGREEMENT. On September 1, 2004, the Company entered into the Amendment No. 1 (the "Amendment") to the Purchase Agreement, among the Company, Ameritech and Ameritech Publishing Inc. ("API"), to amend certain terms, including without limitation the post-closing delivery requirements, of the Purchase Agreement (and together with the Amendment, the "Purchase Agreement"), dated as of July 28, 2004, among the Company, Ameritech and API. The Amendment is filed herewith as Exhibit 2.2. The foregoing description of the Amendment is qualified in its entirety by the full text of such document, which is incorporated by reference herein. AMENDED AND RESTATED CREDIT AGREEMENT. The Company and R.H. Donnelley Inc., as the borrower, entered into an Amended and Restated Credit Agreement (the "Credit Agreement") with the lenders from time to time parties thereto, J.P. Morgan Securities Inc. and Bear, Stearns & Co. Inc., as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank and Bear Stearns Corporate Lending Inc., as co-syndication agents, Citicorp North America, Inc. and Goldman Sachs Credit Partners L.P., as co-documentation agents, and Deutsche Bank Trust Company Americas, as administrative agent as of September 1, 2004 in order to fund a portion of the purchase price of the Directory Business and to provide additional liquidity. Among other things, the Credit Agreement provides for a $50,000,000 increase in the revolving loan facility, $600,503,418.82 of additional tranche A-2 term loans and $731,829,406.92 of additional tranche B-2 term loans for an aggregate credit facility of $2,525,000,000. In connection with the Credit Agreement, the Company and its subsidiaries entered into an Amended and Restated Guaranty and Collateral Agreement that provides for a guaranty of the obligations of R.H. Donnelley Inc. by the Company and the subsidiaries of R.H. Donnelley Inc. In addition, pursuant to the Amended and Restated Guaranty and Collateral Agreement, the Company and its subsidiaries have granted a lien on substantially all of their assets, including pledges of subsidiary stock, as collateral for the obligations under the Credit Agreement and the 8-7/8% Senior Notes due 2010, as required by the Indenture, dated as of December 3, 2002, by and between R.H. Donnelley Finance Corporation I ("Finance Corp.") and The Bank of New York, as trustee (the "Trustee"), as supplemented by (1) the Supplemental Indenture, dated as of January 3, 2003, by and among R.H. Donnelley Inc. (as successor to Finance Corp), the guarantors party thereto, and the Trustee and (2) the Second Supplemental Indenture, dated as of September 1, 2004, by and among R.H. Donnelley Inc., the guarantors party thereto and the Trustee, governing such notes. The Credit Agreement and the Amended and Restated Guaranty and Collateral Agreement are filed herewith as Exhibits 10.5 and 10.6, respectively. The foregoing descriptions of the Credit Agreement and the Amended and Restated Guaranty and Collateral Agreement are qualified in their entirety by reference to the full text of such documents, which are incorporated by reference herein. 4 ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS. On September 1, 2004, the Company completed its acquisition of the Directory Business. The acquisition was accomplished pursuant to, and in accordance with, the terms of the Purchase Agreement. Pursuant to the Purchase Agreement, affiliates of the Company acquired from Ameritech and API certain partnership interests in APIL, The AM-DON Partnership and DonTech, each an Illinois general partnership. The Company purchased the Directory Business for $1.41 billion in cash, after working capital adjustments and the settlement of a $30 million liquidation preference owed to the Company related to the DonTech partnership. As discussed under "Amended and Restated Credit Agreement" in Item 1.01, the Company received debt financing to fund the purchase price from a group of banks led by J.P. Morgan Securities Inc. and Bear, Stearns & Co., Inc. As discussed under "General" in Item 1.01, the Company and an affiliate of SBC operated the Directory Business through DonTech. In connection with the closing of the transaction, the Company and/or certain of its affiliates has entered into commercial arrangements with SBC and/or its affiliates as described under Item 1.01 of this report. The foregoing description of the Purchase Agreement is qualified in its entirety by the full text of such document, which is incorporated by reference herein. ITEM 8.01. OTHER EVENTS. In connection with the acquisition of the Directory Business described under Item 1.01 and Item 2.01 to this report, the Company, R.H. Donnelley Inc. and its direct and indirect subsidiaries entered into supplemental indentures to each of the indentures governing R.H. Donnelley Inc.'s 8-7/8% Senior Notes due 2010 and 10-7/8% Senior Subordinated Notes due 2012 to add certain newly created or acquired subsidiaries as quarantors of R.H. Donnelley Inc.'s obligations under each indenture. Copies of the supplemental indentures are attached hereto as Exhibits 4.1 and 4.2, respectively. In addition, on September 1, 2004, the Company issued a press release announcing the completion of the acquisition, a copy of which is attached hereto as Exhibit 99.1. 5 ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Businesses Acquired. The financial statements required by this item will be filed by amendment not later than 71 calendar days after the date this initial report on Form 8-K is required to be filed. (b) Pro Forma Financial Information. The pro forma financial information required by this item will be filed by amendment not later than 71 calendar days after the date this initial report on Form 8-K is required to be filed. (c) Exhibits.
Exhibit Number Description - ------- ----------- 2.1 Purchase Agreement, dated as of July 28, 2004, by and among R.H. Donnelley Corporation, Ameritech Corporation and Ameritech Publishing, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 2, 2004, Commission File No. 001-07155) 2.2 Amendment No. 1 to the Purchase Agreement, dated as of September 1, 2004, by and among R.H. Donnelley Corporation, Ameritech Corporation and Ameritech Publishing, Inc. 4.1 Second Supplemental Indenture, dated as of September 1, 2004, by and among R.H. Donnelley Inc., the guarantors party thereto and The Bank of New York, as Trustee, with respect to the 8 7/8% Senior Notes due 2010 of R.H. Donnelley Inc. 4.2 Third Supplemental Indenture, dated as of September 1, 2004, by and among R.H. Donnelley Inc., the guarantors party thereto and The Bank of New York, as Trustee, with respect to the 10 7/8% Senior Subordinated Notes due 2012 of R.H. Donnelley Inc. 4.3 Senior Guarantees relating to the Second Supplemental Indenture to the Indenture governing R.H. Donnelley Inc.'s 8 7/8% Senior Notes 4.4 Senior Subordinated Guarantees relating to the Third Supplemental Indenture to the Indenture governing R.H. Donnelley Inc.'s 10 7/8% Senior Subordinated Notes due 2012 10.1 Directory Services License Agreement, dated as of September 1, 2004, among R.H. Donnelley Corporation, R.H. Donnelley Publishing & Advertising of Illinois Partnership (formerly known as The APIL Partners Partnership), DonTech II Partnership, Ameritech Corporation, SBC Directory Operations, Inc. and SBC Knowledge Ventures, L.P. 10.2 Non-Competition Agreement, dated as of September 1, 2004, between R.H. Donnelley Corporation and SBC Communications, Inc. 10.3 SMARTpages Reseller Agreement, dated as of September 1, 2004, among SBC Communications, Inc., Southwestern Bell Yellow Pages, Inc., SBC Knowledge Ventures, L.P., R.H. Donnelley Corporation, R.H. Donnelley Publishing & Advertising of Illinois Partnership (formerly known as The APIL Partners Partnership) and DonTech II Partnership.
6 10.4 Ameritech Directory Publishing Listing License Agreement, dated as of September 1, 2004, among R.H. Donnelley Publishing & Advertising of Illinois Partnership (formerly known as The APIL Partners Partnership), DonTech II Partnership and Ameritech Services Inc. 10.5 Amended and Restated Credit Agreement, dated as of September 1, 2004, by and among, R.H. Donnelley Inc., as borrower, R.H. Donnelley Corporation, the lenders from time to time parties thereto, J.P. Morgan Securities Inc. and Bear, Stearns & Co. Inc., as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank and Bear Stearns Corporate Lending Inc., as co-syndication agents, Citicorp North America, Inc. and Goldman Sachs Credit Partners L.P., as co-documentation agents, and Deutsche Bank Trust Company Americas, as administrative agent. 10.6 Amended and Restated Guaranty and Collateral Agreement, dated as of September 1, 2004, by and among R.H. Donnelley Corporation, R.H. Donnelley Inc., R.H. Donnelley APIL, Inc., R.H. Donnelley Publishing & Advertising, Inc., Get Digital Smart.com Inc., R.H. Donnelley Publishing & Advertising of Illinois Partnership, DonTech II Partnership, DonTech Holdings, LLC, and R.H. Donnelley Publishing & Advertising of Illinois Holdings, LLC. 99.1 Press Release, dated September 1, 2004
7 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. R.H. DONNELLEY CORPORATION By: /s/ Robert J. Bush ----------------------------------------- Name: Robert J. Bush Title: Vice President and General Counsel R.H. DONNELLEY INC. By: /s/ Robert J. Bush ----------------------------------------- Name: Robert J. Bush Title: Vice President and General Counsel Date: September 3, 2004 8 EXHIBIT INDEX
Exhibit Number Description - ------- ----------- 2.1 Purchase Agreement, dated as of July 28, 2004, by and among R.H. Donnelley Corporation, Ameritech Corporation and Ameritech Publishing, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 2, 2004, Commission File No. 001-07155) 2.2 Amendment No. 1 to the Purchase Agreement, dated as of September 1, 2004, by and among R.H. Donnelley Corporation, Ameritech Corporation and Ameritech Publishing, Inc. 4.1 Second Supplemental Indenture, dated as of September 1, 2004, by and among R.H. Donnelley Inc., the guarantors party thereto and The Bank of New York, as Trustee, with respect to the 8 7/8% Senior Notes due 2010 of R.H. Donnelley Inc. 4.2 Third Supplemental Indenture, dated as of September 1, 2004, by and among R.H. Donnelley Inc., the guarantors party thereto and The Bank of New York, as Trustee, with respect to the 10 7/8% Senior Subordinated Notes due 2012 of R.H. Donnelley Inc. 4.3 Senior Guarantees relating to the Second Supplemental Indenture to the Indenture governing R.H. Donnelley Inc.'s 8 7/8% Senior Notes due 2010 4.4 Senior Subordinated Guarantees relating to the Third Supplemental Indenture to the Indenture governing R.H. Donnelley Inc.'s 10 7/8% Senior Subordinated Notes due 2012 10.1 Directory Services License Agreement, dated as of September 1, 2004, among R.H. Donnelley Corporation, R.H. Donnelley Publishing & Advertising of Illinois Partnership (formerly known as The APIL Partners Partnership), DonTech II Partnership, Ameritech Corporation, SBC Directory Operations, Inc. and SBC Knowledge Ventures, L.P. 10.2 Non-Competition Agreement, dated as of September 1, 2004, between R.H. Donnelley Corporation and SBC Communications, Inc. 10.3 SMARTpages Reseller Agreement, dated as of September 1, 2004, among SBC Communications, Inc., Southwestern Bell Yellow Pages, Inc., SBC Knowledge Ventures, L.P., R.H. Donnelley Corporation, R.H. Donnelley Publishing & Advertising of Illinois Partnership (formerly known as The APIL Partners Partnership) and DonTech II Partnership. 10.4 Ameritech Directory Publishing Listing License Agreement, dated as of September 1, 2004, among R.H. Donnelley Publishing & Advertising of Illinois Partnership (formerly known as The APIL Partners Partnership), DonTech II Partnership and Ameritech Services Inc. 10.5 Amended and Restated Credit Agreement, dated as of September 1, 2004, by and among, R.H. Donnelley Inc., as borrower, R.H. Donnelley Corporation, the lenders from time to time parties thereto, J.P. Morgan Securities Inc. and Bear,
9 Stearns & Co. Inc., as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank and Bear Stearns Corporate Lending Inc., as co-syndication agents, Citicorp North America, Inc. and Goldman Sachs Credit Partners L.P., as co-documentation agents, and Deutsche Bank Trust Company Americas, as administrative agent. 10.6 Amended and Restated Guaranty and Collateral Agreement, dated as of September 1, 2004, by and among R.H. Donnelley Corporation, R.H. Donnelley Inc., R.H. Donnelley APIL, Inc., R.H. Donnelley Publishing & Advertising, Inc., Get Digital Smart.com Inc., R.H. Donnelley Publishing & Advertising of Illinois Partnership, DonTech II Partnership, DonTech Holdings, LLC, and R.H. Donnelley Publishing & Advertising of Illinois Holdings, LLC. 99.1 Press Release, dated September 1, 2004
10 EX-2.2 2 l09401aexv2w2.txt EXHIBIT 2.2 EXHIBIT 2.2 AMENDMENT NO. 1 TO THE PURCHASE AGREEMENT THIS AMENDMENT NO. 1 TO THE PURCHASE AGREEMENT is made as of the 1st day of September, 2004 (this "Amendment") to the Purchase Agreement, dated as of July 28, 2004 (the "Purchase Agreement"), by and among Ameritech Corporation ("Ameritech"), Ameritech Publishing Inc., a Delaware corporation ("API", and together with Ameritech, "Sellers"), and R. H. Donnelley Corporation, a Delaware corporation ("Buyer"). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement. RECITAL Sellers and Buyer desire to amend the Purchase Agreement in the manner described herein. NOW, THEREFORE, the parties hereto agree as follows: 1. Final Balance Sheet. Section 5.2 of the Purchase Agreement is hereby amended by adding the following as clause 5.2(e): "(e) Sellers shall deliver to Buyer no later than December 31, 2004 an audited combined consolidated balance sheet of the DonTech Business as of the close of business on the Closing Date (the "Closing Balance Sheet"). The Closing Balance Sheet to be delivered to Buyer will be prepared from, and will be consistent with, the books and records of the Seller Entities which relate to the DonTech Business and will present fairly and accurately, in all material respects, the financial position of the DonTech Business on a combined consolidated basis as of the date indicated, in conformity with GAAP consistently applied (the "Accounting Principles") except as noted therein. Sellers shall engage Ernst & Young (the "Sellers Auditor") to conduct the audit with respect to the Closing Balance Sheet. Sellers shall deliver to Buyer the Closing Balance Sheet together with the opinion of the Sellers Auditor thereon stating that the audit has been conducted in accordance with the Accounting Principles except as noted therein. Upon Buyer's reasonable request, Sellers shall (i) provide Buyer or its representatives reasonable access to the work papers, schedules and other documents prepared by Sellers in connection with the preparation of the Closing Balance Sheet and (ii) use all commercially reasonable efforts to cause the Sellers Auditor to provide Buyer and its accounting firm with reasonable access the Sellers Auditor's work papers used in connection with its audit with respect to the Closing Balance Sheet. The Closing Balance Sheet shall in no event be deemed to be included in the definition of Financial Statements for purposes of Section 3.6 of this Agreement. Buyer shall reimburse Sellers for all reasonable costs and expenses incurred by Sellers in connection with the fulfillment of their obligations under this clause (e). Notwithstanding anything to the contrary in Section 5.14 of this Agreement, Sellers may retain any financial books and records relating to the DonTech Business as reasonably required to fulfill their obligations under this clause (e); provided, that (A) Sellers shall provide Buyer or its representatives with reasonable access to such retained financial books and records and (B) on, or as reasonably practicable after, Sellers' delivery of the Closing Balance Sheet to Buyer, subject to Section 5.14 of this Agreement, Sellers will transfer, or caused to be transferred, to Buyer all such retained financial books and records." 2. Vendor Contracts. Section 5.3 of the Purchase Agreement is hereby amended by adding the following as clause 5.3(e): "(e) Notwithstanding anything to the contrary in (x) Section 5.3(b) or 5.3(c) of this Agreement or (y) any amendment to a Vendor Contract to which Buyer or any of its Affiliates is a party (each such Vendor Contract, as amended, an "Amended Vendor Contract"), in the event any Vendor under an Amended Vendor Contract ceases for any reason (other than a material breach by Buyer or any of its Affiliates of such Amended Vendor Contract) to provide Buyer or any of its Affiliates with the services or products provided under such Amended Vendor Contract prior to December 31, 2004, Sellers agree to provide such services and products, directly or indirectly, to Buyer or its Affiliates on terms and conditions substantially similar to those set forth in such Amended Vendor Contract, for the period from and including the date on which the Vendor ceases to provide such services or products until and including December 31, 2004." 3. Intercompany Accounts. Section 5.16 of the Purchase Agreement is hereby amended to read in its entirety as follows: "SECTION 5.16 INTERCOMPANY ACCOUNTS. (a) All intercompany accounts, agreements or arrangements (other than the Ancillary Agreements and the existing billing and collection accounts, agreements and arrangements between the Companies, on the one hand, and the SBC Telcos, on the other, and the financial rights and obligations arising out of those accounts, agreements and arrangements) between any Seller Entity (other than APIL Partners) and any of the Companies shall be terminated as of the Closing without any settlement, offset or payment of any consideration and shall be deemed without further action to be fully discharged as of the Closing Date. (b) From and after the Closing, the SBC Telcos shall continue to bill and collect from customers of the Companies with respect to the amounts listed in Account Nos. 1101.410 and 1199.999 of APIL Partners' general ledger as of the Closing Date (the "Gross AR"), all in accordance with the billing and collection practices that the SBC Telcos currently utilize on behalf of the Companies and in accordance with the Transition Services Agreement. In addition, the SBC Telcos shall perform similar billing and collection services with respect to all new accounts receivable (collectively, with the Gross AR, the "Companies AR") generated by the Companies during the period from the Closing Date until 30 days after the date on which the SBC Telcos cease to provide billing and collection services under the Transition Services Agreement (the "Transition Period"). (c) During the Transition Period, the SBC Telcos shall remit to SBC Directory Operations monthly any amounts purchased from the Companies AR in the -2- prior month net of the uncollectible settlement. SBC Directory Operations will remit all such amounts to Buyer in accordance with the Transition Services Agreement. (d) Within 30 days following the end of the Transition Period, except as otherwise provided in the Transition Services Agreement, the SBC Telcos shall transfer all Companies AR which remain outstanding to SBC Directory Operations (the "Outstanding AR"). SBC Directory Operations will promptly transfer the Outstanding AR to the Buyer. Within 30 days after such transfer the parties shall make a final settlement of all Companies AR by netting the final prior month's monthly remittance amount due to Buyer plus the holdback for the cumulative estimate for the uncollectible due to Buyer less the amount due from the Buyer for the Outstanding AR transferred to Buyer and due SBC. The net settlement amount, as determined to be owed to SBC or Buyer, shall then be paid within five business days. (e) Sellers agree that, as of the Closing, the Companies will own all of the accounts receivable, whether billed or unbilled, of the DonTech Business, whether or not such receivables are reflected in the financial statements of the DonTech Business, other than any such accounts receivable which have been transferred to the SBC Telcos in accordance with the billing and collection agreements and arrangements with the SBC Telcos that the Companies currently utilize. Payment for the final month's billing prior to close which is recorded as an accounts receivable on APIL Partners' balance sheet will be remitted to Buyer according to the Transition Services Agreement." 4. Agreed Upon Procedures. (a) Section 5.2(c) of the Purchase Agreement is hereby amended by replacing "30 days" with "45 days" in the sixth sentence thereof. (b) Schedule 5.2(c) of the Purchase Agreement is hereby amended and replaced in its entirety with Schedule 5.2(c) attached hereto. 5. Company Disclosure Letter. Section 3.13 of the Company Disclosure Letter is hereby amended by replacing "Knowledge Solutions/SRI" under the caption "Usage Studies" with "Knowledge Networks/SRI". 6. Ancillary Agreements. Any amendments to the form of each of the Ancillary Agreements (including any exhibits or schedules thereto) since the date of the Purchase Agreement have been mutually agreed upon by the parties hereto as evidenced by their execution and delivery by the applicable Seller Parties and Buyer Parties on the date hereof. 7. No Other Amendments. Except as expressly amended hereby, the provisions of the Purchase Agreement are and shall remain in full force and effect. 8. Governing Law. This Amendment shall be governed and construed in accordance with the laws of the State of New York. 9. Counterparts and Effectiveness. This Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall -3- become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that both parties need not sign the same counterpart. -4- IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the date first above written. AMERITECH CORPORATION By: /s/ James S. Kahan --------------------------------------- Name: James S. Kahan Title: Sr. Exec. VP-Corp. Dev. AMERITECH PUBLISHING, INC. By: /s/ Dennis Payne --------------------------------------- Name: Dennis Payne Title: President and CEO R. H. DONNELLEY CORPORATION By: /s/ Robert J. Bush --------------------------------------- Robert J. Bush Vice President, General Counsel and Corporate Secretary EX-4.1 3 l09401aexv4w1.txt EXHIBIT 4.1 EXHIBIT 4.1 SECOND SUPPLEMENTAL INDENTURE SECOND SUPPLEMENTAL INDENTURE (this "Second Senior Notes Supplemental Indenture"), dated as of September 1 , 2004, among R.H. Donnelley Inc., a Delaware corporation ("Donnelley"), the Guarantors signatory hereto (the "Guarantors") and The Bank of New York, as trustee under the Indenture referred to below (the "Trustee"). W I T N E S S E T H : WHEREAS, Donnelley, the guarantors party thereto and the Trustee have entered into a Supplemental Indenture, dated as of January 3, 2003 (the "First Senior Notes Supplemental Indenture"), relating to the Indenture, dated as of December 3, 2002 (as heretofore amended and supplemented, the "Senior Notes Indenture"), which provided for the issuance of the 8-7/8% Senior Notes due 2010 (the "Securities"); WHEREAS, Section 8.01(a) of the Senior Notes Indenture provides, among other things, that Donnelley and the Trustee may modify or amend the Senior Notes Indenture without the consent of the Holders of the outstanding Securities to, including, without limitation, add new Guarantors; WHEREAS, Section 4.18 of the Senior Notes Indenture prohibits Restricted Subsidiaries (as defined in the Senior Notes Indenture) from guaranteeing or pledging any assets to secure the payment of any Debt (as defined in the Senior Notes Indenture) of Donnelley or another Restricted Subsidiary unless such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee (as defined in the Senior Notes Indenture) of payment of the Securities by such Restricted Subsidiary; WHEREAS, the execution of this Second Senior Notes Supplemental Indenture has been duly approved and authorized by the Board of Directors of Donnelley and the Guarantors and all other necessary corporate action on the part of Donnelley and the Guarantors; and WHEREAS, Donnelley has furnished, or caused to be furnished, to the Trustee, and the Trustee has received, an Officers' Certificate and Opinion of Counsel stating, among other things, that this Second Senior Notes Supplemental Indenture is authorized or permitted by the Senior Notes Indenture. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, Donnelley, the Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows: ARTICLE 1 Agreement Section 1.1 Definitions. Capitalized terms used but not otherwise defined in this Second Senior Notes Supplemental Indenture have the meanings ascribed thereto in the Senior Notes Indenture. Section 1.2 Additional Guarantors. Each of DonTech Holdings, LLC, a Delaware limited liability company, R.H. Donnelley Publishing & Advertising of Illinois Holdings, LLC, a Delaware limited liability company, DonTech II Partnership, an Illinois general partnership, and R.H. Donnelley Publishing & Advertising of Illinois Partnership, an Illinois general partnership, shall be (i) a Subsidiary Guarantor under the Senior Notes Indenture and (ii) bound by and subject to the terms and conditions of the Senior Notes Indenture applicable to a Subsidiary Guarantor. Section 1.3 Trustee's Acceptance. The Trustee hereby accepts this Second Senior Notes Supplemental Indenture and agrees to perform the same under the terms and conditions set forth in the Senior Notes Indenture. ARTICLE 2 Miscellaneous Section 2.1 Effect of Supplemental Indenture. Upon the execution and delivery of this Second Senior Notes Supplemental Indenture by Donnelley, the Guarantors and the Trustee, the Senior Notes Indenture shall be supplemented in accordance herewith, and this Second Senior Notes Supplemental Indenture shall form, along with the First Senior Notes Supplemental Indenture, a part of the Senior Notes Indenture for all purposes, and every Holder of Securities heretofore or hereafter authenticated and delivered under the Senior Notes Indenture shall be bound thereby. Section 2.2 Senior Notes Indenture and First Senior Notes Supplemental Indenture Remain in Full Force and Effect. Except as supplemented hereby, all provisions in the Senior Notes Indenture and First Senior Notes Supplemental Indenture shall remain in full force and effect. Section 2.3 Senior Notes Indenture, First Senior Notes Supplemental Indenture and Second Senior Notes Supplemental Indenture Construed Together. This Second Senior Notes Supplemental Indenture is an indenture supplemental to and in implementation of the Senior Notes Indenture and First Senior Notes Supplemental Indenture, and the Senior Notes Indenture, the First Senior Notes Supplemental Indenture and this Second Senior Notes Supplemental Indenture shall henceforth be read and construed together. Section 2.4 Confirmation and Preservation of Senior Notes Indenture. The Senior Notes Indenture and the First Senior Notes Supplemental Indenture, as supplemented by this Second Senior Notes Supplemental Indenture, are in all respects confirmed and preserved. Section 2.5 Conflict with Trust Indenture Act. If any provision of this Second Senior Notes Supplemental Indenture limits, qualifies or conflicts with any provision of the TIA that is required or deemed under the TIA to be part of and govern any provision of this Second Senior Notes Supplemental Indenture, such provision of the TIA shall control. If any provision of this Second Senior Notes Supplemental Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Senior Notes Indenture and the First Senior Notes Supplemental Indenture as so modified or to be excluded by this Second Senior Notes Supplemental Indenture, as the case may be. Section 2.6 Severability. In case any provision in this Second Senior Notes Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 2.7 Benefits of Second Senior Notes Supplemental Indenture. Nothing in this Second Senior Notes Supplemental Indenture or the Securities, express or implied, shall give to any Person, other than the parties hereto and thereto and their successors hereunder and thereunder and the Holders of the Securities, any benefit of any legal or equitable right, remedy or claim under the Senior Notes Indenture, the First Senior Notes Supplemental Indenture, this Second Senior Notes Supplemental Indenture or the Securities. Section 2.8 Successors. All agreements of Donnelley in this Second Senior Notes Supplemental Indenture shall bind its successors. All agreements of the Trustee in this Second Senior Notes Supplemental Indenture shall bind its successors. Section 2.9 Certain Duties and Responsibilities of the Trustee. In entering into this Second Senior Notes Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Senior 2 Notes Indenture, the First Senior Notes Supplemental Indenture and the Securities relating to the conduct or affecting the liability or affording protection to the Trustee, whether or not elsewhere herein so provided. Section 2.10 Governing Law. This Second Senior Notes Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York, but without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby. Section 2.11 Multiple Originals. The parties may sign any number of copies of this Second Senior Notes Supplemental Indenture, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 2.12 Headings. The Article and Section headings herein are inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. Section 2.13 The Trustee. The Trustee shall not be responsible in any manner for or in respect of the validity or sufficiency of this Second Senior Notes Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made by Donnelley and the Guarantors. 3 IN WITNESS WHEREOF, the parties hereto have caused this Second Senior Notes Supplemental Indenture to be duly executed as of the date first written above. R.H. DONNELLEY INC. By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY CORPORATION By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President GET DIGITAL SMART.COM INC. By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY APIL, INC. By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING, INC. By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President DONTECH HOLDINGS, LLC By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS HOLDINGS, LLC By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President DONTECH II PARTNERSHIP By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS PARTNERSHIP By: R.H. Donnelley Publishing & Advertising of Illinois Holdings, LLC, Its Managing Partner By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President THE BANK OF NEW YORK, as trustee By: /s/ Julie Salovitch-Miller ------------------------------------- Name: Julie Salovitch-Miller Title: Vice President EX-4.2 4 l09401aexv4w2.txt EXHIBIT 4.2 EXHIBIT 4.2 THIRD SUPPLEMENTAL INDENTURE THIRD SUPPLEMENTAL INDENTURE (this "Third Senior Subordinated Notes Supplemental Indenture"), dated as of September 1, 2004 among R.H. Donnelley Inc., a Delaware corporation ("Donnelley"), the Guarantors signatory hereto (the "Guarantors") and The Bank of New York, as trustee under the Indenture referred to below (the "Trustee"). W I T N E S S E T H : WHEREAS, Donnelley, the guarantors party thereto and the Trustee have entered into a Supplemental Indenture, dated as of January 3, 2003 (the "First Senior Subordinated Notes Supplemental Indenture"), and a Second Supplemental Indenture, dated as of January 9, 2004 (the "Second Senior Subordinated Notes Supplemental Indenture"), relating to the Indenture, dated as of December 3, 2002 (as heretofore amended and supplemented, the "Senior Subordinated Notes Indenture"), which provided for the issuance of the 10-7/8% Senior Subordinated Notes due 2012 (the "Securities"); WHEREAS, Section 8.01(a) of the Senior Subordinated Notes Indenture provides, among other things, that Donnelley and the Trustee may modify or amend the Senior Subordinated Notes Indenture without the consent of the Holders of the outstanding Securities to, including, without limitation, add new Guarantors; WHEREAS, Section 4.19 of the Senior Subordinated Notes Indenture prohibits Restricted Subsidiaries (as defined in the Senior Subordinated Notes Indenture) from guaranteeing or pledging any assets to secure the payment of any Debt (as defined in the Senior Subordinated Notes Indenture) of Donnelley or another Restricted Subsidiary unless such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee (as defined in the Senior Subordinated Notes Indenture) of payment of the Securities by such Restricted Subsidiary; WHEREAS, the execution of this Third Senior Subordinated Notes Supplemental Indenture has been duly approved and authorized by the Board of Directors of Donnelley and the Guarantors and all other necessary corporate action on the part of Donnelley and the Guarantors; and WHEREAS, Donnelley has furnished, or caused to be furnished, to the Trustee, and the Trustee has received, an Officers' Certificate and Opinion of Counsel stating, among other things, that this Third Senior Subordinated Notes Supplemental Indenture is authorized or permitted by the Senior Subordinated Notes Indenture. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, Donnelley, the Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows: ARTICLE 1 Agreement Section 1.1 Definitions. Capitalized terms used but not otherwise defined in this Third Senior Subordinated Notes Supplemental Indenture have the meanings ascribed thereto in the Senior Subordinated Notes Indenture. Section 1.2 Additional Guarantors. Each of DonTech Holdings, LLC, a Delaware limited liability company, R.H. Donnelley Publishing & Advertising of Illinois Holdings, LLC, a Delaware limited liability company, DonTech II Partnership, an Illinois general partnership, and R.H. Donnelley Publishing & Advertising of Illinois Partnership, an Illinois general partnership, shall be (i) a Subsidiary Guarantor under the Senior Subordinated Notes Indenture and (ii) bound by and subject to the terms and conditions of the Senior Subordinated Notes Indenture applicable to a Subsidiary Guarantor. Section 1.3 Trustee's Acceptance. The Trustee hereby accepts this Third Senior Subordinated Supplemental Indenture and agrees to perform the same under the terms and conditions set forth in the Senior Subordinated Notes Indenture. ARTICLE 2 Miscellaneous Section 2.1 Effect of Supplemental Indenture. Upon the execution and delivery of this Third Senior Subordinated Notes Supplemental Indenture by Donnelley, the Guarantors and the Trustee, the Senior Subordinated Notes Indenture shall be supplemented in accordance herewith, and this Third Senior Subordinated Notes Supplemental Indenture shall form, along with the First Senior Subordinated Notes Supplemental Indenture and Second Senior Subordinated Notes Supplemental Indenture, a part of the Senior Subordinated Notes Indenture for all purposes, and every Holder of Securities heretofore or hereafter authenticated and delivered under the Senior Subordinated Notes Indenture shall be bound thereby. Section 2.2 Senior Subordinated Notes Indenture, First Senior Subordinated Notes Supplemental Indenture and Second Senior Subordinated Notes Supplemental Indenture Remain in Full Force and Effect. Except as supplemented hereby, all provisions in the Senior Subordinated Notes Indenture, First Senior Subordinated Notes Supplemental Indenture and Second Senior Subordinated Notes Supplemental Indenture shall remain in full force and effect. Section 2.3 Senior Subordinated Notes Indenture, First Senior Subordinated Notes Supplemental Indenture, Second Senior Subordinated Notes Supplemental Indenture and Third Senior Subordinated Notes Supplemental Indenture Construed Together. This Third Senior Subordinated Notes Supplemental Indenture is an indenture supplemental to and in implementation of the Senior Subordinated Notes Indenture, First Senior Subordinated Notes Supplemental Indenture and Second Senior Subordinated Notes Supplemental Indenture, and the Senior Subordinated Notes Indenture, the First Senior Subordinated Notes Supplemental Indenture, the Second Senior Subordinated Notes Supplemental Indenture and this Third Senior Subordinated Notes Supplemental Indenture shall henceforth be read and construed together. Section 2.4 Confirmation and Preservation of Senior Subordinated Notes Indenture. The Senior Subordinated Notes Indenture, the First Senior Subordinated Notes Supplemental Indenture and Second Senior Subordinated Notes Supplemental Indenture, as supplemented by this Third Senior Subordinated Notes Supplemental Indenture, are in all respects confirmed and preserved. Section 2.5 Conflict with Trust Indenture Act. If any provision of this Third Senior Subordinated Notes Supplemental Indenture limits, qualifies or conflicts with any provision of the TIA that is required or deemed under the TIA to be part of and govern any provision of this Third Senior Subordinated Notes Supplemental Indenture, such provision of the TIA shall control. If any provision of this Third Senior Subordinated Notes Supplemental Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Senior Subordinated Notes Indenture, the First Senior Subordinated Notes Supplemental Indenture and the Second Senior Subordinated Notes Supplemental Indenture as so modified or to be excluded by this Third Senior Subordinated Notes Supplemental Indenture, as the case may be. Section 2.6 Severability. In case any provision in this Third Senior Subordinated Notes Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 2.7 Benefits of Third Senior Subordinated Notes Supplemental Indenture. Nothing in this Third Senior Subordinated Notes Supplemental Indenture or the Securities, express or implied, shall give to 2 any Person, other than the parties hereto and thereto and their successors hereunder and thereunder and the Holders of the Securities, any benefit of any legal or equitable right, remedy or claim under the Senior Subordinated Notes Indenture, the First Senior Subordinated Notes Supplemental Indenture, the Second Senior Subordinated Notes Supplemental Indenture, this Third Senior Subordinated Notes Supplemental Indenture or the Securities. Section 2.8 Successors. All agreements of Donnelley in this Third Senior Subordinated Notes Supplemental Indenture shall bind its successors. All agreements of the Trustee in this Third Senior Subordinated Notes Supplemental Indenture shall bind its successors. Section 2.9 Certain Duties and Responsibilities of the Trustee. In entering into this Third Senior Subordinated Notes Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Senior Subordinated Notes Indenture, the First Senior Subordinated Notes Supplemental Indenture, the Second Senior Subordinated Notes Supplemental Indenture and the Securities relating to the conduct or affecting the liability or affording protection to the Trustee, whether or not elsewhere herein so provided. Section 2.10 Governing Law. This Third Senior Subordinated Notes Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York, but without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby. Section 2.11 Multiple Originals. The parties may sign any number of copies of this Third Senior Subordinated Notes Supplemental Indenture, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 2.12 Headings. The Article and Section headings herein are inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. Section 2.13 The Trustee. The Trustee shall not be responsible in any manner for or in respect of the validity or sufficiency of this Third Senior Subordinated Notes Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made by Donnelley and the Guarantors. 3 IN WITNESS WHEREOF, the parties hereto have caused this Third Senior Subordinated Notes Supplemental Indenture to be duly executed as of the date first written above. R.H. DONNELLEY INC. By: /s/ Robert J. Bush ----------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY CORPORATION By: /s/ Robert J. Bush ----------------------------------------- Name: Robert J. Bush Title: Vice President GET DIGITAL SMART.COM INC. By: /s/ Robert J. Bush ----------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY APIL, INC. By: /s/ Robert J. Bush ----------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING, INC. By: /s/ Robert J. Bush ----------------------------------------- Name: Robert J. Bush Title: Vice President DONTECH HOLDINGS, LLC By: /s/ Robert J. Bush ----------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS HOLDINGS, LLC By: /s/ Robert J. Bush ----------------------------------------- Name: Robert J. Bush Title: Vice President DONTECH II PARTNERSHIP By: /s/ Robert J. Bush ----------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS PARTNERSHIP By: R.H. Donnelley Publishing & Advertising of Illinois Holdings, LLC, Its Managing Partner By: /s/ Robert J. Bush ----------------------------------------- Name: Robert J. Bush Title: Vice President THE BANK OF NEW YORK, as trustee By: /s/ Julie Salovitch-Miller ----------------------------------------- Name: Julie Salovitch-Miller Title: Vice President 2 EX-4.3 5 l09401aexv4w3.txt EXHIBIT 4.3 EXHIBIT 4.3 SENIOR GUARANTEES Each of the undersigned (the "GUARANTORS") hereby jointly and severally unconditionally guarantees, to the extent set forth in the Indenture, dated as of December 3, 2002, by and among R.H. Donnelley Finance Corporation I, a Delaware corporation, as issuer, and The Bank of New York, as trustee (the "TRUSTEE") (as amended, restated or supplemented from time to time, the "SENIOR NOTES INDENTURE"), as supplemented by (1) the Supplemental Indenture, dated as of January 3, 2003, among R.H. Donnelley Inc., a Delaware corporation (the "COMPANY"), the guarantors party thereto and the Trustee and (2) the Second Supplemental Indenture, dated as of September 1, 2004, among the Company, the guarantors party thereto and the Trustee, and subject to the provisions of the Senior Notes Indenture, (a) the due and punctual payment of the principal of, and premium, if any, and interest on the Notes, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on overdue principal of, and premium and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee, all in accordance with the terms set forth in Article Ten of the Senior Notes Indenture, and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders and to the Trustee pursuant to this Guarantee and the Senior Notes Indenture are expressly set forth in Article Ten of the Senior Notes Indenture, and reference is hereby made to the Senior Notes Indenture for the precise terms and limitations of this Guarantee. Each Holder of the Note to which this Guarantee is endorsed, by accepting such Note, agrees to and shall be bound by such provisions. Each Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by such Guarantor after giving effect to all of its other contingent and fixed liabilities without rendering such Guarantee, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. [SIGNATURES ON FOLLOWING PAGES] IN WITNESS WHEREOF, each of the Guarantors has caused this Guarantee to be signed by a duly authorized officer as of this 1st day of September 2004. DONTECH HOLDINGS, LLC By: /s/ ROBERT J. BUSH ---------------------------------------- Name: ROBERT J. BUSH Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS HOLDINGS, LLC By: /s/ ROBERT J. BUSH ---------------------------------------- Name: Robert J. Bush Title: Vice President DONTECH II PARTNERSHIP By: /s/ ROBERT J. BUSH ---------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS PARTNERSHIP By: R.H. Donnelley Publishing & Advertising of Illinois Holdings, LLC, Its Managing Partner By: /s/ ROBERT J. BUSH ---------------------------------------- Name: Robert J. Bush Title: Vice President 2 EX-4.4 6 l09401aexv4w4.txt EXHIBIT 4.4 EXHIBIT 4.4 SENIOR SUBORDINATED GUARANTEES Each of the undersigned (the "Guarantors") hereby jointly and severally unconditionally guarantees, to the extent set forth in the Indenture, dated as of December 3, 2002, by and among R.H. Donnelley Finance Corporation I, a Delaware corporation, as issuer, and The Bank of New York, as trustee (the "TRUSTEE") (as amended, restated or supplemented from time to time, the "SENIOR SUBORDINATED NOTES INDENTURE"), as supplemented by (1) the Supplemental Indenture, dated as of January 3, 2003, among R.H. Donnelley Inc., a Delaware corporation (the "COMPANY"), the guarantors party thereto and the Trustee, (2) the Second Supplemental Indenture, dated as of January 9, 2004, among the Company, the guarantors party thereto and the Trustee and (3) the Third Supplemental Indenture, dated as of September 1, 2004, among the Company, the guarantors party thereto and the Trustee, and subject to the provisions of the Senior Subordinated Notes Indenture, (a) the due and punctual payment of the principal of, and premium, if any, and interest on the Notes, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on overdue principal of, and premium and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee, all in accordance with the terms set forth in Article Ten of the Senior Subordinated Notes Indenture, and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders and to the Trustee pursuant to this Guarantee and the Senior Subordinated Notes Indenture are expressly set forth in Article Ten of the Senior Subordinated Notes Indenture, and reference is hereby made to the Senior Subordinated Notes Indenture for the precise terms and limitations of this Guarantee. Each Holder of the Note to which this Guarantee is endorsed, by accepting such Note, agrees to and shall be bound by such provisions. Each Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by such Guarantor after giving effect to all of its other contingent and fixed liabilities without rendering such Guarantee, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. [SIGNATURES ON FOLLOWING PAGES] IN WITNESS WHEREOF, each of the Guarantors has caused this Guarantee to be signed by a duly authorized officer as of this 1st day of September 2004. DONTECH HOLDINGS, LLC By: /s/ ROBERT J. BUSH ------------------------------------------ Name: Robert J. Bush Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS HOLDINGS, LLC By: /s/ ROBERT J. BUSH ------------------------------------------ Name: Robert J. Bush Title: Vice President DONTECH II PARTNERSHIP By: /s/ ROBERT J. BUSH ------------------------------------------ Name: Robert J. Bush Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS PARTNERSHIP By: R.H. Donnelley Publishing & Advertising of Illinois Holdings, LLC, Its Managing Partner By: /s/ ROBERT J. BUSH ------------------------------------------ Name: Robert J. Bush Title: Vice President 2 EX-10.1 7 l09401aexv10w1.txt EXHIBIT 10.1 EXHIBIT 10.1 DIRECTORY SERVICES LICENSE AGREEMENT BY AND AMONG R. H. DONNELLEY CORPORATION, R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS PARTNERSHIP, DONTECH II PARTNERSHIP, AMERITECH CORPORATION AND SBC DIRECTORY OPERATIONS, INC. TABLE OF CONTENTS ARTICLE 1 DEFINITIONS....................................................... 2 Section 1.1 Definitions....................................................... 2 ARTICLE 2 LICENSE TO PUBLISH................................................ 13 Section 2.1 License to Publish................................................ 13 Section 2.2 Official Provider................................................. 13 Section 2.3 Print Directory Exclusivity....................................... 13 ARTICLE 3 TRADEMARK LICENSE................................................. 13 Section 3.1 Trademark License................................................. 13 Section 3.2 Use of Trademark.................................................. 14 Section 3.3 Compliance with Branding Policies................................. 14 Section 3.4 Reservation of Rights............................................. 14 Section 3.5 Co-Branding....................................................... 14 Section 3.6 Similar Marks..................................................... 14 Section 3.7 Proprietary Rights; Legends....................................... 14 Section 3.8 Corporate or Business Name........................................ 15 Section 3.9 Approval of Materials............................................. 15 Section 3.10 Rights to the Licensed Marks...................................... 15 Section 3.11 Termination or Expiration of this Agreement....................... 16 Section 3.12 Infringement...................................................... 16 Section 3.13 Further Protection................................................ 17 ARTICLE 4 GENERAL PUBLISHER OBLIGATIONS..................................... 17 Section 4.1 General........................................................... 17 Section 4.2 White Pages Directories........................................... 18 Section 4.3 Yellow Pages Listing.............................................. 19
-i- Section 4.4 Telco-Sold White Pages Products................................... 19 Section 4.5 Geographic Coverage Area.......................................... 19 Section 4.6 Interfiling....................................................... 20 Section 4.7 Information Pages................................................. 20 Section 4.8 Warehousing; Initial and Secondary Distribution................... 21 Section 4.9 Accuracy.......................................................... 21 Section 4.10 Queries........................................................... 21 Section 4.11 Publication Schedule.............................................. 21 Section 4.12 Regulatory/Legal Matters Cooperation.............................. 22 Section 4.13 Complaints........................................................ 22 Section 4.14 Recycling Services................................................ 22 Section 4.15 Agreements with CLECs and Other ILECs............................. 23 Section 4.16 Additional Listing Information.................................... 23 Section 4.17 SBC Product Referrals............................................. 23 ARTICLE 5 GENERAL OBLIGATIONS OF AMERITECH AND SBC DIRECTORY OPERATIONS.... 24 Section 5.1 Distribution Information; Delivery Quantities..................... 24 Section 5.2 Directory Sales-Initiated Changes................................. 24 Section 5.3 Accuracy.......................................................... 24 Section 5.4 Complaints Relating to the SBC Telcos' Services................... 25 Section 5.5 Queries........................................................... 25 Section 5.6 Referrals......................................................... 25 ARTICLE 6 DIRECTORY ADVERTISING............................................. 25 Section 6.1 Standards and Guidelines.......................................... 25 Section 6.2 Restrictions on Advertising....................................... 26 Section 6.3 SBC Advertising................................................... 26
-ii- Section 6.4 Option on Premium Advertising..................................... 26 Section 6.5 Products and Services............................................. 27 Section 6.6 SBC Entities Minimum Spend........................................ 27 Section 6.7 Out-of-Area Sales................................................. 27 ARTICLE 7 OTHER COMMERCIAL AGREEMENTS....................................... 27 Section 7.1 Non-Competition Agreement......................................... 27 Section 7.2 Subscriber Listings Agreement..................................... 28 Section 7.3 IYP Reseller Agreement............................................ 28 ARTICLE 8 BRANDING.......................................................... 28 Section 8.1 Print Directory Cover............................................. 28 Section 8.2 Co-Branding....................................................... 28 Section 8.3 Look and Feel..................................................... 29 ARTICLE 9 TERM AND TERMINATION.............................................. 29 Section 9.1 Term.............................................................. 29 Section 9.2 Effects of Termination............................................ 29 Section 9.3 Early Termination by the SBC Entities............................. 30 Section 9.4 Early Termination by Publisher.................................... 32 Section 9.5 Change of Control of RHD.......................................... 32 ARTICLE 10 SALE OF BUSINESS.................................................. 33 Section 10.1 Sold Territory.................................................... 33 ARTICLE 11 NONCOMPETE AND NONSOLICITATION.................................... 35 Section 11.1 Publisher Obligations............................................. 35 Section 11.2 Existing Non-Competition Agreements............................... 36 ARTICLE 12 INTERNET DIRECTORIES.............................................. 36 Section 12.1 Publisher Obligations............................................. 36
-iii- Section 12.2 No Rights......................................................... 36 ARTICLE 13 CONFIDENTIAL INFORMATION.......................................... 37 Section 13.1 Nondisclosure..................................................... 37 Section 13.2 Relief............................................................ 37 Section 13.3 Termination of Agreement.......................................... 37 ARTICLE 14 REPRESENTATIONS AND WARRANTIES.................................... 38 Section 14.1 Applicable SBC Entities Representations and Warranties............ 38 Section 14.2 Applicable RHD Entities Representations and Warranties............ 38 Section 14.3 Disclaimer of Warranties.......................................... 38 ARTICLE 15 INDEMNIFICATION; LIMITATION OF LIABILITY.......................... 38 Section 15.1 Publisher Indemnity............................................... 38 Section 15.2 SBC Entities Indemnity............................................ 39 Section 15.3 Procedure......................................................... 39 Section 15.4 Errors and Omissions.............................................. 40 ARTICLE 16 ADDITIONAL REGULATORY REQUIREMENTS AND COSTS...................... 40 Section 16.1 Regulatory Requirements........................................... 40 ARTICLE 17 SBC SERVICES...................................................... 41 Section 17.1 SBC Services...................................................... 41 Section 17.2 Existing RHD Obligations.......................................... 41 ARTICLE 18 DISPUTE RESOLUTION................................................ 42 Section 18.1 Dispute Resolution................................................ 42 Section 18.2 Governing Law..................................................... 42 Section 18.3 Forum Selection................................................... 42 Section 18.4 Waiver of Jury Trial.............................................. 42 Section 18.5 Attorneys' Fees................................................... 42
-iv- Section 18.6 Cumulative Remedies............................................... 42 ARTICLE 19 GENERAL........................................................... 42 Section 19.1 Assignment........................................................ 42 Section 19.2 RHD Guarantee..................................................... 43 Section 19.3 SBC Guarantees.................................................... 43 Section 19.4 Subcontractors.................................................... 44 Section 19.5 Relationship...................................................... 45 Section 19.6 Notices........................................................... 45 Section 19.7 Independent Contractor............................................ 46 Section 19.8 Entire Agreement.................................................. 46 Section 19.9 Severability...................................................... 46 Section 19.10 Compliance with Laws/Regulations.................................. 46 Section 19.11 Force Majeure..................................................... 46 Section 19.12 Third Party Beneficiaries......................................... 46 Section 19.13 Binding Effect.................................................... 47 Section 19.14 Waivers........................................................... 47 Section 19.15 Exhibits.......................................................... 47 Section 19.16 Headings.......................................................... 47 Section 19.17 Survival.......................................................... 47 Section 19.18 Modifications..................................................... 47 Section 19.19 Counterparts...................................................... 47
-v- DIRECTORY SERVICES LICENSE AGREEMENT THIS DIRECTORY SERVICES LICENSE AGREEMENT (this "Agreement") is entered into as of this 1st day of September, 2004 among R. H. Donnelley Corporation, a Delaware corporation ("R. H. Donnelley Corporation"), R.H. Donnelley Publishing & Advertising of Illinois Partnership (f/k/a The APIL Partners Partnership), an Illinois general partnership ("APIL Partners"), DonTech II Partnership, an Illinois general partnership ("DonTech II"), Ameritech Corporation ("Ameritech Corporation"), a Delaware corporation, SBC Directory Operations, Inc., a Delaware corporation ("SBC Directory Operations, Inc.") and SBC Knowledge Ventures, L.P., a Nevada limited partnership ("SBC Knowledge Ventures"). Each of Ameritech Corporation, SBC Directory Operations, Inc., SBC Knowledge Ventures and Ameritech Publishing Inc., a Delaware corporation ("API"), is a wholly owned direct or indirect subsidiary of SBC Communications, Inc., a Delaware corporation ("SBC"). In this Agreement, RHD and Publisher (as each such term is defined below), on the one hand, and Ameritech and SBC Directory Operations (as each such term is defined below), on the other hand, are sometimes referred to each as a "Party" and collectively as the "Parties." RECITALS: A. On the date of this Agreement, RHD, or one of its wholly owned Subsidiaries, is acquiring (i) from API, 1% of the outstanding partnership interests in APIL Partners and (ii) from API's wholly owned subsidiary Ameritech Publishing of Illinois, Inc. ("APIL"), (a) 99% of the outstanding partnership interests in APIL Partners, (b) 47% of the outstanding partnership interests in The AM-DON Partnership, an Illinois general partnership ("DonTech I"), and (c) 50% of the outstanding partnership interests in DonTech II, pursuant to a Purchase Agreement, dated as of July 28, 2004 (the "Purchase Agreement"), among RHD, Ameritech and API; B. The Purchase Agreement provides that the Parties will enter into this Agreement as a condition to the closing of the transactions contemplated by the Purchase Agreement; C. Ameritech, through one or more of its Affiliates, desires (i) to license to Publisher the right to produce, publish and distribute White Pages Directories in the Territory as the agent for SBC Directory Operations and (ii) to grant to Publisher the exclusive right to (A) publish and distribute Print Directories in the Territory and use the Licensed Marks in the Territory as contemplated in this Agreement and the other Commercial Agreements and (B) solicit and sell Local and National (as each such term is defined in the Non-Competition Agreement) yellow pages and white pages advertising for inclusion in such Print Directories, in each case on the terms and conditions set forth in this Agreement and the other Commercial Agreements; D. Publisher desires to produce, publish and distribute Print Directories in the Territory on the terms and conditions set forth in this Agreement and the other Commercial Agreements; E. SBC Licensor desires to grant, and Publisher desires to obtain, subject to the terms and conditions of this Agreement and the other Commercial Agreements, certain rights to use the Licensed Marks in connection with producing, publishing and distributing Print Directories in the Territory; and F. The Parties desire to set forth certain understandings among themselves with respect to certain aspects of Publisher's business from and after the date hereof. AGREEMENT NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Agreement and the consummation of the transactions contemplated by the Purchase Agreement, the Parties agree as follows: ARTICLE 1 DEFINITIONS SECTION 1.1 DEFINITIONS. The following defined terms used in this Agreement will have the meanings specified below: (a) "Affiliate" shall have the meaning assigned to such term in Rule 12b-2 under the Securities Exchange Act of 1934. (b) "Applicable Requirement" means any applicable legal or regulatory requirement with respect to the Publisher Business as in effect from time to time; provided, however, Applicable Requirement shall not include any change to the Legal and Regulatory Requirements after the date of this Agreement which applies to the SBC Telcos unless and until (i) an SBC Entity notifies Publisher in writing of such change or (ii) Publisher knew of such change. (c) "Ameritech" means, collectively, Ameritech Corporation, any Person into whom Ameritech Corporation merges or consolidates and any other Person to whom all or substantially all the business or assets of Ameritech Corporation is transferred. Prior to the time that the defined term "Ameritech" applies to any Person other than Ameritech Corporation, Ameritech Corporation shall cause such Person to enter into a written agreement, in form and substance reasonably satisfactory to RHD, pursuant to which such Person assumes all of Ameritech's obligations under this Agreement and the other Commercial Agreements. From and after such assumption, such Person shall also be deemed to be Ameritech Corporation for purposes of this Agreement, but such assumption shall not discharge or release any other Persons to which such defined term then applies. (d) "Approved Publisher Mark" means any Publisher Mark that has not been used in connection with the provision marketing or sale of Telecom Services. (e) "Business Office Close Date" means the final date that service orders are accepted for a Print Directory. (f) "Buyer" means, with respect to any Change of Control of RHD or any sale or transfer of all or a majority of the Publisher Business, any Person (other than the RHD Entities) -2- who engages in the transaction which results in such Change of Control (excluding the RHD Entities) and its Controlled Affiliates (excluding the RHD Entities). (g) "Change of Control" means, with respect to any Person, the occurrence of any of the following events: (i) any Person becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Securities Exchange Act of 1934) of securities of such Person representing more than 50% of the total voting power of such Person's outstanding securities determined on a fully diluted basis; (ii) any transaction (including, without limitation, any merger or consolidation) involving such Person after the consummation of which the holders of such Person's equity securities immediately prior to such consummation will not own a majority of the outstanding equity interest and voting power of the surviving corporation immediately after such consummation; (iii) the sale of a majority of such Person's assets (including, in the case of RHD, a majority of the assets used or held for use in the Publisher Business) to any other Person; or (iv) the Continuing Directors of such Person represent less than a majority of the board of directors of such Person as a result of any action(s) taken by or on behalf of a Telecom Competitor or (v) a majority of the Publisher Business becomes owned or operated by any Person as a result of any liquidation, dissolution, winding up, reorganization or similar proceeding involving any RHD Entities. (h) "Change of Control Window Period" means the period commencing on the date hereof and continuing until the date (if any) which is 90 days after (i) in the case of a Change of Control of RHD, or any sale or transfer of all or a majority of the Publisher Business, to a Buyer that is providing Telecom Services in the United States at the closing of such transaction, the earlier of the date (if any) on which (A) the closing of such transaction is publicly announced and (B) Publisher gives written notice to SBC Directory Operations of the closing of such transaction indicating that Publisher believes in good faith that the SBC Entities might conclude the Buyer is a Telecom Competitor, and (ii) in the case of a Change of Control of RHD, or a sale or transfer of all or a majority of the Publisher Business, to a Buyer that is not providing Telecom Services in the United States at the closing of such transaction, the date (if any) on which Publisher gives written notice to SBC Directory Operations indicating that the Buyer is then providing Telecom Services and that Publisher believes in good faith that the SBC Entities might conclude that the Buyer is a Telecom Competitor; provided, however, that no written notice given by RHD pursuant to clauses (i)(B) or (ii) above will be deemed to be an admission by RHD that, or evidence of whether, the Buyer is a Telecom Competitor or that SBC Directory Operations is entitled to exercise its rights under Section 9.5(a) of this Agreement; and provided, further, that RHD shall have no obligation to provide any such notice. (i) "Cingular" means Cingular Wireless LLC and any successor to all or substantially all of its assets (whether by merger, consolidation or otherwise). (j) "CLEC" means any competitive local exchange carrier operating within the Territory. (k) "Commercial Agreements" means this Agreement, the Non-Competition Agreement, the Subscriber Listings Agreement and the IYP Reseller Agreement. -3- (l) "Confidential Information" means, with respect to any Party, all information and documentation of such Party which such Party does not make generally available to the public or has been furnished to the other Party in connection with this Agreement or any other Commercial Agreement, including confidential and/or proprietary technical or business information, confidential marketing and business plans and customer lists. Confidential Information does not include information which (i) was in the possession of the receiving Party free of restriction prior to its receipt from the disclosing Party, (ii) is or becomes publicly known or available through no breach of this Agreement by the receiving Party, (iii) is rightfully acquired by the receiving Party free of restrictions on its disclosure or (iv) is independently developed by personnel of the receiving Party to which such Confidential Information has not been previously disclosed. Subscriber Listing Information will be considered Confidential Information of the SBC Telcos until the publication of such information in any directory, or until such information otherwise ceases to be Confidential Information for any of the reasons (i) through (iv) cited above. (m) "Continuing Director" means, with respect to any Person as of any date of determination, any member of the board of directors of such Person who (i) was a member of such board of directors as of the date of this Agreement or (ii) was nominated for election or elected to such board of directors with the approval, recommendation or endorsement of a majority of the Continuing Directors who were members of such board of directors at the time of such nomination or election. (n) "Controlled Affiliate" means, with respect to any Person, any Subsidiary of such Person or any other Person with respect to which such first Person has, directly or indirectly, the power generally to direct or control the management and policies thereof, whether through ownership of securities, by contract or otherwise. (o) "Controlled Subsidiary" means (i) any Subsidiary of SBC other than Cingular and its Subsidiaries and (ii) each of Cingular and each of its Subsidiaries if and when SBC has, directly or indirectly, the unilateral power generally to direct or control the day-to-day management and policies thereof, whether through ownership of securities, by contract or otherwise; provided, however, that SBC's rights with respect to Cingular as of the date of this Agreement are not sufficient to make Cingular and its Subsidiaries Controlled Subsidiaries of SBC; and provided, further, neither (x) limited and customary investor protection rights in favor of minority shareholders nor (y) the need for shareholder approval under applicable law, the constitutive documents of Cingular or any of its Subsidiaries or the rules of any securities exchange shall, by themselves, prevent Cingular and its Subsidiaries from being Controlled Subsidiaries. (p) "Directional Information" means subscriber name, address and primary telephone number (including mobile telephone number), email address, types of goods or services offered, hours of operation, methods of payment and other similar information primarily designed for the purpose of directing consumers who are seeking a product or service to providers of that product or service in order to satisfy such consumer's previously recognized need or desire for such product or service and is distinguished from "promotional information," which is primarily designed to stimulate (as opposed to direct) demand for products and services in consumers who did not previously recognize such need or desire for such products or services. -4- (q) "Directory Advertising" means any advertising purchased from, or provided without cost by, Publisher for inclusion in a Print Directory, including (i) Premium Advertising Products, (ii) standard classified advertising and other advertising in Yellow Pages Directories, such as display advertising and in-column advertisements, foreign classified listings and listings under additional headings in Yellow Pages Directories and (iii) offerings of a directional or promotional nature in White Pages Directories, including, without limitation, in-column advertisements, but excluding Telco-Sold White Pages Products. (r) "Existing IYP Directories" means any electronic directories, regardless of whether or not the particular directory exists as of the date of the this Agreement, which (i) are made generally available to the public through the world wide web over the Internet (or any successor network or protocol to the world wide web over the Internet) and are accessible by a personal computer and other access devices (e.g., PDAs or handheld devices), (ii) provide comprehensive classified business listings and advertising for informational purposes, and (iii) are searchable by alpha, location, category of products or services or keywords in response to a specific search, request or similar action, initiated by end users who are seeking data in connection with contemplating a decision to purchase goods or services from an advertiser (A) who has paid the provider of such directory for inclusion in such directory of his phone number and other Directional Information for a buyer of such products or services or (B) whose listing information has been included by the provider of such directory to create comprehensive listings; provided, however, Existing IYP Directories will not include any such directory which uses or applies a database (other than a database created solely from such user's interaction with such Existing IYP Directory) which contains information relating to, or derived from, users (e.g., their preferences, profiles, past purchases, browsing history, survey results, etc.) and displays its results based upon such user information; and provided, further, that no product or service offered by Cingular or its Subsidiaries shall ever be an Existing IYP Directory. Notwithstanding the foregoing, the definition of Existing IYP Directories shall not include any network, hosting or related telecommunications services. (s) "Future Electronic Directory" means any type of electronic directional advertising product or service which (i) is not an Existing IYP Directory and which SBC or any of its Subsidiaries (excluding Cingular and its Subsidiaries) owns or with respect to which any of them can grant the preferred provider rights set forth in Section 2.3(a) of the Non-Competition Agreement or (ii) Cingular or any of its Subsidiaries owns or with respect to which any of them has the right to grant the preferred provider rights set forth in Section 2.3(a) of the Non-Competition Agreement (but this clause (ii) shall apply only when Cingular is a Controlled Subsidiary of SBC) and, in each case in clauses (i) and (ii), for which SBC Directory Operations is the primary sales agent for advertising to be included in such product or service with respect to areas outside the Territory. (t) "Geographic Coverage Area" for a Print Directory means the geographic area in the Territory where Subscribers reside whose Standard Listings are included in such Print Directory. (u) "GS" means, The Goldman Sachs Group, Inc. and any successor to all or substantially all of its assets (whether by merger, consolidation or otherwise). -5- (v) "GS Telecom Portfolio Company" means any Controlled Affiliate of GS that (i) is a portfolio company of any investment fund or vehicle managed by GS or any of its Controlled Affiliates and (ii) provides Telecom Services in the United States. (w) "ILEC" means an incumbent local exchange carrier providing services or operating within the Territory. (x) "Information Pages" means basic information pages generally included at the front of a Print Directory, commonly referred to in the telephone directory publishing industry as "Preliminary Pages" or "Information Pages," which (i) relate to services provided by an SBC Telco to its customers or (ii) are required by the Legal and Regulatory Requirements. (y) "Initial Distribution" means the primary distribution of a Print Directory in the Territory pursuant to the terms and conditions of this Agreement, normally once per year. (z) "Interfile" means, as the context may require, the process of combining (i) Subscriber Listing Information from Subscribers in two or more local exchange service areas or geographic areas into a single set of alphabetical listings, (ii) residential and business Subscriber Listing Information into a single set of alphabetical listings or (iii) when referring to captions, Subscriber Listing Information of businesses operating under the same name, or other subscribers with multiple telephone numbers, into a single listing with multiple addresses and/or phone numbers. (aa) "Legal and Regulatory Requirements" means all actions and requirements that are necessary to enable an SBC Entity to comply with (i) its obligations with respect to any Print Directories under interconnection and similar agreements entered into between such SBC Entity and any CLEC or Other ILEC or (ii) its obligations with respect to any Print Directory under any order, injunction, decree, statute, law, ordinance, principle of common law, rule, tariff or regulation applicable to an SBC Telco as a local exchange carrier (including such SBC Entity's compliance with any applicable regulatory agency's customs and practices). Exhibit B sets forth the Legal and Regulatory Requirements specified in clause (i) above in effect as of the date of this Agreement. (bb) "Licensed Marks" means the trademarks and service marks listed in Exhibit A attached hereto, as such Exhibit may be amended from time to time in accordance with this Agreement. (cc) "Listing Information Updates" means current data concerning business or residential Subscribers whose telephone service has been installed, disconnected or otherwise changed, which data is required by Publisher in connection with the publication of Print Directories and the sale of Directory Advertising. Listing Information Updates are used to correct or add information in or to a Print Directory and as sales leads for Directory Advertising sales. (dd) "Multiple Breach Window Period" means, with respect to any substantially similar breach referred to in Section 9.3(b) of this Agreement, the period commencing on the date hereof and continuing until the date (if any) which is 90 days after the earlier of (i) the date (if any) on which Publisher provides written notice to SBC Directory Operations indicating that -6- Publisher believes in good faith that facts exist which might lead the SBC Entities to conclude that a substantially similar breach has occurred and describing such facts in reasonable detail and (ii) the first date (if any) on which the chief executive officer or general counsel of SBC Directory Operations had actual knowledge of the occurrence of such substantially similar breach. (ee) "Other ILEC" means any ILEC other than an SBC Telco. (ff) "Person" means an individual, corporation, limited liability company, association, partnership, group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder), trust, joint venture, business trust, unincorporated organization or other entity, or a governmental or any agency or political subdivision thereof. (gg) "Premium Advertising Products" means any advertising that is in limited supply and/or occupies prominent placement in or on a Print Directory, including but not limited to any advertising printed on, or attached to, the front, back or inside front cover or back cover, spine or edges of a Print Directory, front cover photo space, front cover billboard, tabbed inserts, fillers, white pages billboard or banners, front of book sponsor banner, editorial guides or ride-along inserts and any future products or components thereof which are similar in nature to the foregoing. (hh) "Print Directories" means any directories of the type currently produced predominantly in book form which (i) are made generally available to the public, (ii) provide comprehensive classified business listings and, with respect to Yellow Pages Directories, advertising in print form, in CD ROM format or in any other tangible media, (iii) are delivered physically to Subscribers in a saturation distribution made predominantly in the Territory and (iv) are intended for use by end users in the Territory who are seeking data in connection with contemplating a decision to purchase goods or services from an advertiser (A) who has paid the provider of such directory for inclusion in such directory of his phone number and other Directional Information for a buyer of such products or services or (B) whose listing information has been included by the provider of such directory as required by the Legal and Regulatory Requirements or to create comprehensive listings, including without limitation any specialty classified print directories (e.g., industrial guides) so distributed and street address directories in Illinois or Calumet, Indiana, but not including any other street address directories. (ii) "Publication Month" means the calendar month appearing on the cover of a Print Directory or, if no such calendar month appears on the cover, the month in which a significant portion of the Initial Distribution of a particular issue of a Print Directory is scheduled to be completed. (jj) "Publication Schedule" means the publication schedule provided to SBC Directory Operations by Publisher from time to time, in the form set forth as Exhibit C, which schedule includes the Publication Month and Business Office Close Date with respect to each Print Directory. -7- (kk) "Publisher" means, collectively, DonTech II and APIL Partners, and any Person to whom all or substantially all of the Publisher Business is transferred (whether by merger, consolidation, sale of assets or otherwise). Prior to the time that the defined term "Publisher" applies to any Person other than DonTech II or APIL Partners, R. H. Donnelley Corporation shall cause such Person to enter into a written agreement, in form and substance reasonably satisfactory to SBC Directory Operations, pursuant to which such Person assumes all of Publisher's obligations under this Agreement and the other Commercial Agreements. From and after such assumption, such Person shall also be deemed to be DonTech II or APIL Partners, as applicable, for all purposes of this Agreement, but such assumption shall not discharge or release any other Persons to which those defined terms then apply. (ll) "Publisher Business" means the Print Directory publishing business for Yellow Pages Directories and street address directories and the agency role for publishing White Pages Directories conducted in the Territory by Publisher. (mm) "RHD" means, collectively, R. H. Donnelley Corporation, any Person into whom R. H. Donnelley Corporation merges or consolidates, any Person to whom all or substantially all of the business or assets of R. H. Donnelley Corporation are transferred and any Person of which RHD becomes a Subsidiary other than pursuant to a Change of Control. Prior to the time that the defined term "RHD" applies to any Person other than R. H. Donnelley Corporation, R. H. Donnelley Corporation shall cause such Person to enter into a written agreement, in form and substance reasonably satisfactory to SBC Directory Operations, pursuant to which such Person assumes all of RHD's obligations under this Agreement and the other Commercial Agreements. From and after such assumption, such Person shall also be deemed to be R. H. Donnelley Corporation for all purposes of this Agreement, but such assumption shall not discharge or release any other Persons to which the defined terms R. H. Donnelley Corporation then applies. (nn) "RHD Entities" means, collectively, RHD and its Subsidiaries. (oo) "SBC Directory Operations" means, collectively, SBC Directory Operations, Inc., any Person into whom SBC Directory Operations, Inc. merges or consolidates and any other Person to whom all or substantially all the business or assets of SBC Directory Operations, Inc. is transferred. Prior to the time that the defined term "SBC Directory Operations" applies to any Person other than SBC Directory Operations, Inc., SBC Directory Operations, Inc. shall cause such Person to enter into a written agreement, in form and substance reasonably satisfactory to RHD, pursuant to which such Person assumes all of SBC Directory Operation's obligations under this Agreement and the other Commercial Agreements. From and after such assumption, such Person shall also be deemed to be SBC Directory Operations, Inc. for purposes of this Agreement, but such assumption shall not discharge or release any other Persons to which such defined term then applies. (pp) "SBC Entities" means, collectively, SBC and its Subsidiaries (excluding Cingular and its Subsidiaries unless Cingular is a Controlled Subsidiary of SBC as of any determination date). (qq) "SBC Licensor" means, collectively, SBC Knowledge Ventures, any Person with whom SBC Knowledge Ventures merges or consolidates and any other Person to whom all or -8- substantially all the business or assets of SBC Knowledge Ventures is transferred. Prior to the time that the defined term "SBC Licensor" applies to any Person other than SBC Knowledge Ventures, SBC Knowledge Ventures shall cause such Person to enter into a written agreement, in form and substance reasonably satisfactory to RHD, pursuant to which such Person assumes all of SBC Knowledge Ventures' obligations under this Agreement. From and after such assumption, such Person shall also be deemed to be SBC Knowledge Ventures for purposes of this Agreement, but such assumption shall not discharge or release any other Persons to which such defined term then applies. (rr) "SBC Telco" means any ILEC which is an SBC Entity. (ss) "Secondary Distribution" means the provision and distribution of a Print Directory to Subscribers who have newly subscribed to local telephone exchange service within the Territory after Initial Distribution is completed and prior to publication of the next issue of such Print Directory. (tt) "Standard Listing" or "Listing" means a listing in a Print Directory which relates to a Subscriber and, except to the extent the Subscriber has requested that such information not appear in a Print Directory, will consist of: (i) the Subscriber's name and one associated telephone number and one associated address and (ii) any other information required by the Legal and Regulatory Requirements. (uu) "Subscriber" means a Person (i) that subscribes to wireline local telephone exchange service in the Territory from an SBC Telco, (ii) that subscribes to wireline local telephone exchange service in the Territory from a CLEC or Other ILEC which has entered into an agreement with an SBC Entity which requires such SBC Entity to publish such Person's Subscriber Listing Information in a Print Directory (e.g., an interconnection agreement) or (iii) whose Subscriber Listing Information must be included in a Print Directory to meet Legal and Regulatory Requirements. (vv) "Subscriber Listing Information" means (i) the names of Subscribers within a specified geographic area, and their associated telephone numbers and listed addresses, (ii) information required under applicable rules and regulations of the Federal Communications Commission to be provided to any requesting directory publishers and (iii) all other information relating to Subscribers required to meet the Legal and Regulatory Requirements. The term "Subscriber Listing Information" does not include information relating to Subscribers who have requested not to be listed in a Print Directory, other than such information as may be required to deliver a Print Directory to such Subscribers. (ww) "Subsidiary" means, with respect to any Person, any other Person of which a majority of the outstanding equity or voting interests is beneficially owned, directly or indirectly, by the first Person or any of its Subsidiaries. (xx) "Telco-Sold White Pages Products" means additional, alternate, foreign, non-published, non-listed, enhanced, vanity or other listings, products or advertising in White Pages Directories that are of an informational nature (such as an extra phone number or address), which (i) are specified in Exhibit D or (ii) are tariffed or price listed and first sold by an SBC Telco -9- after the date of this Agreement and before any RHD Entity shall have derived material revenue from the sale of the same listing, product or advertising. (yy) "Telecom Competitor" any Person (other than an RHD Entity) that directly or indirectly is engaged in, manages, operates or has any 5% or greater profit or other equity interest in or participates with any third party in any business or entity that engages in the provision of Telecom Services in the United States which Telecom Services (i) generate more than $200 million in annual revenues, (ii) are competitive in any material respect to any Telecom Service operations of SBC and its Affiliates in the United States or (iii) are reasonably likely to generate more than $200 million in annual revenues within three years from the date of determination; provided, however, that the dollar amounts specified in clauses (i) and (iii) of the immediately preceding sentence will be adjusted by the percentage change in the Consumer Price Index (Midwest urban) published by the Bureau of Labor Statistics of the U.S. Department of Labor, from the most recently published level of such index immediately prior to the date of this Agreement to the most recently published level of such index immediately prior to the determination date; and provided further, that in no event shall such amounts ever be reduced below $200 million; and provided, further, that solely for purposes of Section 9.5 until the first date on which GS and its Controlled Affiliates cease to beneficially own (as defined in Rules 13d-3 and 13d-5 of the Securities Exchange Act of 1934) at least 5% of the total voting power of the outstanding voting stock of RHD (determined on a fully diluted basis) neither GS nor any of its Controlled Affiliates shall be deemed to be a Telecom Competitor as long as the RHD Entities are held and managed separately from any GS Telecom Portfolio Company (other than the RHD Entities) and no director or executive officer (or individuals performing similar function in Persons that are not corporations) (each, a "Control Person") of any RHD Entity is also a Control Person of any GS Telecom Portfolio Company (other than the RHD Entities). (zz) "Telecom Services" means any of the following products or services: (i) long distance phone services, local phone services, wireless phone services, paging services, audio or video conferencing services, unified communications services (also known as unified messaging services, UCS and UMS), centrex services and any successors thereto; (ii) all ancillary services provided that such services are offered in conjunction with any of the services listed in clause (i), including, but not limited to, voice mail, caller ID, call waiting, call forwarding, calling card services, toll calling plans and associated consumer premises equipment and any successors thereto; (iii) virtual private networks and associated consumer premises equipment; (iv) voice and data network services such as ATM, DSL, frame relay and optical transport, network design and integration, telecommunications equipment installation, web hosting services, telecommunications maintenance and support services and telecommunications software development services; (v) software or services that enable businesses to transmit or exchange on an automated basis without human interaction from one computer system to another (A) data to effect, monitor, track, record or otherwise facilitate the purchase and sale of goods or services, the provision of materials or supplies, the payment therefor or transportation thereof or (B) data generated or used by businesses, governmental entities or other organizations; (vi) any product or service that emulates or replicates any of the foregoing utilizing an Internet protocol (IP) and/or the PSTN (including, without limitation, IP telephony, IP fax, voice-over-IP, UCS and Internet call waiting and associated CPE); and (vii) multichannel video distribution services (e.g., cable and direct broadcast satellite services), broadcast distribution video services, or pay-per-view or pay-per-download video distribution services; provided, however, that none of the foregoing -10- products or services shall be Telecom Services if and to the extent they are (x) offered ancillary to, and delivered in connection with, any Existing IYP Directory or Future Electronic Directory and the RHD Entities do not derive any material incremental compensation from or as a result of the offer or delivery of such ancillary products or services or (y) marketing consultancy or marketing-related services provided by any RHD Entity to small and medium sized businesses in the Territory, in each case in this clause (y), which do not substantially relate to the marketing of any products or services that would be Telecom Services without this clause (y). (aaa) "Termination Window Period" means the period commencing on the date hereof and continuing until the date (if any) which is 90 days after (a) in the case of any Termination Event covered by clause (i), (ii) or (iii) of Section 9.3(a) of this Agreement, the date on which the cure period applicable to such Termination Event expires and (b) in the case of any breach which may be a Termination Event covered by clause (iv) of Section 9.3(a) of this Agreement, the earlier of the date (if any) on which (x) Publisher delivers a written notice to SBC Directory Operations indicating that Publisher believes in good faith that facts exist which might lead the SBC Entities to conclude that a breach of the type specified in Section 9.3(a)(iv) has occurred and describing such facts in reasonable detail or (y) the chief executive officer or general counsel of SBC Directory Operations first had actual knowledge of, and reasonable detail about, such breach. (bbb) "Territory" means the geographic areas specified by the maps set forth as Exhibit E. (ccc) "White Pages Directory" means any Print Directory produced, published or distributed by Publisher that contains only Subscriber Listing Information, Information Pages, Telco-Sold White Pages Products, Directory Advertising (excluding clause (ii) of the definition thereof), information required by the Legal and Regulatory Requirements and other information pertaining to Subscribers within the Geographic Coverage Area, including, but not limited to, mobile telephone numbers, e-mail addresses, website addresses and the like. The White Pages Directory may be bound or produced together, in each case as an integrated unit, with a Yellow Pages Directory. (ddd) "Yellow Pages Directory" means any Print Directory produced, published or distributed by Publisher that contains Directional Information, Subscriber Listing Information, Directory Advertising (excluding clause (iii) of the definition thereof) and other information, in each case with respect to Subscribers and businesses or organizations located or providing products or services within the Geographic Coverage Areas. The Yellow Pages Directory may be bound or produced together, in each case as an integrated unit, with a White Pages Directory. (eee) Additional Definitions:
Term Section ---- ------- Advertising Policies 6.1 Agreement Introduction Ameritech Corporation Introduction API Introduction APIL Recitals
-11- APIL Partners Introduction Available Products 6.4 Branding Policies 8.1 Change of Control Notice 9.5(a) Co-Brand Standards 8.2(a) Cure Notice 9.3(a)(i) DCR 5.2 DonTech I Recitals DonTech II Introduction Expenses 15.1 Fee 4.2(b) First Option 6.4 Force Majeure 19.11 Initial Term 9.1 IYP Reseller Agreement 7.3 Losses 15.1 New ILEC Brand 10.1(a)(ii) Non-Competition Agreement 7.1 Parties Introduction Party Introduction Publisher Indemnified Parties 15.2 Publisher Marks 8.2(a) Publisher Obligations 18.2(a) Purchase Agreement Recitals Purchaser 10.1(a) Regulatory Changes 16.1(b) Regulatory Notice 9.3(a)(ii) Renewal Term 9.1 Reserved Products 6.4 RHD Guarantee 19.2(b) RHD Guaranteed Parties 19.2(a) RHD Obligations 19.2(a) R. H. Donnelley Corporation Introduction SBC Introduction SBC Directory Operations, Inc. Introduction SBC Guarantee 19.3(b) SBC Guaranteed Parties 19.3(a) SBC Knowledge Ventures Introduction SBC Licensor Recitals SBC Obligations 19.3(a) Sold Territory 10.1(a) Subscriber Listings Agreement 7.2 Telecom Services Notice 9.3(a)(iii) Term 9.1 Termination Event 9.3(a) Termination Notice 9.3(a)
-12- Visible Area 6.2(a) White Pages Requirements 4.2(c)
ARTICLE 2 LICENSE TO PUBLISH SECTION 2.1 LICENSE TO PUBLISH. SBC Directory Operations hereby grants to Publisher a non-transferable (except as provided in Sections 9.5 and 19.1 of this Agreement), exclusive license, without the right to sublicense (except as provided in Section 19.4 of this Agreement), to produce, publish and distribute White Pages Directories in the Territory as the agent of SBC Directory Operations in the Territory on the terms and conditions set forth in this Agreement and the other Commercial Agreements and as necessary to comply with the Legal and Regulatory Requirements; provided, however, that nothing in this Article 2 will be deemed to preclude SBC or any of its Affiliates from taking any actions or engaging in any activities (or authorizing a third party to take any actions or engage in any activities) not otherwise prohibited under the Non-Competition Agreement. SECTION 2.2 OFFICIAL PROVIDER. During the Term, Publisher will be the official and exclusive provider of Yellow Pages Directory services of the SBC Entities in the Territory as provided in the terms and conditions of this Agreement and the other Commercial Agreements. SECTION 2.3 PRINT DIRECTORY EXCLUSIVITY. Subject to the terms and conditions of this Agreement and the other Commercial Agreements, Publisher will have the exclusive right to (i) publish and distribute Print Directories and use the Licensed Marks in the Territory as contemplated in this Agreement and the other Commercial Agreements and (ii) solicit and sell Local and National yellow pages and white pages advertising for inclusion in such Print Directories. ARTICLE 3 TRADEMARK LICENSE SECTION 3.1 TRADEMARK LICENSE. (a) Subject to the terms and conditions of this Agreement, SBC Licensor hereby grants to Publisher a non-transferable (except as provided in Section 19.1), exclusive license to use, for the term of this Agreement, the Licensed Marks (i) on Print Directories and (ii) for related aspects of producing, publishing or distributing such directories and soliciting and selling advertising in connection therewith in the Territory, including on such items as sales collateral, stationary, contracts, invoices, customer correspondence, business cards and advertising and promotional materials. Any royalty associated with the license granted in this Section 3.1(a) is to be paid as part of the Purchase Price (as defined in the Purchase Agreement) pursuant to the Purchase Agreement. -13- (b) SBC Licensor shall not grant a license covering the Licensed Marks to any party that would permit any party to do any act that SBC is prohibited from doing under the Non-Competition Agreement. SECTION 3.2 USE OF TRADEMARK. Except as provided in Section 3.1, Publisher may not use the Licensed Marks in connection with any service or product or for any other purpose whatsoever, including any Telecom Services. SECTION 3.3 COMPLIANCE WITH BRANDING POLICIES. (a) Publisher must comply at all times with the Branding Policies for each Licensed Mark. In addition to the foregoing, Publisher must at all times use each Licensed Mark in a manner that will preserve and protect the goodwill, reputation and name of the Licensed Mark and of the SBC Entities with respect to the Licensed Mark. The Parties agree that the Branding Policies, Advertising Policies and White Pages Requirements are designed to preserve and protect the goodwill, reputation and name of the Licensed Mark and of the SBC Entities with respect to the Licensed Marks. (b) If Publisher's use of any Licensed Mark varies from the Branding Policies because of a change to the Branding Policies pursuant to Section 8.1 of this Agreement or the Licensed Marks by SBC Licensor, Publisher (i) may exhaust its existing stocks of materials displaying the Licensed Mark within a commercially reasonable period of time and (ii) will be permitted to produce, publish and distribute Print Directories containing the Licensed Marks which have a Business Office Close Date that is less than 120 days after the date of receipt of notice by Publisher from SBC Directory Operations or SBC Licensor of such change to the Branding Policies or the Licensed Marks. If Publisher's use of any Licensed Mark varies from this Agreement, including the Branding Policies, for any reason other than a change to the Branding Policies or the Licensed Marks by SBC Licensor, Publisher shall as promptly as is practicable cease using all materials displaying the Licensed Mark in violation of this Agreement, including the Branding Policies and the Co-Brand Standards. SECTION 3.4 RESERVATION OF RIGHTS. SBC Licensor reserves all rights in and to the Licensed Marks not otherwise expressly granted to Publisher hereunder. SECTION 3.5 CO-BRANDING. Publisher shall not use any other trademark, service mark, phrase, word or symbol, whether owned by Publisher, its Affiliates or by third parties, in conjunction with the Licensed Marks, except as provided in Section 8.2 of this Agreement. SECTION 3.6 SIMILAR MARKS. Publisher and its Affiliates shall not use or seek to register as trademarks: (a) any trademark or phrase which is confusingly similar to any Licensed Mark; or (b) any word, symbol, character, or set of words, symbols, or characters, which in any language would be identified as substantially or materially the equivalent of a Licensed Mark. SECTION 3.7 PROPRIETARY RIGHTS; LEGENDS. Publisher's use of the Licensed Marks that are registered with the U.S. Patent and Trademark Office on the services and products -14- authorized by this Agreement shall include use of the notice of registration - (R) - at least one time on each good or service in a manner that is visible to the public. SECTION 3.8 CORPORATE OR BUSINESS NAME. Publisher shall not use any Licensed Mark or the name "SBC" or any substantially or materially equivalent mark or name in its corporate or business name, nor allow its Affiliates to use any Licensed Mark or the name "SBC" in their respective corporate or business names. Furthermore, Publisher and its Affiliates shall not use any corporate or business name or any mark, logo or indicia that suggests in any manner that Publisher or its Affiliates are a subsidiary of or affiliated with the SBC Entities; provided, however, that Publisher may suggest and hold itself out as having the rights provided to Publisher pursuant to Article 2 of this Agreement. The Parties acknowledge that any use of the Licensed Marks by Publisher in accordance with Sections 3.1, 8.1 and 8.2 of this Agreement will not violate this Section 3.8. SECTION 3.9 APPROVAL OF MATERIALS. Publisher shall provide to SBC Licensor for approval prior to publication reasonable samples of any material on which a Licensed Mark appears and which has not been previously approved in the same or substantially the same form, and Publisher agrees to modify any Print Directory, packaging, labels, advertising and other material if the use of a Licensed Mark is not in accordance with the provisions of this Agreement, including the Branding Policies. Publisher shall provide to SBC Licensor for review and approval representative samples of Publisher's proposed use of the Licensed Marks whenever such samples are not consistent with the provisions of this Agreement or the Branding Policies. In the event that SBC Licensor does not notify Publisher within 10 business days of its receipt of any such samples that it disapproves of Publisher's proposed use of the Licensed Marks, SBC Licensor shall be deemed to have approved of such use. SECTION 3.10 RIGHTS TO THE LICENSED MARKS. (a) Interest in Licensed Marks. Publisher agrees that the Licensed Marks are proprietary to SBC Licensor and nothing in this Agreement constitutes the grant of a general license for their use; rather, they may only be used in accordance with the terms and conditions of this Agreement. SBC Licensor represents and warrants that (i) to the best of its knowledge SBC Licensor owns all right, title and interest (including the goodwill) in and to the Licensed Marks for use on Print Directories and (ii) the execution and performance of this Agreement by SBC Licensor will not breach any other agreement or license relating to the Licensed Marks. In accepting this Agreement, Publisher acknowledges SBC Licensor's ownership of the Licensed Marks, the goodwill connected with them and the validity of the Licensed Marks. Publisher acquires no right, title, or interest in the Licensed Marks or the goodwill associated with the Licensed Marks due to its use of the Licensed Marks, other than the right to use the Licensed Marks in accordance with the terms and conditions of this Agreement. Use of the Licensed Marks by Publisher and its Affiliates inures to the benefit of SBC Licensor. Neither Publisher nor its Affiliates will attack the Licensed Marks in any manner whatsoever (including, without limitation, lawsuits, oppositions and cease and desist letters) nor assist anyone in attacking the Licensed Marks. (b) Registration of Marks by Publisher. Publisher agrees that neither it nor any of its Affiliates will make any application to register the Licensed Marks, nor adopt, use, license, make -15- an application to register or register any trademark, service mark or trade name that is confusingly similar to a Licensed Mark, during and after expiration or termination of this Agreement. (c) Registration of Marks by SBC Licensor. SBC Licensor shall maintain the federal registration of all Licensed Marks that are registered with the United States Patent and Trademark Office throughout the Term, to the extent such Licensed Marks continue to be registrable. SBC Licensor shall bear all expenses relating to the prosecution of any application or maintenance of any registration issued pursuant to this provision. At the request of SBC Licensor, Publisher shall take all reasonable actions necessary to assist with the prosecution of any application under this provision and the filing of any document or other materials required to maintain any registration issued pursuant to this provision. SECTION 3.11 TERMINATION OR EXPIRATION OF THIS AGREEMENT. This Section 3.11 shall survive the termination or expiration of this Agreement. On the termination or expiration of this Agreement or the exercise by the SBC Entities of its rights under clause (i) of the first sentence of Section 9.5(a) of this Agreement, all rights granted to Publisher under this Agreement in and to the Licensed Marks, together with any interest in and to the Licensed Marks which Publisher may have or may have acquired pursuant to this Agreement or otherwise, shall forthwith, without further act or instrument, be assigned to and revert to SBC Licensor. In addition, Publisher shall execute any reasonable instruments prepared at the sole expense of and requested by SBC Licensor that are necessary to accomplish or confirm the foregoing. Publisher shall destroy all materials in Publisher's possession which contain the Licensed Marks within a reasonable period after the termination or expiration of the Agreement; provided, however, that Publisher shall be permitted to produce, publish and distribute the Print Directories containing the Licensed Marks which have a Business Office Close Date preceding the date of the termination or expiration of this Agreement; and provided, further, that Publisher may retain copies of documents containing the Licensed Marks for archival purposes. Publisher shall refrain from further use of the Licensed Marks, or any other trademark, service mark, trade name, design or logo that is confusingly similar to the Licensed Marks. Publisher acknowledges and admits that there would be no adequate remedy at law for its failure to cease use of the Licensed Marks upon termination of this Agreement. Publisher agrees that, in the event of such failure, SBC Licensor will be entitled to seek equitable relief by the way of temporary, preliminary and permanent injunction, and seek further relief as any court with jurisdiction may deem just and proper. SECTION 3.12 INFRINGEMENT. (a) Notice of Infringement. Publisher shall promptly notify SBC Licensor of any infringement of any of the Licensed Marks that comes to its attention. SBC Licensor may take such action that it determines, in its sole discretion, to terminate the infringement. SBC Licensor shall promptly notify Publisher of any infringement of any of the Licensed Marks only in connection with the uses identified in Section 3.1(a) of this Agreement that comes to its attention. If SBC Licensor decides that action should be taken, SBC Licensor may take the action either in its own name or, alternatively, SBC Licensor may authorize Publisher to initiate the action in SBC Licensor's name, at SBC Licensor's sole cost and expense. -16- (b) Defense by Publisher. If SBC Licensor does not decide to take any action with respect to such infringement, then Publisher may request in writing to prosecute such action at Publisher's expense and Publisher may take such action only with SBC Licensor's prior written consent, which shall not be unreasonably withheld. Publisher and SBC Licensor will keep each other apprised of all material developments in such case and will make no settlement of the action that could impair the goodwill or reputation of the Licensed Marks. In the event that SBC Licensor reasonably determines that any action is likely to result in an adverse effect on the enforceability or validity of the Licensed Marks or otherwise prejudice SBC Licensor, it shall promptly notify Publisher and Publisher shall promptly cease further proceedings. (c) Cooperation. SBC Licensor and Publisher agree to cooperate fully with the other party to whatever extent necessary to prosecute any action with all expenses being borne by the party bringing the action, or shared equally, if the parties agree to both prosecute the action. (d) Damages. The party which bears the expenses of any action(s) to enforce a Licensed Mark shall be entitled to all damages, settlement amounts or other recovery in connection with such action. SECTION 3.13 FURTHER PROTECTION. At the reasonable request of SBC Licensor and at SBC Licensor's sole expense, Publisher shall execute any papers or documents necessary to protect the rights of SBC Licensor in the Licensed Marks and execute and deliver any other documents as may be reasonably requested by SBC Licensor. ARTICLE 4 GENERAL PUBLISHER OBLIGATIONS SECTION 4.1 GENERAL. Except for the obligations of any SBC Entity specifically set forth under this Agreement and the other Commercial Agreements, as between the Parties, Publisher will be responsible for all activities relating to the production, publication and distribution of Print Directories, including, but not limited to, the following: (a) the printing of Print Directories; (b) the compilation and layout of Print Directories; (c) the purchasing of paper and other raw materials necessary to produce Print Directories; (d) information technology services necessary to produce, publish and distribute Print Directories; (e) the marketing and promotion of Print Directories; (f) all customer care, sales, billing and collection activities relating to Directory Advertising; (g) the preparation of advertisements for Print Directories; -17- (h) subject to Article 16, all actions that are necessary to enable the SBC Telcos to comply with the Legal and Regulatory Requirements; (i) the distribution of Print Directories; and (j) certain other matters related to Print Directories as specifically set forth in this Agreement. Notwithstanding the foregoing, Publisher's obligation to publish and distribute any White Page Directory shall be suspended during any period in which the Legal and Regulatory Requirements do not require any SBC Entity to publish or distribute such White Page Directory. SECTION 4.2 WHITE PAGES DIRECTORIES. (a) Publisher will act as the agent for SBC Directory Operations with respect to White Pages Directories and will be responsible for all operational aspects of producing, publishing and distributing White Pages Directories, except that employees of SBC Directory Operations will continue to supervise and manage the SBC Telco employees who maintain the Subscriber Listing Information database. Publisher will include a Standard Listing in each applicable White Pages Directory as required by the Legal and Regulatory Requirements for each Subscriber based on the Subscriber Listing Information provided to Publisher by the SBC Telcos pursuant to the Subscriber Listings Agreement. (b) Publisher will be financially responsible for all aspects of the production, publication and distribution of White Pages Directories. During the three-year period immediately following the date of this Agreement, SBC Directory Operations will provide to Publisher, and Publisher will purchase from SBC Directory Operations Subscriber Listing Information for its White Pages Directories and Publisher will pay to SBC Directory Operations a quarterly fee therefor in arrears equal to $250,000 for the first year, $200,000 for the second year and $150,000 for the third year. After this three year period, Publisher will purchase Subscriber Listing Information for its White Page Directories under the Subscriber Listing Agreement. Any additional formatting or data management services will be performed by the relevant SBC Entities only if the Parties subsequently agree to do so and then only pursuant to a separate agreement among the Parties. (c) Publisher shall use its commercially reasonable efforts to comply with SBC Directory Operations' requirements for producing White Pages Directories on behalf of the SBC Telcos, which are set forth in Exhibit F (the "White Pages Requirements") as such requirements may be changed from time to time by SBC Directory Operations as provided in the next sentence or as required by changes in the Legal and Regulatory Requirements; provided, however, that no failure to comply with the White Page Requirements shall give rise to a right of termination under Section 9.3. SBC Directory Operations may make changes from time to time to the White Pages Requirements (other than those required by changes in the Legal and Regulatory Requirements), if SBC Directory Operations makes such changes on a non-discriminatory basis with respect to substantially all comparable print directories published by the SBC Entities and notifies Publisher in writing of such changes, in which case Exhibit F shall be deemed to have been amended by such changes upon delivery of such notice; provided, however, that if any such -18- notice is delivered less than 120 days prior to the Business Office Close Date for any White Pages Directory, then the changes effected by such notice shall not become effective as to such White Pages Directory until its next publication. Notwithstanding the foregoing, SBC Directory Operations may not materially increase the level of detail or specificity of the White Pages Requirements beyond the level contained in Exhibit F as of the date of this Agreement unless required by the Legal and Regulatory Requirements. SECTION 4.3 YELLOW PAGES LISTING. Publisher will purchase Subscriber Listing Information for its Yellow Page Directories pursuant to the Subscriber Listing Agreement and will include a Standard Listing in each such Yellow Pages Directory for each business Subscriber based on such Subscriber Listing Information. SECTION 4.4 TELCO-SOLD WHITE PAGES PRODUCTS. Publisher will include in each applicable White Pages Directory all Telco-Sold White Pages Products sold by the SBC Telcos for such White Pages Directory to the extent that (a) the applicable SBC Telco timely provides such Telco-Sold White Pages Products to Publisher and (b) such Telco-Sold White Pages Products do not conflict with any Legal and Regulatory Requirements. As between the SBC Entities and the RHD Entities, the SBC Entities (other than SBC Directory Operations) will maintain the exclusive right to sell Telco-Sold White Pages Products and such SBC Entities will be entitled to bill for and retain all revenue for Telco-Sold White Pages Products sold by them. All other products sold with respect to White Page Directories shall be sold by Publisher. The Parties will cooperate to avoid conflicts in sales channels in connection with the activities described in this Section 4.4. SECTION 4.5 GEOGRAPHIC COVERAGE AREA. Publisher will be entitled to determine each Print Directory's Geographic Coverage Area, except that (a) Publisher may not expand the scope of any White Pages Directory's Geographic Coverage Area to include areas outside of the Territory and (b) Publisher may not decrease the scope of any White Pages Directory's Geographic Coverage Area without the prior written consent of SBC Directory Operations, which will not be unreasonably withheld, except that SBC Directory Operations' consent shall not be required (i) in the event Publisher decreases the scope of any underlay White Pages Directory so long as Publisher distributes to the affected Subscribers a White Pages Directory that covers the entire Geographic Coverage Area or (ii) with respect to a White Pages Directory not required to be published by the Legal and Regulatory Requirements; provided, that Publisher gives SBC Directory Operations notice of such changes in scope with respect to the foregoing clause (i) or (ii) at least 120 days prior to the Business Office Close Date for any such White Pages Directory. Without limiting the foregoing, if Publisher expands or decreases the scope of any Print Directory's Geographic Coverage Area that includes Listings required under agreements with CLECs or any Other ILEC, at least 45 days prior to the effective date of such change in scope, Publisher will provide (a) written notice of such change, (b) updated community scoping information as required by SBC Directory Operations and (c) a schedule of any Subscribers with existing paid foreign listings that will become local listings as a result of such change in scope. Subject to Article 16, Publisher will ensure that the Geographic Coverage Area of the Print Directories includes all geographic areas that are required in order to comply with the Legal and Regulatory Requirements. As of the date of this Agreement, SBC Directory Operations has delivered information that generally identifies the Geographic Coverage Area for each Print Directory. Upon reasonable request, Publisher will provide to SBC Directory -19- Operations coverage maps and other information that generally identifies the Geographic Coverage Area for each Print Directory. None of the foregoing shall preclude Publisher from publishing or distributing underlay directories or changing their scoping in the Territory so long as the Legal and Regulatory Requirements are satisfied. Publisher will rescope the Geographic Coverage Area for any White Pages Directory as requested by SBC Directory Operations if SBC Directory Operations reimburses Publisher for all incremental costs and expenses it incurs. SECTION 4.6 INTERFILING. If required by the Legal and Regulatory Requirements, Publisher will Interfile the Listings in a Print Directory in accordance with such requirements. If not required by the Legal and Regulatory Requirements, Publisher may Interfile the Listings in a Print Directory in any manner not inconsistent with such requirements. Interfiled Listings will be indistinguishable from Listings of other Subscribers in the applicable Print Directory. SBC Directory Operations may submit to Publisher for its consideration caption listings in SBC Directory Operations' preferred format, except that the methodology used and format for Interfiling caption listings will be mutually agreed between SBC Directory Operations and Publisher. Publisher will use commercially reasonable efforts to provide SBC Directory Operations with written notice at least 120 days prior to the Business Office Close Date if Publisher intends to modify a White Pages Directory in order to effect Interfiling and/or business-residence splits. SECTION 4.7 INFORMATION PAGES. (a) To the extent necessary to satisfy the Legal and Regulatory Requirements, at Publisher's sole cost and expense, SBC Directory Operations may specify the following for the Information Pages in any Print Directory (i) content (including copy, layout, color and paper type) of pages, (ii) placement of pages and (iii) number of pages, and SBC Directory Operations' specifications may be different for each Print Directory. At SBC Directory Operations' sole cost and expense, SBC Directory Operations may issue additional specifications for Information Pages to be included in a Print Directory if they are reasonable and consistent with the Legal and Regulatory Requirements and Information Pages included by SBC Directory Operations in other comparable print directories. Publisher will include and publish the Information Pages as so specified by SBC Directory Operations without alteration; provided, that Publisher may make changes to the Information Pages that are not inconsistent with SBC Directory Operations' specifications with SBC Directory Operations' consent, which shall not be unreasonably withheld. Publisher will not be obligated to publish any content with respect to the Information Pages that primarily promotes a party other than SBC and its Affiliates, except in accordance with the Legal and Regulatory Requirements. Publisher will have the right to determine the format, style, content and number of all other information pages in the Print Directories, except as otherwise provided in this Agreement and the other Commercial Agreements. (b) In order for information to be included in the Information Pages section of a White Pages Directory, SBC Directory Operations must provide adequate information to Publisher by the appropriate dates (as set forth in the Publication Schedule) for that White Pages Directory. In order for any changes to be made to information in the Information Pages section of a White Pages Directory prior to publication of that White Pages Directory, SBC Directory Operations must return proofs to Publisher by the appropriate dates (as set forth in the Publication Schedule for that White Pages Directory). -20- SECTION 4.8 WAREHOUSING; INITIAL AND SECONDARY DISTRIBUTION. (a) Warehousing. Publisher will be responsible for warehousing Print Directories in quantities sufficient to perform the Initial Distributions and Secondary Distributions and will warehouse such Print Directories in quantities sufficient to distribute such Print Directories in accordance with the Legal and Regulatory Requirements. (b) Distribution Services. Publisher will produce, publish and distribute Print Directories with such frequency as is required to comply with the Legal and Regulatory Requirements. Unless otherwise required by the Legal and Regulatory Requirements, Publisher may determine the number and distribution means (subject to this Section 4.8(b)) of Print Directories to be delivered to each Subscriber. Publisher will distribute at no cost to the SBC Entities a reasonable number of Print Directories to the SBC Entities' offices and sites for administrative use. Publisher also will fulfill, at its expense, reasonable requests for additional copies of Print Directories to be delivered to local, state, regional or national governmental agencies. Publisher will use its commercially reasonable efforts to meet or exceed the service levels for the Initial Distributions and the Secondary Distributions set forth on Exhibit G. (c) Ride Along Deliveries. Subject to Section 6.2 of this Agreement, Publisher may distribute other materials with Print Directories, including advertising, marketing or promotional materials distributed by Publisher or others, at Publisher's reasonable discretion. (d) Additional Directories. Publisher will provide additional copies of Print Directories to Subscribers upon reasonable terms and conditions. Upon SBC Directory Operations' request, Publisher will provide SBC Directory Operations with additional copies of Print Directories at most favored customer pricing to be re-sold by SBC Directory Operations to customers outside the Territory. SECTION 4.9 ACCURACY. Publisher will work cooperatively with SBC Directory Operations and use commercially reasonable efforts to ensure that the Standard Listings are accurate; provided, that the Parties recognize that the accuracy of the Standard Listings is based primarily upon the information delivered by the SBC Telcos to Publisher under the Subscriber Listings Agreement. SECTION 4.10 QUERIES. Publisher will provide SBC Directory Operations with contact numbers for queries concerning services to be provided by Publisher under this Agreement, and will use commercially reasonable efforts to respond to such queries within a timely fashion. SECTION 4.11 PUBLICATION SCHEDULE. Publisher may modify the Publication Schedule from time to time to reflect changes in the publication cycles of the Print Directories, including changes to Business Office Close Dates, provided that such modifications do not conflict with any Legal and Regulatory Requirements or the proviso in the next sentence; and provided, further, that if such modification conflicts with any Legal or Regulatory Requirements and Publisher so requests, then SBC Directory Operations will use commercially reasonable efforts (taking into account the SBC Entities' other dealings and relationships with the relevant regulators) to cause such Legal and Regulatory Requirements to be changed so as to permit such modification and Publisher shall reimburse the SBC Entities for any reasonable out-of-pocket -21- expenses they incur in connection therewith. Publisher will provide SBC Directory Operations with prompt written notice of any changes to the Publication Schedule, and such revised Publication Schedule shall be deemed to be incorporated as part of the terms and conditions of this Agreement in replacement of the prior Publication Schedule; provided, however, Publisher may not change the Publication Month of any Print Directory without giving written notice of such change to SBC Directory Operations at least 120 days prior to the Business Office Close Date for such Print Directory. SECTION 4.12 REGULATORY/LEGAL MATTERS COOPERATION. Each Party will promptly notify the other Party of, and at either Party's request, the other Party will cooperate with such Party with respect to, any inquiry, investigation, formal or informal complaint, lawsuit or docket relating to the matters covered by this Agreement begun or threatened by any regulatory or judicial entity with jurisdiction over such Party. Publisher will cooperate with SBC Directory Operations with respect to legal efforts to change legislation or regulations in an effort to minimize directory publication costs. As between the Parties, the SBC Entities will have sole responsibility for all discussions, communications and other interactions with governmental or regulatory authorities with respect to existing or prospective Legal and Regulatory Requirements; provided, that the RHD Entities may have any such discussions, communications or interactions if they give SBC Directory Operations reasonable prior notice and the right to participate in each of any such discussions, communications or interactions and, in the case of written correspondences, the right to receive copies thereof; and provided, further, that SBC Directory Operations will reasonably consult with Publisher on any such discussions, communications or interactions which relate to the Publisher Business. In any discussions, communications or interactions with governmental or regulatory authorities, Publisher will make it clear that it does not represent, or otherwise have authority to speak for or bind, any SBC Entity. SECTION 4.13 COMPLAINTS. Publisher will have the responsibility for responding to complaints relating to the Print Directories or to any Directory Advertising. Publisher will not, and will use commercially reasonable efforts to cause its employees and other representatives not to, make any oral or written statements to Subscribers which are of a negative or critical nature concerning any SBC Entity or its operations. SBC Directory Operations will promptly refer any such complaints to Publisher for its response. Publisher will use commercially reasonable efforts to resolve such complaints. Upon request by Publisher, SBC Directory Operations will cooperate with Publisher in order to resolve the complaints arising out of the services provided by Publisher. Publisher will use its commercially reasonable efforts to direct to SBC Directory Operations all calls received by Publisher that were intended for any SBC Entity. SECTION 4.14 RECYCLING SERVICES. Publisher will handle recycling activities, if any, associated with the recovery of old Print Directories in a manner consistent with complying with the Legal and Regulatory Requirements. Publisher will use commercially reasonable efforts to comply with any industry guidelines or standards with respect to the recycling of Print Directories and the use of recycled materials to the extent (but only to the extent) that the SBC Entities are complying with such guidelines and standards with respect to substantially all comparable print directories published by them. -22- SECTION 4.15 AGREEMENTS WITH CLECS AND OTHER ILECS. Publisher will include in each publication of each Print Directory all information with respect to CLECs and Other ILECs and their Subscribers required by the Legal and Regulatory Requirements if Publisher receives such information prior to the Business Office Close Date for such publication or as otherwise required by the Legal and Regulatory Requirements. Publisher will treat Listings from CLECs and Other ILECs in the same manner as it treats Listings from the SBC Telcos, and as required in order to comply with the Legal and Regulatory Requirements. SECTION 4.16 ADDITIONAL LISTING INFORMATION. (a) As permitted by applicable privacy and other laws or the respective privacy policies of the Parties, Publisher may request that SBC Directory Operations provide to Publisher for inclusion in the Listings additional information in the SBC Telcos' possession that the SBC Telcos are not required to publish pursuant to the Legal and Regulatory Requirements. SBC Directory Operations will be required to provide such information if the incremental cost in the aggregate to the SBC Entities resulting from providing the information is de minimis, or if Publisher agrees to reimburse such SBC Entities for such incremental cost. (b) Subject to applicable privacy and other laws and the respective privacy policies of the Parties, SBC Directory Operations may request that Publisher include in the Listings additional information concerning Subscribers that SBC Directory Operations is not required to publish pursuant to the Legal and Regulatory Requirements. Publisher will be required to provide such information in the Listings if the incremental cost to Publisher in the aggregate resulting from the inclusion of the information is de minimis (in which case such cost will be borne by Publisher), or if SBC Directory Operations agrees to reimburse Publisher for such cost; provided, that Publisher will not be required to provide such information in the Listings if it would be contrary to directory publishing industry standards. Otherwise, the Parties will discuss in good faith the terms and conditions upon which such information may be included in the Listings. If the provision of any such additional information represents a revenue opportunity, Publisher shall be entitled to sell or otherwise provide such additional information and recognize all revenues in connection therewith under this Agreement. (c) Notwithstanding the foregoing, Publisher will continue to include all Subscriber Listing Information with respect to each Print Directory consistent with the Legal and Regulatory Requirements. SECTION 4.17 SBC PRODUCT REFERRALS. Publisher will use its commercially reasonable efforts to refer all Subscribers and all other customers of Publisher in the Territory, who are interested in purchasing products and services from SBC or its Affiliates, to the appropriate SBC Entity; provided, however, that Publisher's obligations pursuant to the foregoing shall be limited to the products and services listed in Exhibit H hereto (as it may be amended from time to time by written notice to Publisher from SBC Directory Operations) and the referral instructions set forth on such Exhibit. SBC Directory Operations may make programs used by any directory publishing Affiliate of SBC Directory Operations outside the Territory available to Publisher, and Publisher may elect to use such programs, for the purpose of conveying such referrals to the appropriate SBC Entity. -23- ARTICLE 5 GENERAL OBLIGATIONS OF AMERITECH AND SBC DIRECTORY OPERATIONS SECTION 5.1 DISTRIBUTION INFORMATION; DELIVERY QUANTITIES. Ameritech will cause the SBC Telcos to provide Publisher with all Subscriber distribution information, including non-published and non-listed Subscriber mailing and hand-delivery information, including zip codes, in the SBC Telcos' possession reasonably required by Publisher to perform its distribution obligations under this Agreement. Publisher shall use this information solely in connection with the delivery of Print Directories under this Agreement. Ameritech will also cause the SBC Telcos to provide to Publisher, at no charge, all street mailing addresses associated with each Subscriber's enhanced 911 service if and to the extent that such information is available and is then being provided to SBC Directory Operations for distribution purposes for substantially all of its comparable print directories. Upon Publisher's request, SBC Directory Operations will provide Publisher with additional copies of any print directories published outside the Territory by SBC Directory Operations or its Affiliates and comparable to the Print Directories at most favored customer pricing to be re-sold by Publisher to any customer inside or outside the Territory. SECTION 5.2 DIRECTORY SALES-INITIATED CHANGES. Ameritech will cause the SBC Telcos, to the extent commercially practicable with their respective existing systems, to timely process Listing changes submitted to them via the Directory Change Request form (the "DCR") from Publisher's sales representatives. In addition, Ameritech will cause the SBC Telcos to process Listing changes and queries submitted to them via the form 3235 timely, or any later-created variation of that form, from certified marketing representatives who sell national Directory Advertising. In processing these Listings changes, the SBC Telcos will correct their Listing databases as directed on the DCR or the form 3235. SECTION 5.3 ACCURACY. Ameritech will cause the SBC Telcos to work cooperatively with Publisher and use their commercially reasonable efforts to ensure that Subscriber Listing Information and Listing Information Updates are accurate and complete, including by properly designating the appropriate Subscriber Listing Information of non-published and unlisted and "address omitted" Subscribers. In the event that SBC Directory Operations notifies Publisher that non-published and unlisted and "address omitted" Subscribers have been included in Subscriber Listing Information delivered to Publisher for inclusion in Print Directories, Publisher will use commercially reasonable efforts to (a) cease further production or distributions of such Print Directories and (b) take such other remedial actions as SBC Directory Operations shall request, in each case, to the extent the foregoing action is reasonable and not inconsistent with remedial action undertaken by SBC Directory Operations in the three most recent instances involving comparable facts and circumstances in comparable print directories published by it outside the Territory. The cost of any such remedy or cure will be at Publisher's expense except to the extent that the inclusion relates to Subscriber Listing Information provided to Publisher by an SBC Telco solely with respect to Persons who fall within clause (i) of the definition of Subscriber or was caused primarily by a breach of an SBC Entity's obligations to a CLEC or Other ILEC or by an act of an SBC Entity (other than simply passing information from a CLEC or Other ILEC to Publisher in the same format received from such CLEC or Other ILEC). The -24- cost of any such remedy or cure which is not at Publisher's expense shall be paid or reimbursed by SBC Directory Operations. SECTION 5.4 COMPLAINTS RELATING TO THE SBC TELCOS' SERVICES. The SBC Telcos will have the responsibility for responding (and Ameritech will cause them to respond) to complaints relating to Telco-Sold White Pages Products or local telephone service. Ameritech will cause the SBC Telcos not to, and will cause the SBC Telcos to use their commercially reasonable efforts to cause its employees and other representatives not to, make any oral or written statements to potential or actual advertisers which are of a negative or critical nature concerning any RHD Entity or its operations. In accordance with the procedures set forth in Exhibit N, Publisher will use its commercially reasonable efforts to refer any such complaints to the SBC Telcos for their response. Ameritech will cause the SBC Telcos to use commercially reasonable efforts to resolve such complaints. Upon request by the SBC Telcos, Publisher will cooperate with the SBC Telcos in order to resolve the complaints arising out of Telco-Sold White Pages Products or the services provided by the SBC Telcos. SECTION 5.5 QUERIES. Ameritech will cause the SBC Telcos to provide Publisher with contact numbers for queries concerning services provided by the SBC Telcos to Publisher under this Agreement. Ameritech will cause the SBC Telcos to respond to any such queries in a timely fashion. SECTION 5.6 REFERRALS. SBC Directory Operations will use its commercially reasonable efforts to refer to Publisher all Subscribers interested in purchasing Directory Advertising in the Territory. Publisher will provide contact information for this purpose to SBC Directory Operations. Ameritech will cause the SBC Telcos to use their commercially reasonable efforts to direct to Publisher all calls received by the SBC Telcos that were intended for Publisher or that relate to Directory Advertising. SECTION 5.7 ALPPS/ACIS. SBC Directory Operations will dedicate one of its employees to process and respond to reasonable requests by Publisher for information from SBC Telcos' ALPPS and ACIS systems (or successor systems). ARTICLE 6 DIRECTORY ADVERTISING SECTION 6.1 STANDARDS AND GUIDELINES. Publisher will comply with the advertising standards and guidelines under the heading "Mandatory Compliance Policies" in Exhibit I hereto (as modified from time to time in accordance with the next sentence, the "Mandatory Policies") and will use its commercially reasonable efforts to comply with the advertising standards and guidelines under the heading "General Compliance Policies" in such Exhibit I (as modified from time to time in accordance with the next sentence, the "General Policies" and, collectively with the Mandatory Policies, the "Advertising Policies"); provided, however, that no failure to comply with the General Policies shall give rise to a right of termination under Section 9.3. If SBC Directory Operations subsequently changes any of those advertising standards and guidelines on a non-discriminatory basis with respect to substantially all comparable print directories published by it or its Affiliates and SBC Directory Operations notifies Publisher in writing of such changes, -25- Exhibit I shall be deemed to have been amended by such changes upon delivery of such notice to the Publisher; provided, however, that if any such notice is delivered after the commencement of advertising sales for any Print Directory, then the changes effected by such notice shall not become effective as to such Print Directory until its next publication. Notwithstanding the foregoing, (i) no such change to the Mandatory Policies shall be effective unless the comparable directories with respect to which such change was made are in substantial compliance with such change and (ii) SBC Directory Operations may not materially increase the level of detail or specificity of the Advertising Policies beyond the level contained in Exhibit I as of the date of this Agreement unless required by the Legal and Regulatory Requirements. SECTION 6.2 RESTRICTIONS ON ADVERTISING. Publisher may not (x) sell or include in any Print Directory any Premium Advertising Products for any Telecom Competitor, (y) sell or include on the front or back cover, or tip-ons adhering to the cover, or spine or edge of any Print Directory or any other part of any Print Directory, including without limitation tabbed inserts, that is visible from the outside (collectively, "Visible Areas") any Premium Advertising Products for any Telecom Service (other than those provided by an SBC Entity), or permit any branding of any Print Directory with any name or brand of a Telecom Competitor which is not an Approved Publisher Mark or Telecom Service (other than those provided by an SBC Entity), or (z) during the Term (as defined in the IYP Reseller Agreement), sell or include in any Print Directory any Premium Advertising Product for any Existing IYP Directory or Future Electronic Directory (other than SMARTpages (as defined in the IYP Reseller Agreement)) unless Publisher makes available on such Print Directory at no cost to SBC Directory Operations comparable (in terms of type, size, visibility and prominence) Premium Advertising Products for SMARTpages, except (i) as required by law or the Legal and Regulatory Requirements, (ii) with SBC Directory Operations' prior written consent or (iii) as required by Publisher in order to avoid a breach of any contract relating to the Publisher Business entered into prior to the date of this Agreement by any Person acquired by RHD. SECTION 6.3 SBC ADVERTISING. Subject to Section 6.6, Publisher will provide SBC and its Affiliates access to, and pricing for, all Directory Advertising on a most-favored-customer basis for similarly situated customers that are purchasing equivalent volumes and types of advertising, including products that are subject to the right of first option pursuant to Section 6.4 of this Agreement except that such most-favored-customer terms for such advertising products will not be available to any SBC Entity during the 30 days prior to the applicable Business Office Closing Date of a particular Print Directory. SECTION 6.4 OPTION ON PREMIUM ADVERTISING. The SBC Entities will have a first option with respect to the purchase of all Premium Advertising Products offered in each Print Directory as contemplated by the provisions of this Section 6.4 (the "First Option"). Before November 1, 2004, Publisher will provide SBC Directory Operations a list of Print Directories with publication dates between July 1, 2005 and December 31, 2005, specifying those Premium Advertising Products available for purchase by the SBC Entities ("Available Products") and those Premium Advertising Products sold to another party in the immediately prior version of the applicable Print Directory ("Reserved Products"). Beginning in 2005, on or prior to April 1st of each year Publisher will provide SBC Directory Operations with a list of both Available Products and Reserved Products for all Print Directories with publication dates between January 1st and June 30th of the following year and on or prior to November 1st of each year Publisher will -26- provide SBC Directory Operations with a list of both Available Products and Reserved Products for all Print Directories with publication dates between July 1st and December 31st of the following year. This notice shall include a description of such Available Products and Reserved Products, the pricing for such products consistent with Section 6.3 of this Agreement, and the sales canvass commencement date for the applicable Print Directory. The SBC Entities, or any of them, may exercise the First Option by providing Publisher with a notice of exercise within 30 days after receipt of notice. This notice of exercise must specify the Premium Advertising Product(s) for which the First Option is exercised, and must specify whether it relates to Available Products, Reserved Products or both. If the SBC Entities exercise the First Option with respect to Available Products, then the SBC Entities shall be required to purchase those Available Products on the terms specified by Publisher in its notice. If the SBC Entities exercise the First Option with respect to Reserved Products, then the SBC Entities shall be required to purchase, on the terms specified by Publisher in its notice, those Reserved Products only upon their becoming Available Products due to the non-renewal (for whatever reason) of the Reserved Product by the prior advertiser. If the SBC Entities do not exercise the First Option with respect to any Available Product within 30 days of notice, the First Option shall expire and, subject to Section 6.2 of this Agreement, Publisher shall be permitted to sell the Premium Advertising Products for the applicable Print Directory to third parties (at a price at equivalent volumes not less than that last offered to the SBC Entities for similar quantities or size) as well as the SBC Entities. Any Premium Advertising Products purchased by the SBC Entities, whether pursuant to an exercise of the First Option or made after the sales canvass commencement date for the applicable Print Directory, will be subject to the most-favored-customer provision set forth in Section 6.3 of this Agreement. An SBC Entity will pay Publisher for any Premium Advertising Products purchased within 60 days of receipt of an invoice from Publisher. SECTION 6.5 PRODUCTS AND SERVICES. Except as prohibited by law or as otherwise provided herein, Publisher will offer the SBC Entities all products and services that it offers other third parties on a non-discriminatory basis. SECTION 6.6 SBC ENTITIES MINIMUM SPEND. Subject to Section 6.3, in each of the initial three years of the Term, the SBC Entities will purchase through the SBC Entities' certified marketing representatives Directory Advertising in Publisher's Print Directories with an aggregate purchase price (including commissions) of $1.5 million per year. The amount paid to Publisher for such advertising will be net of commissions. SECTION 6.7 OUT-OF-AREA SALES. Each of SBC and RHD and their respective Affiliates may sell advertising inside or outside the Territory for any print directory they publish which is not prohibited by this Agreement or the other Commercial Agreements. ARTICLE 7 OTHER COMMERCIAL AGREEMENTS SECTION 7.1 NON-COMPETITION AGREEMENT. On the date hereof, SBC and RHD will enter into the Non-Competition Agreement in the form attached hereto as Exhibit J (the "Non-Competition Agreement"). -27- SECTION 7.2 SUBSCRIBER LISTINGS AGREEMENT. On the date hereof, the SBC Entities and RHD Entities party thereto will enter into the Ameritech Directory Publishing Listing License Agreement in the form attached hereto as Exhibit K (the "Subscriber Listings Agreement"). SECTION 7.3 IYP RESELLER AGREEMENT. On the date hereof, the SBC Entities and RHD Entities party thereto will enter into the SMARTpages Reseller Agreement in the form attached hereto as Exhibit L (the "IYP Reseller Agreement"). ARTICLE 8 BRANDING SECTION 8.1 PRINT DIRECTORY COVER. During the Term, and unless otherwise expressly agreed to in writing by the Parties, at no cost to SBC or any other SBC Entity, the Licensed Marks will appear clearly and conspicuously on the front cover and the spine of each Print Directory (a) in the format and style specified in the Branding Policies and (b) in compliance with all other terms of this Agreement (including the Branding Policies and Article 3). Publisher will comply with branding specifications and standards set forth in Exhibit M (as modified from time to time in accordance with the next sentence, the "Branding Policies"). If SBC Directory Operations subsequently changes any of those branding specifications and standards on a non-discriminatory basis with respect to substantially all comparable print directories published by it and its Subsidiaries and notifies Publisher of such changes in writing, Exhibit M shall be deemed to have been amended by such changes upon delivery of such notice to Publisher, provided, however, that if any such notice is delivered less than 120 days prior to the Business Office Close Date for any Print Directory, then the changes effected by such notice shall not become effective as to such Print Directory until its next publication. Notwithstanding the foregoing, SBC Directory Operations may not change any requirements on pages 8 through 10 of Exhibit M without Publisher's prior written consent. Upon SBC Directory Operations' reasonable request, Publisher shall provide SBC Directory Operations with copies of the front cover and spine of any Print Directory prior to publication in order for SBC Directory Operations to ensure compliance with this Article 8. If there is an inconsistency between the terms of this Agreement and the Branding Policies, the terms of this Agreement control. SECTION 8.2 CO-BRANDING. (a) Publisher may co-brand the front covers and spines of the Print Directories with any trademark or trade name of RHD (the "Publisher Marks"); provided, that except as otherwise specified in this Section 8.2, in all cases the appearance and relative size of the Licensed Marks in conjunction with the Publisher Marks must comply with the co-brand standards, which are contained on pages 8 through 10 of Exhibit M (the "Co-Brand Standards"). (b) If Publisher wishes to use the Publisher Marks in a specific graphic use that is outside of the agreed-upon Co-Brand Standards, the Parties will negotiate in good faith to agree on Co-Brand Standards. Subject to the prior sentence, Publisher may change the actual specific graphic uses of the co-branding of the Publisher Marks and the Licensed Marks, provided that such specific graphic uses comply with the Branding Policies and the Co-Brand Standards. -28- (c) Notwithstanding any other provision of this Agreement, Publisher may not include on any Visible Areas (i) any advertising for a Telecom Competitor or Telecom Services (other than those provided by an SBC Entity) or (ii) any name or brand of any Telecom Competitor which is not an Approved Publisher Mark or any Telecom Services (other than those provided by an SBC Entity), except in either case (x) as required by applicable law or the Legal and Regulatory Requirements, (y) with SBC Directory Operations' prior written consent or (z) as required by Publisher in order to avoid a breach of any contract relating to the Publisher Business entered into prior to the date of this Agreement by any Person acquired by RHD. (d) For the two-year period prior to the end of any Initial Term or Renewal Term for which any Party has provided notice to the others of its intention to terminate this Agreement at the end of such term, the Parties will agree in writing, prior to publication, upon revisions to the Co-Brand Standards, including the specific graphic uses of the Publisher Marks in relation to the Licensed Marks to be applied to the front covers and spines of Print Directories; provided, that the Parties hereby agree that the Licensed Marks shall no longer be required to comply with the relative size requirements of the Co-Brand Standards, and the revised Co-Brand Standards shall be no more restrictive on Publisher than the then-existing Co-Brand Standards or then-existing Branding Policies. (e) In the event any SBC Entity substitutes any brand or trademark for the Licensed Marks in an SBC Telco's provision of local telephone exchange service as the ILEC in any area within the Territory, SBC Licensor will file U.S. trademark applications to register such new trademarks in its name for at least all of the goods and services permitted to be used by Publisher pursuant to this Agreement and the other Commercial Agreements, and upon first use such new trademarks will be deemed either added or substituted, as the case may be, and become the Licensed Marks. SECTION 8.3 LOOK AND FEEL. Except as otherwise provided in Article 8, Publisher shall generally have the right to make changes to the cover design and layout and the other aspects of "look and feel" of Print Directories in Publisher's reasonable discretion, provided that such changes are not inconsistent with the Branding Policies and the Co-Brand Standards. ARTICLE 9 TERM AND TERMINATION SECTION 9.1 TERM. Except as otherwise provided in this Article 9, the term of this Agreement will commence on the date of this Agreement and will continue for a term of 50 years (the "Initial Term"). Thereafter, the Agreement will automatically renew for successive five-year terms (each, a "Renewal Term"), unless either Party terminates the Agreement by providing at least two years prior written notice to the other Party of its intent to terminate the Agreement at the end of the Initial Term or any Renewal Term. The Initial Term and the Renewal Terms, if any, are collectively referred to in this Agreement as the "Term." SECTION 9.2 EFFECTS OF TERMINATION. Upon termination of this Agreement, except as otherwise provided in Sections 9.3(d)(iii) and 9.4(d) of this Agreement or elsewhere herein or in the other Commercial Agreements, all rights and obligations of each Party under this Agreement -29- and the other Commercial Agreements (to the extent not previously terminated) will terminate immediately or, in the case of a termination with respect to a particular Print Directory or service area pursuant to Section 9.3(b) below, solely with respect to such Print Directory or service area; provided, however, the indemnification obligations of the Parties set forth in Article 15 shall continue indefinitely, subject to any applicable statutes of limitation, and no termination of all or any part of this Agreement will release any Party from liability for prior breaches of any provision of this Agreement. For the avoidance of doubt, no exercise by the SBC Entities of their right to terminate the Publisher's trademark license pursuant to clause (i) of Section 9.5(a) of this Agreement shall be deemed to be a termination of this Agreement for purposes of this Section 9.2. SECTION 9.3 EARLY TERMINATION BY THE SBC ENTITIES. (a) If any of the events described in this Section 9.3(a) (each, a "Termination Event") shall occur, then SBC Directory Operations may terminate this Agreement by giving written notice (a "Termination Notice") to Publisher during the Termination Window Period: (i) Publisher fails to publish any White Pages Directory when required by any Applicable Requirement and does not cure such failure within 60 days after the Publisher receives written notice (a "Cure Notice") of such failure from an SBC Entity; provided, however, that if (A) Publisher delivers a written notice to SBC Directory Operations indicating that Publisher believes in good faith that SBC Directory Operations might conclude that Publisher has failed to publish any White Pages Directory as required by any Applicable Requirements and (B) such written notice is delivered before any SBC Entity has delivered a Cure Notice to Publisher with respect to any such failure, then the SBC Entities' right to deliver a Cure Notice shall terminate 30 days after the date on which Publisher provided such written notice to SBC Directory Operations; (ii) Any RHD Entity violates any Applicable Requirement which (A) results in the commencement of any formal action by any court or regulatory authority that has had or is reasonably likely to have a material adverse effect on (x) the SBC Telcos or any other SBC Entities to the extent they then provide products or services in the Territory which have become substitutes or replacements for the Telecom Services currently provided by the SBC Telcos, taken as a whole, or (y) the Licensed Marks in the Territory, taken as a whole, and (B) Publisher fails to cure after any RHD Entity shall have received written notice from such court or regulatory authority of the commencement of such formal action (a "Regulatory Notice") or, if such Regulatory Notice is not delivered to an RHD Entity, the date on which any RHD Entity shall have received written notice (with such Regulatory Notice attached thereto) from an SBC Entity (1) in the case of any such violation which can only be cured by republishing a Print Directory, in the next regularly scheduled publication of the affected directory, provided that such Regulatory Notice is given at least 90 days prior to such next publication date of such directory or (2) in the case of all other such violations, within 30 days of receiving such Regulatory Notice or such shorter period as required by any law, rule, regulation, order or decree of any court or regulatory authority as long as, if requested by Publisher, SBC Directory Operations has used its commercially reasonable efforts to extend such shorter period up to 30 days; -30- (iii) Any RHD Entity directly or indirectly provides, offers or sells Telecom Services in the Territory, whether as principal, reseller or otherwise, and such activity is not divested or discontinued within 30 days following written notice (a "Telecom Services Notice") from an SBC Entity; provided, however, that if (A) Publisher delivers a written notice to SBC Directory Operations indicating that Publisher believes in good faith that SBC Directory Operations might conclude an RHD Entity is providing any Telecom Services in the Territory and describing such services in reasonable detail and (B) such written notice is delivered before any SBC Entity has delivered a Telecom Services Notice to any RHD Entity with respect to such Telecom Services, then the SBC Entities' right to deliver a Telecom Services Notice with respect to such Telecom Services shall terminate 30 days after the date on which Publisher provided such written notice to SBC Directory Operations; and provided, further, that if any RHD Entity acquired such Telecom Services as part of an acquisition of a Person and such Telecom Services accounted for less than 15% of the total consolidated assets, revenues and earnings before interest and taxes, depreciation and amortization of such Person for its most recently completed fiscal year, then the foregoing cure period shall increase from 30 days to 180 days; and provided, further, that no RHD Entity will be deemed to have engaged in the offer or sale of Telecom Services for purposes of this clause (iii) solely by virtue of the fact that RHD becomes controlled by, or sells the Publisher Business to, a Telecom Competitor; or (iv) Any RHD Entity commits a breach of this Agreement or the other Commercial Agreements which has had a material adverse effect on the Licensed Marks within the Territory. (b) The applicable SBC Entities may, by written notice delivered to Publisher during the Multiple Breach Window Period (also a "Termination Notice"), terminate this Agreement and the other Commercial Agreements with respect to any Print Directory or service area if there are two or more substantially similar material breaches of this Agreement or any other Commercial Agreement (other than breaches covered in Section 9.3(a) of this Agreement) by the RHD Entities within any five-year period with respect to such Print Directory or service area. (c) Any termination pursuant to Section 9.3(a) or 9.3(b) of this Agreement shall be effective on the date specified in the Termination Notice, which shall not be less than 60 days after the date on which such Termination Notice is given. No written notice given by RHD to any SBC Entity pursuant to Sections 9.3(a) or 9.3(b) above will be deemed to be an admission by RHD that, or evidence of whether, such SBC Entity has a right to terminate this Agreement or the other Commercial Agreements or that RHD has breached this Agreement or any of the other Commercial Agreements and in no event will RHD be obligated to provide any such notice. (d) In case of any termination of this Agreement and the other Commercial Agreements pursuant to this Section 9.3, (i) the provisions of Section 9.2 of this Agreement will apply, (ii) at SBC Directory Operations' option exercised by notice to Publisher at or prior to the termination of this Agreement, Publisher will continue to produce, publish and distribute White Pages Directories (including white pages listings and a classified business directory) under this Agreement for one additional publication cycle following the date of termination at SBC Directory Operations' cost in order to enable the SBC Telcos to meet the Legal and Regulatory -31- Requirements (in which case Publisher will continue to have access to Subscriber List Information under the Subscriber Listings Agreement solely for the purpose of complying with this obligation), and (iii) the RHD Entities will be prohibited from including on any Visible Area of any Print Directory affected by such termination any name or brand of a Telecom Competitor which is not an Approved Publisher Mark or any Telecom Services (other than those provided by an SBC Entity) until the later of (A) the fifth anniversary of the effective date of such termination and (B) the end of the Initial Term. (e) The termination rights provided in this Section 9.3 are the exclusive means by which the SBC Entities can terminate this Agreement, the Subscriber Listing Agreement and the Non-Competition Agreement, but they are not exclusive with respect to, and are in addition to, all other rights and remedies that the SBC Entities may have under applicable law. (f) Notwithstanding any provision of this Section 9.3, the SBC Entities shall not have any termination right in respect of any breach or failure to cure by an RHD Entity caused primarily by a breach of this Agreement or the other Commercial Agreements by an SBC Entity. SECTION 9.4 EARLY TERMINATION BY PUBLISHER. (a) Publisher may terminate this Agreement upon any material breach of this Agreement or any other Commercial Agreement by any SBC Entity which the SBC Entities fail to cure within a reasonable time (not to exceed 12 months) after receiving written notice from an RHD Entity. (b) Publisher may terminate this Agreement with respect to any Print Directory or service area if there are two or more substantially similar material breaches of this Agreement or any other Commercial Agreement by the SBC Entities within any five-year period with respect to such Print Directory or service area after written notice of any substantially similar breach is given by any RHD Entity. (c) The termination rights provided in this Section 9.4 and Section 9.5 are the exclusive means by which Publisher can terminate this Agreement, the Subscriber Listing Agreement and the Non-Competition Agreement, but they are not exclusive with respect to, and are in addition to, all other rights and remedies that Publisher may have under applicable law. (d) In the case of any termination under this Section 9.4, the provisions of Section 9.2 will apply, except that SBC's rights and obligations set forth in Sections 2.1, 2.2, 2.3 and Article III of the Non-Competition Agreement will survive until the later to occur of (i) the fifth anniversary of the effective date of such termination and (ii) the expiration of the Initial Term, except, that notwithstanding any other provision of this Agreement or the Non-Competition Agreement, the SBC Entities will be permitted to publish White Pages Directories (including white pages and classified business directories) in order to comply with the Legal and Regulatory Requirements. SECTION 9.5 CHANGE OF CONTROL OF RHD. (a) From and after a Change of Control of RHD to a Person that is or becomes, or any sale or transfer of all or a majority of the Publisher Business to, a Telecom Competitor, the -32- applicable SBC Entities will have the right (exercisable in their sole discretion by giving written notice (a "Change of Control Notice") to Publisher during the Change of Control Window Period) to (i) terminate Publisher's trademark license under Article 3 hereof and any related rights to use the Licensed Marks but otherwise keep this Agreement and the other Commercial Agreements (including the right to use Publisher's then-existing brand) in full force and effect; provided, however, that the SBC Entities may not grant any third party the right to use the Licensed Marks on Print Directories, for related aspects of producing, publishing or distributing Print Directories or for soliciting and selling Directory Advertising in connection with such directories in the Territory, in each case until the later of (x) the Initial Term of this Agreement and (y) the termination or expiration of the Non-Competition Agreement, or (ii) keep this Agreement and the other Commercial Agreements in full force and effect in their entirety (including Publisher's rights to use the Licensed Marks) and require the Buyer to become jointly and severally liable with RHD for its obligations under this Agreement and the other Commercial Agreements; provided, however, that no SBC Entity shall have any such rights if (x) Telecom Services accounted for less than 15% of the total consolidated assets, revenues and earnings before interest and taxes, depreciation and amortization of the Buyer for its most recently completed fiscal year and (y) the Buyer divests and/or discontinues the provision of all Telecom Services (other than any de minimus Telecom Services that would not cause the buyer to be deemed a Telecom Competitor) within 180 days after the Change of Control or its purchase of the Publisher Business. Any termination pursuant to clause (i) of this Section 9.5(a) shall become effective on the date specified in the Change of Control Notice, which shall not be less than 60 days after the date on which such Change of Control Notice was given. Unless the applicable RHD Entities exercise the termination right provided in Section 9.5(b) of this Agreement, the RHD Entities will continue to be prohibited from using any name or brand of any Telecom Competitor (other than an Approved Publisher Mark) or any Telecom Services (other than those provided by an SBC Entity) on the Visible Areas of any Print Directory until the later of (i) the fifth anniversary of the effective date of the revocation of the right to use the Licensed Marks and (ii) the expiration of the Initial Term. (b) If the applicable SBC Entities terminate Publisher's rights to use the Licensed Marks pursuant to clause (a) of this Section 9.5, at any time during the 6-month period immediately following the date of such termination, the Publisher will have the right to terminate all (but not less than all) the remaining provisions of this Agreement in which case the provisions of Section 9.2 and 9.3(d)(ii) will apply. ARTICLE 10 SALE OF BUSINESS SECTION 10.1 SOLD TERRITORY. (a) Upon any direct or indirect sale or transfer by the SBC Entities of all or any part of their wireline telephone business in all or any part of the Territory (the "Sold Territory") after the date of this Agreement (whether by a sale of assets or capital stock or by merger), the ultimate parent entity of the purchaser of any Sold Territory (the "Purchaser") and its appropriate Affiliates will: -33- (i) be entitled to the benefit of and will be required to assume in writing and agree to be bound by all of the SBC Entities' rights and obligations under this Agreement and the other Commercial Agreements with respect to such Sold Territory, (including but not limited to the applicable SBC Entities' non-compete obligations with respect to Print Directories and Existing IYP Directories, preferred provider obligations with respect to Future Electronic Directories and trademark license obligations set forth in the Non-Competition Agreement, in each case with respect to the Sold Territory); (ii) have the right (exercisable in the Purchaser's sole discretion) to substitute any brand and trademarks other than the Licensed Marks (a "New ILEC Brand") for any of the brand and trademarks previously used by the SBC Telcos or their Affiliates in the provision of local telephone exchange service as the ILEC in the Sold Territory; and (iii) if the Purchaser or any of its Affiliates effects any substitution pursuant to clause (ii) above, it will be obligated to substitute the New ILEC Brand for the Licensed Marks and to license to Publisher the New ILEC Brand on substantially similar terms as this Agreement, including the Branding Policies, and Publisher will be required to accept such substitution in accordance with the terms of this Agreement, including Article 3. (iv) Upon such assumption in writing by the Purchaser and execution of new agreements on substantially similar terms as the Commercial Agreements as described in clause (i) above and Section 10.1(c) below, the SBC Entities will have no ongoing obligations with respect to the this Agreement and the other Commercial Agreements in respect of the Sold Territory, except that SBC's rights and obligations set forth in Sections 2.1, 2.2, 2.3 and Article 3 of the Non-Competition Agreement will survive until the expiration of the Term of this Agreement as it applies to SBC. This Agreement and the other Commercial Agreements will remain in full force and effect with respect to the Territory (excluding the Sold Territory). (b) If the Purchaser, at the time of its acquisition, already publishes directories using the New ILEC Brand in the Sold Territory and has not substituted the New ILEC Brand for the existing ILEC brand in the Sold Territory, the Purchaser may continue to do so if Publisher otherwise has the exclusive right to publish Print Directories and use the existing ILEC brand on Print Directories in the Sold Territory. If, however, the Purchaser substitutes the New ILEC Brand for the existing ILEC brand in the Sold Territory, then Publisher will have the exclusive right to use the New ILEC Brand for the publishing of Print Directories in the Sold Territory and the Purchaser must shut down any of its existing Print Directories in the Sold Territory or rebrand them so that such directories do not use the New ILEC Brand, the Licensed Marks or any brand or mark which Purchaser previously used on any print directory distributed in the Sold Territory or on any Existing IYP Directory or Future Electronic Directory for which Purchaser sold Local IYP Advertising (as defined in the Non-Competition Agreement) in the Sold Territory. (c) At the closing of any sale or transfer of the Sold Territory pursuant to Section 10.1(a), Ameritech shall cause the Purchaser and its applicable Affiliates as contemplated by Section 10.1(a)(i) of this Agreement to enter into separate agreements in a form -34- reasonably satisfactory to Publisher that contain substantially identical terms and conditions as this Agreement and the other Commercial Agreements with respect to the Sold Territory. (d) Notwithstanding any sale of all or any part of the wireline telephone business in the Territory, the SBC Entities will ensure that Publisher continues to have all rights to use the Licensed Marks that are in effect as of the consummation of such sale pursuant to this Agreement, including Article 3, until substitution of brands or trademarks pursuant to Sections 10.1(a)(ii), 10.1(a)(iii) and 10.1(b) of this Agreement. Upon any such substitution of a New ILEC Brand for the Licensed Marks, Publisher will immediately cease to have any rights with respect to the Licensed Marks in the Sold Territory. ARTICLE 11 NONCOMPETE AND NONSOLICITATION SECTION 11.1 PUBLISHER OBLIGATIONS. (a) During the Term, Publisher agrees that neither it nor any other RHD Entity shall directly or indirectly engage in, manage, operate, have any profit or other equity interest (other than less than 5% of a Person) or participate with any third party in any business or Person (other than pursuant to this Agreement) that engages in the business of producing, publishing and distributing (or selling advertising for inclusion in) any Print Directory which has a saturation distribution in the Territory; provided, however, that any RHD Entity may produce, publish or distribute (and sell advertising for inclusion in) specialty guides or directories containing Subscriber Listing Information or Directional Information distributed in the Territory so long as such products do not (i) materially compete with and are not significant substitutes for Print Directories covered by this Agreement and the Commercial Agreements or (ii) use or contain the Licensed Marks. Notwithstanding the foregoing, if an RHD Entity acquires a Person or business whose business would violate the non-compete obligations set forth in this Section 11.1, Publisher will not thereby breach this Section 11.1(a) if such RHD Entity in good faith attempts to divest the competing directory business or otherwise permanently ceases publication of any competing directories and does so divest or cease publication within 12 months of the closing of such acquisition. In addition, if RHD is acquired by any Person that is engaged in operations that cause Publisher to violate the non-compete obligations set forth in this Section 11.1(a), Publisher will not be deemed to be in violation as a result of activities of the acquiring party that exist as of the closing of such sale, and such acquiring party may make any reasonable modifications to its business so long as such modifications in the aggregate do not increase the competitive effects of such business against Publisher's Print Directory business in the Territory. (b) In the event of a termination of this Agreement pursuant to Sections 9.3 of this Agreement, or any revocation of the right to use the Licensed Marks pursuant to Section 9.5 of this Agreement, the Publisher and its Affiliates will be prohibited from including on the Visible Areas of any Print Directory any name or brand of a Telecom Competitor which is not an Approved Publisher Mark or any Telecom Service (other than those provided by an SBC Entity). The restriction under this Section 11.1(b) shall continue until the later of (i) the fifth anniversary -35- of the effective date of such termination of this Agreement or revocation of the right to use the Licensed Marks, and (ii) the expiration of the Initial Term. (c) During (i) the period between the date of this Agreement and the second anniversary (or, in the case of senior sales and executive management, the third anniversary) of the date of this Agreement and (ii) the two year period (or, in the case of senior sales and executive management, the three year period) following the termination of this Agreement, Publisher will not, directly or indirectly, through one or more of its Affiliates, on behalf of itself or any other person, recruit or otherwise solicit or induce any employee of SBC or any of its Affiliates or any of their successors to terminate his or her employment relationship with SBC or its Affiliates (other than Publisher and its Subsidiaries). The foregoing will not, however, prohibit Publisher or any of its Affiliates from publishing any general public solicitation of employment opportunities or employing anyone who responds to such solicitation. SECTION 11.2 EXISTING NON-COMPETITION AGREEMENTS. The non-competition terms of Section 6 of the Master Agreement, dated August 19, 1997, among R. H. Donnelley Corporation, The Dun & Bradstreet Corporation, DonTech I, DonTech II, API, Ameritech Publishing of Illinois, Inc., Ameritech, DonTech I Publishing Company LLC and APIL Partners, and Section 14 of the Exclusive Sales Agency Agreement, dated August 19, 1997, between APIL Partners and DonTech II, as modified by a Letter Agreement dated November 20, 2002, by and among R. H. Donnelley Corporation, RHD Inc., a Delaware corporation, and API, shall survive the transactions provided in the Purchase Agreement until the expiration of this Agreement; provided, however, nothing set forth in this Agreement or the other Commercial Agreements shall be deemed to constitute new consideration for such non-competition terms. ARTICLE 12 INTERNET DIRECTORIES SECTION 12.1 PUBLISHER OBLIGATIONS. Following the termination or expiration of the Non-Compete Term (as defined in the IYP Reseller Agreement) until the SBC Entities or the RHD Entities no longer sell Local IYP Advertising for an Existing IYP Directory, RHD will remain obligated for the term of this Agreement to provide SBC Directory Operations any published non-listing information with respect to any Local IYP Advertising sold by the RHD Entities with respect to Existing IYP Directories that SBC Directory Operations is reasonably likely to use (subject to third party rights, which RHD will use its commercially reasonable efforts to assist SBC Directory Operations in obtaining) at no cost to SBC Directory Operations. SBC Directory Operations may use such information solely for placement of Local IYP Advertising in the SBC Entities' Existing IYP Directories and SBC Directory Operations will be obligated to include any such Local IYP Advertising it obtains in its Existing IYP Directories. SECTION 12.2 NO RIGHTS. Except to the extent otherwise provided in IYP Reseller Agreement, each Party agrees that nothing in the Commercial Agreements will give any Party any right to place advertising, or except as expressly provided in Section 2.3 of the Non-Competition Agreement, otherwise participate in any existing or future electronic directory service or platform owned or used by any other Party. -36- ARTICLE 13 CONFIDENTIAL INFORMATION SECTION 13.1 NONDISCLOSURE. Each Party may disclose to the other Confidential Information. Each Party agrees to keep Confidential Information of the other Party confidential, and not to disclose such information to any third Party, except to those of its employees, subcontractors, consultants and agents with a need to know and solely for the purpose of performing the receiving Party's obligations under this Agreement and the other Commercial Agreements and as otherwise permitted under this Agreement and the other Commercial Agreements; provided, that any such employees, subcontractors, consultants or agents are informed by the recipient Party of the confidential nature of the Confidential Information and agree to be bound by the terms no less restrictive than this Article 13. The recipient of Confidential Information may use the Confidential Information and make copies of Confidential Information only as reasonably necessary to perform its obligations under this Agreement and the other Commercial Agreements and as otherwise permitted under this Agreement and the other Commercial Agreements. All such copies will be subject to the same restrictions and protections as the original. Each Party will safeguard such Confidential Information from unauthorized use or disclosure with at least the same degree of care with which the recipient Party safeguards its own Confidential Information. The recipient Party will be responsible for any breach of this Article 13 by the recipient's employees, subcontractors, consultants or agents. Confidential Information belonging to a Party that is in the possession of the other Party will be returned, or destroyed at the disclosing Party's request, within 30 days after a written request is delivered to the recipient, including any copies made by the recipient Party. If either Party loses or makes an unauthorized disclosure of the other Party's Confidential Information, it will notify such other Party immediately and use reasonable efforts to retrieve the lost or wrongfully disclosed information. A Party may disclose Confidential Information which is required to be disclosed by law, a court of competent jurisdiction or governmental or administrative agency so long as the disclosing Party has been notified of the requirement promptly after the receiving Party becomes aware of the requirement and so long as the receiving Party undertakes all lawful measures to avoid disclosing such information until the disclosing Party has had reasonable time to seek a protective order and complies with any protective order that covers the Confidential Information to be disclosed. SECTION 13.2 RELIEF. Each Party agrees that the discloser of Confidential Information would be irreparably injured by a breach of Section 13.1 by the recipient of such Confidential Information or its representatives, and that the discloser will be entitled to seek equitable relief, including injunctive relief and specific performance, in the event of any breach of the provisions of Section 13.1. Such remedies will not be deemed to be the exclusive remedies for a breach of this Agreement, but will be in addition to all other remedies available at law or in equity. SECTION 13.3 TERMINATION OF AGREEMENT. The obligations and rights under this Article 13 will survive the termination of this Agreement for a period of three years from the effective date of such cancellation or termination. -37- ARTICLE 14 REPRESENTATIONS AND WARRANTIES SECTION 14.1 APPLICABLE SBC ENTITIES REPRESENTATIONS AND WARRANTIES. Each of Ameritech, SBC Directory Operations and SBC Licensor represents and warrants to RHD that it has the power and authority to enter into this Agreement and to grant the rights it is granting hereunder and that Ameritech Services has the power and authority to enter into the Subscriber Listing Agreement and to grant the rights it is granting thereunder. SECTION 14.2 APPLICABLE RHD ENTITIES REPRESENTATIONS AND WARRANTIES. RHD represents and warrants to Ameritech that each of it, APIL Partners and DonTech II has the power and authority to enter into this Agreement. SECTION 14.3 DISCLAIMER OF WARRANTIES. Except as expressly set forth in this Article 14, each Party makes no representation or warranty under this Agreement, and the Parties hereby disclaim all other warranties, whether express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, title, or noninfringement. ARTICLE 15 INDEMNIFICATION; LIMITATION OF LIABILITY SECTION 15.1 PUBLISHER INDEMNITY. RHD will defend, hold harmless and indemnify each SBC Entity and its officers, directors, shareholders, employees, contractors, agents and representatives from and against any and all losses, damages, claims, demands, complaints, suits, liabilities, fines, penalties, costs, obligations, settlement payments, awards, judgments, deficiencies or other charges ("Losses") and any and all expenses incurred in connection with investigating, defending or asserting any claim, complaint, action, suit or proceeding ("Expenses") arising out of, resulting from or based upon any pending or threatened claim, complaint, action, proceeding or suit by any third party, whether based on contract, tort or otherwise, arising out of or in connection with: (a) any errors, omissions, refusals to accept advertising, misclassification or misuse of information, claimed or actual, concerning any of the Print Directories, except to the extent resulting from any errors, omissions or misclassifications in the Subscriber Listing Information provided by the SBC Telcos under the Subscriber Listings Agreement; (b) any other claims by advertisers with respect to Print Directories; (c) any breach of this Agreement or the Subscriber Listing Agreement by Publisher; (d) Publisher's activities with respect to the production, publishing and distribution of Print Directories (excluding any matters as to which Ameritech has an indemnification obligation under Section 15.2); (e) the use of the Licensed Marks by Publisher in violation of this Agreement; (f) breach by RHD of any of its representations or warranties set forth in Section 14.2; and (g) any published information with respect to any Local IYP Advertising for Existing IYP Directories or Future Electronic Directories provided to any SBC Entity by any RHD Entity (other than to the extent no RHD Entity had any role in creating any such information, in which case the applicable RHD Entity will assign any indemnification rights or other contractual or legal recourse it may have with respect to such information to SBC Directory Operations) and provided to SBC Directory Operations pursuant to Section 12.1 of this Agreement. -38- SECTION 15.2 SBC ENTITIES INDEMNITY. Ameritech will defend, hold harmless and indemnify Publisher and each of its Affiliates, officers, directors, shareholders, employees, contractors, agents and representatives (collectively, the "Publisher Indemnified Parties") from and against any and all Losses and Expenses arising out of, resulting from or based upon (i) any breach of the Subscriber Listing Agreement or (ii) any pending or threatened claim, complaint, action, proceeding or suit by any third party, whether based on contract, tort or otherwise, arising out of or in connection with: (a) claims resulting from errors, omissions or misclassifications in the Subscriber Listing Information provided by the SBC Telcos except to the extent any such matter occurred because, or would have occurred if, SBC simply passed information it received from the CLEC to the RHD Entities in the same format received from such CLEC, in which case the applicable SBC Entity will assign any indemnification rights or other contractual or legal recourse it may have with respect to such information to Publisher; (b) any breach of this Agreement or the Subscriber Listings Agreement by an SBC Entity; (c) breach by the applicable SBC Entity of any of its representations or warranties set forth in Section 14.1; (d) claims relating to Telco-Sold White Pages Products to the extent not resulting from a breach of this Agreement or the other Commercial Agreements by RHD or Publisher or any services provided by the SBC Telcos, including without limitation, local, long distance, wireless or other telecommunications services; (e) any failure to satisfy the Legal and Regulatory Requirements accruing prior to the date of this Agreement; (f) any breach of Article III of this Agreement by SBC Licensor; and (g) the use of the Licensed Marks by Publisher in accordance with the terms of this Agreement. SECTION 15.3 PROCEDURE. Promptly after receipt by the indemnified party of notice by a third party of a claim or of the commencement of any action or proceeding with respect to which such indemnified party may be entitled to receive payment from the other party for any Losses or Expenses, such indemnified party will notify the indemnifying party of the notice of such claim or of the commencement of such action or proceeding; provided, however, that the failure to so notify the indemnifying party will relieve the indemnifying party from liability under this Agreement with respect to such claim, action or proceeding only if, and only to the extent that, such failure to notify the indemnifying party results in the forfeiture by the indemnifying party of rights and defenses otherwise available to the indemnifying party with respect to such claim, action or proceeding. The indemnifying party will have the right, upon written notice delivered to the indemnified party, to assume control of the defense of such claim, action or proceeding, including the employment of counsel reasonably satisfactory to the indemnified party and the payment of the fees and disbursements of such counsel; provided that RHD may not assume control of the defense of any claim, action or proceeding involving regulatory matters. In any claim, action or proceeding with respect to which indemnification is being sought hereunder, the indemnified party or the indemnifying party, whichever is not assuming the defense of such action, will have the right to participate in such matter and to retain its own counsel at such party's own expense. The indemnifying party or the indemnified party, as the case may be, will at all times use reasonable efforts to keep the indemnifying party or the indemnified party, as the case may be, reasonably apprised of the status of the defense of any action the defense of which they are maintaining and to cooperate (at the expense of the indemnifying party) in good faith with each other with respect to the defense of any such action. If the indemnifying party has assumed the defense of a claim, action or proceeding, no indemnified party may settle or compromise such matter or consent to the entry of any judgment with respect to such matter without the prior written consent of the indemnifying party. An indemnifying party may not, -39- without the prior written consent of the indemnified party, settle or compromise any claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder unless (i) simultaneously with the effectiveness of such settlement, compromise or consent, the indemnifying party pays in full any obligation imposed on the indemnified party by such settlement, compromise or consent (ii) such settlement, compromise or consent contains a complete release of the indemnified party and its Affiliates and their respective directors, officers and employees and (iii) such settlement, compromise or consent does not contain any equitable order, judgment or term which in any manner affects, restrains or interferes with the business of the indemnified party or any of the indemnified party's Affiliates. In the event an indemnified party will claim a right to payment pursuant to this Agreement not involving a third party claim covered by this Article 15, such indemnified party will send written notice of such claim to the appropriate indemnifying party. Such notice will specify the basis for such claim. SECTION 15.4 ERRORS AND OMISSIONS. (a) Subject to applicable law, Ameritech agrees to limit, or cause to limit, by tariff or contract, its own and its contractors' and agents' (and hence Publisher's) liability to any Subscriber for any error or omission in any Subscriber Listing Information to no more than the cost, if any, assessed to the Subscriber for directory listing services. (b) Subject to applicable law, RHD agrees to limit, or cause to limit, by contract, its own and its contractors' and agents' (and hence SBC's) liability to any advertiser for any error or omission in any Directory Advertising or Local IYP Advertising to no more than the cost assessed to the advertiser for such Directory Advertising or Local IYP Advertising. ARTICLE 16 ADDITIONAL REGULATORY REQUIREMENTS AND COSTS SECTION 16.1 REGULATORY REQUIREMENTS. (a) Subject to Section 16.1(b) of this Agreement, Publisher will abide by and implement any changes related to the production, publishing and distribution of Print Directories that are required in order to comply with the Legal and Regulatory Requirements. This obligation includes maintaining, retaining and producing upon request all records sufficient to show that Publisher has complied with the Legal and Regulatory Requirements. (b) SBC Directory Operations will be responsible for promptly notifying Publisher of any changes to any Legal and Regulatory Requirements ("Regulatory Changes"). The failure of SBC Directory Operations to notify Publisher of any Regulatory Change will not relieve Publisher of its obligations to fulfill the Legal and Regulatory Requirements if Publisher knew of any such Regulatory Change. Following the date of this Agreement, notwithstanding its role as agent for the SBC Telcos in terms of satisfying the Legal and Regulatory Requirements with respect to the Print Directories, Publisher will (i) bear the full burden of any incremental costs incurred in connection with the production, publication -40- and distribution of the Print Directories resulting from Regulatory Changes relating to the Print Directories; and/or (ii) enjoy the full benefit of any incremental cost savings realized in connection with the production, publication and distribution of the Print Directories resulting from Regulatory Changes relating to the Print Directories; provided, however, that SBC Directory Operations will reimburse Publisher for any incremental costs incurred by Publisher in connection with the production, publication and distribution of the Print Directories in the Territory resulting from Publisher's compliance with Regulatory Changes from and after date of this Agreement to the extent (but only to the extent) that such costs are actually incurred by Publisher and such Regulatory Changes (x) are attributable to an SBC Entity's interaction with regulators and its agreement to make telephone directory concessions in exchange for desired outcomes in favor of any other line of its business or (y) are not legally or regulatorily mandated, arise under an agreement of the type referred to in clause (i) of the definition of Legal and Regulatory Requirements and are not consistent with the directory related obligations of the SBC Entities under such agreements generally in areas outside the Territory. SBC Directory Operations will have a right to audit any changes in Publisher's costs attributable to any Regulatory Changes for which Publisher seeks reimbursement hereunder. ARTICLE 17 SBC SERVICES SECTION 17.1 SBC SERVICES. For any Telecom Service, RHD for itself and on behalf of its Subsidiaries will give the applicable SBC Entity the opportunity to negotiate with RHD, for 30 days on a non-exclusive basis, a mutually acceptable agreement under which such SBC Entity might become a provider of such Telecom Service for RHD and its Subsidiaries for an agreed upon term and each party agrees to conduct such negotiations in good faith; provided, however, that (i) if such SBC Entity makes a binding offer to RHD or its Subsidiaries during such 30-day period setting forth in reasonable detail the price and all other material terms and conditions on which it is prepared to agree to perform such services, then RHD and its Subsidiaries will not enter into any agreement with a third party to provide such services unless the price and such other material terms and conditions of such third party agreement are, in the aggregate and in RHD's reasonable judgment, more favorable to it and its Subsidiaries than those offered by such SBC Entity to it and its Subsidiaries and (ii) the foregoing will not impose any obligations on either party to agree to or enter into any such agreement. Neither RHD nor any of its Subsidiaries will enter into any agreement with any third party to receive any Telecom Service which agreement has a term of more than three years and, within a commercially reasonable period before the expiration of the term of any such agreement, RHD will initiate a new preferred provider process prior to renewing, extending or replacing such agreement. SECTION 17.2 EXISTING RHD OBLIGATIONS. With respect to any Telecom Service, the requirements of Section 17.1 of this Agreement shall not apply to any RHD Entity to the extent that such RHD Entity has an existing contractual arrangement with a third party for such Telecom Service as of the date of this Agreement until the expiration of such arrangement in accordance with its terms. -41- ARTICLE 18 DISPUTE RESOLUTION SECTION 18.1 DISPUTE RESOLUTION. The Parties will discuss and attempt to resolve in good faith any issue, dispute or controversy arising out of or relating to this Agreement and the other Commercial Agreements. SECTION 18.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. SECTION 18.3 FORUM SELECTION. Each Party irrevocably submits to the jurisdiction of the Federal and state courts in the Borough of Manhattan, The City of New York for the resolution of any and all disputes relating to this Agreement and waives any and all objections it might otherwise have to such jurisdiction and venue. SECTION 18.4 WAIVER OF JURY TRIAL. EACH PARTY WAIVES ITS RIGHT TO A JURY TRIAL IN ANY COURT ACTION ARISING AMONG ANY OF THE PARTIES, WHETHER UNDER OR RELATING TO THIS AGREEMENT, AND WHETHER MADE BY CLAIM, COUNTER-CLAIM, THIRD PARTY CLAIM OR OTHERWISE. The agreement of each party to waive its right to a jury trial will be binding on its successors and assigns and will survive the termination of this Agreement. SECTION 18.5 ATTORNEYS' FEES. The prevailing Party in any formal dispute will be entitled to reasonable attorneys' fees and costs, including reasonable expert fees and costs. This provision will not apply if the prevailing Party rejected a written settlement offer that exceeds the prevailing Party's recovery. SECTION 18.6 CUMULATIVE REMEDIES. No right or remedy in this Agreement conferred upon or reserved to either Party is intended to be exclusive of any other right or remedy, and each and every right and remedy will be cumulative and in addition to any other right or remedy under this Agreement or under applicable law, whether now or hereafter existing. The Parties agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with its terms and that the Parties will be entitled to specific performance and injunctive relief (without the necessity of posting bond) in addition to any other remedy to which they are entitled at law or equity. ARTICLE 19 GENERAL SECTION 19.1 ASSIGNMENT. Except as provided in Section 10.1 of this Agreement, neither Party may assign all or any of its rights or obligations under the Agreement without the prior written consent of the other Party, except that, subject to the terms and conditions of this Agreement, either Party may assign all of its rights and obligations under the Agreement (a) in -42- connection with a sale of all or substantially all of its assets or by merger or consolidation if the purchaser assumes in writing all of the assigning Party's rights and obligations under this Agreement and the other Commercial Agreements in a form reasonably acceptable to the other Party and (b) to (i) any of its Affiliates or (ii) any lender or other party as collateral for any financing; provided, that no such assignment will relieve such Party of any of its obligations under this Agreement. SECTION 19.2 RHD GUARANTEE. (a) RHD irrevocably and unconditionally guarantees the payment and performance by each other RHD Entity of each and every representation, warranty, covenant, agreement and other obligation of such RHD Entity under this Agreement and the other Commercial Agreements (collectively, the "RHD Obligations") for the benefit of Ameritech and SBC Directory Operations (the "RHD Guaranteed Parties"). RHD shall exercise all of its corporate power and authority to cause the RHD Entities to perform the RHD Obligations. (b) RHD acknowledges and agrees that the guarantee in Section 19.2(a) above (the "RHD Guarantee") is full and unconditional, and no release or extinguishment of any of the RHD Entities' obligations or liabilities (other than in accordance with the terms of this Agreement or other applicable Commercial Agreement), whether by decree in any bankruptcy proceeding or otherwise, will affect the continuing validity and enforceability of this RHD Guarantee. RHD's obligations under this RHD Guarantee shall not be affected by any circumstance relating to the RHD Obligations that might otherwise constitute a legal or equitable discharge of or defense to RHD not available to the other RHD Entities. (c) The RHD Guarantee is a guarantee of payment and performance, and not of collection. In the event that any payment to an RHD Guaranteed Party is rescinded or must otherwise be returned for any reason whatsoever, RHD shall remain liable hereunder with respect to such RHD Obligations as if such payment had not been made. (d) RHD hereby waives, for the benefit of the RHD Guaranteed Parties, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by law that limit the liability of or exonerate guarantors or sureties, except to the extent that any such defense is available with respect to claims directly against any other RHD Entity. Without limiting the foregoing, RHD reserves the right to assert defenses which any other RHD Entity may have to payment or performance of any RHD Obligations other than defenses arising from the bankruptcy or insolvency of an entity comprising such RHD Entity and other defenses expressly waived hereby. SECTION 19.3 SBC GUARANTEES. (a) Ameritech irrevocably and unconditionally guarantees the payment and performance by each other SBC Entity, and SBC Directory Operations irrevocably and unconditionally guarantees the payment and performance by SBC Licensor, of each and every representation, warranty, covenant, agreement and other obligation of such SBC Entity under this Agreement and the other Commercial Agreements (collectively, the "SBC Obligations") for the benefit of RHD and Publisher (the "SBC Guaranteed Parties"). Each of Ameritech and SBC -43- Directory Operations shall exercise all of its corporate power and authority to cause the other SBC Entities or, in the case of SBC Directory Operations, SBC Licensor to perform the SBC Obligations. (b) Each of Ameritech and SBC Directory Operations acknowledges and agrees that the guarantees in Section 19.3(a) above (collectively, the "SBC Guarantee") is full and unconditional, and no release or extinguishment of any of the SBC Entities' or, in the case of SBC Directory Operations, SBC Licensor's obligations or liabilities (other than in accordance with the terms of this Agreement or other applicable Commercial Agreement), whether by decree in any bankruptcy proceeding or otherwise, will affect the continuing validity and enforceability of this SBC Guarantee. Neither Ameritech's nor SBC Directory Operations' obligations under this SBC Guarantee shall be affected by any circumstance relating to the SBC Obligations that might otherwise constitute a legal or equitable discharge of or defense to Ameritech or SBC Directory Operations not available to the other SBC Entities or, in the case of SBC Directory Operations, to SBC Licensor. (c) The SBC Guarantee is a guarantee of payment and performance, and not of collection. In the event that any payment to an SBC Guaranteed Party is rescinded or must otherwise be returned for any reason whatsoever, each of Ameritech and SBC Directory Operations shall remain liable hereunder with respect to its respective SBC Obligations as if such payment had not been made. (d) Each of Ameritech and SBC Directory Operations hereby waives, for the benefit of the SBC Guaranteed Parties, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by law that limit the liability of or exonerate guarantors or sureties, except to the extent that any such defense is available with respect to claims directly against any other SBC Entity or, in the case of SBC Directory Operations, against SBC Licensor. Without limiting the foregoing, each of Ameritech and SBC Directory Operations reserves the right to assert defenses which any other SBC Entity or, in the case of SBC Directory Operations, SBC Licensor may have to payment or performance of any SBC Obligations other than defenses arising from the bankruptcy or insolvency of an entity comprising such SBC Entity and other defenses expressly waived hereby. SECTION 19.4 SUBCONTRACTORS. Notwithstanding the prohibition on sublicensing or outsourcing set forth in the Subscriber Listings Agreement and Section 2.1 hereof, any Party may subcontract or outsource with third parties or Affiliates of such Party (except, in the case of Publisher, to a Telecom Competitor) for the performance of any of such Party's obligations under this Agreement. If any obligation is performed for either Party through a subcontractor or outsource service provider, such Party will remain fully responsible for the performance of this Agreement in accordance with its terms, including any obligations it performs through subcontractors or outsource service providers, and such Party will be solely responsible for payments due to its subcontractors or outsource service providers. No contract, subcontract or other agreement entered into by either Party with any third party in connection with the provision of services under this Agreement will provide for any indemnity, guarantee or assumption of liability by, or other obligation of, the other Party with respect to such arrangement, except as consented to in writing by the other Party. No subcontractor or outsource service provider will be deemed a third party beneficiary for any purposes under this Agreement. -44- SECTION 19.5 RELATIONSHIP. Nothing contained in this Agreement shall be construed to create the relationship of employer and employee between any SBC Entity and Publisher, franchisor - franchisee, or to make any SBC Entity or Publisher partners, joint venturer or co-employer of the other, or result in joint service offerings to their respective customers. SECTION 19.6 NOTICES. Any notice required or permitted under this Agreement will be in writing and will be hand-delivered, sent by confirmed facsimile or mailed by overnight express mail. Notice will be deemed to have been given when such notice is received. Addresses for notices are as follows: If to an SBC Entity: Ameritech Corporation c/o SBC Communications, Inc. 175 East Houston San Antonio, Texas 78205 Attention: Wayne Watts, Esq. Facsimile: 210-351-3257 and SBC Directory Operations, Inc. One SBC Center St. Louis, Missouri 63101 Attention: Linda Legg, Esq. Facsimile: 314-242-8992 With a copy to: Sullivan & Cromwell LLP 125 Broad Street New York, New York 10016 Attention: Duncan C. McCurrach Facsimile: 212-558-3588 If to an RHD Entity: R. H. Donnelley Corporation 1001 Winstead Drive Cary, North Carolina 27513 Attention: Robert J. Bush Facsimile: 919-297-1518 With copy to: Jones Day 222 East 41st Street -45- New York, New York 10017 Attention: John J. Hyland, Esq. Facsimile: 212-755-7306 or at such other address as either Party may provide to the other by written notice. SECTION 19.7 INDEPENDENT CONTRACTOR. The relationship between the Parties is that of an independent contractor. Each Party will be solely responsible for such Party's employees, including compliance with all employment laws, regulations, and rules and payment of wages, benefits and employment taxes such as Social Security, unemployment, workers compensation and federal and state withholding with respect to such employees. SECTION 19.8 ENTIRE AGREEMENT. The Commercial Agreements constitute the entire understanding and agreement of the Parties concerning the subject matter of this Agreement and the other Commercial Agreements, and supersede any prior agreements, representations, statements, understandings, proposals, undertakings or negotiations, whether written or oral, with respect to the subject matter expressly set forth in the Commercial Agreements. SECTION 19.9 SEVERABILITY. If any term, condition or provision of this Agreement is held to be invalid or unenforceable for any reason, such invalidity will not invalidate the entire Agreement, unless such construction would be unreasonable. This Agreement will be construed as if it did not contain the invalid or unenforceable provision or provisions, and the rights and obligations of each Party will be construed and enforced accordingly, except that in the event such invalid or unenforceable provision or provisions are essential elements of this Agreement and substantially impair the rights or obligations of either Party, the Parties will promptly negotiate in good faith a replacement provision or provisions. SECTION 19.10 COMPLIANCE WITH LAWS/REGULATIONS. Subject to Article 16, each Party will comply with all federal, state, and local laws, regulations, rules, ordinances and orders relating to the performance of its obligations and the use of services provided under the Agreement, including any rulings, modifications, regulations or orders of the Federal Communications Commission and/or any applicable state utility commission to the extent this Agreement is subject to the jurisdiction of such regulatory authority. SECTION 19.11 FORCE MAJEURE. Neither Party will be liable for any delay or failure in performance of any part of this Agreement caused by a Force Majeure condition, including acts of God, a public enemy or terrorism, fires, floods, freight embargoes, earthquakes, volcanic actions, wars (whether against a nation or otherwise), civil disturbances or other similar causes beyond the reasonable control of the Party claiming excusable delay or other failure to perform (a "Force Majeure"). If any Force Majeure condition occurs, the Party whose performance fails or is delayed because of such Force Majeure condition will give prompt notice to the other Party, will use commercially reasonable efforts to perform in spite of the Force Majeure condition and upon cessation of such Force Majeure condition will give like notice and commence performance under the Agreement as promptly as reasonably practicable. SECTION 19.12 THIRD PARTY BENEFICIARIES. This Agreement is intended solely for the benefit of the Parties, and no third-party beneficiaries are created by this Agreement. This -46- Agreement does not provide and should not be construed to provide third parties with any remedy, claim, liability, reimbursement, cause of action or other privilege. SECTION 19.13 BINDING EFFECT. This Agreement will be binding on and inure to the benefit of the Parties, and their respective successors and permitted assigns. SECTION 19.14 WAIVERS. No waiver of any provision of this Agreement, and no consent to any default under this Agreement, will be effective unless the same is in writing and signed by an officer of the Party against whom such waiver or consent is claimed. In addition, no course of dealing or failure of a Party strictly to enforce any term, right or condition of this Agreement will be construed as a waiver of such term, right or condition. Waiver by either Party of any default by the other Party will not be deemed a waiver of any subsequent or other default. SECTION 19.15 EXHIBITS. Exhibits to this Agreement are incorporated and made a part of this Agreement. In the event of a conflict between the terms of this Agreement and an exhibit to this Agreement, the terms of this Agreement will override and govern. SECTION 19.16 HEADINGS. The headings and numbering of sections and paragraphs in this Agreement are for convenience only and will not be construed to define or limit any of the terms in this Agreement or affect the meaning or interpretation of this Agreement. SECTION 19.17 SURVIVAL. Any liabilities or obligations of a Party for acts or omissions occurring prior to the cancellation or termination of this Agreement and any obligations of a Party under any other provisions of this Agreement which, by their express terms, are contemplated to survive (or be performed after) termination of this Agreement (subject to any time limitations specified therein) will survive the cancellation or termination of this Agreement. SECTION 19.18 MODIFICATIONS. No amendments, deletions, additions or other modifications to this Agreement will be binding unless evidenced in writing and signed by an officer of each of the respective parties hereto. SECTION 19.19 COUNTERPARTS. This Agreement may be executed in any number of counterparts, and each such counterpart will be deemed to be an original instrument, but all such counterparts together will constitute but one agreement. This Agreement will become effective when one or more counterparts have been signed by each and delivered to the other Party, it being understood that the Parties need not sign the same counterpart. [SIGNATURE PAGE FOLLOWS] -47- IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written. R. H. DONNELLEY CORPORATION By: /s/ Robert J. Bush ---------------------------------------- Robert J. Bush Vice President, General Counsel and Corporate Secretary R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS PARTNERSHIP By: /s/ Robert J. Bush ---------------------------------------- Robert J. Bush Vice President, General Counsel and Corporate Secretary DONTECH II PARTNERSHIP By: /s/ Robert J. Bush ---------------------------------------- Robert J. Bush Vice President, General Counsel and Corporate Secretary AMERITECH CORPORATION By: /s/ James S. Kahan ---------------------------------------- Name:James S. Kahan Title: Sr. Exec. VP - Corp. Dev. SBC DIRECTORY OPERATIONS, INC. By: /s/ Dennis Payne ---------------------------------------- Name:Dennis Payne Title: President and CEO SBC KNOWLEDGE VENTURES, L.P. By: SBC Knowledge Ventures GP, Inc., its general partner By: /s/ Abha S. Divine ---------------------------------------- Name: Abha S. Divine Title: President and CEO EX-10.2 8 l09401aexv10w2.txt EXHIBIT 10.2 EXHIBIT 10.2 NON-COMPETITION AGREEMENT THIS NON-COMPETITION AGREEMENT (this "Agreement") is effective as of this 1st day of September, 2004, by and between R. H. Donnelley Corporation, a Delaware corporation, and SBC Communications Inc., a Delaware corporation. Capitalized terms not herein defined shall have the meanings assigned in the Directory Services License Agreement, dated as of the date hereof (the "Directory Services License Agreement"), by and among R. H. Donnelley Corporation, R.H. Donnelley Publishing & Advertising of Illinois Partnership (f/k/a The APIL Partners Partnership), an Illinois general partnership, DonTech II Partnership, an Illinois general partnership, Ameritech Corporation, a Delaware corporation and a direct wholly owned subsidiary of SBC Communications Inc., and SBC Directory Operations, Inc., a Delaware corporation and a direct wholly owned subsidiary of SBC Communications Inc. RECITALS: A. On the date of this Agreement, R. H. Donnelley Corporation, or one of its wholly owned Subsidiaries, is acquiring (i) from API, 1% of the outstanding partnership interests in APIL Partners and (ii) from API's wholly owned subsidiary APIL, (a) 99% of the outstanding partnership interests in APIL Partners, (b) 47% of the outstanding partnership interests in DonTech I, and (c) 50% of the outstanding partnership interests in DonTech II, pursuant to the Purchase Agreement; B. The Purchase Agreement provides that RHD and SBC (the "Parties") will enter into this Agreement as a condition to the closing of the transactions contemplated by the Purchase Agreement; C. Pursuant to the terms of the Purchase Agreement, on the date of this Agreement, R. H. Donnelley Corporation, APIL Partners, DonTech II, Ameritech Corporation and SBC Directory Operations, Inc. are entering into the Directory Services License Agreement in order to provide for the continued production, publication and distribution of Print Directories by Publisher following the closing of the transactions contemplated by the Purchase Agreement; D. SBC acknowledges that the agreements and covenants contained in this Agreement are essential to protect the benefits that RHD expects to receive pursuant to the transactions contemplated by the Purchase Agreement and the Directory Services License Agreement; and E. SBC acknowledges that the agreements and covenants contained in this Agreement were a material inducement to RHD's agreement to enter into the Purchase Agreement and the other agreements contemplated by the Purchase Agreement and the Directory Services License Agreement. AGREEMENT NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Agreement and the consummation of the transactions contemplated by the Purchase Agreement, the Parties agree as follows: ARTICLE 1 TERM AND TERMINATION SECTION 1.1 TERM. This Agreement will terminate immediately and without any further action when the Directory Services License Agreement expires at the end of the Term, is terminated by or on behalf of SBC Directory Operations in accordance with its terms or is terminated by or on behalf of Publisher in accordance with its terms or otherwise; provided, however, that notwithstanding the foregoing (i) in the event of a termination of the Directory Services License Agreement pursuant to Section 9.4 or 10.1(a) thereof, this Agreement shall remain in effect to the extent and for the periods specified in Section 9.4(d) and 10.1(a)(iv) thereof, respectively, and (ii) no termination or expiration of this Agreement will release SBC from liability for any prior breaches of any provision of this Agreement. ARTICLE 2 EXCLUSIVITY AND NON-COMPETE SECTION 2.1 PRINT DIRECTORIES. (a) Exclusivity. Publisher will have the exclusive right to (i) publish and distribute Print Directories and use the Licensed Marks in the Territory as contemplated in the Directory Services License Agreement and the other Commercial Agreements and (ii) solicit and sell Local and National yellow pages and white pages advertising for inclusion in such Print Directories. As used with respect to Print Directories, (i) "National" yellow pages and white pages advertising will have the same meaning as provided for such term under the current Yellow Pages Integrated Media Association ("YPIMA") minimum standards, and (ii) "Local" yellow pages and white pages advertising shall mean all such advertising that does not constitute National (as so defined). (b) Non-Compete. Until the termination of this Agreement, neither SBC nor any of its Subsidiaries will directly or indirectly engage in, manage, operate or have any profit or other equity interest (other than less than 5% of a Person) in any Person (other than pursuant to the Directory Services License Agreement) that engages in the business of (i) producing, publishing or distributing any Print Directories in the Territory, or (ii) soliciting or selling Local or National yellow pages or white pages advertising for inclusion in any Print Directories published or distributed in the Territory; provided, however, if the RHD Entities cease at any time to publish and distribute any Print Directory in the Territory, SBC may publish and distribute, or cause to be published and -2- distributed, such directory to the extent necessary to comply with the Legal and Regulatory Requirements. (c) Permitted Activities. Notwithstanding Sections 2.1(a) and 2.1(b) of this Agreement, neither RHD's exclusivity rights nor SBC's non-compete obligations described therein will prohibit (i) any SBC Entity from (A) producing, publishing or distributing (or selling advertising for inclusion in) industrial guides (other than the Illinois Industrial Guide) in the Territory so long as such products do not materially compete with and are not significant substitutes for Print Directories currently published by Publisher or (B) (1) managing, operating or having any profit or other equity interest in a Certified Marketing Representative ("CMR") with respect to the sale of National yellow pages and white pages advertising or (2) earning and collecting a CMR commission with respect to the sale of National yellow pages and white pages advertising, or (ii) the SBC Entities from soliciting or selling Telco-Sold White Pages Products. The Parties hereby agree to terminate, or cause to be terminated, on the date hereof the agreements set forth on Exhibit A with respect to street address directories outside of the Territory sold by DonTech II (and RHD agrees to transfer, or cause to be transferred, all relevant records for such street address directories to SBC Directory Operations). SECTION 2.2 EXISTING IYP DIRECTORIES. (a) Non-Compete. Until the termination of this Agreement, neither SBC nor any of its Subsidiaries will directly or indirectly engage in, manage, operate or have any profit or equity interest (other than less than 5% of a Person) in any Person (other than pursuant to the IYP Reseller Agreement) that engages in the business of soliciting or selling Local IYP Advertising for inclusion in Existing IYP Directories. Furthermore, until the termination of this Agreement, SBC will not license the Licensed Marks or any other mark relating to any SBC Telco, any Existing IYP Directory or any Future Electronic Directory for which Publisher is acting as exclusive sales agent in the Territory, to a third party (or Cingular or any of its Subsidiaries) for use in connection with soliciting and selling Local IYP Advertising for inclusion in Existing IYP Directories or, in the case of Cingular or any of its Subsidiaries, in Future Electronic Directories, except for incidental use ancillary to any solicitation and sales of Local IYP Advertising by a third party for which SBC does not receive any incremental monetary consideration. (b) Local and National IYP Advertising. (i) "Local IYP Advertising" means, any advertising, which for this purpose shall include any unpaid listings, to be included in any Existing IYP Directory or Future Electronic Directory which is solicited from an advertiser physically located in the Territory (each, an "Advertiser"), other than any such advertising which (x) promotes (A) services to be rendered substantially outside the Territory or (B) products, if such advertising substantially directs potential purchasers to one or more business establishments or sales personnel physically located outside the Territory and (y) is solicited from an Advertiser who at the time of such solicitation has, or has a binding contract to place, advertisements in -3- two or more other IYP or electronic directories, and "National IYP Advertising" will mean all such advertising which is solicited from an Advertiser that does not constitute Local IYP Advertising; provided, however, that for five years from the date of this Agreement (the "Five Year Period") any advertising to be included in any Existing IYP Directory or Future Electronic Directory which is solicited from an Advertiser who at the time of such solicitation (i) had previously purchased advertising included in SMARTpages (as defined in the IYP Reseller Agreement) shall be deemed to be Local IYP Advertising or (ii) (A) has Local white or yellow page advertising in a then current Print Directory or a binding contract to place such advertising in the next publication of a Print Directory shall be deemed to be Local IYP Advertising or (B) has National white or yellow page advertising in a then current Print Directory or a binding contract to place such advertising in the next publication of a Print Directory shall be deemed to be National IYP Advertising; and provided, further, that except to the extent otherwise provided in clause (ii) of the foregoing proviso, if at any time YPIMA or any successor directory industry association officially adopts, or subsequently amends, provisions which define or establish distinctions between local and national Directory Advertising for inclusion in IYP or other electronic directories (excluding Print Directories), then the foregoing definitions of "Local IYP Advertising" and "National IYP Advertising" will be replaced with such definitions or will be amended to reflect such distinctions, as applicable. The date on which such definitions or distinctions first become effective is referred to herein as the "New Regulation Date." (ii) Unless the New Regulation Date shall have occurred, a reasonable time prior to the end of the Five Year Period, the parties to the Directory Services License Agreement will negotiate in good faith any revisions to such definitions which they deem appropriate or desirable and in so doing will give significant weight to any industry standards which may have developed which define or distinguish between local and national advertising in the context of Existing IYP Directories and/or Future Electronic Directories as they may evolve with changing technologies and practices; provided, however, that the foregoing shall not obligate either party to agree to any such revisions. During the term of the Directory Services License Agreement, the parties will negotiate in good faith policies and procedures (which must be consistent with the spirit and principles of the definitions in Section 2.2(b)(i) above, except that the first proviso to such definitions shall not be given effect for any period after the Five Year Period) that will be used to determine whether and to what extent IYP advertising which promotes services to be performed or products to be sold both inside and outside the Territory is Local IYP Advertising or National IYP Advertising (as the definitions of such terms may change over time). SECTION 2.3 PREFERRED PROVIDER. (a) Future Electronic Directories. With respect to any Future Electronic Directory published by SBC or any of its Controlled Subsidiaries, SBC will give Publisher -4- the opportunity to negotiate with SBC Directory Operations, for 30 days on a non-exclusive basis, a mutually acceptable agreement under which Publisher might become the sales agent of SBC or such Controlled Subsidiary for Local IYP Advertising for inclusion in such Future Electronic Directory for an agreed upon term and each party agrees to conduct such negotiations in good faith; provided, however, that (i) if Publisher makes a binding offer to SBC Directory Operations during such 30-day period setting forth in reasonable detail the price and all other material terms and conditions on which it is prepared to agree to perform such services, then SBC or such Controlled Subsidiary will not enter into any agreement with a third party to provide such services unless the price and such other material terms and conditions of such third party agreement are, in the aggregate and in SBC Directory Operations' reasonable judgment, more favorable to SBC or such Controlled Subsidiary than those offered by Publisher to SBC or such Controlled Subsidiary and (ii) the foregoing will not impose any obligation on either party to agree to or enter into any such agreement. Neither SBC nor any of its Controlled Subsidiaries will enter into any agreement with any third party to offer or sell any Local IYP Advertising for inclusion in a Future Electronic Directory which agreement has a term of more than three years and, within a commercially reasonable period before the expiration of the term of any such agreement, SBC Directory Operations will initiate a new preferred provider process prior to renewing, extending or replacing such agreement; provided, however, that if and when Cingular becomes a Controlled Subsidiary of SBC, the foregoing shall not apply until the expiration (without giving effect to any discretionary renewal rights in favor of Cingular) or termination of any then existing sales agency arrangements of Cingular or any of its Subsidiaries with respect to the sale of Local IYP Advertising in the Territory for inclusion in a Future Electronic Directory. (b) Print Directories. With respect to any Print Directory published by Cingular or any of its Subsidiaries when Cingular is a Controlled Subsidiary of SBC, SBC will give Publisher the opportunity to negotiate with Cingular, for 30 days on a non-exclusive basis, a mutually acceptable agreement under which Publisher might become Cingular's sales agent for Local yellow pages and white pages advertising for inclusion in such Print Directory for an agreed upon term and each party agrees to conduct such negotiations in good faith; provided, however, that (i) if Publisher makes a binding offer to Cingular during such 30-day period setting forth in reasonable detail the price and all other material terms and conditions on which it is prepared to agree to perform such services, then Cingular will not enter into any agreement with a third party to provide such services to it unless the price and such other material terms and conditions of such third party agreement are, in the aggregate and in Cingular's reasonable judgment, more favorable to it than those offered by Publisher to it and (ii) the foregoing will not impose any obligation on either party to agree to or enter into any such agreement. At any time when Cingular is a Controlled Subsidiary of SBC, SBC will not permit Cingular -5- or any of its Subsidiaries to enter into any agreement with any third party to offer or sell any Local yellow pages or white pages advertising for inclusion in any Print Directory published by it which agreement has a term of more than three years and, within a commercially reasonable period before the expiration of the term of any such agreement, Cingular will initiate a new preferred provider process prior to renewing, extending or replacing such agreement. Notwithstanding the foregoing, if any Print Directory published by Cingular or any of its Subsidiaries at the time when Cingular becomes a Controlled Subsidiary of SBC is subject to an existing sales agency agreement with respect to the sale of Local yellow pages or white pages advertising in the Territory for inclusion in such Print Directory, then this Section 2.3(b) shall not apply to such Print Directory until the expiration or termination (without giving effect to any discretionary renewal rights in favor of Cingular or its Subsidiaries) of such agreement. SECTION 2.4 ACQUISITION BY OR OF SBC. (a) If SBC acquires a Person whose operations would cause SBC to violate Sections 2.1 or 2.2 of this Agreement, then SBC will not be deemed to have breached such Sections as a result of such operations if it in good faith attempts to divest or cease such operations and in fact divests or ceases such operations within 12 months of the closing of such acquisition. (b) If SBC is acquired by a Person that is engaged in operations that cause SBC to violate Sections 2.1 or 2.2 of this Agreement, then SBC will not be deemed to have breached such Sections as a result of such operations of the acquiring party that exist as of the closing of such sale so long as the acquiring party agrees in writing that (i) Publisher will continue to have the exclusive right to produce, publish and distribute (and solicit or sell advertising for) Print Directories in the Territory and use the ILEC brand as contemplated in the Directory Services License Agreement and the other Commercial Agreements, and (ii) it and its Controlled Affiliates will agree to abide by the restrictions set forth under Sections 2.1(b), 2.2 and 2.3 and Article 3 of this Agreement; provided, however, in the event that the acquiring party substitutes a New ILEC Brand for the existing ILEC brand in the Territory, Publisher will have the exclusive right and obligation to use the New ILEC Brand for the publishing of Print Directories and the acquiring party must shut down any of its existing Print Directories or rebrand them so that such directories do not use the New ILEC Brand, the Licensed Marks or any brand or mark which purchaser previously used on any print directory distributed in the Territory or on any Existing IYP Directory or Future Electronic Directory for which acquiring party sold Local IYP Advertising in the Territory. SECTION 2.5 RESERVATIONS. (a) No Rights to Electronic Directory Platforms. Subject to the IYP Reseller Agreement, nothing in this Agreement will give either Party any right to place advertising or, except as expressly provided in Section 2.3 of this Agreement, otherwise participate in any existing or future electronic directory platform or service owned or used by the other Party. (b) Cingular. None of the obligations set forth in Section 2.1 or 2.2 of this Agreement will apply to Cingular or any of its Subsidiaries; provided, however, that, Section 2.1(b) shall apply to Cingular and its Subsidiaries from and after the time (if any) that Cingular becomes a wholly owned Subsidiary of SBC (the "Wholly Owned Date") and; provided, further, that neither Cingular nor any of its Subsidiaries will be deemed to -6- be in violation of Section 2.1(b) of this Agreement as a result of any activities that any of them conducts as of the Wholly Owned Date and they may continue to conduct such activities without violating 2.1(b) of this Agreement, in each case as long as such activities were commenced for a valid business purpose and not primarily for the purpose of circumventing the restrictions in this Section 2.5(b) and Section 2.1(b) of this Agreement. Notwithstanding this Section 2.5(b), (i) if any Subsidiary or business of SBC that is subject to the restrictions in Sections 2.1 and 2.2 of this Agreement is sold or otherwise transferred to Cingular or any of its Subsidiaries, such Subsidiary or business (but not any other Subsidiary or business of Cingular) will remain subject to such restrictions as long as they apply to SBC, and (ii) if Cingular or any of its Subsidiaries merges into, consolidates with or otherwise transfers all or any portion of its assets or its Subsidiaries' assets to any SBC Entity that is subject to the restrictions in Sections 2.1 and 2.2 of this Agreement, the obligations of such SBC Entity under this Agreement shall not be affected by such transaction. ARTICLE 3 NON-SOLICITATION SECTION 3.1 NON-SOLICITATION. During (a) the period between the date of this Agreement and the second anniversary (or, in the case of senior sales and executive management, the third anniversary) of the date of this Agreement and (b) the two year period (or, in the case of senior sales and executive management, the three year period) following the termination of this Agreement, no SBC Entity will, directly or indirectly, through one or more of its Affiliates, on behalf of itself or any other Person, recruit or otherwise solicit or induce any employee of the RHD Entities or any of their successors to terminate his or her employment relationship with the RHD Entities or any of their successors. The foregoing will not, however, prohibit any SBC Entity from publishing any general public solicitation of employment opportunities or employing anyone who responds to such solicitation. ARTICLE 4 OTHER PRINT DIRECTORIES SECTION 4.1 OTHER PRINT DIRECTORIES. If SBC determines to outsource or sell all of its print directory publishing business in any State or States (excluding any such sale which also involves any other non-directory businesses or assets of any SBC Entity), RHD will be entitled to receive notice of SBC's intent to so outsource all or sell any such aspect, as the case may be, of its publishing business and SBC will in good faith provide RHD with the opportunity to participate in any bidding with respect to such outsourcing or sale process. -7- ARTICLE 5 MISCELLANEOUS SECTION 5.1 ASSIGNMENT. Except as provided in Sections 9.5 and 10.1 of the Directory Services License Agreement, no Party may assign all or any of its rights or obligations under the Agreement without the prior written consent of the other Parties, except that any Party may assign all of its rights and obligations under this Agreement (a) in connection with a sale of all or substantially all of its assets or by merger or consolidation if the purchaser assumes in writing all of the assigning Party's rights and obligations under this Agreement in a form reasonably acceptable to the other Party and (b) to (i) any of its Affiliates or (ii) any lender or any other party as collateral in connection with any financing provided that no such assignment permitted by this clause (b) will relieve such Party of any of its obligations under this Agreement. SECTION 5.2 COSTS; EXPENSES. In addition to any rights and remedies that the Parties may have under applicable law, if either Party breaches this Agreement and the other Party seeks and obtains appropriate relief therefor, then the non-breaching Party will be entitled to recover any reasonable costs or expenses, including attorneys fees and disbursements, incurred by such non-breaching Party in obtaining such relief from the breaching Party. SECTION 5.3 NOTICES. Any notice required or permitted under this Agreement will be in writing and will be hand-delivered, sent by confirmed facsimile or mailed by overnight express mail. Notice will be deemed to have been given when such notice is received. Addresses for notices are as follows: If to a SBC Entity: SBC Communications Inc. 175 East Houston San Antonio, Texas 78205 Attention: Wayne Watts, Esq. Facsimile: (210) 351-3257 and SBC Directory Operations, Inc. One SBC Center St. Louis, Missouri 63101 Attention: Linda Legg, Esq. Facsimile: (314) 242-8992 -8- With a copy to: Sullivan & Cromwell LLP 125 Broad Street New York, New York 10016 Attention: Duncan C. McCurrach Facsimile: (212) 558-3588 If to RHD or Publisher: R. H. Donnelley Corporation 1001 Winstead Drive Cary, North Carolina 27513 Attention: Robert J. Bush, Esq. Facsimile: 919-297-1518 With a copy to: Jones Day 222 East 41st Street New York, New York 10017 Attention: John J. Hyland, Esq. Facsimile: 212-755-7306 or at such other address as any Party may provide to the others by written notice. SECTION 5.4 ENTIRE AGREEMENT. This Agreement constitutes the entire understanding and agreement of the Parties concerning the subject matter of this Agreement, and supersedes any prior agreements, representations, statements, understandings, proposals, undertakings or negotiations, whether written or oral, with respect to the subject matter expressly set forth in this Agreement. SECTION 5.5 SEVERABILITY. If any term, condition or provision of this Agreement is held to be invalid or unenforceable for any reason, such invalidity will not invalidate the entire Agreement, unless such construction would be unreasonable. This Agreement will be construed as if it did not contain the invalid or unenforceable provision or provisions, and the rights and obligations of each Party will be construed and enforced accordingly, except that in the event such invalid or unenforceable provision or provisions are essential elements of this Agreement and substantially impair the rights or obligations of a Party, the Parties will promptly negotiate in good faith a replacement provision or provisions. SECTION 5.6 NO THIRD PARTY BENEFICIARIES. This Agreement is intended solely for the benefit of the Parties, and no third-party beneficiaries are created by this Agreement. This Agreement does not provide and should not be construed to provide third parties with any remedy, claim, liability, reimbursement, cause of action or other -9- privilege. SECTION 5.7 BINDING EFFECT. This Agreement will be binding on and inure to the benefit of the Parties, and their respective successors and permitted assigns. SECTION 5.8 WAIVERS. No waiver of any provision of this Agreement, and no consent to any default under this Agreement, will be effective unless the same is in writing and signed by an officer of the Party against whom such waiver or consent is claimed. In addition, no course of dealing or failure of a Party strictly to enforce any term, right or condition of this Agreement will be construed as a waiver of such term, right or condition. Waiver by a Party of any default by any other Party will not be deemed a waiver of any subsequent or other default. SECTION 5.9 HEADINGS. The headings and numbering of sections and paragraphs in this Agreement are for convenience only and will not be construed to define or limit any of the terms in this Agreement or affect the meaning or interpretation of this Agreement. SECTION 5.10 SURVIVAL. Any liabilities or obligations of a Party for acts or omissions occurring prior to the cancellation or termination of this Agreement and any obligations of a Party under any other provisions of this Agreement which, by their terms, are contemplated to survive (or be performed after) termination of this Agreement (subject to any time limitations specified therein) will survive the cancellation or termination of this Agreement. SECTION 5.11 MODIFICATIONS. No amendments, deletions, additions or other modifications to this Agreement will be binding unless evidenced in writing and signed by an officer of each of the respective parties hereto. SECTION 5.12 COUNTERPARTS. This Agreement may be executed in any number of counterparts, and each such counterpart will be deemed to be an original instrument, but all such counterparts together will constitute but one agreement. This Agreement will become effective when one or more counterparts have been signed by each and delivered to the other Parties, it being understood that the Parties need not sign the same counterpart. SECTION 5.13 REMEDIES. The Parties agree that all disputes or controversies arising out of or relating to this Agreement shall be resolved using the procedures set forth in the Directory Services License Agreement, including Sections 18.1, 18.3, 18.4, 18.5 and 18.6, which are incorporated herein by this reference. SECTION 5.14 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. -10- SECTION 5.15 ACKNOWLEDGEMENTS. The Parties expressly agree that the duration, scope and geographic area of the restrictions set forth in Articles 2 and 3 are reasonable. SBC acknowledges that such covenants and restrictions are necessary, fundamental and required for the protection of the business purchased by RHD pursuant to the Purchase Agreement, that such covenants and restrictions relate to matters that are of a special, unique and extraordinary value and that RHD would not enter into the Purchase Agreement, the Directory Services License Agreement and related agreements or the transactions contemplated thereby without the protection provided by this Agreement. -11- IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written. SBC COMMUNICATIONS INC. By: /s/ James S. Kahan ------------------------------------- Name: James S. Kahan Title: Sr. Exec. VP - Corp Dev. R. H. DONNELLEY CORPORATION By: /s/ Robert J. Bush ------------------------------------- Robert J. Bush Vice President, General Counsel and Corporate Secretary EX-10.3 9 l09401aexv10w3.txt EXHIBIT 10.3 EXHIBIT 10.3 SMARTPAGES RESELLER AGREEMENT THIS SMARTPAGES RESELLER AGREEMENT, dated as of this 1st day of September, 2004 (this "Agreement"), is made and entered into by and among SBC Communications, Inc., a Delaware corporation, Southwestern Bell Yellow Pages, Inc., a Missouri corporation ("Southwestern Bell, Inc."), SBC Knowledge Ventures, L.P., a Nevada limited partnership, R. H. Donnelley Corporation, a Delaware corporation, R.H. Donnelley Publishing & Advertising of Illinois Partnership (f/k/a The APIL Partners Partnership), an Illinois general partnership, and DonTech II Partnership, an Illinois general partnership. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Directory Services License Agreement, dated as of the date hereof (the "Directory Services License Agreement"), by and among RHD, APIL Partners, DonTech II, Ameritech, SBC Directory Operations and SBC Knowledge Ventures. In this Agreement, RHD and Publisher, on the one hand, and SBC, Southwestern Bell and SBC Knowledge Ventures, on the other hand, are sometimes referred to individually as a "Party" and collectively as the "Parties". RECITALS: A. On the date of this Agreement, RHD, or one of its wholly owned Subsidiaries, is acquiring (i) from API, 1% of the outstanding partnership interests in APIL Partners and (ii) from API's wholly owned subsidiary APIL, (a) 99% of the outstanding partnership interests in APIL Partners, (b) 47% of the outstanding partnership interests in DonTech I, and (c) 50% of the outstanding partnership interests in DonTech II, pursuant to the Purchase Agreement. B. Southwestern Bell currently owns and operates an Existing IYP Directory using the domain name "SMARTpages.com" (as of any determination date, such Existing IYP Directory or any successor product which has become, as of such determination date, the principal electronic directional advertising product or service sold by Southwestern Bell outside the Territory is referred to herein as "SMARTpages"). C. Southwestern Bell desires to grant Publisher, and Publisher desires to obtain from Southwestern Bell, the exclusive right to sell Local IYP Advertising (as defined in the Non-Competition Agreement) and the non-exclusive right to sell National IYP Advertising (as defined in the Non-Competition Agreement) for inclusion in SMARTpages to any Person physically located in the Territory, in each case on the terms and conditions set forth in this Agreement and the other Commercial Agreements. D. The Purchase Agreement provides that the Parties will enter into this Agreement as a condition to the closing of the transactions contemplated by the Purchase Agreement. AGREEMENT NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Agreement and the other Commercial Agreements and the consummation of the transactions contemplated by the Purchase Agreement and the other Commercial Agreements, the Parties agree as follows: 1. GRANT OF RIGHTS. Subject to the terms and conditions of this Agreement, Southwestern Bell hereby grants Publisher the exclusive right to sell Local IYP Advertising and the non-exclusive right to sell National IYP Advertising to any Person physically located in the Territory (an "Advertiser") for inclusion in SMARTpages; provided, however, Publisher will not have the right to sell any advertising for inclusion in SMARTpages to, or through a certified marketing representative (a "CMR") for the account of, any Advertiser that qualifies to place National (as defined in the Non-Competition Agreement) white or yellow pages advertising under the current YPIMA (as defined in the Non-Competition Agreement) minimum standards. Without limiting the foregoing, Publisher will be permitted to determine the pricing for all Basic Listings and Premium Products, in its sole discretion, except that Publisher will price Premium Products (other than Local Premium Products) generally at rate card rates, and, subject to compliance with Section 2 in the case of Basic Listings and Section 3 in the case of Premium Products, will be entitled to all revenue from the sale of such advertising. 2. BASIC LISTINGS. (a) During each year of the Term (as hereinafter defined), Southwestern Bell will include on SMARTpages an unlimited number of Basic Listings sold by Publisher, and Publisher will pay Southwestern Bell the following monthly amounts, which shall be payable in installments monthly in arrears:
Months of the Term Monthly Payment - ------------------ --------------- Months 1 through 6 $ 0 Months 7 through 12 $ 83,333 Months 13 through 18 $233,333 Months 19 through 24 $250,000 Months 25 through 36 $291,667 Months 37 through 48 $333,333 Months 49 through 60 and thereafter $375,000
For purposes of this Agreement, "Basic Listings" means basic local enhanced listings for inclusion in SMARTpages, which listings (i) are accessible by users of SMARTpages searching listings within the Territory or any smaller geographic area constituting a part thereof (e.g., local, regional or Illinois statewide), and Publisher may make available to Advertisers that purchase Basic Listings all such geographic areas then available on SMARTpages, (ii) appear sorted in alphabetical order among the basic local -2- enhanced listing tier within the "featured businesses" or other substantially comparable section of SMARTpages, (iii) will include, and Publisher may select with respect to any Advertiser, any of the following information relating to an Advertiser: (A) the business name, address and telephone number, (B) the brands offered, (C) hours of operation, (D) payment options, (E) Internet links to a website, (F) Internet links to a SMARTpages web page, (G) Internet links to maps and driving directions and (H) Internet links to a customer's print ad; provided, however, in the case of Internet links to certain websites or web pages as specified in clauses (E), (F) and (H), Southwestern Bell will not be responsible for providing the content for such websites or web pages, and (iv) any other content or features which SMARTpages may from time to time decide in its sole discretion to include in Basic Listings. (b) Southwestern Bell will place each Advertiser's Basic Listings under any headings that Publisher may select among all headings then available on SMARTpages (each, an "Existing Heading"). (c) If any Advertiser purchases Basic Listings directly from SMARTpages through self-fulfillment, Southwestern Bell will notify Publisher of such purchase and remit to Publisher any amounts received by Southwestern Bell from such sale within 30 days of receipt, after which Publisher shall be responsible for servicing such Advertiser with respect to such advertising. The foregoing shall not apply to any purchase of Premium Products (as defined below) through self-fulfillment. (d) During the Non-Compete Term (as hereinafter defined), Publisher will provide to Southwestern Bell free of charge all published non-listing information relating to Advertisers which (i) is consistent with what is then considered a Basic Listing, (ii) has been sold from time to time by Publisher for any Existing IYP Directory or Future Electronic Directory and (iii) is usable by Southwestern Bell on any of its Existing IYP Directories or Future Electronic Directories (but subject to third party rights, which Publisher will use its commercially reasonable efforts to assist Southwestern Bell in obtaining) (collectively, the "Publisher Provided Information"). Southwestern Bell and Publisher will cooperate in good faith to agree upon the format in which such published information will be delivered to Southwestern Bell. During the Non-Compete Term, Southwestern Bell will include the Publisher Provided Information in SMARTpages as a Basic Listing for which Publisher will pay the monthly amounts specified in Section 2(a) above. (e) On the date of this Agreement, Southwestern Bell will transfer to Publisher all rights it has to receive any payments from the sale of advertising in the Territory by Southwestern Bell for inclusion in SMARTpages prior to such date which have not been invoiced prior to the date of this Agreement, and Publisher will remit to Southwestern Bell an amount equal to 50% of the then current published rate card rate for any such advertising within 30 days of receipt. -3- 3. PREMIUM PRODUCTS. (a) If Publisher sells any advertising product or service included in SMARTpages other than Basic Listings (each, a "Premium Product"), then Publisher will pay to Southwestern Bell the lesser of (i) 50% of the then-current published rate card rate for such Premium Product and (ii) the price then available for such Premium Product on a most-favored-customer basis for similarly situated customers that are purchasing equivalent volumes and types of advertising (the "Premium Product Rate"). Premium Products may include, but are not limited to: (x) any improved placement product, service or functionality offered on SMARTpages, whether or not such product, service or functionality exists as of the date of this Agreement, including "Look Here First", premium banner and trademark premium banner, trademark banner, single banner or double banner, enhanced placement listing and enhanced placement listings with logo products (each, an "Improved Placement Product"), which in each case will include click-to-call functionality, (y) any headings other than Existing Headings and (z) any advertising product or service accessible by users of SMARTpages searching listings outside the Territory. With respect to any Improved Placement Product sold by Publisher which it provides to Southwestern Bell in a "production ready" format, the Parties will negotiate in good faith an appropriate reduction in the price relative to the Premium Product Rate for such Improved Placement Product. (b) If any Advertiser purchases Premium Products that are accessible solely by users of SMARTpages searching listings within the Territory (each, a "Local Premium Product") directly from SMARTpages through self-fulfillment, Southwestern Bell will notify Publisher of such purchase and remit to Publisher any amounts received by Southwestern Bell from such sale within 30 days of receipt, after which (i) Publisher (x) will pay Southwestern Bell the Premium Product Rate for such purchase and (y) shall be responsible for servicing such Advertiser with respect to such advertising and (ii) such Local Premium Products will be deemed to be sold by Publisher in accordance with Section 3(a) above. 4. NATIONAL SALES. Publisher will refer to Southwestern Bell all sales of advertising to, or through a CMR for the account of, any Advertiser that qualifies to place National advertising under the current YPIMA minimum standards. Within 30 days following the end of each year of the Term, Southwestern Bell will pay to Publisher an aggregate amount equal to 3.0% of Southwestern Bell's gross revenues during the most recent prior year from the sale of advertising on SMARTpages through CMRs (the "Revenue Share"). Upon Publisher's request, Southwestern Bell will provide Publisher or its representatives with reasonable access once a year to the books and records and other documents of Southwestern Bell that Publisher may reasonably request concerning the calculation of the Revenue Share for the prior year. 5. OTHER DIRECTORIES. RHD and its Subsidiaries may resell or enter into any other relationship to sell or benefit from the sale of advertising for inclusion in any other Existing IYP Directory or Future Electronic Directory, other than in the Territory with respect to any Existing IYP Product or Future Electronic Directory owned or operated by -4- Verizon Communications Inc. or any of its Affiliates (each, a "Prohibited IYP Directory") unless at such time Southwestern Bell also sells any advertising for inclusion in such Prohibited IYP Directory. 6. PUBLISHER OBLIGATIONS. (a) Standards. Publisher will comply with all advertising standards and guidelines for SMARTpages advertising that Southwestern Bell may issue from time to time and provide to Publisher (as modified in accordance with the next sentence, the "IYP Advertising Policies"). Southwestern Bell may, in its sole discretion, change the IYP Advertising Policies. Southwestern Bell will notify Publisher promptly of any such change a reasonable period before it becomes effective. Southwestern Bell will not be obligated to accept from Publisher, and may at any time remove from SMARTpages, any advertising sold by Publisher that Southwestern Bell reasonably determines does not comply with the IYP Advertising Policies. (b) Customization. Publisher may request programming changes for SMARTpages and will be responsible for all costs and expenses incurred by Southwestern Bell to implement such changes if such changes are implemented only with respect to the Territory; provided, however, prior to incurring any such costs and expenses, Southwestern Bell will provide Publisher with an estimate thereof and will not commence any such programming changes without Publisher's prior approval of such estimate; and provided, further, that this Section 6(b) will not obligate Southwestern Bell to agree to implement any such changes. 7. NON-COMPETITION. During the Non-Compete Term, neither SBC nor any of its Subsidiaries will sell any Local IYP Advertising for any Existing IYP Directory or Future Electronic Directory. For purposes of this Agreement, "Non-Compete Term" means the period commencing on the date of this Agreement and ending on the later of (i) the fifth anniversary of the date of this Agreement and (ii) the 18-month anniversary of the date on which Publisher terminates this Agreement pursuant to Section 8 below. 8. CONSORTIUM PRODUCT. If Southwestern Bell enters into a strategic arrangement with one or more third parties regarding a successor product to SMARTpages (a "Consortium Product"), Southwestern Bell will use commercially reasonable efforts to secure for Publisher the right to sell advertising to Advertisers for such Consortium Product under the same terms and conditions as this Agreement. If despite such efforts Southwestern Bell is unable to secure such right on or prior to the date on which the Consortium Product is first generally made available to the public, then on or before such date Southwestern Bell will propose amendments to this Agreement as required to be compatible with such strategic arrangement; provided, that Southwestern Bell may not amend the annual rates for Basic Listings set forth in Section 2 of this Agreement or clause (ii) of the definition of Premium Product Rate and will negotiate with Publisher in good faith any amendments to the fees for Premium Products included in clause (i) of the definition of Premium Product Rate (a "Successor Proposal"). Within 30 days of receiving a Successor Proposal, Publisher may, in its sole discretion, (i) accept -5- the Successor Proposal and enter into a new IYP Reseller Agreement on the terms and conditions of the Successor Proposal or (ii) terminate this Agreement without any further obligation or liability except as provided in Sections 2(a) and 2(d) of this Agreement. 9. TERM. The term of this Agreement shall commence on the date of this Agreement and will continue for a term of five years (the "Term"); provided, however, this Agreement will terminate immediately and without any further action when (i) the Directory Services License Agreement expires in accordance with its terms, is terminated by or on behalf of Southwestern Bell in accordance with its terms or is terminated by or on behalf of Publisher in accordance with its terms or otherwise or (ii) Publisher terminates this Agreement pursuant to Section 8 above, and provided, further, that if this Agreement terminates pursuant to Section 8 above, then Sections 2(a), 2(d) and 7 of this Agreement will survive during the Non-Compete Term. Unless earlier terminated, the Parties agree to negotiate in good faith to extend the term of this Agreement; provided, however, that neither Party will be obligated to agree to any such extension of the Term. 10. SMARTPAGES MARK. (a) Subject to the terms and conditions of this Agreement, each of Southwestern Bell and SBC Knowledge Ventures (each, an "IYP Licensor") hereby grants to Publisher a non-transferable (except as provided in Section 12), non-exclusive right to use for the Term the mark "SMARTpages" (the "SMARTpages Mark") on sales collateral, contracts, invoices, customer correspondences and advertising and promotional materials solely in connection with soliciting and selling advertising to Advertisers for inclusion in SMARTpages as permitted by this Agreement and oral communications with respect thereto. (b) Publisher will comply with all standards for usage of the SMARTpages Mark, as issued from time to time by an IYP Licensor to Publisher (the "Usage Standards"), provided, that such IYP Licensor will notify Publisher of any such Usage Standards a reasonable period before they become effective. During the Term, any IYP Licensor may request from time to time, and Publisher agrees to provide, access to or samples of Publisher's public usage of the SMARTpages Mark to ensure Publisher's compliance with the Usage Standards. Immediately upon termination of this Agreement, Publisher will cease displaying and using the SMARTpages Mark on any materials and destroy or turn over to IYP Licensors any materials using the SMARTpages Mark; provided, however, that Publisher may retain copies of materials containing the SMARTpages Mark for archival purposes. (c) Publisher shall not use the SMARTpages Mark or the name "SMARTpages" in its corporate or business name, nor allow its Affiliates to use the SMARTpages Mark or the name "SMARTpages" in their respective corporate or business names, except that any use of the SMARTpages Mark by Publisher in accordance with Section 10(a) above will not violate this Section 10(c). IYP Licensors reserve all rights in and to the SMARTpages Mark not otherwise expressly granted to Publisher under Section 10(a), -6- (d) Publisher shall promptly notify IYP Licensors of any infringement of the SMARTpages Mark that comes to its attention. Publisher shall cooperate with IYP Licensors to take such actions as IYP Licensors in their sole discretion may consider necessary to protect the SMARTpages Mark with all expenses being borne by IYP Licensors. (e) Each IYP Licensor represents and warrants that it has the power and authority to enter into this Agreement and grant the rights it is granting under this Agreement. 11. INDEMNIFICATION. (a) Publisher Indemnity. Publisher will defend, hold harmless and indemnify Southwestern Bell and each of its Affiliates, officers, directors, shareholders, employees, contractors, agents and representatives from and against any and all Losses and Expenses arising out of, resulting from or based upon any pending or threatened claim, action, proceeding or suit by any third party, whether based on contract, tort or otherwise, arising out of or in connection with (i) any breach of this Agreement by RHD or Publisher, (ii) the use of the SMARTpages Mark by Publisher in violation of this Agreement, (iii) any advertising for inclusion in SMARTpages provided by Publisher to Southwestern Bell pursuant to this Agreement and (iv) any published non-listing information for Existing IYP Directories or Future Electronic Directories provided to any SBC Entity by any RHD Entity (other than any such information which no RHD Entity had any role in creating, in which case the applicable RHD Entity will assign any indemnification rights such RHD Entity may have with respect to such information) pursuant to Section 2(d) of this Agreement. (b) Southwestern Bell Indemnity. Southwestern Bell will defend, hold harmless and indemnify Publisher and each of its Affiliates, officers, directors, shareholders, employees, contractors, agents and representatives from and against any and all Losses and Expenses arising out of, resulting from or based upon any pending or threatened claim, action, proceeding or suit by any third party, whether based on contract, tort or otherwise, arising out of or in connection with (i) any breach of this Agreement by SBC or Southwestern Bell or (ii) the use of the SMARTpages Mark by Publisher in accordance with the terms of this Agreement. (c) Procedure. Promptly after receipt by the indemnified party of notice by a third party of a claim or of the commencement of any action or proceeding with respect to which such indemnified party may be entitled to receive payment from the other party for any Losses or Expenses, such indemnified party will notify the indemnifying party of the notice of such claim or of the commencement of such action or proceeding; provided, however, that the failure to so notify the indemnifying party will relieve the indemnifying party from liability under this Agreement with respect to such claim, action or proceeding only if, and only to the extent that, such failure to notify the indemnifying party results in the forfeiture by the indemnifying party of rights and defenses otherwise available to the indemnifying party with respect to such claim, action -7- or proceeding. The indemnifying party will have the right, upon written notice delivered to the indemnified party, to assume the defense of such claim, action or proceeding, including the employment of counsel reasonably satisfactory to the indemnified party and the payment of the fees and disbursements of such counsel. In any claim, action or proceeding with respect to which indemnification is being sought hereunder, the indemnified party or the indemnifying party, whichever is not assuming the defense of such action, will have the right to participate in such matter and to retain its own counsel at such party's own expense. The indemnifying party or the indemnified party, as the case may be, will at all times use reasonable efforts to keep the indemnifying party or the indemnified party, as the case may be, reasonably apprised of the status of the defense of any action the defense of which they are maintaining and to cooperate in good faith with each other with respect to the defense of any such action. If the indemnifying party has assumed the defense of a claim, action or proceeding, no indemnified party may settle or compromise such matter or consent to the entry of any judgment with respect to such matter without the prior written consent of the indemnifying party. An indemnifying party may not, without the prior written consent of the indemnified party, settle or compromise any claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder unless (i) simultaneously with the effectiveness of such settlement, compromise or consent, the indemnifying party pays in full any obligation imposed on the indemnified party by such settlement, compromise or consent (ii) such settlement, compromise or consent contains a complete release of the indemnified party and its Affiliates and their respective directors, officers and employees and (iii) such settlement, compromise or consent does not contain any equitable order, judgment or term which in any manner affects, restrains or interferes with the business of the indemnified party or any of the indemnified party's Affiliates. In the event an indemnified party will claim a right to payment pursuant to this Agreement not involving a third party claim covered by this Section 11, such indemnified party will send written notice of such claim to the appropriate indemnifying party. Such notice will specify the basis for such claim. 12. BINDING EFFECT; ASSIGNMENT. This Agreement will be binding on and inure to the benefit of the Parties, and their respective successors and permitted assigns. Except as provided in Section 10.1 of the Directory Services License Agreement, no Party may assign all or any of its rights or obligations under this Agreement without the prior written consent of the other Party, except that any Party may assign all of its rights and obligations under this Agreement (a) in connection with a sale of all or substantially all of its assets or by merger or consolidation if the purchaser assumes in writing all of the assigning Party's rights and obligations under this Agreement in a form reasonably acceptable to the other Party, and (b) to any of its Affiliates; or (ii) any lender or other party as collateral in connection with any financing, provided, that no such assignment permitted by this clause (b) will relieve such Party of any of its obligations under this Agreement. 13. NOTICES. Any notice required or permitted under this Agreement will be given in accordance with the notice provisions of the Directory Services License Agreement. -8- 14. REMEDIES. The Parties agree that all disputes or controversies arising out of or relating to this Agreement shall be resolved using the procedures set forth in the Directory Services License Agreement, including Sections 18.1, 18.4 and 18.6, which are incorporated herein by this reference. 15. GOVERNING LAW; FORUM SELECTION. This Agreement shall be governed, construed and enforced in accordance with the laws of the State of New York without reference to the conflict of laws principles thereof. Each Party irrevocably submits to the jurisdiction of the Federal and state courts in the Borough of Manhattan, The City of New York for the resolution of any and all disputes relating to this Agreement and waives any and all objections it might otherwise have to such jurisdiction and venue. 16. AMENDMENT; WAIVER. No amendments, deletions, additions or other modifications to this Agreement will be binding unless evidenced in writing and signed by an officer of each of the respective Parties hereto. No waiver of any provision of this Agreement, and no consent to any default under this Agreement, will be effective unless the same is in writing and signed by an officer of the Party against whom such waiver or consent is claimed. In addition, no course of dealing or failure of a Party strictly to enforce any term, right or condition of this Agreement will be construed as a waiver of such term, right or condition. Waiver by either Party of any default by the other Party will not be deemed a waiver of any subsequent or other default. 17. RELATIONSHIP. Nothing contained in this Agreement shall be construed to create the relationship of employer and employee between the Parties, franchiser - franchisee, or to make the Parties partners, joint venturer or co-employer of the other, or result in joint service offerings to their respective customers. The relationship between the Parties is that of an independent contractor. Each Party will be solely responsible for such Party's employees, including compliance with all employment laws, regulations, and rules and payment of wages, benefits and employment taxes such as Social Security, unemployment, workers compensation and federal and state withholding with respect to such employees. 18. HEADINGS. The headings and numbering of sections and paragraphs in this Agreement are for convenience only and will not be construed to define or limit any of the terms in this Agreement or affect the meaning or interpretation of this Agreement. 19. SURVIVAL. Any liabilities or obligations of a Party for acts or omissions occurring prior to the cancellation or termination of this Agreement and any obligations of a Party under any other provisions of this Agreement which, by their express terms, are contemplated to survive (or be performed after) termination of this Agreement (subject to any time limitations specified therein) will survive the cancellation or termination of this Agreement. 20. ENTIRE AGREEMENT. The Commercial Agreements constitute the entire understanding and agreement of the Parties concerning the subject matter of this Agreement and the other Commercial Agreements, and supersede any prior agreements, -9- representations, statements, understandings, proposals, undertakings or negotiations, whether written or oral, with respect to the subject matter set forth in the Commercial Agreements. 21. SEVERABILITY. If any term, condition or provision of this Agreement is held to be invalid or unenforceable for any reason, such invalidity will not invalidate the entire Agreement, unless such construction would be unreasonable. This Agreement will be construed as if it did not contain the invalid or unenforceable provision or provisions, and the rights and obligations of each Party will be construed and enforced accordingly, except that in the event such invalid or unenforceable provision or provisions are essential elements of this Agreement and substantially impair the rights or obligations of either Party, the Parties will promptly negotiate in good faith a replacement provision or provisions. 22. COMPLIANCE WITH LAWS AND REGULATIONS. Each Party will comply with all federal, state, and local laws, regulations, rules, ordinances and orders relating to the performance of its obligations and the use of services provided under this Agreement, including any rulings, modifications, regulations or orders of the Federal Communications Commission and/or any applicable state utility commission to the extent this Agreement is subject to the jurisdiction of such regulating authority. 23. THIRD PARTY BENEFICIARIES. This Agreement is intended solely for the benefit of the Parties, and no third-party beneficiaries are created by this Agreement. This Agreement does not provide and should not be construed to provide third parties with any remedy, claim, liability, reimbursement, cause of action or other privilege. 24. COUNTERPARTS. This Agreement may be executed in any number of counterparts, and each such counterpart will be deemed to be an original instrument, but all such counterparts will constitute but one agreement. This Agreement will become effective when one or more counterparts have been signed by each and delivered to the other Party, it being understood that the Parties need not sign the same counterpart. 25. SOUTHWESTERN BELL. For purposes of this Agreement, "Southwestern Bell" means, collectively, Southwestern Bell, Inc., any Person into whom Southwestern Bell, Inc. merges or consolidates and any other Person to whom SMARTpages or all or substantially all of the business or assets of Southwestern Bell, Inc. is transferred. Prior to the time that the defined term "Southwestern Bell" applies to any Person other than Southwestern Bell, Inc., Southwestern Bell, Inc. shall cause such Person to enter into a written agreement, in form and substance reasonably satisfactory to RHD pursuant to which such Person assumes all of Southwestern Bell's obligations under this Agreement. From and after such assumption, such Person shall also be deemed to be Southwestern Bell, Inc. for purposes of this Agreement, but such assumption shall not discharge or release any other Persons to which such defined term then applies. -10- 26. DIRECTORY SERVICES LICENSE AGREEMENT. No breach of any provision of this Agreement (other than Sections 2(d) and 5 hereof) will be deemed to give rise to any termination right under Article 9 of the Directory Services License Agreement. -11- IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written. R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS PARTNERSHIP By: /s/ Robert J. Bush ------------------------------------- Robert J. Bush Vice President, General Counsel and Corporate Secretary DONTECH II PARTNERSHIP By: /s/ Robert J. Bush ------------------------------------- Robert J. Bush Vice President, General Counsel and Corporate Secretary R. H. DONNELLEY CORPORATION By: /s/ Robert J. Bush ------------------------------------- Robert J. Bush Vice President, General Counsel and Corporate Secretary SOUTHWESTERN BELL YELLOW PAGES, INC. By: /s/ Dennis Payne ------------------------------------- Name: Dennis Payne Title: President and CEO SBC COMMUNICATIONS, INC. By: /s/ James S. Kahan ------------------------------------- Name: James S. Kahan Title: Sr. Exec. VP. - Corp. Dev. SBC KNOWLEDGE VENTURES, L.P. By: SBC Knowledge Ventures GP, Inc., its general partner By: /s/ Abha S. Divine ------------------------------------- Name: Abha S. Divine Title: President and CEO EX-10.4 10 l09401aexv10w4.txt EXHIBIT 10.4 EXHIBIT 10.4 AMERITECH DIRECTORY PUBLISHING LISTING LICENSE AGREEMENT This Agreement (this "Agreement") entered into as of the 1st of September, 2004, among R.H. Donnelley Publishing & Advertising of Illinois Partnership (f/k/a The APIL Partners Partnership), an Illinois general partnership, and DonTech II Partnership, an Illinois general partnership (collectively, "Licensee"), on the one hand, and Ameritech Services Inc., on behalf of and as agent for Illinois Bell Telephone Company and Indiana Bell Telephone Company, Incorporated, on the other hand. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Directory Services License Agreement, dated as of the date hereof (the "Directory Services License Agreement"), by and among R. H. Donnelley Corporation, R.H. Donnelley Publishing & Advertising of Illinois Partnership, DonTech II Partnership, Ameritech Corporation and SBC Directory Operations, Inc. The term Licensor will have the meaning set forth in Section 6.19. RECITALS: A. Licensor to the extent permitted by law, is the owner of all right, title and interest in and to the Subscriber Listing Information and Listing Information Updates (collectively, "SLI"); and B. Licensee desires to obtain SLI for use in publishing a directory or directories (including street address directories) in any format (each a "Licensee Directory") and for soliciting advertising for such directories, in each case, in the Territory; and C. Licensor is willing to license the right to use its SLI to Licensee strictly pursuant to the provisions of this Agreement and for no other purpose; and D. Licensee and Ameritech Corporation (an Affiliate of Licensor) and other of their respective Affiliates concurrently herewith are entering into the Directory Services License Agreement for purposes of providing for the continued production, publication and distribution of the Licensee Directories by Licensee following the closing of the transactions contemplated by the Purchase Agreement. AGREEMENT NOW, THEREFORE, in consideration of the premises and mutual representations, warranties, covenants and agreements set forth in this Agreement and the Other Commercial Agreements and the consummation of the transactions contemplated by the Purchase Agreement and the Other Commercial Agreements, the parties hereto agree as follows: 1 ARTICLE ONE - LISTING REQUESTS 1.0 Licensee may, from time-to-time, during the term of this Agreement obtain from Licensor SLI subject to the considerations stated herein. Such SLI shall be current as of the date of the extraction from Licensor's listing system. 1.1 All requests for SLI pursuant to this Agreement shall be made by Licensee in a manner, timeframe, form and format consistent with Current Practices (as defined below) ("Request"). 1.2 Subject to Sections 1.1 and 2.1, each Request shall specify the SLI requested according to either the exchange areas, zip code, or community and include the format specified in Appendix A in which such SLI shall be furnished. For purposes of this Agreement, "exchange area" means the Licensor central office serving area represented by the first three digits of the telephone number within an area code. 1.3 Each Request shall be subject to appropriate license fees and other charges as set forth in Article Three herein. Any Request submitted by Licensee for Subscriber Listing Information only shall be subject to a minimum charge of $150. 1.4 Each Request shall be provided to Licensor at least 30 calendar days prior to the date that the SLI (and/or any related Additional Services) are requested to be provided to the Licensee consistent with Current Practices. Orders that require expedited service or that are not consistent with Current Practices will be subject to an additional charge as outlined in Appendix B of this Agreement. In the event that the specifications not consistent with Current Practices requested cannot be accommodated, then notification will be provided to Licensee within 30 days of receipt of request. ARTICLE TWO - LICENSE 2.0 Subject to the provisions of this Agreement, Licensor grants to Licensee during the term of this Agreement a non-exclusive, non-transferable license for use of SLI provided pursuant to each Request, such use to be limited to the publication of Licensee Directories by Licensee and soliciting advertising for Licensee Directories. This Agreement applies to SLI contained in Licensor's records with respect to business and residence customers and excludes all non-published and non-listed telephone numbers, with the exception of Listing Information Update product number seven as defined in Appendix B. The residential Listing Information Update product number one in Appendix B, if requested, will include the street address, city, state and zip code for non-published and non-listed numbers for directory delivery purposes. 2.1 Licensor agrees to maintain a database of SLI consistent with Current Practices (as herein defined) for the term of this Agreement. Licensor will provide the SLI in a manner, timeframe, form and format consistent with the ordinary and customary business practices of Licensor with respect to the Publisher Business during the 12-month period prior to the date hereof (collectively, the "Current Practices"). The parties shall negotiate 2 in good faith to make any modifications to the Current Practices as they relate to SLI upon written notice from either party of requested modifications. Notwithstanding the foregoing, Licensor reserves the right to make reasonable changes in the format of its SLI, including without limitation changes in the form, content or scope of its SLI; provided that (a) such changes must be reasonable and implemented on a non-discriminatory basis with respect to substantially all comparable print directories published by SBC Directory Operations and its Subsidiaries and (b) Licensor shall notify Licensee in writing of any such changes not less than 60 days prior to implementation. 2.2 Any source material containing SLI furnished by Licensor hereunder, whether or not used by Licensee for the purpose stated herein, shall remain the property of Licensor and, upon termination of this Agreement, Licensee shall, upon request from Licensor, but in no event later than 30 days following the termination of this Agreement as stated in Section 6.5 herein, return or destroy such source material; provided, however, that after the termination of this Agreement, Licensee will be permitted to use the SLI for any Licensee Directories that commenced production prior to such termination and not be required to recall any Licensee Directories published prior to such termination. 2.3 If SLI provided hereunder mistakenly includes any listings or other information that is the property of a CLEC (other than Licensor) that has not authorized Licensor to include its listings with the SLI, at Licensor's written request, Licensee will enter into a separate license agreement with such CLEC if Licensee desires to use or publish any such listings or other information in a Licensee Directory. Licensee shall furnish a copy of such license agreement or letter of authorization signed by the local exchange carrier to Licensor. 2.4 The license granted herein shall be non-assignable (except as provided in Section 6.14) and Licensee shall have no right to sub-license or permit any other publisher or person to use the Listing Information or any information extracted therefrom except for the purpose of publication of directories by Licensee or soliciting advertising for Licensee Directories. Specifically, the SLI cannot be used to market Telecom Services. Publishing a directory or soliciting advertising for Licensee Directories is, for the purpose of this Agreement, not considered a Telecom Service. Licensee shall take reasonable and prudent steps to prevent disclosure of the source material containing SLI at least equal to the steps taken by Licensee to protect its own similar proprietary information, including adequate computer security measures to prevent unauthorized access to SLI when contained in any database. 2.5 SLI published in an electronic format must also contain a notice to the user indicating that the user may use, copy, and/or distributes listings for non-commercial, informational purposes only. All copies made of the listing information must identify Licensor as the data source and include proper Licensor copyright notice as provided by Licensor. The user notice must be prominently displayed in a publicly available, noticeable area of the CD Rom or Internet directory. 3 2.6 Any Listing Information Updates will be provided by Licensor as soon as reasonably practicable but in any event within three business days of the Listing Information Update being added to Licensor's records, which Listing Information Updates may be used to publish a directory or solicit advertising for the Licensee Directories. In no event shall Licensee use, disclose or reproduce any Licensor service order information furnished hereunder or permit anyone but its duly authorized employees or agents to inspect or use the same, except for the purpose expressly provided herein. Specifically, Listing Information Updates cannot be used to market Telecom Services. ARTICLE THREE - LICENSE FEE 3.0 Licensee agrees to pay Licensor all applicable fees specified in Appendix B such as per listing charges, fees for additional services as specified in Section 3.2 and such state, municipal and federal taxes as may be applicable to such transactions (hereafter "Fees") for each submitted Request. The per listing price will be paid in the aggregate. Notwithstanding the foregoing, Licensor may from time to time alter the rates charged by it for SLI, upon prior written notice to Licensee, except that such rates will be at the Federal Communication Commission's maximum applicable safe harbor rates and may not exceed the maximum rates allowed by any applicable law or regulation for such SLI; provided, that any such payments will be made on a most-favored-customer basis at the lowest available price given to other publishers in the Territory, whether such price is that offered by Licensor to any Affiliated or third party publisher. For purposes of the foregoing, "aggregate" means on an aggregated basis regardless of how often and in what media, format or device such SLI is displayed by Licensee. 3.1 All fees owed to Licensor under this Agreement shall be paid by the Licensee within 30 days of the invoice date. Fees not paid within 30 days of the invoice date are subject to a late charge of $50 or 1% of the total invoice, whichever is greater, for each 30 day period beyond the initial 30 days after the invoice date. 3.2 Additional Services. Customization services that require special programming not consistent with Current Practices, as noted in Article II of Appendix B ("Additional Services"), are also available to Licensee upon receipt of a Request by Licensee and upon approval by Licensor. Licensor may choose, in its sole discretion, to accommodate all such customization requests and other requests not consistent with Current Practices. For each Request requiring special programming, Licensee shall pay to Licensor a one time fee set forth in Appendix B in addition to any other fees described in Section 3.0. ARTICLE FOUR - INTELLECTUAL PROPERTY 4.0 Licensee shall, to the extent legally permissible, include a proper copyright notice in its name in each Licensee Directory published by it and Licensee shall use its best efforts to protect and maintain the validity of said copyright. Nothing contained in this Agreement shall restrict, impair or diminish the proprietary interest of Licensor in the SLI furnished to the Licensee for use in Licensee Directories. Licensee will own all information and 4 work product relating to advertising in Licensee Directories, except for any such information or work product owned solely by customers of Licensee or other parties. 4.1 Except as provided herein or in the Directory Services License Agreement, nothing in this Agreement will be deemed to grant any rights to Licensee in respect of any intellectual property or proprietary information of Licensor or any of its Affiliates. ARTICLE FIVE - INDEMNITY/LIMITATION OF LIABILITY 5.0 If the SLI provided to Licensee by Licensor is not that as stated in the Request, Licensor shall, upon request, use its reasonable best efforts to attempt to provide those listings identified in the particular Request at no additional cost to Licensee. Such request must be made within 30 calendar days of Licensee's receipt of the SLI and shall include the SLI Request. 5.1 Except as provided in this Article Five, the SLI is provided "AS IS"; Licensor does not warrant or represent that any SLI made available to Licensee pursuant to this Agreement is correct or complete; and, except as provided in this Article Five, Licensee hereby releases Licensor from any liability due to errors, inclusions or omissions in the SLI provided hereunder; provided, however, that Licensee shall be entitled to refund of the amount paid for any individual listing to the extent such listing is found to be inaccurate or incomplete. 5.2 THE REMEDIES STATED IN SECTIONS 5.0 AND 5.1 HEREOF SHALL BE LICENSEE'S SOLE AND EXCLUSIVE REMEDY AGAINST LICENSOR WITH RESPECT TO THE PROVISION OF SLI HEREUNDER, LICENSOR MAKES AND LICENSEE RECEIVES NO WARRANTY, EXPRESS OR IMPLIED, AND THERE ARE EXPRESSLY EXCLUDED ALL WARRANTIES OR MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. LICENSOR SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT FOR DIRECT, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. ARTICLE SIX - MISCELLANEOUS 6.0 Non-Exclusivity. Nothing in this Agreement or elsewhere shall give Licensee any exclusive right to the use of the SLI, and Licensor shall be free at any time to grant similar Licenses to others under the same or different terms and conditions as Licensor in its sole discretion may determine; provided that any different pricing terms and conditions offered by Licensor to others in the Territory that are more favorable than the pricing terms and conditions of this Agreement must be offered to Licensee on a most-favored-customer basis in accordance with Section 3.0. 6.1 Force Majeure. No party will be liable for any delay or failure in performance of any part of this Agreement caused by a Force Majeure condition. If any Force Majeure condition occurs, the party whose performance fails or is delayed because of such Force Majeure 5 condition will give prompt notice to the other party, will use commercially reasonable efforts to perform in spite of the Force Majeure condition and upon cessation of such Force Majeure condition will give like notice and commence performance under the Agreement as promptly as reasonably practicable. This clause shall not excuse the payment of money. 6.2 Survival of Obligations. Any liabilities or obligations of a party for acts or omissions occurring prior to the cancellation or termination of this Agreement and any obligations of a party under any other provisions of this Agreement which, by their express terms, are contemplated to survive (or be performed after) termination of this Agreement (subject to any time limitations specified therein) will survive the cancellation or termination of this Agreement. 6.3 Governing Law; Forum Selection. This Agreement shall be governed, construed and enforced in accordance with the laws of the State of New York without reference to the conflict of laws principles thereof. Each party irrevocably submits to the jurisdiction of the Federal and state courts in the Borough of Manhattan, The City of New York for the resolution of any and all disputes relating to this Agreement and waives any and all objections it might otherwise have to such jurisdiction and venue. 6.4 Severability. If any term, condition or provision of this Agreement is held to be invalid or unenforceable for any reason, such invalidity will not invalidate the entire Agreement, unless such construction would be unreasonable. This Agreement will be construed as if it did not contain the invalid or unenforceable provision or provisions, and the rights and obligations of each party will be construed and enforced accordingly, except that in the event such invalid or unenforceable provision or provisions are essential elements of this Agreement and substantially impair the rights or obligations of either party, the parties will promptly negotiate in good faith a replacement provision or provisions. 6.5 Term and Termination. Subject to Section 6.2, this Agreement will terminate immediately and without further action when the Directory Services License Agreement expires at the end of the Term, is terminated by or on behalf of SBC Directory Operations in accordance with its terms or is terminated by or on behalf of Publisher in accordance with its terms or otherwise. Termination of this Agreement shall not relieve Licensee of the obligation to pay all amounts owing to Licensor as of the date of termination or any of its other obligations contained herein including those in Article Two. 6.6 Amendment; Waiver. No amendments, deletions, additions or other modifications to this Agreement will be binding unless evidenced in writing and signed by an officer of each of the respective parties hereto. No waiver of any provision of this Agreement, and no consent to any default under this Agreement, will be effective unless the same is in writing and signed by an officer of the party against whom such waiver or consent is claimed. In addition, no course of dealing or failure of a party strictly to enforce any term, right or condition of this Agreement will be construed as a waiver of such term, right or condition. Waiver by either party of any default by the other party will not be deemed a waiver of any subsequent or other default. 6 6.7 Headings. The headings and numbering of sections and paragraphs in this Agreement are for convenience only and will not be construed to define or limit any of the terms in this Agreement or affect the meaning or interpretation of this Agreement. 6.8 Compliance with Laws and Regulations. Each party will comply with all federal, state, and local laws, regulations, rules, ordinances and orders relating to the performance of its obligations and the use of services provided under this Agreement, including any rulings, modifications, regulations or orders of the Federal Communications Commission and/or any applicable state utility commission to the extent this Agreement is subject to the jurisdiction of such regulating authority. 6.9 Remedies. The parties agree that all disputes or controversies arising out of or relating to this Agreement shall be resolved using the procedures set forth in the Directory Services License Agreement, including Sections 18.2, 18.4 and 18.6, which are incorporated herein by this reference. 6.10 Third Party Beneficiaries. This Agreement is intended solely for the benefit of the parties, and no third-party beneficiaries are created by this Agreement. This Agreement does not provide and should not be construed to provide third parties with any remedy, claim, liability, reimbursement, cause of action or other privilege. 6.11 Appendices. Appendices to this Agreement are incorporated and made a part of this Agreement. In the event of a conflict between the terms of this Agreement and an appendix to this Agreement, the terms of this Agreement will override and govern. 6.12 Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart will be deemed to be an original instrument, but all such counterparts will constitute but one agreement. This Agreement will become effective when one or more counterparts have been signed by each and delivered to the other party, it being understood that the parties need not sign the same counterpart. 6.13 Relationship. Nothing contained in this Agreement shall be construed to create the relationship of employer and employee between the parties, franchiser - franchisee, or to make the parties partners, joint venturer or co-employer of the other, or result in joint service offerings to their respective customers. The relationship between the parties is that of an independent contractor. Each party will be solely responsible for such party's employees, including compliance with all employment laws, regulations, and rules and payment of wages, benefits and employment taxes such as Social Security, unemployment, workers compensation and federal and state withholding with respect to such employees. 6.14 Binding Effect; Assignment. This Agreement will be binding on and inure to the benefit of the parties, and their respective successors and permitted assigns. Except as provided in Section 10.1 of the Directory Services License Agreement, no party may assign all or any of its rights or obligations under this Agreement without the prior written consent of 7 the other party, except that any party may assign all of its rights and obligations under this Agreement (a) in connection with a sale of all or substantially all of its assets or by merger or consolidation if the purchaser assumes in writing all of the assigning party's rights and obligations under this Agreement in a form reasonably acceptable to the other party, and (b) to any of its Affiliates or (ii) any lender or other party as collateral in connection with any financing provided that no such assignment permitted by this clause (b) will relieve such party of any of its obligations under this Agreement. 6.15 Audits. Licensor retains the right to audit the use of the SLI provided. It is agreed that the use of SLI will be monitored by a combination of one or more methods of computer control, and/or seeded and/or varied names and addresses, or a combination of the foregoing or other means. The Licensee acknowledges this and consents and agrees to the monitoring. The use of SLI shall be open to audit by a certified public accountant or internal Licensor audit team designated by Licensor at the principal offices of Licensee upon reasonable prior notice, during regular business hours and in such a manner as not to interfere with Licensee's normal business activities and that such audit shall be conducted at Licensor's sole expense unless Licensor discovers that use of the SLI has been for purposes other than the publication of Licensee Directories or the solicitation of advertising for Licensee Directories in which event Licensee shall bear the entire expense of the audit. 6.16 Charges for Additional Services. Charges for additional services specified in Paragraph 3.2 herein may be increased by Licensor at any time upon 30 days prior written notice to Licensee; provided, that any such charges will be made on a most-favored-customer basis at the lowest available price. Notwithstanding the foregoing, all Fees and other charges herein may be decreased by Licensor at any time without notice. 6.17 Notices. Any notice required or permitted under this Agreement will be in writing and will be hand-delivered, sent by confirmed facsimile or mailed by overnight express mail. Notice will be deemed to have been given when such notice is received. Addresses for notices are as follows: If to Licensor: SBC Midwest c/o Scott Smith, Director - Wholesale Markets One SBC Plaza, Room 3420 Dallas, TX 75202 With a copy to: SBC Communication Inc. Attn.: Wayne Watts 175 E. Houston Street San Antonio, TX 78205 8 If to Licensee: R.H. Donnelley Publishing & Advertising of Illinois Partnership DonTech II Partnership Robert Hoff, AVP Publishing 6001 Hospitality Court Morrisville, NC 27560 With a copy to: Robert J. Bush VP and General Counsel R.H. Donnelley Corporation 1001 Winstead Drive, Cary NC 27513 or at such other address as any party may provide to the others by written notice. 6.18 Entire Agreement. The Commercial Agreements constitute the entire understanding and agreement of the parties concerning the subject matter of the Commercial Agreements and supersede any prior agreements, representations, statements, understandings, proposals, undertakings or negotiations, whether written or oral, with respect to the subject matter set forth in the Commercial Agreements. 6.19 Definition. "Licensor" means, collectively, Ameritech Services, Inc., and any Person to whom all or substantially all the business or assets of Ameritech Services, Inc. is transferred (whether by merger, consolidation, sale of assets or otherwise). Prior to the time that the defined term "Licensor" applies to any Person other than Ameritech Services, Inc., Ameritech Services, Inc. shall cause such Person to enter into a written agreement, in form and substance reasonably satisfactory to Licensee, pursuant to which such Person assumes all of Licensor's obligations under this Agreement. From and after such assumption, such Person shall also be deemed to be Ameritech Services, Inc., for all purposes of this Agreement, but such assumption shall not discharge or release any other Persons to which those defined terms then apply. 9 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS PARTNERSHIP By: /s/ Robert J. Bush ------------------------------------- Robert J. Bush Vice President, General Counsel and Corporate Secretary DONTECH II PARTNERSHIP By: /s/ Robert J. Bush ------------------------------------- Robert J. Bush Vice President, General Counsel and Corporate Secretary AMERITECH SERVICES, INC. By: /s/ Kirk R. Brannock ------------------------------------- Name: Kirk R. Brannock Title: President 10 EX-10.5 11 l09401aexv10w5.txt EXHIBIT 10.5 EXHIBIT 10.5 EXECUTION COPY $2,525,000,000 AMENDED AND RESTATED CREDIT AGREEMENT among R.H. DONNELLEY CORPORATION, R.H. DONNELLEY INC., as Borrower, The Several Lenders from Time to Time Parties Hereto, JPMORGAN CHASE BANK, and BEAR STEARNS CORPORATE LENDING INC., as Co-Syndication Agents, CITICORP NORTH AMERICA, INC. and GOLDMAN SACHS CREDIT PARTNERS L.P., as Co-Documentation Agents, and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent Dated as of September 1, 2004 J.P. MORGAN SECURITIES INC. and BEAR, STEARNS & CO. INC., as Joint Lead Arrangers and Joint Bookrunners DEUTSCHE BANK SECURITIES INC., as Co-Arranger TABLE OF CONTENTS
Page SECTION 1. DEFINITIONS ................................................................ 2 1.1. Defined Terms............................................................... 2 1.2. Other Definitional Provisions............................................... 28 SECTION 2. AMOUNT AND TERMS OF TERM COMMITMENTS........................................ 28 2.1. Term Commitments............................................................ 28 2.2. Procedure for Term Loan Borrowing........................................... 29 2.3. [Reserved].................................................................. 29 2.4. Repayment of Term Loans..................................................... 29 SECTION 3. AMOUNT AND TERMS OF REVOLVING COMMITMENTS................................... 31 3.1. Revolving Commitments....................................................... 31 3.2. Procedure for Revolving Loan Borrowing...................................... 31 3.3. Swingline Commitment........................................................ 32 3.4. Procedure for Swingline Borrowing; Refunding of Swingline Loans............. 32 3.5. Commitment and Other Fees................................................... 34 3.6. Termination or Reduction of Revolving Commitments........................... 34 3.7. L/C Commitment.............................................................. 34 3.8. Procedure for Issuance of Letter of Credit.................................. 35 3.9. Fees and Other Charges...................................................... 35 3.10. L/C Participations.......................................................... 35 3.11. Reimbursement Obligation of the Borrower.................................... 36 3.12. Obligations Absolute........................................................ 37 3.13. Letter of Credit Payments................................................... 37 3.14. Letter of Credit Requests................................................... 37 SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT................ 37 4.1. Optional Prepayments........................................................ 37 4.2. Mandatory Prepayments and Commitment Reductions............................. 38 4.3. Conversion and Continuation Options......................................... 40 4.4. Limitations on Eurodollar Tranches.......................................... 41 4.5. Interest Rates and Payment Dates............................................ 41 4.6. Computation of Interest and Fees............................................ 42 4.7. Inability to Determine Interest Rate........................................ 42 4.8. Pro Rata Treatment and Payments............................................. 43 4.9. Requirements of Law......................................................... 44 4.10. Taxes....................................................................... 45 4.11. Indemnity................................................................... 47 4.12. Change of Lending Office.................................................... 48 4.13. Replacement of Lenders...................................................... 48
i 4.14. Evidence of Debt............................................................ 48 4.15. Illegality.................................................................. 49 4.16. Tranche C Term Loans........................................................ 49 SECTION 5. REPRESENTATIONS AND WARRANTIES.............................................. 51 5.1. Financial Condition......................................................... 51 5.2. No Change................................................................... 52 5.3. Corporate Existence; Compliance with Law.................................... 52 5.4. Power; Authorization; Enforceable Obligations............................... 52 5.5. No Legal Bar................................................................ 53 5.6. Litigation.................................................................. 53 5.7. No Default.................................................................. 53 5.8. Ownership of Property; Liens................................................ 53 5.9. Intellectual Property....................................................... 53 5.10. Taxes....................................................................... 53 5.11. Federal Regulations......................................................... 54 5.12. ERISA....................................................................... 54 5.13. Investment Company Act; Other Regulations................................... 54 5.14. Subsidiaries and Joint Ventures............................................. 54 5.15. Use of Proceeds............................................................. 55 5.16. Environmental Matters....................................................... 55 5.17. Accuracy of Information, etc................................................ 56 5.18. Security Documents.......................................................... 56 5.19. Solvency.................................................................... 57 5.20. Senior Debt................................................................. 57 5.21. Regulation H................................................................ 57 5.22. Certain Documents........................................................... 57 SECTION 6. CONDITIONS PRECEDENT........................................................ 57 6.1. Conditions to Effectiveness of Agreement and Initial Extensions of Credit... 57 6.2. Conditions to Each Extension of Credit...................................... 60 SECTION 7. AFFIRMATIVE COVENANTS....................................................... 60 7.1. Financial Statements........................................................ 60 7.2. Certificates; Other Information............................................. 62 7.3. Payment of Obligations...................................................... 63 7.4. Maintenance of Existence; Compliance........................................ 63 7.5. Maintenance of Property; Insurance.......................................... 64 7.6. Inspection of Property; Books and Records; Discussions...................... 64 7.7. Notices..................................................................... 64 7.8. Environmental Laws.......................................................... 65 7.9. Interest Rate Protection.................................................... 65 7.10. Additional Collateral, etc.................................................. 65 7.11. Further Assurances.......................................................... 67
ii SECTION 8. NEGATIVE COVENANTS.......................................................... 67 8.1. Financial Condition Covenants............................................... 67 8.2. Indebtedness................................................................ 70 8.3. Liens....................................................................... 73 8.4. Fundamental Changes......................................................... 75 8.5. Disposition of Property..................................................... 75 8.6. Restricted Payments......................................................... 76 8.7. Capital Expenditures........................................................ 78 8.8. Investments................................................................. 78 8.9. Optional Payments and Modifications of Certain Debt Instruments............. 80 8.10. Transactions with Affiliates................................................ 81 8.11. Sales and Leasebacks........................................................ 81 8.12. Hedge Agreements............................................................ 81 8.13. Changes in Fiscal Periods................................................... 82 8.14. Negative Pledge Clauses..................................................... 82 8.15. Clauses Restricting Subsidiary Distributions................................ 82 8.16. Lines of Business........................................................... 82 8.17. Amendments to Acquisition Documents......................................... 82 SECTION 9. EVENTS OF DEFAULT........................................................... 83 SECTION 10. THE AGENTS.................................................................. 86 10.1. Appointment................................................................. 86 10.2. Delegation of Duties........................................................ 87 10.3. Exculpatory Provisions...................................................... 87 10.4. Reliance by Agents.......................................................... 87 10.5. Notice of Default........................................................... 88 10.6. Non-Reliance on Agents and Other Lenders.................................... 88 10.7. Indemnification............................................................. 88 10.8. Agent in Its Individual Capacity............................................ 89 10.9. Successor Administrative Agent.............................................. 89 10.10. Agents Generally............................................................ 89 10.11. The Lead Arrangers.......................................................... 90 SECTION 11. MISCELLANEOUS............................................................... 90 11.1. Amendments and Waivers...................................................... 90 11.2. Notices..................................................................... 91 11.3. No Waiver; Cumulative Remedies.............................................. 92 11.4. Survival of Representations and Warranties.................................. 92 11.5. Payment of Expenses and Taxes............................................... 92 11.6. Successors and Assigns; Participations and Assignments...................... 93 11.7. Adjustments; Set-off........................................................ 97 11.8. Counterparts................................................................ 97
iii 11.9. Severability................................................................ 97 11.10. Integration................................................................. 97 11.11. GOVERNING LAW............................................................... 98 11.12. Submission To Jurisdiction; Waivers......................................... 98 11.13. Acknowledgments............................................................. 98 11.14. Releases of Guarantees and Liens............................................ 99 11.15. Confidentiality............................................................. 99 11.16. WAIVERS OF JURY TRIAL....................................................... 99 11.17. Delivery of Addenda......................................................... 100 11.18. Termination................................................................. 100
iv ANNEX: A Pricing Grid SCHEDULES: 1.1 Mortgaged Property 3.7 Existing Letters of Credit 5.4 Consents, Authorizations, Filings and Notices 5.6 Litigation 5.14 Subsidiaries 5.18(a) UCC Filing Jurisdictions 5.18(b) Mortgage Filing Jurisdictions 8.2(a)(iv) Existing Indebtedness 8.3(a)(vi) Existing Liens 8.14 Existing Negative Pledge Clauses 8.15 Existing Subsidiary Distribution Restrictions EXHIBITS: A Form of Amended and Restated Guarantee and Collateral Agreement B Form of Compliance Certificate C Form of Closing Certificate D Form of Mortgage E Form of Assignment and Assumption F-1 Form of Legal Opinion of Jones Day F-2 Form of Legal Opinion of Robert J. Bush, Esq. G Form of Prepayment Option Notice H Form of Exemption Certificate I-1 Form of Term Note I-2 Form of Revolving Note I-3 Form Swingline Note J Form of Addendum L Form of Letter of Credit Request v AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September 1, 2004, among R.H. DONNELLEY CORPORATION, a Delaware corporation ("Holdings"), R.H. DONNELLEY INC., a Delaware corporation and a wholly owned subsidiary of Holdings ("RHDonnelley" or the "Borrower"), the several banks and other financial institutions or entities from time to time parties to this Agreement (the "Lenders"), J.P. MORGAN SECURITIES INC. and BEAR, STEARNS & CO. INC., as joint lead arrangers and joint bookrunners (in such capacity, the "Lead Arrangers"), JPMORGAN CHASE BANK and BEAR STEARNS CORPORATE LENDING INC., as co-syndication agents (in such capacity, the "Co-Syndication Agents"), CITICORP NORTH AMERICA, INC. and GOLDMAN SACHS CREDIT PARTNERS L.P., as co-documentation agents (in such capacity, the "Co-Documentation Agents"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, as administrative agent (in such capacity, the "Administrative Agent"). Recitals WHEREAS, Holdings and the Borrower are parties to the Credit Agreement (as amended, the "Existing Credit Agreement"), dated as of December 6, 2002 (the "Original Closing Date"), among Holdings, the Borrower, the several banks and other financial institutions or entities parties thereto (the "Existing Lenders"), the documentation agents and syndication agents named therein and Deutsche Bank Trust Company Americas, as administrative agent, pursuant to which the Existing Lenders made (i) tranche A-2 term loans (the "Existing Tranche A-2 Term Loans") to the Borrower which have a current outstanding principal balance of $99,496,581.18, (ii) tranche B-2 term loans (the "Existing Tranche B-2 Term Loans") to the Borrower which have a current outstanding principal balance of $918,170,593.08 and (iii) commitments (the "Existing Revolving Commitments") to make revolving extensions of credit in an aggregate principal amount of up to $125,000,000; WHEREAS, Holdings has entered into a Purchase Agreement, dated as of July 28, 2004 (the "Acquisition Agreement"), by and among Ameritech Corporation ("Ameritech"), a Delaware corporation and a direct wholly owned subsidiary of SBC Communications, Inc., a Delaware corporation, Ameritech Publishing Inc., a Delaware corporation and a direct wholly owned subsidiary of Ameritech ("API", and together with Ameritech, "Sellers"), and Holdings, pursuant to which Holdings will acquire (the "Acquisition") (i) a 47% partnership interest in the AM-DON Partnership, an Illinois general partnership, (ii) a 50% partnership interest in DonTech II, an Illinois general partnership ("DonTech II"), (iii) 100% of the partnership interests in APIL Partners Partnership, an Illinois general partnership and (iv) a license to publish telephone directories, sell yellow pages advertising and use certain trademarks of the Sellers and its affiliates in connection therewith (collectively, the "Acquired Business"), for a purchase price of $1,450,000,000 (subject to adjustment as described therein) and will concurrently receive a cash payment of $29,898,000 from the Sellers on account of a liquidation preference described in Amendment No. 1 to the partnership agreement, dated as of January 28, 2000, of DonTech II; WHEREAS, Holdings and the Borrower intend to finance the Acquisition and the related fees and expenses with $600,503,418.82 of additional tranche A-2 term loans (the "New Tranche A-2 Term Loans") and $731,829,406.92 of additional tranche B-2 term loans (the "New Tranche B-2 Term Loans") to be made pursuant to this Agreement; 2 WHEREAS, Holdings and the Borrower have also requested that the Existing Revolving Commitments be increased from $125,000,000 to $175,000,000 (such increase, together with the New Tranche A-2 Term Loans and the New Tranche B-2 Term Loans, the "New Facilities"); WHEREAS, Holdings and the Borrower have requested that the Existing Lenders amend and restate the Existing Credit Agreement as provided in this Agreement and that the Lenders make available the New Facilities in order to, among other things, finance the Acquisition and pay related fees and expenses; and WHEREAS, the Lenders are willing to provide the New Facilities and amend and restate the Existing Credit Agreement on the terms and conditions set forth herein. Now, therefore, the parties hereto hereby agree as follows: 1.1 SECTION 1. DEFINITIONS Defined Terms. As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1. "Acquired Business": as defined in the recitals to this Agreement. "Acquisition": as defined in the recitals to this Agreement. "Acquisition Agreement": as defined in the recitals to this Agreement. "Acquisition Documentation": collectively, the Acquisition Agreement and all schedules, exhibits and annexes thereto and all side letters and agreements affecting the terms thereof or entered into in connection therewith. "Addendum": an instrument, substantially in the form of Exhibit J, by which a Lender becomes a party to this Agreement as of the Closing Date. "Additional Senior Subordinated Debt": any Indebtedness of the Borrower having substantially the same terms and conditions as the Senior Subordinated Notes (but in no event with an earlier maturity) and any Guarantee Obligations of any Subsidiary Guarantor or Holdings in respect of such Indebtedness; provided that such Guarantee Obligations are subordinated to the same extent as the obligations of the Borrower in respect of the Senior Subordinated Notes. "Additional Senior Subordinated Debt Documents": the agreements pursuant to which any Additional Senior Subordinated Debt is issued. "Additional Senior Unsecured Debt Documents": the agreements pursuant to which any Additional Senior Unsecured Notes are issued. "Additional Senior Unsecured Notes": any Indebtedness of the Borrower having substantially the same terms and conditions as the Senior Unsecured Notes (but in no event with 3 an earlier maturity) and any Guarantee Obligations of any Subsidiary Guarantors of Holdings in respect of such Indebtedness having substantially the same terms and conditions as the Guarantee Obligations relating to the Senior Unsecured Notes. "Adjustment Date": as defined in the Pricing Grid. "Administrative Agent": as defined in the recitals to this Agreement. "Affiliate": as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or Persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. "Agents": the collective reference to the Co-Syndication Agents, the Co-Documentation Agents, the Lead Arrangers and the Administrative Agent. "Aggregate Exposure": with respect to any Lender at any time, an amount equal to (a) until the Closing Date, the aggregate amount of such Lender's Commitments at such time and (b) thereafter, the sum of (i) the aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the amount of such Lender's Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Lender's Revolving Extensions of Credit then outstanding. "Aggregate Exposure Percentage": with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time. "Agreement": this Amended and Restated Credit Agreement. "Allocated Expenditure Use Amounts": at any time, an amount equal to the sum (in each case, solely to the extent that the following are made or paid after the First Amendment Effective Date in reliance upon Permitted Acquisition Reserve Amounts) of (i) the consideration for all Permitted Acquisitions, (ii) the aggregate amount of Restricted Payments made pursuant to Section 8.6(e) and, to the extent made in reliance on borrowings of Tranche C Term Loans, pursuant to Section 8.6(i), (iii) the aggregate amount expended to redeem, repurchase or prepay Indebtedness to the extent permitted under Section 8.9, (iv) the aggregate amount of any Investments made pursuant to Section 8.8(n) and (v) the Permitted Acquisition Reserve Amounts at the time such Permitted Acquisition is consummated. 4 "Applicable Margin": for each Type of Loan, the rate per annum set forth below:
Eurodollar Loans Base Rate Loans ---------------- --------------- Revolving Loans and Swingline Loans 2.00% 1.00% Tranche A-2 Term Loans 2.00% 1.00% Tranche B-2 Term Loans 2.25% 1.25%
provided, that, on and after the first Adjustment Date occurring after the Closing Date, the Applicable Margin will be determined pursuant to the Pricing Grid and provided, further, that (a) if at any time the Applicable Margin with respect to any outstanding Tranche C Term Loans is more than 0.25% greater than the Applicable Margin with respect to Tranche B-2 Term Loans, the Applicable Margin with respect to Tranche B-2 Term Loans shall be increased such that the Applicable Margin with respect to such Tranche B-2 Term Loans is equal to the margins applicable to each Type of Tranche C Term Loan minus 0.25% and (b) solely for the purpose of determining any adjustment to the Applicable Margin with respect to Tranche B-2 Term Loans required by clause (b) above, the Applicable Margin with respect to Tranche C Term Loans shall reflect any original issue discount ("OID") applicable to the Tranche C Term Loans (with OID being equated to Applicable Margin based on an assumed four-year life to maturity). "Asset Sale": any Disposition of property or series of related Dispositions of property (excluding any such Disposition permitted by clause Section 8.5 (other than clause (j) thereof)) that yields gross proceeds to any Group Member (valued at the initial principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of $1,000,000. "Assignee": as defined in Section 11.6(b). "Assignment and Assumption": an Assignment and Assumption, substantially in the form of Exhibit E. "Available Revolving Commitment": as to any Revolving Lender at any time, an amount equal to the excess, if any, of (a) such Lender's Revolving Commitment then in effect over (b) such Lender's Revolving Extensions of Credit then outstanding; provided that, in calculating any Lender's Revolving Extensions of Credit for the purpose of determining such Lender's Available Revolving Commitment pursuant to Section 3.5, the aggregate principal amount of Swingline Loans then outstanding shall be deemed to be zero. "Base Rate": for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 0.50%. For purposes hereof: "Prime Rate" shall mean the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate in effect at its principal office in New York City (the Prime Rate not being intended to be the lowest rate of interest charged by the Administrative Agent in connection with extensions of credit to debtors). Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening 5 of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. "Base Rate Loans": Loans the rate of interest applicable to which is based upon the Base Rate. "Benefitted Lender": as defined in Section 11.7(a). "Board": the Board of Governors of the Federal Reserve System of the United States (or any successor). "Borrower": as defined in the preamble to this Agreement. "Borrower's Portion of Excess Cash Flow": with respect to each fiscal year of the Borrower ending on or after December 31, 2003, the portion of Excess Cash Flow for such fiscal year which is not required to be used to prepay Term Loans or to reduce Revolving Commitments pursuant to Section 4.2(d) (or, in the case of the fiscal year ended December 31, 2003, the analogous provision of the Existing Credit Agreement). "Borrowing Date": any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make Loans hereunder. "Business": as defined in Section 5.16(b). "Business Day": a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close, provided, that with respect to notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, such day is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market. "Capital Lease Obligations": as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP. "Capital Stock": any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing. "Closing Date": the date on which the conditions precedent set forth in Section 6.1 shall have been satisfied, which date is September 1, 2004. "Co-Documentation Agents": as defined in the preamble to this Agreement. "Co-Syndication Agents": as defined in the preamble to this Agreement. 6 "Code": the Internal Revenue Code of 1986, as amended from time to time. "Collateral": all property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document. "Collateral Agent": Deutsche Bank Trust Company Americas, in its capacity as collateral agent under the Security Documents. "Commitment": as to any Lender, the sum of the Tranche A-2 Term Commitment, the Tranche B-2 Term Commitment and the Revolving Commitment of such Lender. "Commitment Fee Rate": 0.375% per annum. "Commonly Controlled Entity": an entity, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 4001(14) of ERISA or is part of a group that includes the Borrower and that is treated as a single employer under Section 414 of the Code. "Compliance Certificate": a certificate duly executed by a Responsible Officer substantially in the form of Exhibit B. "Conduit Lender": any special purpose entity organized and administered by any Lender for the purpose of making Loans otherwise required to be made by such Lender and designated by such Lender in a written instrument, subject to the consent of the Administrative Agent and the Borrower (which consent shall not be unreasonably withheld); provided, that the designation by any Lender of a Conduit Lender shall not relieve the designating Lender of any of its obligations to fund a Loan under this Agreement if, for any reason, its Conduit Lender fails to fund any such Loan, and the designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and waivers required or requested under this Agreement with respect to its Conduit Lender, and provided, further, that no Conduit Lender shall (a) be entitled to receive any greater amount pursuant to Section 4.9, 4.10, 4.11 or 11.5 than the designating Lender would have been entitled to receive in respect of the extensions of credit made by such Conduit Lender or (b) be deemed to have any Commitment. "Confidential Information Memoranda": the Confidential Information Memoranda furnished to the Lenders. "Consolidated Capital Expenditures": for any period, with respect to Holdings, the aggregate of all expenditures by Holdings and its Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) that should be capitalized under GAAP on a consolidated balance sheet of Holdings and its Subsidiaries. "Consolidated Current Assets": at any date, all amounts (other than cash and Permitted Investments) that would, in conformity with GAAP, be set forth opposite the caption "total current assets" (or any like caption) on a consolidated balance sheet of Holdings and its Subsidiaries at such date. 7 "Consolidated Current Liabilities": at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption "total current liabilities" (or any like caption) on a consolidated balance sheet of Holdings and its Subsidiaries at such date, but excluding (a) the current portion of any Funded Debt of Holdings and its Subsidiaries and (b) without duplication of clause (a) above, all Indebtedness consisting of Revolving Loans or Swingline Loans to the extent otherwise included therein. "Consolidated EBITDA": for any period, Consolidated Net Income for such period plus, without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (a) income tax expense, (b) interest expense, amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including the Loans), (c) depreciation and amortization expense, (d) any extraordinary charges or losses determined in accordance with GAAP, (e) non-cash compensation expenses arising from the issuance of stock, options to purchase stock and stock appreciation rights to the management of Holdings, (f) any other non-cash charges (including charges against goodwill), non-cash expenses or non-cash losses of Holdings or any of its Subsidiaries for such period (excluding any such charge, expense or loss incurred in the ordinary course of business that constitutes an accrual of or a reserve for cash charges for any future period) and (g) all non-recurring charges consisting of (i) severance costs associated with a restructuring, (ii) payments of customary investment and commercial banking fees and expenses, (iii) cash premiums or penalties payable in connection with the early extinguishment of Indebtedness and (iv) corporate relocation expenses; provided, however, that cash payments made in such period or in any future period in respect of such non-cash charges, expenses or losses (excluding any such charge, expense or loss incurred in the ordinary course of business that constitutes an accrual of or a reserve for cash charges for any future period) shall be subtracted from Consolidated Net Income in calculating Consolidated EBITDA in the period when such payments are made, and minus, to the extent included in the statement of such Consolidated Net Income for such period, the sum of (a) interest income, (b) any extraordinary income or gains determined in accordance with GAAP and (c) any other non-recurring or non-cash income (excluding any items that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period that are described in the parenthetical to clause (f) above), all as determined on a consolidated basis, provided that, for purposes of Section 8.1 and with respect to any period ending prior to September 30, 2005, Consolidated EBITDA shall be calculated on a pro forma basis giving effect to (i) the consummation of the Acquisition, (ii) the Loans to be made (or otherwise outstanding) on the Closing Date and the use of proceeds thereof and (iii) the payment of fees and expenses in connection with the foregoing as if such events occurred on the first day of the relevant period. For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a "Reference Period") pursuant to any determination of the Consolidated Leverage Ratio, (i) if at any time during such Reference Period Holdings or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period and (ii) if during such Reference Period Holdings or any Subsidiary shall have made a Material Acquisition (other than the Acquisition), Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the 8 first day of such Reference Period. As used in this definition, "Material Acquisition" means any acquisition of property or series of related acquisitions of property other than the Acquired Business that (a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (b) would have increased or decreased Consolidated EBITDA for the most recent period of four consecutive fiscal quarters for which financial statements are available by more than $1,000,000; and "Material Disposition" means any Disposition of property or series of related Dispositions of property that contributed more than $1,000,000 to Consolidated EBITDA for the most recent period of four consecutive fiscal quarters for which financial statements are available. "Consolidated Interest Coverage Ratio": for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for such period. "Consolidated Interest Expense": for any period, total cash interest expense (including that attributable to Capital Lease Obligations) of Holdings and its Subsidiaries for such period with respect to all outstanding Indebtedness of Holdings and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing and net costs under Hedge Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP). "Consolidated Leverage Ratio": at any time, the ratio of (a) Consolidated Total Debt at such time to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters ended on the last day of the most recently completed fiscal quarter for which financial statements have been delivered pursuant to Section 7.1. "Consolidated Net Income": for any period, the consolidated net income (or loss) of Holdings and its Subsidiaries, determined on a consolidated basis in accordance with GAAP but in any event prior to the payment or accrual of dividends on the Preferred Stock and any non-cash adjustments to net income or loss in respect of the Preferred Stock in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of Holdings or is merged into or consolidated with Holdings or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of Holdings) in which Holdings or any of its Subsidiaries has an ownership interest (including the portion of Consolidated Net Income allocable to minority interests in unconsolidated Persons to the extent that cash distributions have not actually been received from such Persons), except to the extent that any such income is actually received by Holdings or such Subsidiary in the form of dividends or similar distributions, (c) the undistributed earnings of any Subsidiary of Holdings to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary, (d) all non-cash accounting adjustments attributable to the application of purchase method accounting of the Acquisition and the Sprint Acquisition, in each case in accordance with GAAP and (e) any non-cash impact of the reduction in deferred revenue as a result of the fair value exercise undertaken as required by the purchase method of accounting for the transactions contemplated by the Acquisition Agreement or the Sprint Acquisition Agreement, in each case in accordance with GAAP, during the twelve consecutive months following the consummation of the Acquisition or the Sprint Acquisition, as applicable. 9 "Consolidated Senior Secured Debt": all Consolidated Total Debt that is secured by a Lien on any assets of Holdings or its Subsidiaries. "Consolidated Senior Secured Leverage Ratio": at any time, the ratio of (a) Consolidated Senior Secured Debt at such time to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters ended on the last day of the most recently completed fiscal quarter for which financial statements have been delivered pursuant to Section 7.1. "Consolidated Total Debt": at any date, the aggregate principal amount of all Indebtedness of Holdings and its Subsidiaries at such date, determined on a consolidated basis in accordance with GAAP. "Consolidated Working Capital": at any date, Consolidated Current Assets on such date minus Consolidated Current Liabilities on such date (which shall be positive if Consolidated Current Assets are greater than Consolidated Current Liabilities and negative if Consolidated Current Assets are less than Consolidated Current Liabilities). "Continuing Directors": the directors of Holdings on the Closing Date, and each other director, if, in each case, such other director's nomination for election to the board of directors of Holdings is recommended by at least 66-2/3% of the then Continuing Directors. "Contractual Obligation": as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "Default": any of the events specified in Section 9, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied. "Disposition": with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof. The terms "Dispose" and "Disposed of" shall have correlative meanings. "Dollars" and "$": dollars in lawful currency of the United States. "Domestic Subsidiary": any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States. "ECF Percentage": in the event that the Consolidated Leverage Ratio as of the end of the relevant fiscal year is (i) equal to or greater than 4.5 to 1.0, 50%, (ii) less than 4.5 to 1.0 but greater than or equal to 4.0 to 1.0, 25% or (iii) less than 4.0 to 1.0, 0%. "Environment": any indoor or outdoor surface, soil, surface waters, groundwaters, land, sediments, surface or subsurface strata, ambient air and any other environment medium or occupied space. "Environmental Laws": any and all foreign, federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, 10 relating to or imposing liability or standards of conduct concerning protection of human health, natural resources or the Environment, as now or may at any time hereafter be in effect. "ERISA": the Employee Retirement Income Security Act of 1974, as amended from time to time. "Eurocurrency Reserve Requirements": for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency reserves under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Board) maintained by a member bank of the Federal Reserve System. "Eurodollar Base Rate": with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on Page 3750 of the Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which the Administrative Agent is offered Dollar deposits at or about 10:00 A.M., New York City time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein. "Eurodollar Loans": Loans the rate of interest applicable to which is based upon the Eurodollar Rate. "Eurodollar Rate": with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%): Eurodollar Base Rate ---------------------------------------- 1.00 - Eurocurrency Reserve Requirements "Eurodollar Tranche": the collective reference to Eurodollar Loans under a particular Facility the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day). "Event of Default": any of the events specified in Section 9, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied. "Excess Cash Flow": for any fiscal year of Holdings, the excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for such fiscal year, (ii) the amount of 11 all non-cash charges (including depreciation, amortization and non-cash taxes) deducted in arriving at such Consolidated Net Income, (iii) decreases in Consolidated Working Capital for such fiscal year, and (iv) the aggregate net amount of non-cash loss on the Disposition of property by Holdings and its Subsidiaries during such fiscal year, to the extent deducted in arriving at such Consolidated Net Income over (b) the sum, without duplication, of (i) the amount of all non-cash credits included in arriving at such Consolidated Net Income, (ii) the aggregate amount actually paid by Holdings and its Subsidiaries in cash during such fiscal year on account of Consolidated Capital Expenditures (excluding the principal amount of Indebtedness incurred to finance such expenditures and any such expenditures financed with the proceeds of any Reinvestment Deferred Amount), (iii) the aggregate amount of all regularly scheduled principal payments of Funded Debt (including the Term Loans) of Holdings and its Subsidiaries made during such fiscal year (other than in respect of any revolving credit facility to the extent there is not an equivalent permanent reduction in commitments thereunder), (iv) increases in Consolidated Working Capital for such fiscal year, and (v) the aggregate net amount of non-cash gain on the Disposition of property by Holdings and its Subsidiaries during such fiscal year (other than sales of inventory in the ordinary course of business), to the extent included in arriving at such Consolidated Net Income. "Excess Cash Flow Application Date": as defined in Section 4.2(d). "Excess Funded Amount": as defined in Section 3.4 of the First Amendment. "Excluded Indebtedness": all Indebtedness permitted by Section 8.2(a), other than Indebtedness permitted by clause (xv) or (xviii) thereof. "Existing Credit Agreement": as defined in the recitals to this Agreement. "Existing Lenders": as defined in the recitals to this Agreement. "Existing Revolving Commitments": as defined in the recitals to this Agreement. "Existing Tranche A-2 Term Loans": as defined in the recitals to this Agreement. "Existing Tranche B-2 Term Loans": as defined in the recitals to this Agreement. "Facility": each of (a) the Tranche A-2 Term Loans, (b) the Tranche B-2 Term Loans (the "Tranche B-2 Term Facility"), and (c) the Revolving Commitments and the extensions of credit made thereunder (the "Revolving Facility"). "Federal Funds Effective Rate": for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it. 12 "Fee Payment Date": (a) the third Business Day following the last day of each March, June, September and December and (b) the last day of the Revolving Commitment Period. "First Amendment": the First Amendment to the Existing Credit Agreement, dated as of December 5, 2003. "First Amendment Effective Date": December 5, 2003. "Foreign Subsidiary": any Subsidiary of the Borrower that is not a Domestic Subsidiary. "Funded Debt": as to any Person, all Indebtedness of such Person that matures more than one year from the date of its creation or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including all current maturities and current sinking fund payments in respect of such Indebtedness whether or not required to be paid within one year from the date of its creation and, in the case of the Borrower, Indebtedness in respect of the Loans. "Funding Office": the office of the Administrative Agent specified in Section 11.2 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders. "GAAP": generally accepted accounting principles in the United States as in effect from time to time. In the event that any Accounting Change (as defined below) shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then Holdings and the Administrative Agent agree to negotiate in good faith in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating Holdings' financial condition shall be the same after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by Holdings, the Administrative Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Changes had not occurred. "Accounting Changes" refers to changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the SEC. "Goldman Sachs": Goldman Sachs Capital Partners 2000, L.P. and its Affiliates. "Governmental Authority": any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners). 13 "Group Members": the collective reference to Holdings, the Borrower and their respective Subsidiaries. "Guarantee and Collateral Agreement": the Amended and Restated Guarantee and Collateral Agreement to be executed and delivered by Holdings, the Borrower and each Subsidiary Guarantor in favor of the Collateral Agent, substantially in the form of Exhibit A. "Guarantee Obligation": as to any Person (the "guaranteeing person"), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the "primary obligations") of any other third Person (the "primary obligor") in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person's maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith. "Guarantors": the collective reference to Holdings and the Subsidiary Guarantors. "Hedge Agreements": any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Hedge Agreement. "Holdings": as defined in the preamble to this Agreement. 14 "Immaterial Subsidiary": any Subsidiary of the Borrower with total assets not exceeding $1,000,000; provided that the aggregate total assets of all Immaterial Subsidiaries shall not exceed $5,000,000 at any time. "Indebtedness": of any Person at any date, without duplication, (a) the principal of and premium on (if any, and to the extent such premium has become due) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than (i) current trade payables incurred in the ordinary course of such Person's business, (ii) customary indemnification obligations entered into in connection with an acquisition or Disposition permitted under this Agreement and (iii) customary purchase price adjustments based on differences between estimated assets or liabilities at closing and subsequent final determination of such assets or liabilities following closing), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property) (other than customary indemnification obligations entered into in connection with an acquisition or Disposition permitted under this Agreement), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under or in respect of acceptances, letters of credit, surety bonds or similar arrangements, (g) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (f) above, (h) all obligations of the kind referred to in clauses (a) through (g) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation (the amount of such obligations with respect to such Person being deemed to be the lesser of the value of such property and the amount of obligations so secured), and (i) for the purposes of Sections 8.2 and 9(e) only, all obligations of such Person in respect of Hedge Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefore. "Indebtedness Measurement Date": as defined in Section 8.2(a)(viii). "Indemnified Liabilities": as defined in Section 11.5. "Indemnitee": as defined in Section 11.5. "Independent Financial Advisor": an accounting, appraisal or investment banking firm of national standing or any third party appraiser or recognized expert with experience in appraising the terms and conditions of the type of transaction or series of related transactions for which an opinion is required; provided that such firm or appraiser is not an Affiliate of the Borrower. 15 "Insolvency": with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA. "Insolvent": pertaining to a condition of Insolvency. "Intellectual Property": the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom. "Interest Payment Date": (a) as to any Base Rate Loan (other than any Swingline Loan), the last day of each March, June, September and December to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any Eurodollar Loan with an Interest Period of three months or less, the last day of such Interest Period, and as to any Eurodollar Loan with an Interest Period longer than three months, each day that is three months (and, if applicable, each day that is six or nine months) after the first day of such Interest Period and the last day of such Interest Period, (c) as to any Loan (other than any Revolving Loan that is a Base Rate Loan and any Swingline Loan), the date of any repayment or prepayment made in respect thereof and (d) as to any Swingline Loan, the day that such Loan is required to be paid. "Interest Period": as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six or (if available to all Lenders under the relevant Facility and subject to certain administrative procedures to be determined by the Administrative Agent) nine or twelve months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six or (if available to all Lenders under the relevant Facility) nine or twelve months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent no later than 11:00 A.M., New York City time, on the date that is three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following: (i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day; (ii) the Borrower may not select an Interest Period under a particular Facility that would extend beyond the Revolving Termination Date or beyond the date final payment is due on the Tranche A-2 Term Loans or the Tranche B-2 Term Loans, as the case may be; 16 (iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and (iv) the Borrower shall select Interest Periods so as not to require a payment or prepayment of any Eurodollar Loan during an Interest Period for such Loan. "Investments": as defined in Section 8.8. "Issuing Lender": the Administrative Agent or any Affiliate thereof (including Deutsche Bank AG, New York Branch), or any other Lender which at the request of the Borrower and with the consent of the Administrative Agent agrees to become an Issuing Lender; provided, however, that until the Administrative Agent notifies the Borrower otherwise, neither the Administrative Agent or its Affiliates (including Deutsche Bank AG, New York Branch) shall be obligated to issue any Letter of Credit other than a standby Letter of Credit. In the event there is more than one Issuing Lender, each reference to the "Issuing Lender" in this Agreement and the other Loan Documents shall, where appropriate, be deemed to be a reference to each Issuing Lender. "L/C Commitment": $25,000,000. "L/C Obligations": at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.11. "L/C Participants": the collective reference to all the Revolving Lenders other than the Issuing Lender. "Lead Arrangers": as defined in the recitals to this Agreement. "Lenders": as defined in the preamble hereto; provided, that unless the context otherwise requires, each reference herein to the Lenders shall be deemed to include any Conduit Lender. "Letter of Credit Request": a Letter of Request, substantially in the form of Exhibit L, submitted by the Borrower to the Issuing Lender to request the issuance of a Letter of Credit. "Letters of Credit": as defined in Section 3.7(a). "Lien": any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing). 17 "Loan": any loan made by any Lender pursuant to this Agreement. "Loan Documents": this Agreement, any Letter of Credit Requests, the Security Documents and the Promissory Notes. "Loan Party": each Group Member that is a party to a Loan Document. "Majority Facility Lenders": with respect to any Facility, the holders of more than 50% of the aggregate unpaid principal amount of the Term Loans or the Total Revolving Extensions of Credit, as the case may be, outstanding under such Facility (or, in the case of the Revolving Facility, prior to any termination of the Revolving Commitments, the holders of more than 50% of the Total Revolving Commitments). "Mandatory Prepayment Date": as defined in Section 4.2(h). "Material Adverse Effect": a material adverse effect on (a) the business, assets, property, operations, condition (financial or otherwise), contingent liabilities, material agreements or prospects of Holdings, the Borrower and their respective Subsidiaries, taken as a whole (after giving effect to the Acquisition), or (b) the validity or enforceability of this Agreement or any of the other Loan Documents or the rights or remedies of the Agents or the Lenders hereunder or thereunder. "Materials of Environmental Concern": any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Law, including asbestos, polychlorinated biphenyls and urea-formaldehyde insulation. "Moody's": Moody's Investors Service, Inc. "Mortgaged Properties": the real properties listed on Schedule 1.1, as to which the Collateral Agent for the benefit of the Administrative Agent and the Lenders have been granted a Lien pursuant to the Mortgages. "Mortgages": each of the mortgages and deeds of trust made by any Loan Party in favor of, or for the benefit of, the Administrative Agent for the benefit of the Lenders, substantially in the form of Exhibit D (with such changes thereto as shall be advisable under the law of the jurisdiction in which such mortgage or deed of trust is to be recorded). "Multiemployer Plan": a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Net Cash Proceeds": (a) in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and Permitted Investments (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or by the Disposition of any non-cash consideration received in connection therewith or otherwise, but only as and when received) of such Asset Sale or Recovery Event, net of attorneys' fees, accountants' fees, investment banking fees, amounts required to be applied to the repayment of Indebtedness secured by a Lien 18 expressly permitted hereunder on any asset that is the subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a Security Document) and other customary fees and expenses actually incurred in connection therewith; net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements); and net of reasonable reserves in respect of post-closing adjustments and escrows (such reserves and escrowed amounts shall be disclosed to the Administrative Agent at the time taken or made and shall be deemed to be "Net Cash Proceeds" when such reserves and escrowed amounts are no longer required to be maintained) and (b) in connection with any issuance or sale of Capital Stock or any incurrence of Indebtedness, the cash proceeds received from such issuance or incurrence, net of attorneys' fees, investment banking fees, accountants' fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith. "New Facilities": as defined in the recitals to this Agreement. "New Lender": as defined in Section 4.16. "New Tranche A-2 Term Loans": as defined in the recitals to this Agreement. "New Tranche B-2 Term Loans": as defined in the recitals to this Agreement. "Non-Cash Pay Holdings Debt": Permitted Holdings Debt which does not mature or amortize, and is not mandatorily redeemable, in whole or in part, or required to be repurchased or reacquired, in whole or in part, by Holdings (unless such redemption is required only if and to the extent then permitted by this Agreement), and which does not require any payment of cash interest, in each case prior to the date that is six months after the Tranche B-2 Maturity Date. "Non-Cash Pay Preferred Stock": preferred stock of Holdings which (i) is not mandatorily redeemable, in whole or part, or required to be repurchased or reacquired, in whole or part, by (A) Holdings (unless such redemption is required only if and to the extent then permitted by this Agreement) or (B) the Borrower or any Subsidiary, and which do not require any payment of cash dividend or distributions, in each case, prior to the date that is six months after the Tranche B-2 Maturity Date, (ii) are not secured by any assets of Holdings, the Borrower or any Subsidiary, (iii) are not guaranteed by the Borrower or any Subsidiary and (iv) are not exchangeable or convertible into Indebtedness of Holdings or any Subsidiary (other than Non-Cash Pay Holdings Debt) or any preferred stock or other Capital Stock of Holdings, the Borrower or any Subsidiary (other than common equity of Holdings or Non-Cash Pay Preferred Stock). "Non-Excluded Taxes": as defined in Section 4.10(a). "Non-U.S. Lender": as defined in Section 4.10(d). "Notes": the Senior Subordinated Notes and the Senior Unsecured Notes. "Notes Indentures": the Senior Subordinated Notes Indenture and the Senior Unsecured Notes Indenture, collectively. 19 "Obligations": the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrower to any Agent or to any Lender (or, in the case of Specified Hedge Agreements, any affiliate of any Lender), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit, any Specified Hedge Agreement or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to any Agent or to any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise; provided, that (i) obligations of the Borrower or any Subsidiary under any Specified Hedge Agreement shall be secured and guaranteed pursuant to the Security Documents only to the extent that, and for so long as, the other Obligations are so secured and guaranteed and (ii) any release of Collateral or Guarantors effected in the manner permitted by this Agreement shall not require the consent of holders of obligations under Specified Hedge Agreements. "Optional Prepayment Date": as defined in Section 4.1(b). "Optional Tranche B-2 Prepayment Amount": as defined in Section 4.1(b). "Original Closing Date": as defined in the recitals to this Agreement. "Other Taxes": any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document. "Participant": as defined in Section 11.6(c). "PBGC": the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor). "Permitted Acquisition": any acquisition, whether in a single transaction or series of related transactions, by the Borrower or any one or more Domestic Subsidiaries, or any combination thereof, of all or a substantial part of the assets, or a going concern business or division, of any Person organized under the laws of any jurisdiction within the United States and conducting substantially all of its business therein, whether through purchase of assets or securities, by merger or otherwise (it being understood that the assets of such Person may include foreign assets (including Capital Stock of Subsidiaries) that are not a material portion of the assets acquired); provided that: (a) both before and immediately after giving effect to such acquisition, no Default or Event of Default shall have occurred and be continuing; 20 (b) the Person whose assets, securities or equity interests are being acquired is engaged in the same line of business activity as the Borrower and its Subsidiaries and businesses reasonably related thereto in compliance with Section 8.16 and such acquisition is initiated and completed with the approval of the board of directors (or other analogous body) of such Person or otherwise on a friendly basis; (c) immediately after giving effect to such acquisition, the Borrower shall be in compliance with the ratios set forth in Section 8.1 opposite the period in which the date of proposed consummation of such acquisition falls (the "Transaction Date") (and, for purposes of determining such compliance, "Consolidated EBITDA" and the "Consolidated Interest Coverage Ratio" shall each be as in effect on the last day of the fiscal quarter most recently ended on or prior to such Transaction Date for which financial statements have been delivered pursuant to Section 7.1 and adjusted to give effect to the proposed acquisition as if it had occurred on the first day of the relevant period for testing compliance and "Consolidated Total Debt" and "Consolidated Senior Secured Debt" shall be as in effect on such Transaction Date and assuming the proposed acquisition had been consummated); (d) if immediately after giving effect to such acquisition, the Borrower shall have any additional Subsidiaries, (i) such additional Subsidiaries shall be Domestic Subsidiaries (except for Foreign Subsidiaries that, together with all other foreign assets acquired, are not a material portion of the assets acquired) and (ii) the Borrower shall have complied, and shall have caused such additional Subsidiaries to have complied, with the provisions of Section 7.10 with respect thereto; and (e) the Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer certifying compliance (with supporting information in reasonable detail) with the conditions set forth above and in Section 8.8 in connection with such acquisition. "Permitted Acquisition Reserve Amounts": at any time, an amount equal to (a) the sum (in each case, if applicable, to the extent the following items occur after the First Amendment Effective Date and are not required to be used to prepay Term Loans and reduce Revolving Commitments pursuant to Section 4.2) of (i) 100% of the Net Cash Proceeds of any issuance of Capital Stock by any Group Member (other than issuances of Capital Stock to any Group Member or as contemplated by Section 8.6(d)), (ii) 100% of the Net Cash Proceeds from borrowings of Tranche C Term Loans, (iii) 100% of the Net Cash Proceeds from the issuance of Additional Senior Subordinated Debt and Additional Senior Unsecured Notes and (iv) an amount equal to the sum of the Borrower's Portion of Excess Cash Flow for each fiscal year ending after the First Amendment Effective Date minus (b) the amount of Allocated Expenditure Use Amounts at such time. "Permitted Asset Swap": any transfer of properties or assets of the Borrower or any of its Subsidiaries in which at least 90% of the consideration received by the transferor consists of properties or assets (other than cash) that will be used in the business of publishing yellow pages directories and the sale of advertising in connection therewith; provided that the aggregate fair market value (as determined in good faith by the board of directors of the Borrower and the board of directors of Holdings) of the properties or assets being transferred by the Borrower or such Subsidiary (a) is not greater than the aggregate fair market value (as 21 determined in good faith by the board of directors of the Borrower and the board of directors of Holdings) of the properties or assets received by the Borrower or such Subsidiary in such exchange and (b) does not exceed, at the time such Permitted Asset Swap is completed, together with the cumulative aggregate fair market value of all other Permitted Asset Swaps completed prior to the date thereof, 15% of consolidated net revenues of Holdings and its Subsidiaries (as determined on a consolidated basis in accordance with GAAP) for the last full fiscal year for which financial statements have been delivered pursuant to Section 7.1; provided, further, that with respect to any transaction or series of related transactions that constitute a Permitted Assets Swap with an aggregate fair market value in excess of $25,000,000, the Borrower, prior to consummation thereof, shall be required to obtain a written opinion from an Independent Financial Advisor to the effect that such transaction or series of related transactions are fair from a financial point of view to the Borrower and its Subsidiaries, taken as a whole. "Permitted Holdings Debt": Indebtedness of Holdings which (i) does not mature, and is not subject to mandatory repurchase, redemption or amortization (other than pursuant to customary asset sale or change in control provisions requiring redemption or repurchase only if and to the extent then permitted by this Agreement), in each case, prior to the date that is six months after the Tranche B-2 Maturity Date, (ii) is not secured by any assets of Holdings, the Borrower or any Subsidiary, (iii) is not Guaranteed by the Borrower or any Subsidiary, (iv) is not exchangeable or convertible into Indebtedness of Holdings (except other Permitted Holdings Debt), the Borrower or any Subsidiary or any preferred stock or other Capital Stock of Holdings, the Borrower or any Subsidiary (other than common stock or Non-Cash Pay Preferred Stock of Holdings, provided that any such exchange or conversion, if effected, would not result in an Event of Default pursuant to Section 9(k)) and (v) if subordinated, is subordinated to the Obligations pursuant to a written instrument delivered, and reasonably satisfactory, to the Administrative Agent or on terms substantially similar to (and no less favorable in any significant respect to the Lenders than) the subordination terms applicable to the Senior Subordinated Notes. "Permitted Investments": any (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof; (b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, a rating of at least A-1 from S&P or a rating of at least P-1 from Moody's; (c) investments in certificates of deposit, banker's acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000 and whose debt has a rating, at the time 22 as of which any investment therein is made, of at least P-1 from Moody's or at least A-1 from S&P; (d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and (e) shares of money market mutual or similar funds that invest exclusively in assets satisfying the requirements of clauses (a) through (d) above. "Person": an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Plan": at a particular time, any employee benefit plan that is covered by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. "Preferred Stock": the 8% redeemable convertible cumulative preferred stock issued to Goldman Sachs on November 25, 2002 and January 3, 2003. "Prepayment Option Notice": as defined in Section 4.1(b). "Pricing Grid": the pricing grid attached hereto as Annex A. "Projections": as defined in Section 7.2(c). "Promissory Notes": the collective reference to any promissory note evidencing Loans. "Properties": as defined in Section 5.16(a). "Recovery Event": any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of any Group Member in excess of $1,000,000. "Refinanced Revolving Commitments": as defined in Section 11.1. "Refunded Swingline Loans": as defined in Section 3.4(b). "Refunding Date": as defined in Section 3.4(c). "Register": as defined in Section 11.6(b). "Regulation U": Regulation U of the Board as in effect from time to time. "Reimbursement Obligation": the obligation of the Borrower to reimburse the Issuing Lender pursuant to Section 3.11 for amounts drawn under Letters of Credit. 23 "Reinvestment Deferred Amount": with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by any Group Member in connection therewith that are not applied to prepay the Term Loans or reduce the Revolving Commitments pursuant to Section 4.2(c) as a result of the delivery of a Reinvestment Notice. "Reinvestment Event": any Asset Sale or Recovery Event in respect of which the Borrower has delivered a Reinvestment Notice. "Reinvestment Notice": a written notice executed by a Responsible Officer stating that no Event of Default has occurred and is continuing and that the Borrower (directly or indirectly through a Subsidiary) intends and expects to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire, replace or repair fixed or capital assets useful in its business or to finance a Permitted Acquisition. "Reinvestment Prepayment Amount": with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount expended prior to the relevant Reinvestment Prepayment Date to acquire, replace or repair fixed or capital assets useful in the Borrower's business or to finance a Permitted Acquisition. "Reinvestment Prepayment Date": with respect to any Reinvestment Event, the earlier of (a) the date occurring 12 months after such Reinvestment Event and (b) the date on which the Borrower shall have determined not to, or shall have otherwise ceased to, acquire, replace or repair fixed or capital assets useful in the Borrower's business or to effect a Permitted Acquisition with all or any portion of the relevant Reinvestment Deferred Amount. "Release": any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, pouring, emitting, emptying, escaping or leaching of any Materials of Environmental Concern into the Environment (including the abandonment or discarding of barrels, containers or other closed receptacles containing any Materials of Environmental Concern). "Reorganization": with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA. "Replacement Revolving Commitments": as defined in Section 11.1. "Reportable Event": any of the events set forth in Section 4043(b) of ERISA, other than those events as to which the thirty day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. Section 4043. "Required Lenders": at any time, the holders of more than 50% of (a) until the Closing Date, the Commitments then in effect and (b) thereafter, the sum of (i) the aggregate unpaid principal amount of the Term Loans then outstanding and (ii) the Total Revolving Commitments then in effect or, if the Revolving Commitments have been terminated, the Total Revolving Extensions of Credit then outstanding. "Requirement of Law": as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, 24 rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Responsible Officer": the chief executive officer, president, chief financial officer or treasurer of the Borrower, but in any event, with respect to financial matters, the chief financial officer of the Borrower. "Restricted Payments": as defined in Section 8.6. "Revolving Commitment": as to any Lender, the obligation of such Lender, if any, to make Revolving Loans and participate in Swingline Loans in an aggregate principal and/or face amount not to exceed the amount set forth under the heading "Revolving Commitment" under such Lender's name on such Lender's Addendum or in the Assignment and Assumption pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The original amount of the Total Revolving Commitments is $175,000,000. "Revolving Commitment Period": the period from and including the Closing Date to the Revolving Termination Date. "Revolving Extensions of Credit": as to any Revolving Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding, (b) such Lender's Revolving Percentage of the L/C Obligations then outstanding and (c) such Lender's Revolving Percentage of the aggregate principal amount of Swingline Loans then outstanding. "Revolving Lender": each Lender that has a Revolving Commitment or that holds Revolving Loans. "Revolving Loans": as defined in Section 3.1(a). "Revolving Percentage": as to any Revolving Lender at any time, the percentage which such Lender's Revolving Commitment then constitutes of the Total Revolving Commitments (or, at any time after the Revolving Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Lender's Revolving Extensions of Credit then outstanding constitutes of the aggregate principal amount of the Revolving Extensions of Credit then outstanding). "Revolving Termination Date": December 31, 2009. "RHDonnelley": as defined in the recitals to this Agreement. "S&P": Standard & Poor's Rating Services. "SEC": the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority. 25 "Security Documents": the collective reference to the Guarantee and Collateral Agreement, the Mortgages and all other security documents hereafter delivered to the Collateral Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Loan Party under any Loan Document. "Sellers": as defined in the recitals to this Agreement. "Senior Subordinated Notes": the 10-7/8% Senior Subordinated Notes of the Borrower due 2012. "Senior Subordinated Notes Indenture": the Indenture, dated as of December 3, 2002, under which the Senior Subordinated Notes were issued and all other instruments, agreements and other documents evidencing or governing the Senior Subordinated Notes. "Senior Unsecured Notes": the 8-7/8% Senior Notes of the Borrower due 2010. "Senior Unsecured Notes Indenture": the Indenture, dated as of December 3, 2002, under which the Senior Unsecured Notes were issued and all other instruments, agreements and other documents evidencing or governing the Senior Unsecured Notes. "Single Employer Plan": any Plan that is covered by Title IV of ERISA, but that is not a Multiemployer Plan. "Solvent": when used with respect to any Person, means that, as of any date of determination, (a) the amount of the "present fair saleable value" of the assets of such Person will, as of such date, exceed the amount of all "liabilities of such Person, contingent or otherwise", as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) "debt" means liability on a "claim", and (ii) "claim" means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured. "Specified Change of Control": a "Change of Control" (or any other defined term having a similar purpose) as defined in the Notes Indentures, the Additional Senior Subordinated Debt Documents or the Additional Senior Unsecured Debt Documents. "Specified Hedge Agreement": any Hedge Agreement (a) entered into by (i) the Borrower or any of its Subsidiaries and (ii) any Person who is an Agent or Lender or any affiliate thereof at the time such Hedge Agreement is entered into, as counterparty and (b) that has been designated by such Agent or Lender, as the case may be, and the Borrower, by notice to the 26 Administrative Agent, as a Specified Hedge Agreement. The designation of any Hedge Agreement as a Specified Hedge Agreement shall not create in favor of the Agent, Lender or affiliate thereof that is a party thereto any rights in connection with the management or release of any Collateral or of the obligations of any Guarantor under the Guarantee and Collateral Agreement. "Sprint Acquisition": the acquisition of all of the issued and outstanding Capital Stock of Directories Americas Inc. and Centel Directory Company LLC pursuant to the Sprint Acquisition Agreement. "Sprint Acquisition Agreement": the Stock Purchase Agreement, dated as of September 21, 2002, by and among Sprint Corporation, Centel Directories LLC and Holdings. "Subsidiary": as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower. "Subsidiary Guarantor": each Subsidiary of the Borrower other than any Foreign Subsidiary. "Supermajority Lenders": at any time, the holders of more than 66 2/3% of (a) until the Closing Date, the Commitments then in effect and (b) thereafter, the sum of (i) the aggregate unpaid principal amount of the Term Loans then outstanding and (ii) the Total Revolving Commitments then in effect or, if the Revolving Commitments have been terminated, the Total Revolving Extensions of Credit then outstanding. "Swingline Commitment": the obligation of the Swingline Lender to make Swingline Loans pursuant to Section 3.3 in an aggregate principal amount at any one time outstanding not to exceed $25,000,000. "Swingline Lender": Deutsche Bank Trust Company Americas, in its capacity as the lender of Swingline Loans. "Swingline Loans": as defined in Section 3.3(a). "Swingline Participation Amount": as defined in Section 3.4(c). "Term Lenders": the collective reference to the Tranche A-2 Term Lenders and the Tranche B-2 Term Lenders. "Term Loans": the collective reference to the Tranche A-2 Term Loans and Tranche B-2 Term Loans. 27 "Total Revolving Commitments": at any time, the aggregate amount of the Revolving Commitments then in effect. "Total Revolving Extensions of Credit": at any time, the aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders outstanding at such time. "Tranche A-2 Term Commitment": as to any Lender, the obligation of such Lender, if any, to make a Tranche A-2 Term Loan to the Borrower in a principal amount not to exceed the amount set forth in its Addendum opposite the heading "Tranche A-2 Term Loan". The original aggregate amount of the Tranche A-2 Term Commitments is $700,000,000. "Tranche A-2 Term Lender": each Lender that holds a Tranche A-2 Term Loan. "Tranche A-2 Term Loan": as defined in Section 2.1. "Tranche A-2 Term Percentage": as to any Tranche A-2 Term Lender at any time, the percentage which the aggregate principal amount of such Lender's Tranche A-2 Term Loans then constitutes of the aggregate principal amount of all the Tranche A-2 Term Loans then outstanding. "Tranche B-2 Maturity Date": June 30, 2011. "Tranche B-2 Prepayment Amount": as defined in Section 4.2(h). "Tranche B-2 Term Commitment": as to any Lender, the obligation of such Lender, if any, to make a Tranche B-2 Term Loan to the Borrower in a principal amount not to exceed the amount set forth in its Addendum opposite the heading "Tranche B-2 Term Loan". The original aggregate amount of the Tranche B-2 Term Commitments is $1,650,000,000. "Tranche B-2 Term Lender": each Lender that holds a Tranche B-2 Term Loan. "Tranche B-2 Term Loan": as defined in Section 2.1. "Tranche B-2 Term Percentage": as to any Tranche B-2 Lender at any time, the percentage which the aggregate principal amount of such Lender's Tranche B-2 Term Loans then outstanding constitutes of the aggregate principal amount of all the Tranche B-2 Term Loans then outstanding. "Tranche C Term Loans": as defined in Section 4.16. "Tranche C Term Loan Request": as defined in Section 4.16. "Transferee": any Assignee or Participant. "Type": as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan. "United States": the United States of America. 28 "Wholly Owned Subsidiary": as to any Person, any other Person all of the Capital Stock of which (other than directors' qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries. "Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is a Wholly Owned Subsidiary of the Borrower. 1.2. Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto. (b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to any Group Member not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP, (ii) the words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation", (iii) the word "incur" shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words "incurred" and "incurrence" shall have correlative meanings), and (iv) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any right or interest in or to assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including cash, Capital Stock, securities, revenues, accounts, leasehold interests and contract rights, and (v) references to agreements or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated or otherwise modified from time to time (subject to any applicable restrictions hereunder). (c) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. SECTION 2. AMOUNT AND TERMS OF TERM COMMITMENTS 2.1. Term Commitments. Subject to the terms and conditions hereof, each Tranche A-2 Term Lender and each Tranche B-2 Term Lender severally agrees to make a tranche A-2 term loan (a "Tranche A-2 Term Loan") or a tranche B-2 term loan (a "Tranche B-2 Term Loan") to the Borrower on the Closing Date (including, in the case of Existing Lenders, through the amendment, restatement, continuation and conversion of all or a portion of its Existing Tranche A-2 Term Loan or Existing Tranche B-2 Term Loan) in an aggregate principal amount not to exceed its Tranche A-2 Term Commitment or Tranche B-2 Term Commitment, respectively. The Term Loans may from time to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2, 2.3 and 4.3. 29 2.2. Procedure for Term Loan Borrowing. The Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to (i) 12:00 Noon, New York City time, one Business Day prior to the anticipated Closing Date in the event the Term Loans requested to be made on the Closing Date shall be Base Rate Loans or (ii) 11:00 A.M., New York City time, three Business Days prior to the anticipated Closing Date in the event the Term Loans requested to be made on the Closing Date shall be Eurodollar Loans) requesting that the Term Lenders make the Term Loans on the Closing Date and specifying the amount to be borrowed. Upon receipt of such notice the Administrative Agent shall promptly notify each Term Lender thereof. Not later than 12:00 Noon, New York City time, on the Closing Date, each Term Lender having a commitment to make a Tranche A-2 Term Loan or Tranche B-2 Term Loan shall make available to the Administrative Agent, an amount in immediately available funds equal to the Tranche A-2 Term Loan or Tranche B-2 Term Loan to be made by such Lender (provided that, unless otherwise agreed by the Administrative Agent and an Existing Lender, the Existing Tranche A-2 Term Loans and Existing Tranche B-2 Term Loans of each Existing Lender having a Tranche A-2 Term Commitment or Tranche B-2 Term Commitment will automatically be deemed to be amended, restated, continued or converted as a Tranche A-2 Term Loan or Tranche B-2 Term Loan, as applicable, and to have been made available to the Borrower as such on the Closing Date). The Administrative Agent shall credit the account of the Borrower on the books of the Funding Office of the Administrative Agent with the aggregate of the amounts of Tranche A-2 Term Loans and Tranche B-2 Term Loans made available to the Administrative Agent by the Term Lenders. 2.3. [Reserved]. 2.4. Repayment of Term Loans. (a) The Tranche A-2 Term Loans of each Tranche A-2 Lender shall mature in 22 consecutive quarterly installments, commencing on September 30, 2004, each of which shall be in an amount equal to such Lender's Tranche A-2 Term Percentage multiplied by the amount set forth below opposite such installment:
Installment Principal Amount ----------- ---------------- September 30, 2004 $ 21,000,000 December 31, 2004 $ 21,000,000 March 31, 2005 $ 21,000,000 June 30, 2005 $ 21,000,000 September 30, 2005 $ 28,000,000 December 31, 2005 $ 28,000,000 March 31, 2006 $ 28,000,000 June 30, 2006 $ 28,000,000 September 30, 2006 $ 28,000,000 December 31, 2006 $ 28,000,000 March 31, 2007 $ 28,000,000 June 30, 2007 $ 28,000,000 September 30, 2007 $ 28,000,000
30
Installment Principal Amount ----------- ---------------- December 31, 2007 $ 28,000,000 March 31, 2008 $ 28,000,000 June 30, 2008 $ 28,000,000 September 30, 2008 $ 35,000,000 December 31, 2008 $ 35,000,000 March 31, 2009 $ 35,000,000 June 30, 2009 $ 35,000,000 September 30, 2009 $ 70,000,000 December 31, 2009 $ 70,000,000
(b) The Tranche B-2 Term Loan of each Tranche B-2 Lender shall mature in 28 consecutive quarterly installments, commencing on September 30, 2004, each of which shall be in an amount equal to such Lender's Tranche B-2 Term Percentage multiplied by the amount set forth below opposite such installment:
Installment Principal Amount ----------- ---------------- September 30, 2004 $ 4,125,000 December 31, 2004 $ 4,125,000 March 31, 2005 $ 4,125,000 June 30, 2005 $ 4,125,000 September 30, 2005 $ 4,125,000 December 31, 2005 $ 4,125,000 March 31, 2006 $ 4,125,000 June 30, 2006 $ 4,125,000 September 30, 2006 $ 4,125,000 December 31, 2006 $ 4,125,000 March 31, 2007 $ 4,125,000 June 30, 2007 $ 4,125,000 September 30, 2007 $ 4,125,000 December 31, 2007 $ 4,125,000 March 31, 2008 $ 4,125,000 June 30, 2008 $ 4,125,000 September 30, 2008 $ 4,125,000 December 31, 2008 $ 4,125,000 March 31, 2009 $ 4,125,000 June 30, 2009 $ 4,125,000 September 30, 2009 $ 4,125,000 December 31, 2009 $ 4,125,000 March 31, 2010 $ 247,500,000 June 30, 2010 $ 247,500,000 September 30, 2010 $ 247,500,000
31
Installment Principal Amount ----------- ---------------- December 31, 2010 $ 247,500,000 March 31, 2011 $ 284,625,000 June 30, 2011 $ 284,625,000
, provided, however, that in the event there shall be more than $25,000,000 in aggregate principal amount of the Senior Unsecured Notes outstanding on June 30, 2010, the aggregate outstanding unpaid principal amount of the Tranche B-2 Term Loans shall be due and payable on June 30, 2010. SECTION 3. AMOUNT AND TERMS OF REVOLVING COMMITMENTS 3.1. Revolving Commitments. (a) Subject to the terms and conditions hereof, each Revolving Lender severally agrees to make revolving credit loans ("Revolving Loans") to the Borrower from time to time during the Revolving Commitment Period in an aggregate principal amount at any one time outstanding which, when added to such Lender's Revolving Percentage of the sum of (i) the L/C Obligations then outstanding and (ii) the aggregate principal amount of the Swingline Loans then outstanding, does not exceed the amount of such Lender's Revolving Commitment. During the Revolving Commitment Period, the Borrower may use the Revolving Commitments by borrowing, prepaying and reborrowing the Revolving Loans in whole or in part, all in accordance with the terms and conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 3.2 and 4.3. (b) The Borrower shall repay all outstanding Revolving Loans on the Revolving Termination Date. (c) On the Closing Date, the Revolving Loans outstanding under the Existing Credit Agreement, as amended and restated hereby, shall be continued hereunder subject to Section 6.1(c). 3.2. Procedure for Revolving Loan Borrowing. The Borrower may borrow under the Revolving Commitments during the Revolving Commitment Period on any Business Day, provided that the Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 12:00 Noon, New York City time, (a) three Business Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date, in the case of Base Rate Loans), specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor. Each borrowing under the Revolving Commitments shall be in an amount equal to (x) in the case of Base Rate Loans, $1,000,000 or a whole multiple thereof (or, if the then aggregate Available Revolving Commitments are less than $1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 in excess thereof; provided, that the Swingline Lender may request, on behalf of the Borrower, borrowings under the Revolving Commitments that are Base Rate Loans in other amounts pursuant to Section 3.4. Upon receipt 32 of any such notice from the Borrower, the Administrative Agent shall promptly notify each Revolving Lender thereof. Each Revolving Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the Funding Office prior to 12:00 Noon, New York City time, on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent crediting the account of the Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent. 3.3. Swingline Commitment. (a) Subject to the terms and conditions hereof, the Swingline Lender agrees to make a portion of the credit otherwise available to the Borrower under the Revolving Commitments from time to time during the Revolving Commitment Period by making swing line loans ("Swingline Loans") to the Borrower; provided that (i) the aggregate principal amount of Swingline Loans outstanding at any time shall not exceed the Swingline Commitment then in effect (notwithstanding that the Swingline Loans outstanding at any time, when aggregated with the Swingline Lender's other outstanding Revolving Loans hereunder, may exceed the Swingline Commitment then in effect) and (ii) the Borrower shall not request, and the Swingline Lender shall not make, any Swingline Loan if, after giving effect to the making of such Swingline Loan, the aggregate amount of the Available Revolving Commitments would be less than zero. During the Revolving Commitment Period, the Borrower may use the Swingline Commitment by borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof. Swingline Loans shall be Base Rate Loans only. (b) The Borrower shall repay all outstanding Swingline Loans on the Revolving Termination Date. 3.4. Procedure for Swingline Borrowing; Refunding of Swingline Loans. (a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice confirmed promptly in writing (which telephonic notice must be received by such Swingline Lender not later than 12 Noon, New York City time, on the proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date (which shall be a Business Day during the Revolving Commitment Period). Each borrowing under the Swingline Commitment shall be in an amount equal to $500,000 or a whole multiple of $100,000 in excess thereof. Not later than 4:00 P.M., New York City time, on the Borrowing Date specified in a notice in respect of Swingline Loans, the Swingline Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the amount of the Swingline Loans to be made by the Swingline Lender. The Administrative Agent shall make the proceeds of such Swingline Loans available to the Borrower on such Borrowing Date by depositing such proceeds in the account of the Borrower with the Administrative Agent on such Borrowing Date in immediately available funds. (b) The Swingline Lender, at any time and from time to time in its sole and absolute discretion may, on behalf of the Borrower (which hereby irrevocably directs the Swingline Lender to act on its behalf), on one Business Day's notice given by the Swingline Lender no later than 12:00 Noon, New York City time, request each Revolving Lender to make, 33 and each Revolving Lender hereby agrees to make, a Revolving Loan, in an amount equal to such Revolving Lender's Revolving Percentage of the aggregate amount of the Swingline Loans (the "Refunded Swingline Loans") outstanding on the date of such notice, to repay the Swingline Lender. Each Revolving Lender shall make the amount of such Revolving Loan available to the Administrative Agent at the Funding Office in immediately available funds, not later than 10:00 A.M., New York City time, one Business Day after the date of such notice. The proceeds of such Revolving Loans shall be immediately made available by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Refunded Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to charge the Borrower's accounts with the Administrative Agent (up to the amount available in each such account) in order to immediately pay the amount of such Refunded Swingline Loans to the extent amounts received from the Revolving Lenders are not sufficient to repay in full such Refunded Swingline Loans. (c) If, prior to the time a Revolving Loan would have otherwise been made pursuant to Section 3.4(b), one of the events described in Section 9(f) shall have occurred and be continuing with respect to the Borrower or if for any other reason, as determined by the Swingline Lender in its sole discretion, Revolving Loans may not be made as contemplated by Section 3.4(b), each Revolving Lender shall, on the date such Revolving Loan was to have been made pursuant to the notice referred to in Section 3.4(b) (the "Refunding Date"), purchase for cash an undivided participating interest in the then outstanding Swingline Loans by paying to the Swingline Lender an amount (the "Swingline Participation Amount") equal to (i) such Revolving Lenders' Revolving Percentage times (ii) the sum of the aggregate principal amount of relevant Swingline Loans then outstanding that were to have been repaid with such Revolving Loans. (d) Whenever, at any time after the Swingline Lender has received from any Revolving Lender such Lender's Swingline Participation Amount in respect of Swingline Loans made by the Swingline Lender, the Swingline Lender receives any payment on account of such Swingline Loans, the Swingline Lender will distribute to such Lender its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender's participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Lender's pro rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all such Swingline Loans then due); provided, however, that in the event that such payment received by the Swingline Lender is required to be returned, such Revolving Lender will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender. (e) Each Revolving Lender's obligation to make the Loans referred to in Section 3.4(b) and to purchase participating interests pursuant to Section 3.4(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such Revolving Lender or the Borrower may have against the Swingline Lender, the Borrower or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 6; (iii) any adverse change in the condition (financial or otherwise) of the Borrower; (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party or any other Revolving Lender; or 34 (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. 3.5. Commitment and Other Fees. (a) The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender a commitment fee for the period from and including the Closing Date to the last day of the Revolving Commitment Period, computed at the Commitment Fee Rate on the average daily amount of the Available Revolving Commitment of such Lender during the period for which payment is made, payable quarterly in arrears on each Fee Payment Date, commencing on the first such date to occur after the date hereof. (b) The Borrower agrees to pay to the Agents and the Lead Arrangers the fees in the amounts and on the dates previously agreed to in writing by the Borrower, the Agents and the Lead Arrangers. 3.6. Termination or Reduction of Revolving Commitments. The Borrower shall have the right, upon not less than three Business Days' notice to the Administrative Agent, to terminate the Revolving Commitments or, from time to time, to reduce the amount of the Revolving Commitments; provided that no such termination or reduction of Revolving Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Loans and Swingline Loans made on the effective date thereof, the Total Revolving Extensions of Credit would exceed the Total Revolving Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently the Revolving Commitments then in effect. 3.7. L/C Commitment. (a) Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the other Revolving Lenders set forth in Section 3.10(a), agrees to issue letters of credit ("Letters of Credit") for the account of the Borrower on any Business Day during the Revolving Commitment Period in such form as may be approved from time to time by the Issuing Lender; provided that the Issuing Lender shall have no obligation to issue any Letter of Credit after the day that is 30 days before the Revolving Termination Date; provided, further, that the Issuing Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (x) the L/C Obligations would exceed the L/C Commitment or (y) the aggregate amount of the Available Revolving Commitments would be less than zero. Each Letter of Credit shall (i) be denominated in Dollars, (ii) expire no later than the earlier of (A) the first anniversary of its date of issuance and (B) (1) if such Letter of Credit is a standby Letter of Credit, the date that is five Business Days prior to the Revolving Termination Date, or (2) if such Letter of Credit is a commercial Letter of Credit, the date that is 30 days before the Revolving Termination Date and (iii) be payable upon presentation of sight drafts; provided, further, that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (ii) above). (b) The Issuing Lender shall not at any time be obligated to issue any Letter of Credit if such issuance would conflict with, or cause the Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law. 35 (c) On the Closing Date, the Letters of Credit outstanding under the Existing Credit Agreement, as amended and restated hereby, shall be continued hereunder. A list of such existing Letters of Credit is set forth in Schedule 3.7. 3.8. Procedure for Issuance of Letter of Credit. The Borrower may from time to time request that the Issuing Lender issue a Letter of Credit by delivering to the applicable Issuing Lender at its address for notices specified herein, with a copy to the Administrative Agent, a Letter of Credit Request, accompanied by such other certificates, documents or other papers as may be requested by the Issuing Lender. Upon receipt of a Letter of Credit Request, the applicable Issuing Lender will process such request in accordance with its customary procedures and shall issue the Letter of Credit requested thereby after securing the Administrative Agent's authorization to do so (but in no event shall the applicable Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Letter of Credit Request and all such other certificates, documents and other papers and information relating thereto). Promptly after the issuance of or amendment to a standby Letter of Credit, the Issuing Lender shall notify the Administrative Agent and the Borrower, in writing, of such issuance or amendment, and such notice shall be accompanied by a copy of such issuance or amendment. Upon receipt of the notice, the Administrative Agent shall promptly notify the Lenders of such issuance or amendment and, if so requested by any Lender, the Administrative Agent shall furnish such Lender with copies of the issuance or amendment. With regard to any commercial Letter of Credit, the Issuing Lender shall on the first Business Day of each week provide the Administrative Agent by facsimile with a report detailing the daily aggregate outstanding amount of such Letters of Credit issued by the Issuing Lender for the previous week. 3.9. Fees and Other Charges. (a) The Borrower will pay a participation fee to the Administrative Agent for the ratable benefit of the Lenders on all outstanding Letters of Credit at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Revolving Facility, shared ratably among the Revolving Lenders and payable quarterly in arrears on each Fee Payment Date after the issuance date. In addition, the Borrower shall pay to the Issuing Lender for its own account a fronting fee of 0.25% per annum (and, in any event, no less than $500 per year) on the undrawn and unexpired amount of each Letter of Credit, payable quarterly in arrears on each Fee Payment Date after the issuance date. (b) In addition to the foregoing fees, the Borrower shall pay or reimburse the Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit. 3.10. L/C Participations. (a) The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions set forth below, for such L/C Participant's own account and risk an undivided interest equal to such L/C Participant's Revolving Percentage in the Issuing Lender's obligations and rights under and in respect of each Letter of Credit and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms 36 of this Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at the Issuing Lender's address for notices specified herein an amount equal to such L/C Participant's Revolving Percentage of the amount of such draft, or any part thereof, that is not so reimbursed. Each L/C Participant's obligation to pay such amount shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C Participant may have against the Issuing Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 6, (iii) any adverse change in the condition (financial or otherwise) of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party or any other L/C Participant or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing (b) If any amount required to be paid by any L/C Participant to the Issuing Lender pursuant to Section 3.10(a) in respect of any unreimbursed portion of any payment made by the Issuing Lender under any Letter of Credit is paid to the Issuing Lender within three Business Days after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand an amount equal to the product of (i) such amount, times (ii) the daily average Federal Funds Effective Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuant to Section 3.10(a) is not made available to the Issuing Lender by such L/C Participant within three Business Days after the date such payment is due, the Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to Base Rate Loans under the Revolving Facility. A certificate of the Issuing Lender submitted to any L/C Participant with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error. (c) Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Section 3.10(a), the Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied thereto by the Issuing Lender), or any payment of interest on account thereof, the Issuing Lender will distribute to such L/C Participant its pro rata share thereof; provided, however, that in the event that any such payment received by the Issuing Lender shall be required to be returned by the Issuing Lender, such L/C Participant shall return to the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it. 3.11. Reimbursement Obligation of the Borrower. If any draft is paid under any Letter of Credit, the Borrower shall reimburse the Issuing Lender for the amount of (a) the draft so paid and (b) any taxes, fees, charges or other costs or expenses incurred by the Issuing Lender in connection with such payment, not later than 12:00 Noon, New York City time, on (i) the Business Day that the Borrower receives notice of such draft, if such notice is received on such day prior to 10:00 A.M., New York City time, or (ii) if clause (i) above does not apply, the Business Day immediately following the day that the Borrower receives such notice. Each such 37 payment shall be made to the Issuing Lender at its address for notices referred to herein in Dollars and in immediately available funds. Interest shall be payable on any such amounts from the date on which the relevant draft is paid until payment in full at the rate set forth in (x) until the Business Day next succeeding the date of the relevant notice, Section 4.5(b) and (y) thereafter, Section 4.5(c). 3.12. Obligations Absolute. The Borrower's obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against the Issuing Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with the Issuing Lender that the Issuing Lender shall not be responsible for, and the Borrower's Reimbursement Obligations under Section 3.11 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. The Issuing Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Issuing Lender. The Borrower agrees that any action taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct, shall be binding on the Borrower and shall not result in any liability of the Issuing Lender to the Borrower. 3.13. Letter of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the Issuing Lender shall promptly notify the Borrower of the date and amount thereof. The responsibility of the Issuing Lender to the Borrower in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit. 3.14. Letter of Credit Requests. To the extent that any provision of any Letter of Credit Request or any Issuing Lender's standard form of application referred to in Section 3.8 is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall apply. SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT 4.1 Optional Prepayments. (a) The Borrower may at any time and from time to time prepay the Loans, in whole or in part, without premium or penalty, upon irrevocable notice delivered to the Administrative Agent no later than 1:00 P.M., New York City time, three Business Days prior thereto, in the case of Eurodollar Loans, and no later than 11:00 A.M., New York City time, on the date thereof, in the case of Base Rate Loans, which notice shall specify the date and amount of prepayment and whether the prepayment is of Eurodollar Loans or Base 38 Rate Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 4.11. Upon receipt of any such notice, the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with (except in the case of Revolving Loans that are Base Rate Loans and Swingline Loans) accrued interest to such date on the amount prepaid. Partial prepayments of Term Loans and Revolving Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple thereof. Partial prepayments of Swingline Loans shall be in an aggregate principal amount of $100,000 or a whole multiple thereof. (b) Notwithstanding anything to the contrary in Section 4.1(a) or 4.8, with respect to the amount of any optional prepayment described in Section 4.1(a) that is allocated to Tranche B-2 Term Loans (such amounts, the "Optional Tranche B-2 Prepayment Amount"), at any time when Tranche A-2 Term Loans remain outstanding, the Borrower will, in lieu of applying such amount to the prepayment of Tranche B-2 Term Loans as provided in Sections 4.1(a) and 4.8, on the date specified in Section 4.1(a) for such prepayment, give the Administrative Agent telephonic notice (promptly confirmed in writing) requesting that the Administrative Agent prepare and provide to each Tranche B-2 Lender a Prepayment Option Notice as described below. As promptly as practicable after receiving such notice from the Borrower, the Administrative Agent will send to each Tranche B-2 Lender a Prepayment Option Notice, which shall be in the form of Exhibit G (a "Prepayment Option Notice"), and shall include an offer by the Borrower to prepay on the date (each an "Optional Prepayment Date") that is 10 Business Days after the date of the Prepayment Option Notice, the relevant Term Loans of such Lender by an amount equal to the portion of the Optional Tranche B-2 Prepayment Amount indicated in such Lender's Prepayment Option Notice as being applicable to such Lender's Tranche B-2 Term Loans. Any Tranche B-2 Lender which wishes to accept any or all of the prepayment applicable to its Tranche B-2 Term Loans shall be required to execute and return the Prepayment Option Notice to the Administrative Agent no later than 5:00 P.M., New York City time, on the date that is 3 Business Days after the date of the Prepayment Option Notice. On the Optional Prepayment Date, (i) the Borrower shall pay to the relevant Tranche B-2 Lenders the aggregate amount necessary to prepay that portion of the outstanding relevant Term Loans in respect of which such Lenders have accepted prepayment as described above and (ii) the Tranche A-2 Term Loans shall be prepaid in an aggregate amount equal to the portion of the Optional Tranche B-2 Prepayment Amount not accepted by the relevant Lenders, and such amount shall be applied to the prepayment of the Tranche A-2 Term Loans to the extent so required. 4.2. Mandatory Prepayments and Commitment Reductions. (a) If any Indebtedness shall be incurred by any Group Member (other than Excluded Indebtedness), an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the date of such incurrence toward the prepayment of the Term Loans and the reduction of the Revolving Commitments as set forth in Section 4.2(g); provided that (i) to the extent that the Consolidated Leverage Ratio as of the date of incurrence of Indebtedness pursuant to clause (xv) or (xviii) of Section 8.2(a), calculated on a pro forma basis after giving effect to the incurrence of such Indebtedness (and any required repayments hereunder), is greater than or equal to 4.0 to 1.0 but less than 5.0 to 1.0, in each case after giving effect thereto, only 75% of the Net Cash Proceeds 39 of such Indebtedness shall be applied on the date of such incurrence toward the prepayment of the Term Loans and the reduction of the Revolving Commitments as set forth in Section 4.2(g) and (ii) to the extent that the Consolidated Leverage Ratio as of the date of incurrence of Indebtedness pursuant to clause (xv) or (xviii) of Section 8.2(a), calculated on a pro forma basis after giving effect to the incurrence of such Indebtedness (and any required repayments hereunder), is less than 4.0 to 1.0 after giving effect thereto, no prepayment of Term Loans or reduction of Revolving Commitments shall be required pursuant to this Section. (b) If any Capital Stock shall be issued or sold by any Group Member (other than issuances of Capital Stock to any Group Member or as contemplated by Section 8.6(d)), an amount equal to 50% of the Net Cash Proceeds thereof shall be applied on the date of such issuance or sale toward the prepayment of the Term Loans and the reduction of the Revolving Commitments as set forth in Section 4.2(g); provided that to the extent that the Consolidated Leverage Ratio as of the date of such issuance or sale of Capital Stock, calculated on a pro forma basis after giving effect to the such issuance or sale (and any required repayments hereunder), is less than 4.5 to 1.0 after giving effect thereto, no prepayment of Term Loans or reduction of Revolving Commitments shall be required pursuant to this Section. (c) If on any date any Group Member shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, an amount equal to 100% of such Net Cash Proceeds shall be applied on such date toward the prepayment of the Term Loans and the reduction of the Revolving Commitments as set forth in Section 4.2(g); provided, that (i) notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be applied toward the prepayment of the Term Loans and the reduction of the Revolving Commitments as set forth in Section 4.2(g) and (ii) the Borrower shall use the Net Cash Proceeds of any Disposition to prepay Term Loans and reduce the Revolving Commitments as set forth in Section 4.2(g) to the extent necessary to avoid having to prepay or to offer to prepay any of the Notes, any Additional Senior Subordinated Debt or any Additional Senior Unsecured Notes. (d) If, for any fiscal year of the Borrower there shall be Excess Cash Flow, the Borrower shall, on the relevant Excess Cash Flow Application Date, apply the ECF Percentage of such Excess Cash Flow toward the prepayment of the Term Loans and the reduction of the Revolving Commitments as set forth in Section 4.2(g); provided that the amount of any prepayment of Term Loans and reduction of Revolving Commitments required pursuant to this Section 4.2(d) shall be reduced by the amount of any optional prepayments of Term Loans and optional prepayments of Revolving Loans and Swingline Loans to the extent accompanying permanent optional reductions of Revolving Commitments, in each case to the extent such prepayments are made during the relevant fiscal year. Each such prepayment and commitment reduction shall be made on a date (an "Excess Cash Flow Application Date") no later than five days after the earlier of (i) the date on which the financial statements of the Borrower referred to in Section 7.1(a), for the fiscal year with respect to which such prepayment is made, are required to be delivered to the Lenders and (ii) the date such financial statements are actually delivered. (e) [Reserved] 40 (f) [Reserved] (g) Amounts to be applied in connection with prepayments and Commitment reductions made pursuant to Section 4.2 shall be applied, first, to prepay the Term Loans and, second, to reduce permanently the Revolving Commitments. Any such reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans and/or Swingline Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans and Swingline Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, replace outstanding Letters of Credit and/or deposit an amount in cash in a cash collateral account established with the Administrative Agent for the benefit of the Lenders on terms and conditions satisfactory to the Administrative Agent. The application of any prepayment pursuant to Section 4.2 shall be made, first, to Base Rate Loans and, second, to Eurodollar Loans. Each prepayment of the Loans under Section 4.2 (except in the case of Revolving Loans that are Base Rate Loans and Swingline Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. (h) Notwithstanding anything to the contrary in Section 4.2(g) or 4.8, with respect to the amount of any mandatory prepayment described in Section 4.2 that is allocated to Tranche B-2 Term Loans (such amounts, the "Tranche B-2 Prepayment Amount"), at any time when Tranche A-2 Term Loans remain outstanding, the Borrower will, in lieu of applying such amount to the prepayment of Tranche B-2 Term Loans as provided in paragraph (g) above, on the date specified in Section 4.2 for such prepayment, give the Administrative Agent telephonic notice (promptly confirmed in writing) requesting that the Administrative Agent prepare and provide to each Tranche B-2 Lender a Prepayment Option Notice. As promptly as practicable after receiving such notice from the Borrower, the Administrative Agent will send to each Tranche B-2 Lender a Prepayment Option Notice and shall include an offer by the Borrower to prepay on the date (each a "Mandatory Prepayment Date") that is 10 Business Days after the date of the Prepayment Option Notice, the relevant Term Loans of such Lender by an amount equal to the portion of the Tranche B-2 Prepayment Amount indicated in such Lender's Prepayment Option Notice as being applicable to such Lender's Tranche B-2 Term Loans. Any Tranche B-2 Lender which wishes to accept any or all of the prepayment applicable to its Tranche B-2 Term Loans shall be required to execute and return the Prepayment Option Notice to the Administrative Agent no later than 5:00 P.M., New York City time, on the date that is 3 Business Days after the date of the Prepayment Option Notice. On the Mandatory Prepayment Date, (i) the Borrower shall pay to the relevant Tranche B-2 Lenders the aggregate amount necessary to prepay that portion of the outstanding relevant Term Loans in respect of which such Lenders have accepted prepayment as described above, (ii) the Tranche A-2 Term Loans shall be prepaid in an aggregate amount equal to the portion of the Tranche B-2 Prepayment Amount not accepted by the relevant Lenders, and such amount shall be applied to the prepayment of the Tranche A-2 Term Loans to the extent so required. 4.3. Conversion and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving the Administrative Agent prior irrevocable notice of such election no later than 12:00 Noon, New York City time, on the Business Day preceding the proposed conversion date, provided that any such conversion of 41 Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of such election no later than 12:00 Noon, New York City time, on the Business Day preceding the proposed conversion date (which notice shall specify the length of the initial Interest Period therefor), provided that no Base Rate Loan under a particular Facility may be converted into a Eurodollar Loan when any Event of Default has occurred and is continuing and the Administrative Agent or the Majority Facility Lenders in respect of such Facility have determined in its or their sole discretion not to permit such conversions. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. (b) Any Eurodollar Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving irrevocable notice to the Administrative Agent, in accordance with the applicable provisions of the term "Interest Period" set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans, provided that no Eurodollar Loan under a particular Facility may be continued as such when any Event of Default has occurred and is continuing and the Administrative Agent has or the Majority Facility Lenders in respect of such Facility have determined in its or their sole discretion not to permit such continuations, and provided, further, that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso such Loans shall be automatically converted to Base Rate Loans on the last day of such then expiring Interest Period. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. 4.4. Limitations on Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Eurodollar Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more than 20 Eurodollar Tranches shall be outstanding at any one time. 4.5. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin. (b) Each Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin. (c) (i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to (x) in the case of the Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to Base Rate Loans under the Revolving Facility plus 2%, and (ii) if all or a portion of any interest payable on any Loan or Reimbursement Obligation or any commitment fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by 42 acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to Base Rate Loans under the relevant Facility plus 2% (or, in the case of any such other amounts that do not relate to a particular Facility, the rate then applicable to Base Rate Loans under the Revolving Facility plus 2%), in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (as well after as before judgment). (d) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on demand. 4.6. Computation of Interest and Fees. (a) Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to Base Rate Loans the rate of interest on which is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such change in interest rate. (b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 4.5(a). 4.7. Inability to Determine Interest Rate. If prior to the first day of any Interest Period: (a) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or (b) the Administrative Agent shall have received notice from the Majority Facility Lenders in respect of the relevant Facility that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans under the relevant Facility requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) any Loans under the relevant Facility that were to have 43 been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the relevant Facility shall be converted, on the last day of the then-current Interest Period, to Base Rate Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans under the relevant Facility shall be made or continued as such, nor shall the Borrower have the right to convert Loans under the relevant Facility to Eurodollar Loans. 4.8. Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from the Lenders hereunder, each payment by the Borrower on account of any commitment or participation fees and any reduction of the Commitments of the Lenders shall be made pro rata according to the respective Tranche A-2 Term Percentages, Tranche B-2 Term Percentages or Revolving Percentages, as the case may be, of the relevant Lenders. (b) Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Term Loans shall be made pro rata according to the respective outstanding principal amounts of the Term Loans then held by the Term Lenders (except as otherwise provided in Sections 4.1(b) and 4.2(h)). The amount of each principal prepayment of the Term Loans shall be applied to reduce the then remaining installments of the Tranche A-2 Term Loans and Tranche B-2 Term Loans, as the case may be, pro rata based upon the then remaining principal amount thereof. Amounts prepaid on account of the Term Loans may not be reborrowed. (c) Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Revolving Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Loans then held by the Revolving Lenders. (d) All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 1:00 P.M., New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Funding Office, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension. (e) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a 44 corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest error. If such Lender's share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days of such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to Base Rate Loans under the relevant Facility, on demand, from the Borrower. (f) Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the Lenders their respective pro rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrower within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower. 4.9. Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any Letter of Credit or any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes covered by Section 4.10 and changes in the rate of tax on the overall net income of such Lender); (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the Eurodollar Rate hereunder; or (iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender, by an amount that such Lender deems to be material, of making, converting into, continuing or maintaining 45 Eurodollar Loans or issuing or participating in Letters of Credit, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender on an after-tax basis for such increased cost or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this paragraph, it shall promptly notify the Borrower in writing (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled, which notice shall set forth in reasonable detail the basis for the calculation of such amounts. (b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender's or such corporation's capital as a consequence of its obligations hereunder or under or in respect of any Letter of Credit to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written request therefor, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation on an after-tax basis for such reduction. (c) A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in this Section, the Borrower shall not be required to compensate a Lender pursuant to this Section for any amounts incurred more than six months prior to the date that such Lender notifies the Borrower of such Lender's intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such six-month period shall be extended to include the period of such retroactive effect. The obligations of the Borrower pursuant to this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 4.10. Taxes. (a) All payments made by the Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on any Agent or any Lender as a result of a present or former connection between such Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from such Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld from any amounts payable to any Agent or any Lender hereunder, the amounts so payable to 46 such Agent or such Lender shall be increased to the extent necessary to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that the Borrower shall not be required to increase any such amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are attributable to such Lender's failure to comply with the requirements of paragraph (d) or (e) of this Section or (ii) that are United States withholding taxes imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement, except to the extent that such Lender's assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph. (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law. (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as possible after payment thereof the Borrower shall send to the Administrative Agent for its own account or for the account of the relevant Agent or Lender, as the case may be, a certified copy of an original official receipt received by the Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Borrower shall indemnify the Agents and the Lenders for any incremental taxes, interest or penalties that may become payable by any Agent or any Lender as a result of any such failure. (d) Each Lender (or Transferee) that is not a "U.S. Person" as defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of "portfolio interest", a statement substantially in the form of Exhibit H and a Form W-8BEN, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrower under this Agreement and the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation). In addition, each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to deliver. (e) A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty 47 to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate, provided that such Lender is legally entitled to complete, execute and deliver such documentation and in such Lender's judgment such completion, execution or submission would not materially prejudice the legal position of such Lender. (f) If any Agent or any Lender determines, in its sole discretion, that it has received a refund of any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 4.10, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 4.10 with respect to the Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of such Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Agent or such Lender in the event such Agent or such Lender is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require any Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person. (g) The agreements in this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 4.11 Indemnity. The Borrower agrees to indemnify each Lender and to hold each Lender harmless from any loss or expense that such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment of or conversion from Eurodollar Loans after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this Section submitted to the Borrower by any Lender shall be conclusive in the absence of manifest error. This covenant 48 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 4.12. Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 4.9 or 4.10(a) with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 4.9 or 4.10(a). 4.13. Replacement of Lenders. The Borrower shall be permitted to replace any Lender that (a) requests reimbursement for amounts owing pursuant to Section 4.9 or 4.10(a) or (b) defaults in its obligation to make Loans hereunder, with a replacement financial institution or (c) does not consent to any amendment to the Loan Documents which is otherwise approved by the Required Lenders; provided that (i) such replacement does not conflict with any Requirement of Law, (ii) no Event of Default shall have occurred and be continuing at the time of such replacement, (iii) prior to any such replacement, such Lender shall have taken no action under Section 4.12 so as to eliminate the continued need for payment of amounts owing pursuant to Section 4.9 or 4.10(a), (iv) the replacement financial institution shall purchase, at par, all Loans and other amounts owing to such replaced Lender on or prior to the date of replacement, (v) the Borrower shall be liable to such replaced Lender under Section 4.11 if any Eurodollar Loan owing to such replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto, (vi) the replacement financial institution, if not already a Lender, shall be reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender shall be obligated to make such replacement in accordance with the provisions of Section 11.6 (provided that the Borrower shall be obligated to pay the registration and processing fee referred to therein), (viii) until such time as such replacement shall be consummated, the Borrower shall pay all additional amounts (if any) required pursuant to Section 4.9 or 4.10(a), as the case may be, and (ix) any such replacement shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender. 4.14. Evidence of Debt. (a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. (b) The Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant to Section 11.6(b), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Loan made hereunder and any Promissory Note evidencing such Loan, the Type of such Loan and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) both the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Lender's share thereof. 49 (c) The entries made in the Register and the accounts of each Lender maintained pursuant to Section 4.14(a) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender in accordance with the terms of this Agreement. (d) The Borrower agrees that, upon the request to the Administrative Agent by any Lender, the Borrower will execute and deliver to such Lender a promissory note of the Borrower evidencing any Term Loans, Revolving Loans or Swingline Loans, as the case may be, of such Lender, substantially in the forms of Exhibit I-1, I-2 or I-3, respectively, with appropriate insertions as to date and principal amount. 4.15. Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to Section 4.11. 4.16. Tranche C Term Loans. (a) In accordance with the provisions of this Section 4.16, the Borrower may, at its option, at any time during the term of this Agreement, request in writing that the Facilities be increased by up to $400,000,000; provided that (i) no Default or Event of Default shall exist at the time of or after giving effect to such increase and the use of proceeds thereof, (ii) immediately after giving effect to the incurrence of such Indebtedness, the Borrower shall be in compliance with the covenants set forth in Section 8.1 opposite the period in which the date of the relevant Indebtedness Measurement Date falls (and, for purposes of determining such compliance, "Consolidated EBITDA" and the "Consolidated Interest Coverage Ratio" shall each be as in effect on the last day of the fiscal quarter most recently ended on or prior to such Indebtedness Measurement Date and adjusted to give effect to the proposed incurrence of Indebtedness and the uses of the proceeds thereof as if such Indebtedness had been incurred and other relevant transactions had occurred on the first day of the relevant period for testing compliance and "Consolidated Total Debt" and "Consolidated Senior Secured Debt" shall be as in effect on such Indebtedness Measurement Date and assuming the proposed Indebtedness had been incurred), (iii) the increase to the Facilities shall be a single new tranche of term loans (the "Tranche C Term Loans" ) which may be borrowed in up to three separate fundings (subject to a minimum amount for any such funding of $100,000,000) and which, except as otherwise specifically provided in this Section, shall have the same terms and conditions as the Tranche B-2 Term Loans, shall be entitled to share pari passu with the Term Loans in all optional and mandatory prepayments under Section 4.2, shall have the same rights under Sections 4.1(b) and 4.2(h) as the Tranche B-2 Term Loans, shall be 50 secured under the Security Documents on a pari passu basis with all of the other Obligations, shall be entitled to all of the other benefits of this Agreement and the other Loan Documents as if such Tranche C Term Loans were Loans or Term Loans, as applicable, and shall be considered a new Facility. (b) The Applicable Margin for Tranche C Term Loans and the amortization and maturity thereof shall be as agreed upon by the Borrower, the Administrative Agent and each Lender providing such Tranche C Term Loans; provided that any such Tranche C Term Loans shall not amortize (on a percentage basis) any faster than the Tranche B-2 Term Loans and shall not mature prior to the Tranche B-2 Maturity Date. Any request for Tranche C Term Loans (a "Tranche C Term Loan Request") shall be submitted by the Borrower to the Lenders through the Administrative Agent not less than 10 days prior to the proposed borrowing date, specify the proposed borrowing date, and amount of such borrowing and shall be accompanied by (i) a certificate of a Responsible Officer of the Borrower stating that no Default or Event of Default exists as of the date of the request or will result from the requested borrowing, (ii) a written consent to the increase in the amount of the Loans outstanding hereunder executed by the Guarantors and (iii) such information as the Administrative Agent may reasonably request. The Borrower may not pay any fees to those Lenders which agree to provide Tranche C Term Loans (other than fees payable under this Agreement). The consent of the Lenders parties to this Agreement at the time of such increase shall not be required for any such borrowing of Tranche C Term Loans pursuant to this Section. (c) Each Lender shall have the option to approve a Tranche C Term Loan Request in its sole and absolute discretion. The failure to approve such a request by any number of Lenders shall not affect the Borrower's right to borrow Tranche C Term Loans pursuant to this Section. Notwithstanding any other provision hereof, no Lender which fails to approve a Tranche C Term Loan Request shall be (i) subject to removal as a Lender as a result of such failure to approve, (ii) obligated to lend any Tranche C Term Loan or (iii) as a result of such failure to approve, deemed to be in default in any respect hereunder. (d) In responding to any Tranche C Term Loan Request under this Section, each Lender that is willing to make such Tranche C Term Loans shall specify the maximum amount of Tranche C Term Loans that it is willing to make. The borrowing of any Tranche C Term Loans shall be contingent upon (i) execution and delivery by the Administrative Agent and the Borrower of documentation satisfactory to the Administrative Agent relating to such Tranche C Term Loans, (ii) execution and delivery by each Lender providing Tranche C Term Loans of documentation satisfactory to the Borrower and the Administrative Agent, (iii) execution and delivery by the Borrower (and, if applicable, Holdings and its Subsidiaries) of such amendments to the Security Documents (including amendments to the Mortgages) or such other documents as the Administrative Agent reasonably deems necessary or desirable to reflect the making of the Tranche C Term Loans, and (iv) receipt by the Administrative Agent of such corporate resolutions and officer's certificates of the Loan Parties and legal opinions of counsel to the Loan Parties as the Administrative Agent shall reasonably request with respect thereto, in each case, in form and substance reasonably satisfactory to the Administrative Agent. In the case of any such documentation executed by any Person that was not theretofore a Lender, upon the making of its Tranche C Term Loans, such Person shall be a party hereto and a Lender hereunder. 51 (e) If the aggregate principal amount committed to by the approving Lenders is less than the amount requested, the Borrower may (i) withdraw its request for Tranche C Term Loans in its entirety, (ii) accept the offered amounts, (iii) designate one or more additional banks, financial institutions or other entities which are reasonably acceptable to the Administrative Agent as additional Lenders hereunder in accordance with clause (f) of this Section (each, a "New Lender"), which New Lenders may commit to the amount of the Tranche C Term Loans that has not been committed to by the approving Lenders, or (iv) request the consenting Lenders to commit to the amount of such request not previously committed to by the approving Lenders. (f) Each New Lender designated by the Borrower shall become an additional party hereto as a Lender concurrently with the making of the Tranche C Term Loans and the documentation pursuant to which the Tranche C Term Loans are made shall, in any event, contain the representations, warranties, indemnities and other protections afforded to the Administrative Agent and the other Lenders which would be granted or made by an Assignee under Section 11.6 by means of the execution of an Assignment and Acceptance. SECTION 5. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, Holdings and the Borrower hereby jointly and severally represent and warrant to each Agent and each Lender that: 5.1. Financial Condition. (a) The audited consolidated balance sheets of Holdings as of December 31, 2001, December 31, 2002 and December 31, 2003 and the related consolidated statements of operations and of cash flows for the fiscal years ended on such dates, reported on without a "going concern" or like qualification or exception, or qualification arising out of the scope of the audit, by PricewaterhouseCoopers LLP, present fairly the consolidated financial condition of Holdings as of such dates, and the consolidated results of its operations and its consolidated cash flows for the respective fiscal years then ended. The unaudited consolidated balance sheet of Holdings as of June 30, 2004, and the related unaudited consolidated statements of operations, cash flows and changes in shareholders equity for the six months then ended, present fairly the consolidated financial condition of Holdings as of such date, and the consolidated statements of operations and of cash flows for the six months then ended (subject to normal year-end audit adjustments). All such consolidated financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein). No Group Member has any material Guarantee Obligations, contingent liabilities and liabilities for taxes, or any long-term leases or unusual forward or long-term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, that are not reflected in the financial statements referred to in the preceding sentence (it being understood that with respect to Guarantee Obligations, the underlying debt is so reflected). During the period from December 31, 2003 to and including the date hereof there has been no Disposition by Holdings or any of its Subsidiaries of any material part of its business or property. 52 (b) The Borrower has provided to the Administrative Agent (i) the audited combined balance sheets of Ameritech Publishing of Illinois, Inc. and Ameritech Publishing of Illinois Partners Partnership as of December 31, 2002 and December 31, 2003 and the related combined statements of income and of cash flows for each of the three years in the period ended December 31, 2003, reported on without a "going concern" or like qualification or exception, or qualification arising out of the scope of the audit, by Ernst & Young LLP and (ii) the audited balance sheets of DonTech II as of December 31, 2002 and December 31, 2003 and the related statements of operations and of cash flows for each of the three years in the period ended December 31, 2003, reported on without a "going concern" or like qualification or exception, or qualification arising out of the scope of the audit, by PricewaterhouseCoopers LLP. All such financial statements, including the related schedules and notes thereto, present fairly and accurately, in all material respects, the financial position, results of operations and cash flows of such entities on a combined or consolidated basis, as applicable, as of the dates and for the applicable periods indicated, in each case in conformity with GAAP consistently applied except as noted therein. 5.2. No Change. Since December 31, 2003, there has been no development, circumstance or event that has had or could reasonably be expected to have a Material Adverse Effect. 5.3. Corporate Existence; Compliance with Law. Each Group Member (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification and (d) is in compliance with all Requirements of Law, in each case with respect to clauses (c) and (d), except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 5.4. Power; Authorization; Enforceable Obligations. Each Loan Party has the power and authority, and the legal right, to execute, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to obtain extensions of credit hereunder. Each Loan Party has taken all necessary organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the extensions of credit on the terms and conditions of this Agreement. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the Acquisition and the extensions of credit hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or any of the Loan Documents, except consents, authorizations, filings and notices described in Schedule 5.4, which consents, authorizations, filings and notices have been obtained or made and are in full force and effect (except, with respect to consents, authorizations, filings and notices solely in connection with the Acquisition, as could not reasonably be expected to have a Material Adverse Effect). Each Loan Document has been duly executed and delivered on behalf of each Loan Party party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding 53 obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 5.5. No Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents, the issuance of Letters of Credit, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any Contractual Obligation of any Group Member and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Security Documents). No Requirement of Law or Contractual Obligation applicable to Holdings, the Borrower or any of its Subsidiaries could reasonably be expected to have a Material Adverse Effect. 5.6. Litigation. Except as set forth on Schedule 5.6, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of Holdings or the Borrower, threatened by or against any Group Member or against any of their respective properties or revenues (a) with respect to the Acquisition, any of the Loan Documents, the Acquisition Documentation or any of the transactions contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Effect. 5.7. No Default. No Group Member is in default under or with respect to any of its Contractual Obligations in any respect that could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 5.8. Ownership of Property; Liens. Each Group Member has title in fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all its other property, except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect, and none of such property is subject to any Lien except as permitted by Section 8.3. 5.9. Intellectual Property. Each Group Member owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted, except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect. No material claim has been asserted and is pending by any Person challenging or questioning the use of any Intellectual Property or the validity or effectiveness of any Intellectual Property, nor does Holdings or the Borrower know of any valid basis for any such claim that could reasonably be expected to have a Material Adverse Effect. The use of Intellectual Property by each Group Member does not infringe on the rights of any Person, except to the extent the same could not reasonably be expected to have a Material Adverse Effect. 5.10. Taxes. Each Group Member has filed or caused to be filed all federal, state and other material tax returns that are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental 54 Authority (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of Holdings, the Borrower or its Subsidiaries, as the case may be); no tax Lien has been filed, and, to the knowledge of Holdings and the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge. 5.11. Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for "buying" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board. If requested by any Lender or the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U. 5.12. ERISA. Neither a Reportable Event nor an "accumulated funding deficiency" (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code. No termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period. The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits by a material amount. Neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be expected to result in a material liability under ERISA, and neither the Borrower nor any Commonly Controlled Entity would become subject to any material liability under ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. 5.13. Investment Company Act; Other Regulations. No Loan Party is an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. No Loan Party is a "holding company", or a company "controlled" by a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. No Loan Party is subject to regulation under any Requirement of Law (other than Regulation X of the Board) that limits its ability to incur Indebtedness. 5.14. Subsidiaries and Joint Ventures. As of the Closing Date, (i) Schedule 5.14 sets forth the name and jurisdiction of incorporation of each Subsidiary and each partnership or joint venture to which the Borrower is a party or in which the Borrower has an economic interest on the Closing Date and, as to each such Subsidiary and each such partnership or joint venture, as the case may be, the percentage of each class of Capital Stock (or other economic interest) owned by any Loan Party and (ii) there are no outstanding subscriptions, options, warrants, calls, 55 rights or other agreements or commitments (other than stock options granted to employees or directors and directors' qualifying shares) of any nature relating to any Capital Stock of the Borrower or any Subsidiary, except as created by the Loan Documents. 5.15. Use of Proceeds. The proceeds of the New Tranche A-2 Term Loans and New Tranche B-2 Term Loans shall be used to finance the Acquisition and to pay related fees and expenses. The proceeds of the Revolving Loans shall be used, together with the proceeds of the Swingline Loans and the Letters of Credit, for general corporate purposes. The proceeds of any Tranche C Term Loans shall be used (i) to finance Permitted Acquisitions and to pay related fees and expenses, (ii) to finance the redemption, repurchase or prepayment of Indebtedness permitted under Section 8.9(a)(v) or (iii) to finance Restricted Payments permitted under Section 8.6(i) with the proceeds thereof. 5.16. Environmental Matters. Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect: (a) the facilities and properties owned, leased or operated by any Group Member (the "Properties") do not contain, and have not previously contained, any Materials of Environmental Concern in amounts or concentrations or under circumstances that constitute or constituted a violation of, or could give rise to liability under, any Environmental Law; (b) no Group Member has received or is aware of any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the business operated by any Group Member (the "Business"), nor does Holdings or the Borrower have knowledge or reason to believe that any such notice will be received or is being threatened; (c) Materials of Environmental Concern have not been transported or disposed of from the Properties in violation of, or in a manner or to a location that could give rise to liability under, any Environmental Law, nor have any Materials of Environmental Concern been generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could give rise to liability under, any applicable Environmental Law; (d) no judicial proceeding or governmental or administrative action is pending or, to the knowledge of Holdings and the Borrower, threatened, under any Environmental Law to which any Group Member is or will be named as a party with respect to the Properties or the Business, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to the Properties or the Business; (e) there has been no Release or threat of Release of Materials of Environmental Concern at or from the Properties, or arising from or related to the operations of any Group Member in connection with the Properties or otherwise in connection with the 56 Business, in violation of or in amounts or in a manner that could give rise to liability under Environmental Laws; (f) the Properties and all operations at the Properties are in compliance, and have in the last five years been in compliance, with all applicable Environmental Laws, and there is no violation of any Environmental Law with respect to the Business; and (g) no Group Member has assumed any liability of any other Person under Environmental Laws. 5.17. Accuracy of Information, etc. No statement or information contained in this Agreement, any other Loan Document, the Confidential Information Memoranda or any other document, certificate or statement furnished by or on behalf of any Loan Party to the Administrative Agent or the Lenders, or any of them, for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, contained as of the date such statement, information, document or certificate was so furnished (or, in the case of the Confidential Information Memoranda, as of the date of this Agreement), any untrue statement of a material fact or omitted to state a material fact necessary to make the statements contained herein or therein not misleading. The projections and pro forma financial information contained in the materials referenced above are based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time made, it being recognized by the Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount. As of the date hereof, the representations and warranties of Holdings contained in the Acquisition Documentation are or will be true and correct in all material respects (except to the extent such representations and warranties relate to a specific date, then as of such date). On the date hereof, there is no fact known to any Loan Party that could reasonably be expected to have a Material Adverse Effect that has not been expressly disclosed herein, in the other Loan Documents, in the Confidential Information Memoranda or in any other documents, certificates and statements furnished to the Administrative Agent and the Lenders for use in connection with the transactions contemplated hereby and by the other Loan Documents. 5.18. Security Documents. (a) The Guarantee and Collateral Agreement is effective to create in favor of the Collateral Agent, for the benefit of the Administrative Agent and the Lenders, a legal, valid and enforceable security interest in the Collateral described therein and proceeds thereof. In the case of the pledged stock described in the Guarantee and Collateral Agreement, the delivery to, and continuing possession by, the Collateral Agent of stock certificates representing such pledged stock, and in the case of the other Collateral described in the Guarantee and Collateral Agreement, the financing statements on file (or to be filed) in the offices specified on Schedule 5.18(a), create (or, when filed, will create) a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds thereof, as security for the Obligations (as defined in the Guarantee and Collateral Agreement), in each case prior and superior in right to any other Person (except Liens permitted by Section 8.3). 57 (b) Each of the Mortgages is effective to create in favor of the Collateral Agent, for the benefit of the Lenders, a legal, valid and enforceable Lien on the Mortgaged Properties described therein and proceeds thereof, and the Mortgages on file in the offices specified on Schedule 5.18(b) create a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in the Mortgaged Properties and the proceeds thereof, as security for the Obligations (as defined in the relevant Mortgage), in each case prior and superior in right to any other Person. Schedule 1.1 lists, as of the Closing Date and after giving effect to the Acquisition, each parcel of owned real property and each leasehold interest in real property located in the United States and held by the Borrower or any of its Subsidiaries. 5.19. Solvency. The Loan Parties, taken as a whole, are, and after giving effect to the Acquisition and the incurrence of all Indebtedness and obligations being incurred in connection herewith and therewith will be and will continue to be, Solvent. 5.20. Senior Debt. The Obligations constitute "Senior Debt" and "Designated Senior Debt" of the Borrower and each Subsidiary Guarantor under and as defined in the Senior Subordinated Notes Indenture. The Obligations constitute "Senior Debt" (or its equivalent) of the Borrower and each Subsidiary Guarantor party thereto (if any) under and as defined in the Additional Senior Subordinated Debt Documents (if any). 5.21. Regulation H. No Mortgage encumbers improved real property that is located in an area that has been identified by the Secretary of Housing and Urban Development as an area having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968. 5.22. Certain Documents. The Borrower has delivered to the Administrative Agent a complete and correct copy of the Acquisition Documentation and the Notes Indentures, including any amendments, supplements or modifications with respect to any of the foregoing. SECTION 6. CONDITIONS PRECEDENT 6.1. Conditions to Effectiveness of Agreement and Initial Extensions of Credit. The effectiveness of this Agreement and the agreement of each Lender to make the initial extension of credit requested to be made by it is subject to the satisfaction, prior to or concurrently with the making of such extension of credit on the Closing Date (but in any event no later than January 5, 2005), of the following conditions precedent: (a) Loan Documents. The Administrative Agent shall have received (i) this Agreement, or, in the case of the Lenders, an Addendum, executed and delivered by each Agent, Holdings, the Borrower and each Lender, (ii) the Guarantee and Collateral Agreement, executed and delivered by Holdings, the Borrower and each Subsidiary Guarantor and (iii) amendments to such other Security Documents as the Administrative Agent deems reasonably necessary or appropriate in order to provide the benefits thereof to the Loans and the obligations of the Loan Parties in connection therewith on the same basis as such benefits are provided to the Existing Lenders for the purpose of securing obligations outstanding under the Existing Credit Agreement. 58 (b) Acquisition, etc. The Borrower shall have acquired the Acquired Business from the Sellers for a purchase price not to exceed $1,450,000,000 (subject to adjustment for working capital as provided in the Acquisition Agreement) pursuant to the Acquisition Agreement, and no material provision of the Acquisition Agreement shall have been waived, amended, supplemented or otherwise modified without the consent of the Administrative Agent. (c) Existing Credit Agreement. (i) All accrued unpaid interest, fees and other amounts (other than principal) owing under the Existing Credit Agreement shall have been paid. (ii) The Revolving Loans outstanding under the Existing Credit Agreement shall be reallocated as directed by the Administrative Agent, with the result that the Revolving Loans will be held by the Revolving Lenders in accordance with their respective Revolving Commitments. (d) Financial Statements. The Administrative Agent shall have received (i) the financial statements referred to in Section 5.1 and (ii) unaudited combined pro forma statement of operations of Holdings and its consolidated Subsidiaries as of December 31, 2002 and December 31, 2003 adjusted to give effect to the combination of the Borrower and the Acquired Business together with a certificate of a Responsible Officer certifying the basis on which such pro forma statements of operations were prepared. (e) Approvals. All governmental and third party approvals (including landlords' and other consents) necessary, in the judgment of the Borrower, in connection with the Acquisition and the continuing operations of the Group Members (including any new Subsidiaries acquired by the Borrower pursuant to the Acquisition Agreement on or prior to the Closing Date) and, in the discretion of the Administrative Agent, in connection with the financing contemplated hereby shall have been obtained and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the Acquisition or the financing contemplated hereby. (f) Lien Searches. The Administrative Agent shall have received the results of a recent Lien search in each of the jurisdictions where assets of the Acquired Business are located (within the meaning of the Uniform Commercial Code), and such search shall reveal no liens on any of the assets of the Acquired Business, except for liens permitted by Section 8.3 or discharged on or prior to the Closing Date pursuant to documentation satisfactory to the Administrative Agent. (g) Fees and Expenses. The Lenders and the Agents shall have received all fees required to be paid, and expenses required to be paid or reimbursed for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the Closing Date. All such amounts will be paid with proceeds of Loans made on the Closing Date and will be reflected in the funding instructions given by the Borrower to the Administrative Agent on or before the Closing Date. 59 (h) Closing Certificate. The Administrative Agent shall have received a certificate of each Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with appropriate insertions and attachments including the certificate of incorporation of each Loan Party that is a corporation certified by the relevant authority of the jurisdiction of organization of such Loan Party, and a long form good standing certificate for each Loan Party from its jurisdiction of organization. (i) Legal Opinions. The Administrative Agent shall have received the following executed legal opinions: (i)the legal opinion of Jones Day, counsel to the Borrower and its Subsidiaries, substantially in the form of Exhibit F-1; (ii) the legal opinion of Robert J. Bush, Esq., general counsel of the Borrower and its Subsidiaries, substantially in the form of Exhibit F-2; and (iii) to the extent consented to by the relevant counsel, each legal opinion, if any, delivered in connection with the Acquisition Agreement, accompanied by a reliance letter in favor of the Lenders. Each such legal opinion shall cover such other matters incident to the transactions contemplated by this Agreement as the Administrative Agent may reasonably require. (j) Pledged Stock; Stock Powers; Pledged Notes. To the extent not previously delivered, the Collateral Agent (or its agent) shall have received (i) the certificates representing the shares of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the Collateral Agent pursuant to the Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof. (k) Filings, Registrations and Recordings. Each document (including any Uniform Commercial Code financing statement) required by the Security Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create or maintain in favor of the Collateral Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 8.3), shall have been filed, registered or recorded. (l) Solvency Certificate. The Administrative Agent shall have received a certificate of the chief financial officer of Holdings certifying as to the solvency of the Loan Parties, taken as a whole, on the Closing Date. (m) Maximum Consolidated Leverage Ratio. The Administrative Agent shall have received a certificate of a Responsible Officer certifying that the Consolidated Leverage Ratio of the Borrower for the twelve month period ended June 30, 2004, adjusted to give pro forma effect to (with such adjustments to be reasonably acceptable to 60 the Administrative Agent) (A) the Acquisition as if it had occurred on the first day of such twelve month period, (B) the Loans to be made (or otherwise outstanding) on the Closing Date and (C) the payment of fees and expenses in connection with the foregoing, is less than 6.00 to 1.0 (which certificate shall attach pro forma financial information (including management estimates of the results of operations of the Acquired Business) in detail reasonably satisfactory to the Administrative Agent supporting such certification). (n) Control Agreements. The Administrative Agent shall have received control agreements executed by all parties thereto with respect to each Deposit Account (as defined in the Guarantee and Collateral Agreement) or Securities Account (as defined in the Guarantee and Collateral Agreement) required to be pledged by any Loan Party to the Administrative Agent pursuant to the Guarantee and Collateral Agreement (subject to the proviso in Section 7.10(e) hereof), in each case in form and substance satisfactory to the Administrative Agent. 6.2. Conditions to Each Extension of Credit. The agreement of each Lender to make any extension of credit requested to be made by it on any date (including any extension of credit on the Closing Date), is subject to the satisfaction of the following conditions precedent: (a) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extensions of credit requested to be made on such date. (b) Representations and Warranties. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct on and as of such date as if made on and as of such date except to the extent such representations and warranties relate to a specified date, then as of such date. (c) Certificate. At the request of the Administrative Agent, the Borrower shall have delivered to the Administrative Agent a certificate of a Responsible Officer certifying the satisfaction of the conditions set forth in Sections 6.2(a) and 6.2(b). Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date of such extension of credit that the conditions contained in this Section 6.2 have been satisfied. SECTION 7. AFFIRMATIVE COVENANTS Holdings and the Borrower hereby jointly and severally agree that, so long as the Commitments remain in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to any Lender or Agent hereunder, each of Holdings and the Borrower shall, and the Borrower shall cause each of its Subsidiaries to: 7.1. Financial Statements. Furnish to the Administrative Agent (with copies for each Lender): 61 (a) as soon as available, but in any event within 90 days after the end of each fiscal year of Holdings (or, if earlier, on or prior to the date on which Holdings is required to file its annual report on Form 10-K (or successor form) with the SEC), a copy of the audited consolidated balance sheet of Holdings and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of operations, cash flows and changes in shareholders' equity for such year, setting forth in each case in comparative form the figures for the previous year on a GAAP basis (and in addition thereto, in the case of the consolidated statements of operations of Holdings delivered for the fiscal year ended December 31, 2004, a comparison between (i) the pro forma consolidated statement of operations for the year ended December 31, 2004 (giving effect to the Acquisition and related financing as if such events had occurred on the first day of such period) as adjusted to reflect certain non-GAAP financial measures that eliminate the impact of purchase accounting and related matters in connection with the Acquisition and related financing prepared on a basis that is consistent with existing periodic reports of Holdings filed with the SEC and (ii) the consolidated statements of operations of Holdings for the period ended December 31, 2003 included in the Form 8-K referred to in paragraph (c) below), reported on without a "going concern" or like qualification or exception, or qualification arising out of the scope of the audit, by PricewaterhouseCoopers LLP or other independent certified public accountants of nationally recognized standing; (b) as soon as available, but in any event not later than 45 days after the end of each of the first three quarterly periods of each fiscal year of Holdings (or, if earlier, not later than the date on which Holdings is required to file such quarterly report on Form 10-Q (or successor form) with the SEC), the unaudited consolidated balance sheet of Holdings and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of operations for such quarter and the portion of the fiscal year through the end of such quarter and statements of changes in shareholders' equity and cash flows for the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year on a GAAP basis (and in addition thereto, in the case of consolidated statements of operations of Holdings for the applicable quarterly periods ended prior to March 31, 2006, a comparison between (i) the pro forma consolidated statements of operations for the quarterly period as adjusted to reflect certain non-GAAP financial measures that eliminate the impact of purchase accounting and related matters in connection with the Acquisition and related financing prepared on a basis that is consistent with existing periodic reports of Holdings filed with the SEC and (ii) the figures for the corresponding period of the previous year prepared on a basis consistent with that used to prepare the pro forma financial statements referred to in paragraph (c) below), certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments); and (c) within 75 days of the consummation of the Acquisition, (i) copies of Holdings' report on Form 8-K filed with the SEC, which report shall include (A) the pro forma balance sheet of Holdings, its consolidated Subsidiaries and the Acquired Business as of June 30, 2004, and (B) a pro forma statement of operations of Holdings, its consolidated Subsidiaries and the Acquired Business for the fiscal year ended December 62 31, 2003 and the six months ended June 30, 2004, in each case giving effect on a pro forma basis to (I) the consummation of the Acquisition, (II) the Loans to be made (or otherwise outstanding) on the Closing Date and the use of proceeds thereof and (III) the payment of fees and expenses in connection with the foregoing as if such events had been consummated on such date or on the first day of such period, as the case may be and (ii) a certificate of a Responsible Officer certifying that the Consolidated Leverage Ratio of Holdings for the twelve month period ended June 30, 2004, as evidenced by the pro forma financial statements delivered pursuant to clause (i) above, was less than 6.00 to 1.0 as of the Closing Date. All such financial statements shall be complete and correct in all material respects, shall be prepared in reasonable detail and, except as otherwise indicated above, shall be in accordance with GAAP or applicable rules and regulations of the SEC (in the case of pro forma and pro forma adjusted financial information) applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein). 7.2. Certificates; Other Information. Furnish to the Administrative Agent (with copies for each Lender) (or, in the case of clause (g), to the relevant Lender): (a) concurrently with the delivery of the financial statements referred to in Section 7.1(a), a certificate of the independent certified public accountants reporting on such financial statements stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default, except as specified in such certificate; (b) concurrently with the delivery of any financial statements pursuant to Section 7.1, (i) a certificate of a Responsible Officer stating that, to the best of each such Responsible Officer's knowledge, each Loan Party during such period has observed or performed all of its covenants and other agreements and satisfied every condition contained in this Agreement and the other Loan Documents to which it is a party to be observed, performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate and (ii) in the case of quarterly or annual financial statements, (x) a Compliance Certificate containing all information and calculations necessary for determining compliance by each Group Member with the provisions of this Agreement referred to therein as of the last day of the fiscal quarter or fiscal year of Holdings, as the case may be, and, if applicable, for determining the Applicable Margins, and (y) to the extent not previously disclosed to the Administrative Agent, a listing of any material Intellectual Property acquired by any Loan Party since the date of the most recent list delivered pursuant to this clause (y) (or, in the case of the first such list so delivered, since the Closing Date); (c) as soon as available, and in any event no later than 30 days after the commencement for each fiscal year of Holdings, a detailed consolidated budget for the following fiscal year (including a projected consolidated balance sheet and related consolidated statements of projected operations and cash flow as of the end of such fiscal year and the assumptions used therein), in each case with supporting commentary and 63 discussion and in form reasonably satisfactory to the Administration Agent, and, promptly when available, any material revision of such budget (collectively, the "Projections"); (d) if Holdings is not then a reporting company under the Securities Exchange Act of 1934, as amended, within 45 days after the end of each fiscal quarter of the Holdings or 90 days in the case of the last fiscal quarter of each fiscal year, a narrative discussion and analysis of the financial condition and results of operations of Holdings and its Subsidiaries for such fiscal quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, as compared to the portion of the Projections covering such periods and to the comparable periods of the previous year; (e) no later than five Business Days prior to the effectiveness thereof, copies of substantially final drafts of any proposed amendment, supplement, waiver or other modification with respect to the Notes Indentures or the Acquisition Documentation; (f) within five days after the same are sent, copies of all financial statements and reports that Holdings or the Borrower sends to the holders of any class of its debt securities or public equity securities and, within five days after the same are filed, copies of all financial statements and reports that Holdings or the Borrower may make to, or file with, the SEC; and (g) promptly, such additional financial and other information, including, such other information regarding the operations, business affairs and financial condition of Holdings, the Borrower or any of their respective Subsidiaries, and compliance with the terms of any Loan Document or Acquisition Documentation, as the Administrative Agent or any Lender may from time to time reasonably request. 7.3. Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) Holdings, the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, (c) such contest effectively suspends collection of the contested obligation and the enforcement of any Lien securing such obligation and (d) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect. 7.4. Maintenance of Existence; Compliance. (a) (i) Preserve, renew and keep in full force and effect its organizational existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 8.4 and except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 64 7.5. Maintenance of Property; Insurance. (a) Keep all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted and (b) maintain with financially sound and reputable insurance companies insurance on all its property in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business. 7.6. Inspection of Property; Books and Records; Discussions. (a) Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities and (b) upon reasonable prior notice permit representatives of any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of the Group Members with officers and employees of the Group Members and with their independent certified public accountants. 7.7. Notices. Promptly give notice to the Administrative Agent and each Lender of: (a) the occurrence of any Default or Event of Default; (b) any (i) default or event of default under any Contractual Obligation of any Group Member which could reasonably be expected to have a Material Adverse Effect or (ii) litigation, investigation or proceeding that, if adversely determined, could reasonably be expected to have a Material Adverse Effect; (c) any litigation or proceeding affecting any Group Member (i) which, if adversely determined, could reasonably be expected to have a Material Adverse Effect or (ii) which relates to any Loan Document; (d) the following events, as soon as possible and in any event within 30 days after the Borrower knows or has reason to know thereof: (i) the occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan; and (e) any development or event that has had or could reasonably be expected to have a Material Adverse Effect. Each notice pursuant to this Section 7.7 shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action Holdings, the Borrower or the relevant Subsidiary proposes to take with respect thereto. 65 7.8. Environmental Laws. (a) Comply in all material respects with, and ensure compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws, and obtain and comply in all material respects with and maintain, and ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, except where the failure to so comply, could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws except where the failure to so conduct and complete such investigations, studies, sampling and testing, could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 7.9. Interest Rate Protection. In the case of the Borrower, within 90 days after the Closing Date, enter into, and thereafter maintain, such Hedge Agreements as are necessary to provide (together with any existing Hedge Agreements entered into prior to the date hereof) that at least 50% of the aggregate principal amount of all Funded Debt at such time is subject to either a fixed interest rate or interest rate protection for a period of not less than three years, which Hedge Agreements shall have terms and conditions reasonably satisfactory to the Administrative Agent. 7.10. Additional Collateral, etc. (a) With respect to any personal property acquired after the Closing Date by any Group Member (other than (w) any property described in paragraph (b), (c), (d) or (e) below, (x) any property subject to a Lien expressly permitted by Section 8.3(a)(viii), (y) property acquired by any Foreign Subsidiary and (z) any other property with respect to which a security interest cannot be perfected by filing a financing statement under the Uniform Commercial Code of the relevant state having a value which, together with the value of all such other property as to which the Collateral Agent, for the benefit of the Administrative Agent and the Lenders, does not have a perfected Lien, does not exceed $2,500,000), promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement or such other documents as the Administrative Agent deems necessary or advisable to grant to the Collateral Agent, for the benefit of the Lenders, a security interest in such property and (ii) take all actions necessary or advisable to grant to the Collateral Agent, for the benefit of the Administrative Agent and the Lenders, a perfected first priority security interest in such property, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Administrative Agent. (b) With respect to any fee interest in any real property having a value (together with improvements thereof) of at least $2,500,000 acquired after the Closing Date by any Group Member (other than (x) any real property subject to a Lien expressly permitted by Section 8.3(a)(viii) and (y) real property acquired by any Foreign Subsidiary), promptly (i) execute and deliver a first priority Mortgage, in favor of the Collateral Agent, for the benefit of the Administrative Agent and the Lenders, covering such real property, (ii) if requested by the Administrative Agent, provide the Lenders with (x) title insurance covering such real property in 66 an amount at least equal to the purchase price of such real property (or such other amount as shall be reasonably specified by the Administrative Agent) as well as a current as-built survey thereof, together with a surveyor's certificate and (y) any consents or estoppels reasonably deemed necessary or advisable by the Administrative Agent in connection with such Mortgage, each of the foregoing in form and substance reasonably satisfactory to the Administrative Agent and (iii) if requested by the Administrative Agent, deliver to the Collateral Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. (c) With respect to any new Subsidiary (other than a Foreign Subsidiary) created or acquired after the Closing Date by any Group Member, promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement as the Administrative Agent deems necessary or advisable to grant to the Collateral Agent, for the benefit of the Administrative Agent and the Lenders, a perfected first priority security interest in the Capital Stock and intercompany obligations of such new Subsidiary that is owned by any Group Member, (ii) deliver to the Collateral Agent the certificates representing such Capital Stock and any intercompany notes evidencing such obligations, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of the relevant Group Member, (iii) cause such new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement, (B) to take such actions necessary or advisable to grant to the Collateral Agent for the benefit of the Administrative Agent and the Lenders a perfected first priority security interest in the Collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Administrative Agent and (C) to deliver to the Administrative Agent a certificate of such Subsidiary, substantially in the form of Exhibit C, with appropriate insertions and attachments, and (iv) if requested by the Administrative Agent, deliver to the Collateral Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. (d) With respect to any new Foreign Subsidiary created or acquired after the Closing Date by any Group Member (other than by any Group Member that is a Foreign Subsidiary), promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement as the Administrative Agent deems necessary or advisable to grant to the Collateral Agent, for the benefit of the Administrative Agent and the Lenders, a perfected first priority security interest in the Capital Stock and intercompany obligations of such new Subsidiary that is owned by any such Group Member (provided that in no event shall more than 65% of the total outstanding Capital Stock of any such new Subsidiary be required to be so pledged), (ii) deliver to the Collateral Agent the certificates representing such Capital Stock and any intercompany notes evidencing such obligations, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of the relevant Group Member, as the case may be, and take such other action as may be necessary or, in the opinion of the Administrative Agent, desirable to perfect the Collateral Agent's security interest therein, and (iii) if requested by the Administrative Agent, deliver to the Collateral Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent. 67 (e) From and after the Closing Date, with respect to any Deposit Account (as defined in the Guarantee and Collateral Agreement) or Securities Account (as defined in the Guarantee and Collateral Agreement) of any Loan Party, cause such Loan Party and the relevant securities intermediary or depository institution to enter into a control agreement in form and substance satisfactory to the Collateral Agent, provided that control agreements shall not be required with respect to Deposit Accounts and Securities Accounts having an aggregate balance of less than $1,000,000 at any one time. (f) Notwithstanding anything to the contrary set forth herein, any Subsidiary which guarantees the Notes, any Additional Senior Subordinated Debt or any Additional Senior Unsecured Notes shall comply with the requirements of Section 7.10(c). 7.11. Further Assurances. From time to time execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take all such actions, as the Administrative Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Loan Documents, or of more fully perfecting or renewing the rights of the Collateral Agent, the Administrative Agent and the Lenders with respect to the Collateral (or with respect to any additions thereto or replacements or proceeds thereof or with respect to any other property or assets hereafter acquired by the Borrower or any Subsidiary which may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the exercise by the Administrative Agent or any Lender of any power, right, privilege or remedy pursuant to this Agreement or the other Loan Documents which requires any consent, approval, recording qualification or authorization of any Governmental Authority, the Borrower will execute and deliver, or will cause the execution and delivery of, all applications, certifications, instruments and other documents and papers that the Administrative Agent or such Lenders may be required to obtain from the Borrower or any of its Subsidiaries for such governmental consent, approval, recording, qualification or authorization. SECTION 8. NEGATIVE COVENANTS Holdings and the Borrower hereby jointly and severally agree that, so long as the Commitments remain in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to any Lender or Agent hereunder, each of Holdings and the Borrower shall not, and the Borrower shall not permit any of its Subsidiaries to, directly or indirectly: 8.1. Financial Condition Covenants. (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio at any time during any fiscal quarter set forth below to exceed the ratio set forth below opposite such fiscal quarter:
Fiscal Quarter Consolidated Leverage Ratio -------------- --------------------------- September 30, 2004 6.25 to 1.0 December 31, 2004 6.25 to 1.0 March 31, 2005 6.25 to 1.0 June 30, 2005 6.25 to 1.0 September 30, 2005 6.25 to 1.0 December 31, 2005 5.90 to 1.0
68
Fiscal Quarter Consolidated Leverage Ratio -------------- --------------------------- March 31, 2006 5.90 to 1.0 June 30, 2006 5.90 to 1.0 September 30, 2006 5.90 to 1.0 December 31, 2006 5.25 to 1.0 March 31, 2007 5.25 to 1.0 June 30, 2007 5.25 to 1.0 September 30, 2007 5.25 to 1.0 December 31, 2007 4.25 to 1.0 March 31, 2008 4.25 to 1.0 June 30, 2008 4.25 to 1.0 September 30, 2008 4.25 to 1.0 December 31, 2008 3.50 to 1.0 March 31, 2009 3.50 to 1.0 June 30, 2009 3.50 to 1.0 September 30, 2009 3.50 to 1.0 December 31, 2009 3.25 to 1.0 March 31, 2010 3.25 to 1.0 June 30, 2010 3.25 to 1.0 September 30, 2010 3.25 to 1.0 December 31, 2010 3.25 to 1.0 March 31, 2011 3.25 to 1.0 June 30, 2011 3.25 to 1.0
(b) Consolidated Senior Secured Leverage Ratio. Permit the Consolidated Senior Secured Leverage Ratio at any time during any fiscal quarter set forth below to exceed the ratio set forth opposite such fiscal quarter:
Consolidated Senior Secured Fiscal Quarter Leverage Ratio -------------- -------------- September 30, 2004 5.50 to 1.0 December 31, 2004 5.50 to 1.0 March 31, 2005 5.50 to 1.0 June 30, 2005 5.50 to 1.0 September 30, 2005 5.50 to 1.0 December 31, 2005 4.90 to 1.0 March 31, 2006 4.90 to 1.0 June 30, 2006 4.90 to 1.0 September 30, 2006 4.90 to 1.0 December 31, 2006 4.25 to 1.0 March 31, 2007 4.25 to 1.0 June 30, 2007 4.25 to 1.0 September 30, 2007 4.25 to 1.0 December 31, 2007 3.50 to 1.0 March 31, 2008 3.50 to 1.0
69
Consolidated Senior Secured Fiscal Quarter Leverage Ratio -------------- -------------- June 30, 2008 3.50 to 1.0 September 30, 2008 3.50 to 1.0 December 31, 2008 2.50 to 1.0 March 31, 2009 2.50 to 1.0 June 30, 2009 2.50 to 1.0 September 30, 2009 2.50 to 1.0 December 31, 2009 1.50 to 1.0 March 31, 2010 1.50 to 1.0 June 30, 2010 1.50 to 1.0 September 30, 2010 1.50 to 1.0 December 31, 2010 1.50 to 1.0 March 31, 2011 1.50 to 1.0 June 30, 2011 1.50 to 1.0
(c) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage Ratio for any period of four consecutive fiscal quarters of Holdings ending with any fiscal quarter set forth below to be less than the ratio set forth below opposite such fiscal quarter:
Consolidated Interest Fiscal Quarter Coverage Ratio -------------- -------------- September 30, 2004 1.80 to 1.0 December 31, 2004 1.80 to 1.0 March 31, 2005 1.80 to 1.0 June 30, 2005 1.80 to 1.0 September 30, 2005 1.80 to 1.0 December 31, 2005 2.00 to 1.0 March 31, 2006 2.00 to 1.0 June 30, 2006 2.00 to 1.0 September 30, 2006 2.00 to 1.0 December 31, 2006 2.25 to 1.0 March 31, 2007 2.25 to 1.0 June 30, 2007 2.25 to 1.0 September 30, 2007 2.25 to 1.0 December 31, 2007 2.50 to 1.0 March 31, 2008 2.50 to 1.0 June 30, 2008 2.50 to 1.0 September 30, 2008 2.50 to 1.0 December 31, 2008 2.75 to 1.0 March 31, 2009 2.75 to 1.0 June 30, 2009 2.75 to 1.0 September 30, 2009 2.75 to 1.0 December 31, 2009 3.25 to 1.0 March 31, 2010 3.25 to 1.0
70
Consolidated Interest Fiscal Quarter Coverage Ratio -------------- -------------- June 30, 2010 3.25 to 1.0 September 30, 2010 3.25 to 1.0 December 31, 2010 3.25 to 1.0 March 31, 2011 3.25 to 1.0 June 30, 2011 3.25 to 1.0
provided that, with respect to the periods ending September 30, 2004, December 31, 2004 and March 31, 2005, Consolidated Interest Expense for such periods shall be calculated by multiplying (x) Consolidated Interest Expense for the three, six and nine month periods, respectively, ending on such dates, by (y) 4, 2 and 4/3, respectively. 8.2. Indebtedness. (a) Create, issue, incur, assume, become liable in respect of or suffer to exist any Indebtedness, except: (i) Indebtedness of any Loan Party pursuant to any Loan Document; (ii) Indebtedness (A) of the Borrower to any Subsidiary, (B) of any Subsidiary Guarantor to the Borrower or any other Subsidiary, (C) of any Foreign Subsidiary to any Foreign Subsidiary and (D) subject to Section 8.8(f), of any Foreign Subsidiary to the Borrower or any Subsidiary Guarantor; (iii) Guarantee Obligations incurred in the ordinary course of business by the Borrower or any of its Subsidiaries of obligations of the Borrower, any Subsidiary Guarantor and, subject to Section 8.8(f), of any Foreign Subsidiary; (iv) Indebtedness outstanding on the date hereof and listed on Schedule 8.2(a)(iv) and any refinancings, refundings, renewals or extensions thereof (without shortening the maturity of, or increasing the principal amount thereof or decreasing weighted average life thereof); (v) Indebtedness (including, without limitation, Capital Lease Obligations) to finance the acquisition, construction or improvement of fixed or capital assets secured by Liens permitted by Section 8.3(a)(viii) in an aggregate principal amount not to exceed $45,000,000 at any one time outstanding; (vi) Indebtedness of the Borrower in respect of the Notes in an aggregate principal amount not to exceed $925,000,000 and Guarantee Obligations of any Subsidiary Guarantor or of Holdings in respect of the Notes, provided that the Guarantee Obligations in respect of the Senior Subordinated Notes are subordinated to the same extent as the obligations of the Borrower in respect of the Senior Subordinated Notes; (vii) Indebtedness of any Person that becomes a Subsidiary after the date hereof (other than any Subsidiaries acquired in the Acquisition); provided that such Indebtedness exists at the time such Person becomes a Subsidiary and is 71 not created in contemplation of or in connection with such Person becoming a Subsidiary; (viii) Indebtedness of the Borrower incurred to finance the cash consideration for Permitted Acquisitions that are permitted by Section 8.8(m) so long as (v) such Indebtedness is subordinated to the Indebtedness created under the Loan Documents in a manner substantially equivalent to the subordination of the Senior Subordinated Notes, (w) the terms of such Indebtedness are no more restrictive than the terms applicable to the Loans, (x) the final maturity of such Indebtedness is no earlier than the final maturity of the Loans, (y) such Indebtedness shall not require any payments of principal thereof prior to the final maturity of the Loans and (z) the aggregate principal amount of such Indebtedness shall not exceed $50,000,000; provided that, immediately after giving effect to the incurrence of such Indebtedness, the Borrower shall be in compliance with the ratios set forth in Section 8.1 opposite the period in which the date of the proposed incurring of such Indebtedness falls (the "Indebtedness Measurement Date") (and, for purposes of determining such compliance, the "Consolidated EBITDA" and the "Consolidated Interest Coverage Ratio" shall each be as in effect on the last day of the fiscal quarter most recently ended on or prior to such Indebtedness Measurement Date and adjusted to give effect to the proposed incurrence of Indebtedness and the uses of the proceeds thereof as if such Indebtedness had been incurred and such acquisition had occurred on the first day of the relevant period for testing compliance and "Consolidated Total Debt" and "Consolidated Senior Secured Debt" shall be as in effect on such Indebtedness Measurement Date and assuming the proposed Indebtedness had been incurred); (ix) Hedge Agreements permitted under Section 8.12; (x) [Reserved]; (xi) Guarantee Obligations of the Borrower or any of its Subsidiaries with respect to borrowings by employees in connection with the purchase of Capital Stock of Holdings by employees or Holdings or any of its Subsidiaries; provided that the aggregate outstanding amount of such Guarantee Obligations, together with the aggregate outstanding principal amount of loans and advances pursuant to Section 8.8(i) shall not exceed $2,500,000; (xii) Indebtedness of the Borrower or any of its Subsidiaries in the ordinary course of business in respect of netting services, overdraft protection and other services in connection with deposit accounts; provided that the aggregate amount of such Indebtedness shall not exceed $5,000,000 at any time; (xiii) Indebtedness of the Borrower or any of its Subsidiaries in connection with surety, performance, appeal or similar bonds, completion guarantees or similar instruments (other than letters of credit) issued in the ordinary course of business and with respect to obligations other than 72 Indebtedness, including any such instruments pursuant to self- insurance and workers' compensation programs; (xiv) Indebtedness of the Borrower or any of its Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within two Business Days of incurrence of such Indebtedness; (xv) Additional Senior Subordinated Debt or Additional Senior Unsecured Notes, so long as Holdings and its Subsidiaries are in compliance, on a pro forma basis after giving effect to the incurrence of such Additional Senior Subordinated Debt or Additional Senior Unsecured Notes, as the case may be, with the covenants set forth in Section 8.1 opposite the period in which the relevant Indebtedness Measurement Date falls (and, for purposes of determining such compliance, "Consolidated EBITDA" and the "Consolidated Interest Coverage Ratio" shall each be as in effect on the last day of the fiscal quarter most recently ended on or prior to such Indebtedness Measurement Date and adjusted to give effect to the proposed incurrence of Indebtedness and the uses of the proceeds thereof as if such Indebtedness had been incurred on the first day of the relevant period for testing compliance and "Consolidated Total Debt" and "Consolidated Senior Secured Debt" shall be as in effect on such Indebtedness Measurement Date and assuming the proposed Indebtedness had been incurred); provided that no Default or Event of Default shall have then occurred and be continuing or would result therefrom; (xvi) additional Indebtedness of the Borrower or any of its Subsidiaries in an aggregate principal amount (for the Borrower and all Subsidiaries) not to exceed $50,000,000 at any one time outstanding; (xvii) (A) Indebtedness incurred to refinance, refund or replace Indebtedness outstanding under Sections 8.2(a)(v) and 8.2(a)(vii) without increasing the principal amount thereof, (B) Additional Senior Subordinated Debt incurred to refinance, refund or replace the Senior Subordinated Notes or any Indebtedness outstanding under Section 8.2(a)(viii) without increasing the principal amount thereof and (C) Indebtedness of the Borrower and the Subsidiary Guarantors or Holdings incurred to refinance, refund or replace the Senior Unsecured Notes without increasing the principal amount thereof, so long as such Indebtedness constitutes either Additional Senior Subordinated Debt or Additional Senior Unsecured Notes; and (xviii) Permitted Holdings Debt, provided that (i) the aggregate outstanding principal amount of Permitted Holdings Debt which is not Non-Cash Pay Holdings Debt may not exceed $500,000,000 at any time, (ii) the Borrower and the Subsidiaries are in compliance, on a pro forma basis after giving effect to the incurrence of such Permitted Holdings Debt, with the covenants set forth in Section 8.1 opposite the period in which the relevant Indebtedness Measurement 73 Date falls (and, for purposes of determining such compliance, "Consolidated EBITDA" and the "Consolidated Interest Coverage Ratio" shall each be as in effect on the last day of the fiscal quarter most recently ended on or prior to such Indebtedness Measurement Date and adjusted to give effect to the proposed incurrence of Indebtedness and the uses of the proceeds thereof as if such Indebtedness had been incurred on the first day of the relevant period for testing compliance and "Consolidated Total Debt" and "Consolidated Senior Secured Debt" shall be as in effect on such Indebtedness Measurement Date and assuming the proposed Indebtedness had been incurred), and (iii) the Net Cash Proceeds of such Indebtedness are applied to prepay the Term Loans and reduce the Revolving Commitments to the extent required by Section 4.2. (b) [Reserved] 8.3. Liens. (a) Create, incur, assume or suffer to exist any Lien upon any of its property, whether now owned or hereafter acquired, except for: (i) Liens for taxes not yet due or that are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrower or its Subsidiaries, as the case may be, in conformity with GAAP; (ii) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith by appropriate proceedings; (iii) Liens arising solely by virtue of any statutory or common law provisions relating to bankers' Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depositary institution; (iv) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation; (v) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (vi) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, are not substantial in amount and that do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries; (vii) Liens in existence on the date hereof listed on Schedule 8.3(a)(vii), securing Indebtedness permitted by Section 8.2(a)(iv), provided that no such Lien 74 is spread to cover any additional property after the date hereof and that the principal amount of Indebtedness secured thereby is not increased; (viii) Liens securing Indebtedness of the Borrower or any other Subsidiary incurred pursuant to Section 8.2(a)(v) to finance the acquisition, construction or improvement of fixed or capital assets, provided that (A) such Liens shall be created substantially simultaneously with the acquisition, construction or improvement of such fixed or capital assets, (B) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and (C) the principal amount of Indebtedness secured thereby is not increased; (ix) Liens created pursuant to the Security Documents (including any Liens created therein in favor of holders of the Senior Unsecured Notes as required by the Senior Unsecured Notes Indenture); (x) any Lien (other than Liens permitted by paragraph (vii)) existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary (other than pursuant to the Acquisition) or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary (other than pursuant to the Acquisition); provided that (A) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (B) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary and (C) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be; (xi) any interest or title of a lessor under any lease entered into by the Borrower or any other Subsidiary in the ordinary course of its business and covering only the assets so leased; (xii) [Reserved]; (xiii) any provision for the retention of title to any property by the vendor or transferor of such property, which property is acquired by the Borrower or a Subsidiary in a transaction entered into in the ordinary course of business of the Borrower or such Subsidiary and for which kind of transaction it is normal market practice for such retention of title provision to be included; (xiv) Liens arising by means of any judgment of any court to the extent not otherwise resulting in a Default; provided that any such Lien is released within 30 days following the creation thereof; and (xv) Liens not otherwise permitted by this Section so long as neither (A) the aggregate outstanding principal amount of the obligations secured thereby nor (B) the aggregate fair market value (determined as of the date such Lien is 75 incurred) of the assets subject thereto exceeds (as to the Borrower and all Subsidiaries) $50,000,000 at any one time. (b) [Reserved] 8.4. Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its property or business, except that: (a) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower (provided that the Borrower shall be the continuing or surviving corporation) or with or into any Subsidiary Guarantor (provided that the Subsidiary Guarantor shall be the continuing or surviving corporation) or, subject to Section 8.8(f), with or into any Foreign Subsidiary; (b) any Subsidiary of the Borrower may Dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any Subsidiary Guarantor or, subject to Section 8.8(f), any Foreign Subsidiary; (c) any Subsidiary may merge or consolidate with any other Person to effect an Investment permitted under Section 8.8(m)(x); (d) any Subsidiary may merge or consolidate with any other Person to effect a Disposition permitted under Section 8.5; and (e) the Borrower may dispose of any or all of its assets to any Subsidiary Guarantor. 8.5. Disposition of Property. Dispose of any of its property, whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any Person, except: (a) the Disposition in the ordinary course of business of obsolete, worn out or permanently retired equipment or facilities that is no longer useful in the conduct of the business; (b) the sale of inventory in the ordinary course of business; (c) the Disposition of Permitted Investments in the ordinary course of business; (d) Dispositions permitted by Section 8.4(a), (b) or (e); (e) the sale or issuance of any Subsidiary's Capital Stock to the Borrower or any Subsidiary Guarantor; (f) the Disposition of the Borrower's facility at 1615 Bluff City Highway, Bristol, Tennessee; 76 (g) the licensing or sublicensing of Intellectual Property in the ordinary course of business in a manner that does not materially interfere with the business of the Borrower and its Subsidiaries; (h) Dispositions of property by a Foreign Subsidiary to another Foreign Subsidiary; (i) Restricted Payments permitted by Section 8.6; (j) the Disposition of other property (other than Dispositions of less than all of the Capital Stock of any Subsidiary owned by the Group Members) having a fair market value not to exceed $25,000,000 in the aggregate for any fiscal year of the Borrower; provided that all Dispositions permitted by this Section 8.5(j) shall be made for fair value and at least 75% of the consideration therefor shall consist of cash or Permitted Investments; and (k) Permitted Asset Swaps. 8.6. Restricted Payments. Declare or pay any dividend (other than dividends payable solely in common stock of the Person making such dividend) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock of any Group Member, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings, the Borrower or any Subsidiary (collectively, "Restricted Payments"), except that: (a) any Subsidiary may make Restricted Payments to the Borrower or any Subsidiary Guarantor (and, if such Subsidiary is not a Wholly Owned Subsidiary, to its other holders of common Capital Stock on a pro rata basis); (b) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, the Borrower may pay dividends to Holdings to permit Holdings to purchase, and Holdings may so purchase, (i) Holdings' common stock or common stock options from present or former directors, officers or employees of any Group Member upon the death, disability, retirement or termination of employment of such officer or employee or a change of control (under the applicable plan) and (ii) Holdings' common stock for contributions to its employee stock purchase and deferred compensation plans in the ordinary course of business, provided, that the aggregate amount of payments under this clause (b) after the Original Closing Date (net of any proceeds received by Holdings and contributed to the Borrower after the Original Closing Date in connection with resales of any common stock or common stock options so purchased) shall not exceed $5,000,000; (c) the Borrower may pay dividends to Holdings to permit Holdings to (i) (A) pay franchise taxes and other amounts allocable to the Borrower required by Holdings to maintain its corporate existence, (B) pay for operating and overhead expenses of Holdings allocable to the Borrower (including, without limitation, salaries and other compensation of employees, directors' fees and expenses and travel and entertainment 77 expenses) incurred by Holdings in the ordinary course of business, (C) pay Holdings fees for services provided by Holdings to the Borrower that would otherwise have been performed by third parties (including accounting, treasury, tax, legal, strategic consulting and corporate development services), (D) to reimburse Holdings for the payment of amounts relating to services (including, without limitation, legal, consulting, software, insurance and accounting services) provided by third parties on the Borrower's or any Subsidiary's behalf, in each case under this clause (i) to the extent such costs and expenses are incurred in the ordinary course of business and do not, for all costs and expenses described in this clause (i), exceed $10,000,000 in any fiscal year, (ii) pay any taxes that are due and payable by Holdings and the Borrower as part of a consolidated group or (iii) pay interest on Permitted Holdings Debt (other than Non-Cash Pay Holdings Debt); (d) Holdings may pay current quarterly dividends on the Preferred Stock with proceeds not in excess of $5,000,000 per quarter from the issuance of shares of common stock by Holdings pursuant to an ongoing program of issuance of common stock arranged and managed by a financial institution; provided that no Default or Event of Default shall have then occurred and be continuing or would result therefrom; (e) Holdings may pay quarterly dividends on the Preferred Stock in an aggregate amount not to exceed 100% of the Net Cash Proceeds of any issuance of Capital Stock of Holdings after the First Amendment Effective Date (other than issuances of Capital Stock to any Group Member or as contemplated by Section 8.6(d)) which are not required to be used to prepay Term Loans or reduce Revolving Commitments pursuant to Section 4.2(b) minus the sum of (i) the aggregate amount of Permitted Acquisitions consummated in reliance on clause (a)(ii) of the definition of Permitted Acquisition Reserve Amount, (ii) the aggregate amount expended to redeem, repurchase or prepay Indebtedness in reliance upon Section 8.9(a)(v)(B) and (iii) the aggregate amount of Investments consummated pursuant to Section 8.8(n) in reliance upon such Net Cash Proceeds, provided that no Default or Event of Default shall have then occurred and be continuing or would result therefrom; (f) the Borrower may make Restricted Payments to Holdings to enable Holdings to pay, and Holdings may pay, quarterly dividends on the Preferred Stock, provided that (i) no Default or Event of Default shall have then occurred and be continuing or would result therefrom and (b) after giving effect thereto, on a pro forma basis, the Consolidated Senior Secured Leverage Ratio is not greater than 4.5 to 1; (g) any Foreign Subsidiary may make Restricted Payments to any other Foreign Subsidiary; (h) Restricted Payments not otherwise permitted by this Section, so long as the aggregate amount of such Restricted Payments, together with all other Restricted Payments made pursuant to this Section 8.6(h) since the Original Closing Date, shall not exceed $5,000,000 (or, to the extent that the Consolidated Leverage Ratio is less than 5.0 to 1.0 at the time such Restricted Payment is made, $25,000,000); and 78 (i) Holdings may, so long as no Default or Event of Default shall have then occurred and be continuing or shall result therefrom, repurchase the Preferred Stock or pay dividends in respect thereof in an amount equal to 100% of the Net Cash Proceeds of borrowings of Tranche C Term Loans after the Closing Date, provided that the amount of Restricted Payments that may be made in reliance on borrowings of Tranche C Term Loans shall be reduced by the amount of Permitted Acquisitions and redemptions, repurchases and prepayments of Indebtedness made pursuant to Sections 8.8 and 8.9, respectively, in reliance on such borrowings. 8.7. Capital Expenditures. Make or commit to make any Consolidated Capital Expenditure, except (a) Consolidated Capital Expenditures of the Borrower and its Subsidiaries not exceeding $25,000,000 during each of the 2003 and 2004 fiscal years and $30,000,000 in any fiscal year thereafter; provided, that (i) up to 100% of any such amount referred to above, if not so expended in the fiscal year for which it is permitted, may be carried over for expenditure in the next succeeding fiscal year and (ii) Consolidated Capital Expenditures made pursuant to this clause (a) during any fiscal year shall be deemed made, first, in respect of amounts permitted for such fiscal year as provided above and, second, in respect of amounts carried over from the prior fiscal year pursuant to subclause (i) above and (b) Consolidated Capital Expenditures made in an amount equal to the proceeds of any Reinvestment Deferred Amount. 8.8. Investments. Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or any assets constituting a business unit of, or make any other investment in, any Person (all of the foregoing, "Investments"), except: (a) extensions of trade credit in the ordinary course of business; (b) cash and Permitted Investments; (c) Guarantee Obligations permitted by Section 8.2; (d) the Acquisition Documentation and the transactions contemplated thereby; (e) intercompany Investments by any Group Member in the Borrower or any Person that, prior to such Investment, is a Subsidiary Guarantor; (f) intercompany Investments by the Borrower or any Subsidiary Guarantor in any Person, that, prior to such Investment, is a Foreign Subsidiary (including, without limitation, Guarantee Obligations with respect to obligations of any such Foreign Subsidiary, loans made to any such Foreign Subsidiary and Investments resulting from mergers with or sales of assets to any such Foreign Subsidiary) in an aggregate amount (valued at cost) not to exceed $5,000,000 during the term of this Agreement; (g) [Reserved]; (h) [Reserved]; 79 (i) loans and advances to employees of the Borrower or any of its Subsidiaries in the ordinary course of business; provided that the aggregate outstanding amount of such loans and advances, together with the aggregate outstanding principal amount of Guarantee Obligations pursuant to Section 8.2(a)(xi), shall not exceed $2,500,000; (j) stock, obligations or other securities received in settlement or good faith compromise of debts created in the ordinary course of business and owing to the Borrower or a Subsidiary or in satisfaction of judgments or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of a debtor; (k) Investments in prepaid expenses and deposits in respect of workers' compensation and other similar deposits provided to third parties in the ordinary course of business, provided that the aggregate outstanding amount of such prepaid expenses and deposits shall not exceed $20,000,000 at any one time; (l) [Reserved]; (m) Investments not otherwise permitted by the foregoing clauses of this Section and consisting of (x) a Permitted Acquisition, provided that (i) the consideration for any such Permitted Acquisition shall consist of common stock of the Borrower, cash, assumed Indebtedness or any combination thereof, and (ii) the aggregate amount of cash and assumed Indebtedness in connection with all such Permitted Acquisitions shall not exceed an amount equal to the sum of (A) $100,000,000, (B) the product of $15,000,000 (or, in the case of any fiscal quarter with respect to which the Consolidated Leverage Ratio (measured on the last day of such fiscal quarter) is less than 4.5 to 1.0, $20,000,000) times the number of fiscal quarters elapsed since July 1, 2004, (C) the amount of Permitted Acquisition Reserve Amounts at such time and (D) the cash portion of the consideration for any Permitted Acquisition which is financed with the proceeds of a Reinvestment Event to the extent permitted pursuant to Section 4.2(c), provided, further, that (I) at least seven Business Days prior to consummating any Permitted Acquisition, the Borrower shall have delivered to the Lenders a certificate of a Responsible Officer of the Borrower certifying that the conditions described in the definition of "Permitted Acquisition" have been met with respect thereto and setting forth in reasonable detail satisfactory to the Administrative Agent the calculations required to be made pursuant to clause (c) of such definition and the assumptions used by the Borrower to make such calculations; (II) in the case of Permitted Acquisitions made in reliance on clauses (a)(ii) and (a)(iii) of the definition of Permitted Acquisition Reserve Amounts, the aggregate consideration in respect of such Permitted Acquisitions made in reliance on such clauses may not exceed (measured at the time that the relevant Permitted Acquisition is consummated) $350,000,000 (or $500,000,000, to the extent that the Consolidated Leverage Ratio at such time, calculated on a pro forma basis as if such Permitted Acquisition and any Indebtedness incurred in connection therewith had been consummated or incurred, as the case may be, on the first day of the relevant period, is less than 5.0 to 1.0), and (y) Investments in joint ventures and partnerships (other than Permitted Acquisitions) organized under the laws of any jurisdiction within the United States of America and conducting substantially all of its business therein in an aggregate amount not to exceed on any date $15,000,000; and 80 (n) Investments not otherwise permitted by the foregoing clauses of this Section, so long as the aggregate amount of such Investments, together with all other Investments permitted pursuant to this Section 8.8(n) since the Original Closing Date, shall not exceed the sum of (i) $50,000,000 and (ii) (1) 100% of the Net Cash Proceeds of any issuance of Capital Stock by any Group Member after the First Amendment Effective Date (other than issuances of Capital Stock to any Group Member or as contemplated by Section 8.6(d)) which are not required to be used to prepay Term Loans or reduce Revolving Commitments pursuant to Section 4.2(b) minus (2) the sum of (x) the aggregate amount of Restricted Payments made pursuant to Section 8.6(e) since the First Amendment Effective Date, (y) the aggregate amount expended to redeem, repurchase or prepay Indebtedness in reliance upon Section 8.9(a)(v)(B) and (z) the aggregate amount of other Investments consummated in reliance upon clause (a)(i) of the definition of Permitted Acquisition Reserve Amounts. 8.9. Optional Payments and Modifications of Certain Debt Instruments. (a) Make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except (i) payment of Indebtedness created under the Loan Documents, (ii) payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness, other than payments in respect of the Senior Subordinated Notes and the Additional Senior Subordinated Debt prohibited by the subordination provisions thereof, (iii) payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, (iv) payments on intercompany Indebtedness, (v) redemptions, repurchases or prepayments of other Indebtedness so long as the aggregate amount of cash expended in connection therewith since the First Amendment Effective Date shall not exceed the sum of (A) the Net Cash Proceeds of borrowings of Tranche C Term Loans after the Closing Date which are not used for Restricted Payments or Permitted Acquisitions made pursuant to Sections 8.6 or 8.8, respectively, (B) (1) 100% of the Net Cash Proceeds of any issuance of Capital Stock by any Group Member after the First Amendment Effective Date (other than issuances of Capital Stock to any Group Member or as contemplated by Section 8.6(d)) which are not required to be used to prepay Term Loans or reduce Revolving Commitments pursuant to Section 4.2(b) minus (2) the sum of (x) the aggregate amount of Restricted Payments made pursuant to Section 8.6(e) since the First Amendment Effective Date, (y) the aggregate amount of Permitted Acquisitions consummated in reliance upon clause (a)(i) of the definition of Permitted Acquisition Reserve Amounts and (z) other Investments consummated pursuant to Section 8.8(n) in reliance upon such Net Cash Proceeds, (C) (1) an amount equal to the sum of the Borrower's Portion of Excess Cash Flow for each fiscal year elapsed since the First Amendment Effective Date minus (2) the aggregate amount of Permitted Acquisitions consummated in reliance upon clause (a)(iv) of the definition of Permitted Acquisition Reserve Amounts and (D) the Excess Funded Amount and (vi) refinancings, refundings or replacements of Indebtedness permitted under Section 8.2(a)(iv), (v), (vii) and (x); (b) amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of the Notes, the Additional Senior Subordinated Debt or the Additional Senior Unsecured Notes, other than any 81 such amendment, modification, waiver or other change that (i) would extend the maturity, reduce the amount of any payment of principal thereof, reduce the rate or extend any date for payment of interest thereon or would change the covenants therein in a manner not materially more restrictive to the Borrower and its Subsidiaries and (ii) does not involve the payment of a consent fee; (c) amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of the Preferred Stock, other than any such amendment, modification, waiver or other change that (i) would extend the scheduled redemption date, reduce the amount of any scheduled redemption payment, reduce the rate or extend any date for payment of dividends thereon or would change the covenants therein in a manner not materially more restrictive to the Borrower and its Subsidiaries and (ii) does not involve the payment of a consent fee; or (d) designate any Indebtedness (other than obligations of the Loan Parties pursuant to the Loan Documents) as "Designated Senior Debt" (or any other defined term having a similar purpose) for the purposes of the Senior Subordinated Notes Indenture and any Additional Senior Subordinated Debt Documents. 8.10. Transactions with Affiliates. Enter into any transaction, including any purchase, sale, lease or exchange of property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than Holdings, the Borrower or any Wholly Owned Subsidiary Guarantor) unless such transaction is (a) otherwise permitted under this Agreement, and (b) upon fair and reasonable terms no less favorable to the relevant Group Member, taken as a whole, than it would obtain in a comparable arm's length transaction with a Person that is not an Affiliate; provided that this Section 8.10 shall not prohibit or require Holdings or the Borrower to modify (i) any arrangement with the Sellers and their Affiliates in connection with the Acquisition or (ii) any Restricted Payment permitted under Section 8.6. 8.11. Sales and Leasebacks. Enter into any arrangement with any Person (other than a Wholly Owned Subsidiary Guarantor) providing for the leasing by any Group Member of real or personal property that has been or is to be sold or transferred by such Group Member to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Group Member, except to the extent permitted by Section 8.2(a)(v). 8.12. Hedge Agreements. Enter into any Hedge Agreement, except (a) the Hedge Agreements contemplated by Section 7.9, (b) Hedge Agreements entered into to hedge or mitigate risks to which the Borrower or any Subsidiary has actual exposure (other than those in respect of Capital Stock or the Notes, any Additional Senior Subordinated Debt or any Additional Senior Unsecured Notes) and (c) Hedge Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary. 82 8.13. Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on a day other than December 31 or change the Borrower's method of determining fiscal quarters. 8.14. Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of any Group Member to create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, other than (a) this Agreement and the other Loan Documents, the Notes Indentures, the Additional Senior Subordinated Debt Documents or Additional Senior Unsecured Debt Documents and the Preferred Stock, (b) any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets financed thereby), (c) customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary or assets pending such sale; provided such restrictions and conditions apply only to the Subsidiary or assets that are to be sold and such sale is permitted under this Agreement, (d) any restrictions in effect on the date hereof and set forth on Schedule 8.14 hereto, (e) customary provisions in leases and other contracts restricting assignment thereof in existence on the date hereof or entered into consistent with past practice and (f) any restrictions imposed by any agreement relating to secured Indebtedness permitted by Sections 8.2 and 8.3, so long as the restrictions under this clause (f) apply only to the collateral on which a Lien is permitted with respect thereto pursuant to Section 8.3. 8.15. Clauses Restricting Subsidiary Distributions. (a) Enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary of the Borrower to (i) make Restricted Payments in respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower, (ii) make loans or advances to, or other Investments in, the Borrower or any other Subsidiary of the Borrower or (iii) transfer any of its assets to the Borrower or any other Subsidiary of the Borrower, except for such encumbrances or restrictions existing under or by reason of (A) any restrictions imposed by law or existing under the Loan Documents, the Notes Indentures, the Additional Senior Subordinated Debt Documents or Additional Senior Unsecured Debt Documents and the Preferred Stock, (B) any restrictions in effect on the date hereof and set forth on Schedule 8.15 hereto, (C) any restrictions with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of such Subsidiary and (D) any restrictions imposed by any agreement relating to secured Indebtedness permitted by Sections 8.2 and 8.3, so long as the restrictions under this clause (D) apply only to the collateral on which a Lien is permitted with respect thereto pursuant to Section 8.3. 8.16. Lines of Business. Enter into any business, either directly or through any Subsidiary, except for those businesses in which the Borrower and its Subsidiaries are engaged on the Closing Date (after giving effect to the Acquisition) or that are reasonably related thereto. 8.17. Amendments to Acquisition Documents. (a) Amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of the indemnities and licenses furnished to the Borrower or any of its Subsidiaries pursuant to the Acquisition Documentation such that after giving effect thereto such indemnities or licenses shall be 83 materially less favorable to the interests of the Loan Parties or the Lenders with respect thereto, or (b) otherwise amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of the Acquisition Documentation or any such other documents in any material respect (but in no event to increase the purchase price payable thereunder) except for any such amendment, supplement or modification that could not reasonably be expected to have a Material Adverse Effect. SECTION 9. EVENTS OF DEFAULT If any of the following events shall occur and be continuing: (a) the Borrower shall fail to pay any principal of any Loan or Reimbursement Obligation when due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation, or any other amount payable hereunder or under any other Loan Document, within five days after any such interest or other amount becomes due in accordance with the terms hereof; or (b) any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made; or (c) any Loan Party shall default in the observance or performance of any agreement contained in clause (i) or (ii) of Section 7.4(a) (with respect to Holdings and the Borrower only), Section 7.7(a) or Section 8 of this Agreement or Sections 5.5 and 5.7(b) of the Guarantee and Collateral Agreement shall have occurred and be continuing; or (d) any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days after notice to the Borrower from the Administrative Agent or any Lender; or (e) any Group Member shall (i) default in making any payment of any principal of any Indebtedness (including any Guarantee Obligation, but excluding the Loans) on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by 84 the obligor thereunder or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable; provided, that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $10,000,000; or (f) (i) any Group Member (other than any Immaterial Subsidiary) shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Group Member (other than any Immaterial Subsidiary) shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Group Member (other than any Immaterial Subsidiary) any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any Group Member (other than any Immaterial Subsidiary) any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) any Group Member (other than any Immaterial Subsidiary) shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any Group Member (other than any Immaterial Subsidiary) shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (g) (i) any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of any Group Member or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any Group Member or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) 85 through (vi) above, such event or condition, together with all other such events or conditions, if any, could, in the sole judgment of the Required Lenders, reasonably be expected to have a Material Adverse Effect; or (h) one or more judgments or decrees shall be entered against any Group Member involving in the aggregate a liability (not paid or fully covered by insurance as to which the relevant insurance company has acknowledged coverage) of $10,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 45 days from the entry thereof; or (i) any of the Security Documents shall cease, for any reason, to be in full force and effect, or any Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien created by any of the Security Documents shall cease to be enforceable and of the same effect and priority purported to be created thereby (other than in respect of Collateral which in the aggregate has a fair market value not in excess of $1,000,000); or (j) the guarantee contained in Section 2 of the Guarantee and Collateral Agreement shall cease, for any reason, to be in full force and effect or any Loan Party or any Affiliate of any Loan Party shall so assert; or (k) (i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more than 40% (or 50%, in the case of Goldman Sachs or any "group" of which Goldman Sachs is a member) of the outstanding common stock of Holdings; (ii) the board of directors of Holdings shall cease to consist of a majority of Continuing Directors; (iii) Holdings shall cease to own and control, of record and beneficially, directly, 100% of each class of outstanding Capital Stock of the Borrower free and clear of all Liens (except Liens created by the Guarantee and Collateral Agreement); or (iv) a Specified Change of Control shall occur; or (l) Holdings shall (i) conduct, transact or otherwise engage in, or commit to conduct, transact or otherwise engage in, any business or operations other than those incidental to its ownership of the Capital Stock of the Borrower, (ii) incur, create, assume or suffer to exist any Indebtedness or other liabilities or financial obligations, except (x) nonconsensual obligations imposed by operation of law, (y) pursuant to the Loan Documents to which it is a party and (z) obligations with respect to its Capital Stock and Permitted Holdings Debt (iii) own, lease, manage or otherwise operate any properties or assets (including cash (other than cash received in connection with dividends made by the Borrower in accordance with Section 8.6 pending application in the manner contemplated by said Section) and cash equivalents) other than the ownership of shares of Capital Stock of the Borrower; or (m) the Senior Subordinated Notes or Additional Senior Subordinated Debt or the guarantees thereof shall cease, for any reason, to be validly subordinated to the Obligations or the obligations of the Subsidiary Guarantors under the Guarantee and 86 Collateral Agreement, as the case may be, as provided in the Senior Subordinated Notes Indenture or the Additional Senior Subordinated Debt Documents, or any Loan Party, any Affiliate of any Loan Party, the trustee in respect of the Senior Subordinated Notes or Additional Senior Subordinated Debt, as the case may be, or the holders of at least 25% in aggregate principal amount of the Senior Subordinated Notes or Additional Senior Subordinated Debt, as the case may be, shall so assert; then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to the Borrower, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrower hereunder and under the other Loan Documents. After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the Borrower hereunder and under the other Loan Documents shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto). Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived by the Borrower. SECTION 10. THE AGENTS 10.1. Appointment. Each Lender hereby irrevocably designates and appoints each Agent as the agent of such Lender under this Agreement and the other Loan Documents, and each such Lender irrevocably authorizes such Agent, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are 87 reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, no Agent shall have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against any Agent. Each Lender hereby expressly authorizes the Administrative Agent to execute, deliver and perform the Security Documents on behalf of such Lender. 10.2. Delegation of Duties. Each Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Agent shall be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 10.3. Exculpatory Provisions. Neither any Agent nor any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document (except to the extent that any of the foregoing are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from its or such Person's own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Agents under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Loan Party a party thereto to perform its obligations hereunder or thereunder. The Agents shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party. 10.4. Reliance by Agents. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including counsel to Holdings or the Borrower), independent accountants and other experts selected by such Agent. The Administrative Agent may deem and treat the payee of any Promissory Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. Each Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or, if so specified by this Agreement, all Lenders) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. The Agents shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or, if so specified by this Agreement, all 88 Lenders or any other instructing group of Lenders specified by this Agreement), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans. 10.5. Notice of Default. No Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless such Agent has received notice from a Lender, Holdings or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders or any other instructing group of Lenders specified by this Agreement); provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders. 10.6. Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that neither the Agents nor any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by any Agent hereafter taken, including any review of the affairs of a Loan Party or any Affiliate of a Loan Party, shall be deemed to constitute any representation or warranty by any Agent to any Lender. Each Lender represents to the Agents that it has, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their respective Affiliates and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their respective Affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any Affiliate of a Loan Party that may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates. 10.7. Indemnification. The Lenders agree to indemnify each Agent in its capacity as such (to the extent not reimbursed by Holdings or the Borrower and without limiting the obligation of Holdings or the Borrower to do so), ratably according to their respective Aggregate Exposure Percentages in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such 89 Aggregate Exposure Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent in any way relating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from such Agent's gross negligence or willful misconduct. The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder. 10.8. Agent in Its Individual Capacity. Each Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Loan Party as though such Agent were not an Agent. With respect to its Loans made or renewed by it and with respect to any Letter of Credit issued or participated in by it, each Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Agent, and the terms "Lender" and "Lenders" shall include each Agent in its individual capacity. 10.9. Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon 30 Business Days' notice to the Lenders and the Borrower. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall (unless an Event of Default under Section 9(a) or Section 9(f) with respect to the Borrower shall have occurred and be continuing) be subject to approval by the Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term "Administrative Agent" shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans. If no successor agent has accepted appointment as Administrative Agent by the date that is 10 days following a retiring Administrative Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and the Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. After any retiring Administrative Agent's resignation as Administrative Agent, the provisions of this Section 10 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents. 10.10. Agents Generally. Except as expressly set forth herein, no Agent shall have any duties or responsibilities hereunder in its capacity as such, and shall incur no liability, under this Agreement and the other Loan Documents. 90 10.11. The Lead Arrangers. The Lead Arrangers, in their capacity as such, shall have no duties or responsibilities, and shall incur no liability, under this Agreement and other Loan Documents. SECTION 11. MISCELLANEOUS 11.1. Amendments and Waivers. Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 11.1. The Required Lenders and each Loan Party party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent and each Loan Party party to the relevant Loan Document may, from time to time, (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) forgive the principal amount or extend the final scheduled date of maturity of any Loan, extend the scheduled date of any amortization payment in respect of any Term Loan, reduce the stated rate of any interest or fee payable hereunder (except (x) in connection with the waiver of applicability of any post-default increase in interest rates, which waiver shall be effective with the consent of the Majority Facility Lenders of each adversely affected Facility and (y) that any amendment or modification of defined terms used in the financial covenants in this Agreement shall not constitute a reduction in the rate of interest or fees for purposes of this clause (i)) or extend the scheduled date of any payment thereof, or increase the amount or extend the expiration date of any Lender's Commitment, in each case without the written consent of each Lender directly affected thereby; (ii) eliminate or reduce the voting rights of any Lender under this Section 11.1 without the written consent of such Lender; (iii) reduce any percentage specified in the definition of Required Lenders or Supermajority Lenders, consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, release a substantial part of the Collateral or release a substantial part of the Subsidiary Guarantors from their obligations under the Guarantee and Collateral Agreement, in each case without the written consent of all Lenders; (iv) amend, modify or waive any provision of Section 4.8 without the written consent of the Majority Facility Lenders in respect of each Facility adversely affected thereby (except for technical amendments with respect to additional extensions of credit pursuant to this Agreement which afford the protections to such additional extensions of credit of the type provided to the Term Loans and the Revolving Loan Commitments on the Closing Date); (v) reduce the percentage specified in the definition of Majority Facility Lenders with respect to any Facility without the written consent of all Lenders under such Facility; (vi) amend, modify or waive any provision of Section 10 without the written consent of each Agent adversely affected thereby; (vii) amend, modify or waive any provision of Section 3.3 or 3.4 without the written consent of each Swingline Lender adversely affected thereby; (viii) amend or modify any provision of Section 11.6 to add any additional consent requirements necessary to effect any assignment or participation under such Section without the consent of the Supermajority Lenders; (ix) amend, modify or waive any provision of Sections 3.7 through 3.14 without the written consent of the 91 Issuing Lender; or (x) amend, modify or waive any provision of Section 4.1(b) or 4.2(h) without the consent of the Majority Facility Lenders in respect of the Tranche B-2 Term Facility. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Agents and all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Agents shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. In addition, notwithstanding the foregoing, this Agreement may be amended at any time after December 31, 2008 with the written consent of the Administrative Agent, the Borrower and the Lenders providing the Replacement Revolving Commitments (as defined below) to permit the refinancing of all outstanding Revolving Commitments ("Refinanced Revolving Commitments") with a replacement revolving facility hereunder ("Replacement Revolving Commitments"); provided that (a) the aggregate principal amount of such Replacement Revolving Commitments shall not exceed the aggregate principal amount of such Refinanced Revolving Commitments, (b) the Applicable Margin for such Replacement Revolving Commitments shall not be higher than the Applicable Margin for such Refinanced Revolving Commitments, (c) the final maturity of such Replacement Revolving Commitments shall not be earlier than the final maturity date of the Tranche B-2 Term Loans at the time of such refinancing and (d) all other terms applicable to such Replacement Revolving Commitments shall be substantially identical to, or less favorable to the Lenders providing such Replacement Revolving Commitments than, those applicable to such Refinanced Revolving Commitments, except to the extent that such substantially identical or less favorable terms may be extended to cover any period after the latest final maturity of the Revolving Commitments in effect immediately prior to such refinancing. 11.2. Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed as follows in the case of Holdings, the Borrower and the Administrative Agent, and as set forth in an administrative questionnaire delivered to the Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto: Holdings: R.H. Donnelley Corporation 1001 Winstead Drive Cary, North Carolina 27513 Attention: General Counsel Telecopy: (919) 297-1518 Telephone: (919) 297-1114 The Borrower: R.H. Donnelley, Inc. 1001 Winstead Drive 92 Cary, North Carolina 27513 Attention: General Counsel Telecopy: (919) 297-1518 Telephone: (919) 297-1114 The Administrative Agent: Deutsche Bank Trust Company Americas 60 Wall Street New York, New York 10005 Attention: Susan L. LeFevre Telecopy: (212) 797-5692 Telephone: (212) 250-6114 provided that any notice, request or demand to or upon any Agent or the Lenders shall not be effective until received. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. 11.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 11.4. Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder. 11.5. Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse each Agent for all their out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the reasonable fees and disbursements of counsel to such Agent and filing and recording fees and expenses, with statements with respect to the foregoing to be submitted to the Borrower prior to the Closing Date (in the case of amounts to be paid on the Closing Date), and from time to time thereafter on a quarterly basis or such other periodic basis as such Agent shall deem appropriate, (b) to pay or reimburse the Administrative Agent for all of its out-of-pocket costs and expenses incurred in connection with any amendment, supplement or modification to this Agreement and 93 the other Loan Documents and any other documents prepared in connection herewith or therewith, (c) to pay or reimburse each Lender and Agent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents, including the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and of counsel to such Agent, (d) to pay, indemnify, and hold each Lender and Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (e) to pay, indemnify, and hold each Lender and Agent and their respective officers, directors, employees, affiliates, agents, trustees, advisors and controlling persons (each, an "Indemnitee") harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents, including any of the foregoing relating to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of any Group Member or any of the Properties and the reasonable fees and expenses of legal counsel in connection with claims, actions or proceedings by any Indemnitee against any Loan Party under any Loan Document (all the foregoing in this clause (e), collectively, the "Indemnified Liabilities"), provided, that the Borrower shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee. Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. All amounts due under this Section 11.5 shall be payable not later than 10 days after written demand therefor. Statements payable by the Borrower pursuant to this Section 11.5 shall be submitted to the Borrower at the address set forth in Section 11.2, or to such other Person or address as may be hereafter designated by the Borrower in a written notice to the Administrative Agent. The agreements in this Section 11.5 shall survive repayment of the Loans and all other amounts payable hereunder. 11.6. Successors and Assigns; Participations and Assignments. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any affiliate of the Issuing Lender that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. 94 (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees (each, an "Assignee") all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of: (A) the Borrower, provided that no consent of the Borrower shall be required (i) for an assignment to a Lender or a Lender Affiliate (as defined below), (ii) for an assignment by any assigning Lender of its Term Loans or (iii) if a Default or Event of Default has occurred and is continuing, for an assignment to any other Person; (B) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment to a Lender or a Lender Affiliate; and (C) the Issuing Lender, provided that no consent of any Issuing Lender shall be required for an assignment to a Lender or Lender Affiliate or of a Term Loan. (ii) Assignments shall be subject to the following additional conditions: (A) except in the case of an assignment to a Lender or a Lender Affiliate or an assignment of the entire remaining amount of the assigning Lender's Commitments or Loans under any Facility, the amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that (1) no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing and (2) such amounts shall be aggregated in respect of each Lender and its Lender Affiliates, if any; (B) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 (it being understood that only a single processing and recordation fee of $3,500 will be payable with respect to any multiple assignments by or to a Lender or a Lender Affiliate pursuant to clause (ii)(A) above that are simultaneously consummated pursuant to a single Assignment and Assumption); and (C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire. For the purposes of this Section 11.6, the term "Lender Affiliate" has the following meaning: "Lender Affiliate" means, with respect to any Lender, (a) such Lender's parent company and/or any affiliate of such Lender that is at least 50% owned by such Lender or its parent company and (b) an Approved Fund. 95 "Approved Fund" means, with respect to any Lender that is a fund that invests in loans, any other fund that invests in loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor. (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from and after the effective date specified in each Assignment and Assumption, the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 4.9, 4.10 and 4.11 and 11.5). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 11.6 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section. (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Lender and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Issuing Lender and any Lender, at any reasonable time and from time to time upon reasonable prior notice. (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Assignee, the Assignee's completed administrative questionnaire (unless the Assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b)(ii) of this Section and any written consent to such assignment required by paragraph (b)(i) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph. (c) (i) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a "Participant") in all or a portion of such Lender's rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lender's obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any 96 amendment, modification or waiver of any provision of this Agreement; provided that such agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that (1) requires the consent of each Lender directly affected thereby pursuant to clause (i) of the proviso to the second sentence of Section 11.1 and (2) directly affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 4.9, 4.10 and 4.11 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.7(b) as though it were a Lender, provided such Participant shall be subject to Section 11.7(a) as though it were a Lender. (ii) A Participant shall not be entitled to receive any greater payment under Section 4.9 or 4.10 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent. Any Participant that is a Non-U.S. Lender shall not be entitled to the benefits of Section 4.10 unless such Participant complies with Section 4.10(d). (d) Nothing in this Agreement or any other Loan Document shall prevent or prohibit any Lender from pledging its Loans and Promissory Notes hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank and, with prior notification to the Administrative Agent (but without the consent of the Administrative Agent or the Borrower), any Lender that is a fund may pledge all or any portion of its Loans and Promissory Notes to its trustee, to a collateral agent or to another creditor providing credit or credit support to such Lender in support of its obligations to such trustee, such collateral agent or a holder of such obligations, or such other creditor as the case may be. No pledge pursuant to this clause (d) shall release the transferor Lender from any of its obligations hereunder. (e) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Promissory Notes to any Lender requiring Promissory Notes to facilitate transactions of the type described in paragraph (d) above. (f) Notwithstanding the foregoing, any Conduit Lender may assign any or all of the Loans it may have funded hereunder to its designating Lender without the consent of the Borrower or the Administrative Agent and without regard to the limitations set forth in Section 11.6(b). Each of Holdings, the Borrower, each Lender and the Administrative Agent hereby confirms that it will not, in its capacity as such, institute against a Conduit Lender or join any other Person in instituting against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any state bankruptcy or similar law, for one year and one day after the payment in full of the latest maturing commercial paper note issued by such Conduit Lender; provided, however, that each Lender designating any Conduit Lender hereby agrees to indemnify, save and hold harmless each other party hereto for any loss, cost, damage or expense arising out of its inability to institute such a proceeding against such Conduit Lender during such period of forbearance. 97 11.7. Adjustments; Set-off. (a) Except to the extent that this Agreement expressly provides for payments to be allocated to a particular Lender or to the Lenders under a particular Facility, if any Lender (a "Benefitted Lender") shall receive any payment of all or part of the Obligations owing to it, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 9(f), or otherwise), in a greater proportion than any such payment to or collateral received by any other relevant Lender, if any, in respect of the Obligations owing to such other Lender, such Benefitted Lender shall purchase for cash from the other relevant Lenders a participating interest in such portion of the Obligations owing to each such other Lender, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collateral ratably with each of the relevant Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to Holdings or the Borrower, any such notice being expressly waived by Holdings and the Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by Holdings or the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise), to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of Holdings or the Borrower, as the case may be. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such setoff and application. 11.8. Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent. 11.9. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or 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. 11.10. Integration. This Agreement and the other Loan Documents represent the entire agreement of Holdings, the Borrower, the Agents and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any Agent or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents. 98 11.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 11.12. Submission To Jurisdiction; Waivers. Each of Holdings and the Borrower hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to Holdings or the Borrower, as the case may be at its address set forth in Section 11.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages. 11.13. Acknowledgments. Each of Holdings and the Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents; (b) no Agent or Lender has any fiduciary relationship with or duty to Holdings or the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Agents and Lenders, on one hand, and Holdings and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among Holdings, the Borrower and the Lenders. 99 11.14. Releases of Guarantees and Liens. (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 11.1) to direct the Collateral Agent to take any action requested by the Borrower having the effect of releasing any Collateral or guarantee obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 11.1 or (ii) under the circumstances described in paragraph (b) below. (b) At such time as the Loans, the Reimbursement Obligations and the other obligations under the Loan Documents (other than obligations under or in respect of Specified Hedge Agreements) shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent, the Administrative Agent and each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person. 11.15. Confidentiality. Each Agent and each Lender agrees to keep confidential all non-public information provided to it by any Loan Party pursuant to this Agreement that is designated by such Loan Party as confidential; provided that nothing herein shall prevent any Agent or any Lender from disclosing any such information (a) to any Agent, any other Lender or any of their respective Affiliates, (b) subject to an agreement to comply with the provisions of this Section, to any actual or prospective Transferee or any pledge referred to in Section 11.6(d) or to any direct or indirect counterparty to any Hedge Agreement or any securitization or derivative transaction (or any professional advisor to such counterparty), (c) to its employees, directors, agents, attorneys, accountants and other professional advisors or those of any of its affiliates, (d) upon the request or demand of any Governmental Authority, (e) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (f) if requested or required to do so in connection with any litigation or similar proceeding, (g) that has been publicly disclosed, (h) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender's investment portfolio in connection with ratings issued with respect to such Lender, or (i) in connection with the exercise of any remedy hereunder or under any other Loan Document. Notwithstanding the foregoing, each Lender and its Affiliates shall have the right to (i) list the names and logos of the Borrower and Holdings, as provided by the Borrower and Holdings from time to time, and describe the transaction that is the subject to this Agreement in their marketing materials and (ii) post such information, including, without limitation, a customary "tombstone," on their website. 11.16. WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 100 11.17. Delivery of Addenda. Each Lender shall become a party to this Agreement by delivering to the Administrative Agent an Addendum duly executed by such Lender. 11.18. Termination. If the Acquisition is not consummated on or before September 30, 2004, the Revolving Commitments are terminated in accordance with this Agreement, and all outstanding Tranche A-2 Term Loans and Tranche B-2 Term Loans have been paid in full in accordance with this Agreement, together with accrued interest thereon and all other amounts owing in respect thereof or otherwise payable hereunder, this Agreement shall terminate (except for those provisions of this Agreement that are stated to survive termination of this Agreement). 101 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. R.H. DONNELLEY CORPORATION By: /s/ ROBERT J. BUSH ------------------------------------------------- Name: ROBERT J. BUSH Title: VICE PRESIDENT, GENERAL COUNSEL & CORPORATE SECRETARY R.H. DONNELLEY INC. By: /s/ ROBERT J. BUSH ------------------------------------------------ Name: ROBERT J. BUSH Title: VICE PRESIDENT, GENERAL COUNSEL & CORPORATE SECRETARY DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent By: /s/ SCOTTYE LINDSEY ------------------------------------------------- Name: SCOTTYE LINDSEY Title: DIRECTOR JPMORGAN CHASE BANK, as Co-Syndication Agent By: /s/ Peter B. Throer ------------------------------------------------- Name: Peter B. Throer Title: Vice President BEAR STEARNS CORPORATE LENDING INC., as Co-Syndication Agent By: /s/ LAWRENCE B. ALLETTO ------------------------------------------------- Name: LAWRENCE B. ALLETTO Title: VICE PRESIDENT 102 CITICORP NORTH AMERICA, INC., as Co-Documentation Agent By: /s/ John Judge ------------------------------------------------- Name: John Judge Title: Director GOLDMAN SACHS CREDIT PARTNERS L.P., as Co-Documentation Agent By: /s/ Robert Wagner ------------------------------------------------- Name: Robert Wagner Title: Authorized Signatory J.P. MORGAN SECURITIES INC., as Joint Lead Arranger By: /s/ Gary L. Spevack ------------------------------------------------- Name: Gary L. Spevack Title: Vice President BEAR, STEARNS & CO. INC., as Joint Lead Arranger By: /s/ Lawrence B. Alletto ------------------------------------------------- Name: Lawrence B. Alletto Title: Senior Managing Director ANNEX A I. PRICING GRID FOR REVOLVING LOANS, SWINGLINE LOANS AND TRANCHE A-2 TERM LOANS
Applicable Margin Applicable Margin for Pricing Level for Eurodollar Loans Base Rate Loans - ------------- -------------------- --------------- I 2.00% 1.00% II 1.75% 0.75% III 1.50% 0.50%
II. PRICING GRID FOR TRANCHE B-2 TERM LOANS
Applicable Margin for Applicable Margin for Base Pricing Level Eurodollar Loans Rate Loans - ------------- --------------------- -------------------------- I 2.25% 1.25% II 2.00% 1.00%
The Applicable Margin shall be adjusted, on and after the first Adjustment Date occurring after the Closing Date, based on changes in the Consolidated Leverage Ratio, with such adjustments to become effective on the date (the "Adjustment Date") that is three Business Days after the date on which the relevant financial statements are delivered to the Lenders pursuant to Section 7.1 and to remain in effect until the next adjustment to be effected pursuant to this paragraph. If any financial statements referred to above are not delivered within the time periods specified in Section 7.1, then, until the date that is three Business Days after the date on which such financial statements are delivered, for (a) Revolving Loans, Swingline Loans and Tranche A-2 Term Loans, the highest rate set forth in each column of the Pricing Grid for Revolving Loans, Swingline Loans and Tranche A-2 Term Loans ("Pricing Grid I") shall apply and (b) for Tranche B-2 Term Loans, the highest rate set forth in each column of the Pricing Grid for Tranche B-2 Term Loans ("Pricing Grid II") shall apply. On each Adjustment Date, the Applicable Margin for (a) Revolving Loans, Swingline Loans and Tranche A-2 Term Loans shall be adjusted to be equal to the Applicable Margins opposite the Pricing Level in Pricing Grid I determined to exist on such Adjustment Date from the financial statements relating to such Adjustment Date and (b) for Tranche B-2 Term Loans shall be adjusted to be equal to the Applicable Margins opposite the Pricing Level in Pricing Grid II determined to exist on such Adjustment Date from the financial statements relating to such Adjustment Date. As used herein, the following rules shall govern the determination of Pricing Levels on each Adjustment Date for Pricing Grid I and Pricing Grid II: (a) Pricing Grid I: "Pricing Level I" shall exist on an Adjustment Date if the Consolidated Leverage Ratio for the relevant period is greater than or equal to 4.50 to 1.00. "Pricing Level II" shall exist on an Adjustment Date if the Consolidated Leverage Ratio for the relevant period is less than 4.50 to 1.00 but greater than or equal to 4.00 to 1.00. "Pricing Level III" shall exist on an Adjustment Date if the Consolidated Leverage Ratio for the relevant period is less than 4.00 to 1.00. (b) Pricing Grid II: "Pricing Level I" shall exist on an Adjustment Date if the Consolidated Leverage Ratio for the relevant period is greater than or equal to 5.00 to 1.00. "Pricing Level II" shall exist on an Adjustment Date if the Consolidated Leverage Ratio for the relevant period is less than 5.00 to 1.00. EX-10.6 12 l09401aexv10w6.txt EXHIBIT 10.6 EXHIBIT 10.6 EXECUTION COPY ================================================================================ AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT among R.H. DONNELLEY CORPORATION R.H. DONNELLEY INC. and certain of its Subsidiaries and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent Dated as of September 1, 2004 ================================================================================ TABLE OF CONTENTS
Page ---- SECTION 1. DEFINED TERMS.................................................................................. 2 1.1 Definitions.................................................................................... 2 1.2 Other Definitional Provisions.................................................................. 5 SECTION 2. GUARANTEE...................................................................................... 5 2.1 Guarantee...................................................................................... 5 2.2 Right of Contribution.......................................................................... 6 2.3 No Subrogation................................................................................. 6 2.4 Amendments, etc. with respect to the Borrower Credit Agreement Obligations..................... 7 2.5 Guarantee Absolute and Unconditional........................................................... 7 2.6 Reinstatement.................................................................................. 8 2.7 Payments....................................................................................... 8 SECTION 3. GRANT OF SECURITY INTEREST..................................................................... 8 3.1 Grant of First Priority Security Interest...................................................... 8 3.2 Grant of Second Priority Security Interest..................................................... 9 3.3 Separate and Distinct Security Interests....................................................... 9 3.4 Excluded Property.............................................................................. 10 3.5 Equal and Ratable Requirements................................................................. 10 3.6 Classification of Credit Agreement Obligations................................................. 10 SECTION 4. REPRESENTATIONS AND WARRANTIES................................................................. 10 4.1 Title; No Other Liens.......................................................................... 11 4.2 Perfected First Priority Lien.................................................................. 11 4.3 Jurisdiction of Organization; Chief Executive Office........................................... 11 4.4 Farm Products.................................................................................. 11 4.5 Investment Property............................................................................ 12 4.6 Receivables.................................................................................... 12 4.7 Intellectual Property.......................................................................... 12 4.8 Deposit Accounts, Securities Accounts.......................................................... 12 SECTION 5. COVENANTS...................................................................................... 13 5.1 Delivery of Instruments, Certificated Securities and Chattel Paper............................. 13 5.2 Maintenance of Insurance....................................................................... 13 5.3 Payment of Obligations......................................................................... 13 5.4 Maintenance of Perfected Security Interest; Further Documentation.............................. 13 5.5 Changes in Locations, Name, etc................................................................ 14 5.6 Notices........................................................................................ 14 5.7 Investment Property............................................................................ 14 5.8 Receivables.................................................................................... 15 5.9 Intellectual Property.......................................................................... 15 5.10 Commercial Tort Claims......................................................................... 17 5.11 Deposit Accounts, Securities Accounts.......................................................... 17 5.12 Unrestricted Subsidiaries...................................................................... 17 SECTION 6. REMEDIAL PROVISIONS............................................................................ 17
i 6.1 Certain Matters Relating to Receivables........................................................ 17 6.2 Communications with Obligors; Grantors Remain Liable........................................... 17 6.3 Pledged Stock.................................................................................. 18 6.4 Proceeds to be Turned Over To Collateral Agent................................................. 19 6.5 Code and Other Remedies........................................................................ 19 6.6 Registration Rights............................................................................ 20 6.7 Deficiency..................................................................................... 20 SECTION 7. THE COLLATERAL ACCOUNT; DISTRIBUTIONS.......................................................... 21 7.1 The Collateral Account......................................................................... 21 7.2 Control of Collateral Account.................................................................. 21 7.3 Investment of Funds Deposited in Collateral Account............................................ 21 7.4 Application of Moneys.......................................................................... 21 7.5 Application of Moneys Distributable to the Trustee............................................. 23 7.6 Collateral Agent's Calculations................................................................ 23 7.7 Pro Rata Sharing............................................................................... 23 SECTION 8. AGREEMENTS WITH THE COLLATERAL AGENT........................................................... 24 8.1 Delivery of Secured Debt Agreements............................................................ 24 8.2 Information as to Secured Parties.............................................................. 24 8.3 Compensation and Expenses...................................................................... 24 8.4 Stamp and Other Similar Taxes.................................................................. 24 8.5 Filing Fees, Excise Taxes, Etc................................................................. 24 8.6 Indemnification................................................................................ 24 8.7 Collateral Agent's Lien........................................................................ 25 SECTION 9. THE COLLATERAL AGENT........................................................................... 26 9.1 Collateral Agent's Appointment as Attorney-in-Fact, etc........................................ 26 9.2 Appointment of Collateral Agent as Agent for the Secured Parties............................... 27 9.3 Duty of Collateral Agent....................................................................... 27 9.4 Execution of Financing Statements.............................................................. 28 9.5 Authority of Collateral Agent.................................................................. 28 9.6 Exculpatory Provisions......................................................................... 28 9.7 Delegation of Duties........................................................................... 29 9.8 Reliance by Collateral Agent................................................................... 29 9.9 Limitations on Duties of Collateral Agent...................................................... 30 9.10 Moneys to be Held in Trust..................................................................... 31 9.11 Resignation and Removal of the Collateral Agent................................................ 31 9.12 Status of Successor Collateral Agent........................................................... 32 9.13 Merger of the Collateral Agent................................................................. 32 9.14 Co-Collateral Agent; Separate Collateral Agent................................................. 32 9.15 Treatment of Payee or Indorsee by Collateral Agent............................................. 33 SECTION 10. MISCELLANEOUS.................................................................................. 34 10.1 Amendments in Writing.......................................................................... 34 10.2 Notices........................................................................................ 34 10.3 No Waiver by Course of Conduct; Cumulative Remedies............................................ 34 10.4 Enforcement Expenses; Indemnification.......................................................... 34 10.5 Successors and Assigns......................................................................... 35 10.6 Set-Off........................................................................................ 35 10.7 Counterparts................................................................................... 35
ii 10.8 Severability................................................................................... 35 10.9 Section Headings............................................................................... 35 10.10 Integration.................................................................................... 36 10.11 GOVERNING LAW.................................................................................. 36 10.12 Submission To Jurisdiction; Waivers............................................................ 36 10.13 Acknowledgements............................................................................... 36 10.14 Additional Grantors............................................................................ 37 10.15 Releases....................................................................................... 37 10.16 WAIVER OF JURY TRIAL........................................................................... 38
SCHEDULES Schedule 1 Notice Addresses Schedule 2 Investment Property Schedule 3 Perfection Matters Schedule 4 Jurisdictions of Organization and Chief Executive Offices Schedule 5 Inventory and Equipment Locations Schedule 6 Intellectual Property Schedule 7 Contracts ANNEXES Annex I Form of Assumption Agreement Annex II Form of Acknowledgement and Consent iii AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated as of September 1, 2004, among each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, the "Grantors"), and Deutsche Bank Trust Company Americas, as Collateral Agent (in such capacity, together with any successor collateral agent, the "Collateral Agent") for (i) the banks and other financial institutions or entities (the "Lenders") from time to time parties to the Amended and Restated Credit Agreement, dated as of September 1, 2004 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among R.H. Donnelley Corporation ("Holdings"), R.H. Donnelley Inc. (the "Borrower"), the Lenders, Deutsche Bank Trust Company Americas, as administrative agent (the "Administrative Agent") and the other agents named therein (together with the Administrative Agent, the "Agents") and (ii) the holders from time to time (the "Holders") of the Borrower's 8?% Senior Notes due 2010 (the "Senior Notes") issued under the Indenture, dated January 3, 2003 (the "Indenture"), among the Borrower and The Bank of New York, as trustee (the "Trustee"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein; WHEREAS, the Borrower is a member of an affiliated group of companies that includes each other Grantor; WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective businesses; WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement; WHEREAS, in connection with the Existing Credit Agreement, certain parties hereto entered into the Guarantee and Collateral Agreement, dated as of December 6, 2002 (the "Existing Guarantee and Collateral Agreement"); WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Collateral Agent for the ratable benefit of the holders of Credit Agreement Obligations (as defined below) (collectively, the "Credit Agreement Secured Parties"); and WHEREAS, pursuant to the Indenture, the Borrower and its Restricted Subsidiaries (as defined in the Indenture) are required, under certain circumstances, to equally and ratably secure the Senior Notes (such requirements, the "Equal and Ratable Requirements"); NOW, THEREFORE, in consideration of the premises and to induce the Credit Agreement Secured Parties to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder and to satisfy the Equal and Ratable 2 Requirements of the Indenture, each Grantor hereby agrees with the Collateral Agent, for the ratable benefit of the Secured Parties (as defined below), to amend and restate the Existing Guarantee and Collateral Agreement in its entirety as follows: SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms are used herein as defined in the New York UCC: Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims, Documents, Equipment, Farm Products, General Intangibles, Instruments, Inventory, Letter-of-Credit Rights, Securities Account and Supporting Obligations. (b) The following terms shall have the following meanings: "Agents": as defined in the preamble. "Agreement": this Amended and Restated Guarantee and Collateral Agreement, as the same may be amended, supplemented or otherwise modified from time to time. "Borrower Credit Agreement Obligations": the collective reference to the unpaid principal of and interest on the Loans and all other obligations and liabilities of the Borrower (including, without limitation, interest accruing at the then applicable rate provided in the Credit Agreement after the maturity of the Loans and interest accruing at the then applicable rate provided in the Credit Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to any Credit Agreement Secured Party (or, in the case of any Specified Hedge Agreement, any Person who was a Lender or an Affiliate of a Lender at the time such Specified Hedge Agreement was entered into), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, this Agreement, the other Loan Documents, any Letter of Credit, any Specified Hedge Agreement or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Credit Agreement Secured Parties that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements). "Collateral": as defined in Section 3. "Collateral Account": the collateral account established by the Collateral Agent as provided in Section 7.1. "Collateral Agent Fees": all fees, costs and expenses of the Collateral Agent of the types described in Sections 8.3, 8.4, 8.5, 8.6 and 9.1(c). "Copyrights": (i) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished (including, without limitation, those listed in Schedule 6), all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United States Copyright Office, and (ii) the right to obtain all renewals thereof. 3 "Copyright Licenses": any written agreement naming any Grantor as licensor or licensee (including, without limitation, those listed in Schedule 6), granting any right under any Copyright, including, without limitation, the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright. "Credit Agreement Obligations": (i) the case of the Borrower, the Borrower Credit Agreement Obligations, and (ii) in the case of each Guarantor, its Guarantor Obligations. "Credit Agreement Secured Parties": as defined in the recitals hereto. "Deposit Account": as defined in the Uniform Commercial Code of any applicable jurisdiction and, in any event, including, without limitation, any demand, time, savings, passbook or like account maintained with a depositary institution. "Distribution Date": each date fixed by the Collateral Agent in its sole discretion for a distribution to the relevant Secured Parties of funds held in the Collateral Account. "Equal and Ratable Requirements": as defined in the recitals hereto. "First Lien Secured Amount": at any time, the lesser of (i) $1,525,000,000 and (ii) the maximum amount that can be secured under the Indenture pursuant to clause (b) of the definition of "Permitted Liens" contained therein. "Foreign Subsidiary": any Subsidiary organized under the laws of any jurisdiction outside the United States of America. "Foreign Subsidiary Voting Stock": the voting Capital Stock of any Foreign Subsidiary. "Grantors": as defined in the preamble hereto. "Guarantor Obligations": with respect to any Guarantor, all obligations and liabilities of such Guarantor which may arise under or in connection with this Agreement (including, without limitation, Section 2) or any other Loan Document to which such Guarantor is a party, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Credit Agreement Secured Parties that are required to be paid by such Guarantor pursuant to the terms of this Agreement or any other Loan Document). "Guarantors": the collective reference to each Grantor other than the Borrower. "Holders": as defined in the preamble hereto. "Indenture": as defined in the preamble hereto "Intellectual Property": the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom. 4 "Intercompany Note": any promissory note evidencing loans made by any Grantor to Holdings or any of its Subsidiaries. "Investment Property": the collective reference to (i) all "investment property," as such term is defined in Section 9-102(a)(49) of the New York UCC (other than any Foreign Subsidiary Voting Stock excluded from the definition of "Pledged Stock") and (ii) whether or not constituting "investment property" as so defined, all Pledged Notes and all Pledged Stock. "Issuers": the collective reference to each issuer of any Investment Property. "New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York. "Patents": (i) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof and all goodwill associated therewith, including, without limitation, any of the foregoing referred to in Schedule 6, (ii) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including, without limitation, any of the foregoing referred to in Schedule 6 and (iii) all rights to obtain any reissues or extensions of the foregoing. "Patent License": all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in part by a Patent, including, without limitation, any of the foregoing referred to in Schedule 6. "Pledged Notes": all promissory notes listed on Schedule 2, all Intercompany Notes at any time issued to any Grantor and all other promissory notes issued to or held by any Grantor (other than promissory notes issued in connection with extensions of trade credit by any Grantor in the ordinary course of business). "Pledged Stock": the shares of Capital Stock listed on Schedule 2, together with any other shares, stock certificates, options, interests or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, any Grantor while this Agreement is in effect; provided that in no event shall more than 65% of the total outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be required to be pledged hereunder. "Proceeds": all "proceeds," as such term is defined in Section 9-102(a)(64) of the New York UCC and, in any event, shall include, without limitation, all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto. "Receivable": any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including, without limitation, any Account). "Secured Debt Agreements": collectively, (a) the Credit Agreement, the Loan Documents and any other documents entered into in connection therewith and (b) the Indenture and any other documents entered into in connection therewith. "Secured Obligations": (i) the Borrower Credit Agreement Obligations, (ii) the Senior Note Obligations and (iii) the Guarantor Obligations. 5 "Secured Parties": collectively, (a) the Credit Agreement Secured Parties, (b) the Holders and (c) the Collateral Agent. "Securities Act": the Securities Act of 1933, as amended. "Senior Notes": as defined in the preamble hereto. "Senior Note Obligations": the unpaid principal of, and premium, if any, and interest on, the Senior Notes (including, without limitation, interest accruing at the then applicable rate provided in the instruments governing the Senior Notes after the maturity of the Senior Notes and interest accruing at the then applicable rate provided in such instruments after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding). "Trademarks": (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto, including, without limitation, any of the foregoing referred to in Schedule 6, and (ii) the right to obtain all renewals thereof. "Trademark License": any agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trademark, including, without limitation, any of the foregoing referred to in Schedule 6. "Trustee": as defined in the preamble hereto. 1.2 Other Definitional Provisions. (a) The words "hereof," "herein," "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor's Collateral or the relevant part thereof. (d) All references to the Lenders hereunder and in the recitals hereto shall, where appropriate, include any Affiliate of any Lender that is a party to a Specified Hedge Agreement. Section 2. Guarantee 2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees as a primary obligor and not merely as surety to the Collateral Agent, for the ratable benefit of the Credit Agreement Secured Parties and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower when due 6 (whether at the stated maturity, by acceleration or otherwise) of the Borrower Credit Agreement Obligations. (b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2). (c) Each Guarantor agrees that the Borrower Credit Agreement Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Collateral Agent or any Credit Agreement Secured Party hereunder. (d) The guarantee contained in this Section 2 shall remain in full force and effect until all the Borrower Credit Agreement Obligations and the obligations of each Guarantor under the guarantee contained in this Section 2 shall have been satisfied by payment in full, no Letter of Credit shall be outstanding and the Commitments shall be terminated, notwithstanding that from time to time during the term of the Credit Agreement the Borrower may be free from any Borrower Credit Agreement Obligations. (e) No payment made by the Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by the Collateral Agent or any Credit Agreement Secured Party from the Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Borrower Credit Agreement Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Borrower Credit Agreement Obligations or any payment received or collected from such Guarantor in respect of the Borrower Credit Agreement Obligations), remain liable for the Borrower Credit Agreement Obligations up to the maximum liability of such Guarantor hereunder until the Borrower Credit Agreement Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. 2.2 Right of Contribution. Each Subsidiary Guarantor hereby agrees that to the extent that a Subsidiary Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Subsidiary Guarantor shall be entitled to seek and receive contribution from and against any other Subsidiary Guarantor hereunder which has not paid its proportionate share of such payment. Each Subsidiary Guarantor's right of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Subsidiary Guarantor to the Collateral Agent and the Credit Agreement Secured Parties, and each Subsidiary Guarantor shall remain liable to the Collateral Agent and the Credit Agreement Secured Parties for the full amount guaranteed by such Subsidiary Guarantor hereunder. 2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Collateral Agent or any Credit Agreement Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of the Collateral Agent or any Credit Agreement Secured Party against the Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by the Collateral Agent or any Credit Agreement Secured Party for the payment of the Borrower Credit Agreement Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Collateral Agent and the Credit 7 Agreement Secured Parties by the Borrower on account of the Borrower Credit Agreement Obligations are paid in full, no Letter of Credit shall be outstanding and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Borrower Credit Agreement Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Collateral Agent and the Credit Agreement Secured Parties, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Collateral Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Collateral Agent, if required), to be applied against the Borrower Credit Agreement Obligations, whether matured or unmatured, in such order as the Collateral Agent may determine. 2.4 Amendments, etc. with respect to the Borrower Credit Agreement Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Borrower Credit Agreement Obligations made by the Collateral Agent or any Credit Agreement Secured Party may be rescinded by the Collateral Agent or such Secured Party and any of the Borrower Credit Agreement Obligations continued, and the Borrower Credit Agreement Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Collateral Agent or any Credit Agreement Secured Party, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Collateral Agent (or the Administrative Agent, the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Collateral Agent or any Secured Party for the payment of the Borrower Credit Agreement Obligations may be sold, exchanged, waived, surrendered or released. Neither the Collateral Agent nor any other Credit Agreement Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Borrower Credit Agreement Obligations or for the guarantee contained in this Section 2 or any property subject thereto. 2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Borrower Credit Agreement Obligations and notice of or proof of reliance by the Collateral Agent or any Credit Agreement Secured Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Borrower Credit Agreement Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Collateral Agent and the Credit Agreement Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the Guarantors with respect to the Borrower Credit Agreement Obligations. Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Borrower Credit Agreement Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Collateral Agent or any Credit Agreement Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower or any other Person against the Collateral Agent or any Credit Agreement Secured Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for 8 the Borrower Credit Agreement Obligations, or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Collateral Agent and any Credit Agreement Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the Credit Agreement Obligations or any right of offset with respect thereto, and any failure by the Collateral Agent or any Credit Agreement Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Collateral Agent or any Credit Agreement Secured Party against any Guarantor. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings. 2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Borrower Credit Agreement Obligations is rescinded or must otherwise be restored or returned by any Credit Agreement Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made. 2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Collateral Agent for the sole benefit of the Credit Agreement Secured Parties without set-off or counterclaim in Dollars at the office of the Collateral Agent located at 60 Wall Street, New York, New York 10005. SECTION 3. GRANT OF SECURITY INTEREST 3.1 Grant of First Priority Security Interest. Each Grantor hereby assigns and transfers to the Collateral Agent, and hereby grants to the Collateral Agent, for the ratable benefit of the Credit Agreement Secured Parties (and, to the extent the following constitutes "Collateral" under, and as defined in, the Existing Guarantee and Collateral Agreement, hereby confirms (without interruption) its assignment and transfer to the Collateral Agent under the Existing Guarantee and Collateral Agreement of), a first priority, security interest (the "First Priority Interest") in, all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of such Grantor's Credit Agreement Obligations (provided, that in no event shall the First Priority Interest at any time secure an amount in excess of (i) principal amounts outstanding under the Credit Agreement up to the First Lien Secured Amount and accrued interest and fees thereon plus (ii) any other Credit Agreement Obligations permitted by the Indenture to be secured on a first priority basis): (a) all Accounts; (b) all Chattel Paper; 9 (c) all Contracts; (d) all Deposit Accounts; (e) all Documents; (f) all Equipment; (g) all General Intangibles; (h) all Instruments; (i) all Intellectual Property; (j) all Inventory; (k) all Investment Property; (l) all Letter-of-Credit Rights; (m) all other property not otherwise described above; (n) all books and records pertaining to the Collateral; and (o) to the extent not otherwise included, all Proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. 3.2 Grant of Second Priority Security Interest. Subject to Section 7.4, each Grantor hereby assigns and transfers to the Collateral Agent, and hereby grants to the Collateral Agent, for the benefit of the Secured Parties, a second priority security interest (the "Second Priority Interest") in all right, title and interest of such Grantor in all Collateral, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations. 3.3 Separate and Distinct Security Interests. (a) As set forth in the separate granting clauses contained in Sections 3.1 and 3.2 above, it is the intent of each Grantor, the Secured Parties and the Collateral Agent, that such grants shall create two separate and distinct security interests in all right, title and interest of each Grantor in all Collateral in favor of (i) the Collateral Agent, for the benefit of the Credit Agreement Secured Parties and (ii) the Collateral Agent, for the benefit of the Secured Parties. For the avoidance of doubt, the parties hereto acknowledge and agree that the First Priority Interest and the Second Priority Interest shall constitute valid and enforceable security interests in the Collateral having the priorities relative to one another established under Sections 3.1 and 3.2 without regard to whether the actual numeric priority of any of such security interests may prove to be different, whether due to the existence of a senior lien or the unenforceability of any of such security interests. (b) Notwithstanding (i) anything to the contrary contained in any other document, filing or agreement related to the creation, attachment, perfection or existence of the security interests granted herein, (ii) the time, place, order or method of attachment or perfection of such security interests, (iii) the time or order of filing or recording of financing statements or other documents filed or recorded to perfect such security interests, and (iv) the rules for determining priority under any law governing the relative 10 priorities of secured creditors, the Second Priority Interest is expressly junior in priority, operation and effect to the First Priority Interest. (c) The priorities set forth herein are intended solely to define the relative priorities of the secured interests in relation to one another and shall not be construed as an agreement by any Secured Party to subordinate its secured interest in favor of the Lien of a Person which is not a Secured Party. 3.4 Excluded Property. Notwithstanding any of the other provisions set forth in this Section 3 (other than Section 3.5), this Agreement shall not constitute a grant of a security interest in any property to the extent that such grant of a security interest is (i) prohibited by any Requirements of Law of a Governmental Authority, requires a consent not obtained of any Governmental Authority pursuant to such Requirement of Law, (ii) is prohibited by, or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property, or (iii) in the case of any Investment Property, Pledged Stock or Pledged Note, any applicable shareholder or similar agreement, except in each case to the extent that such Requirement of Law or the term in such contract, license, agreement, instrument or other document or shareholder or similar agreement providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable law. 3.5 Equal and Ratable Requirements. Anything herein or in any other Loan Document to the contrary notwithstanding, (a) to the extent the Holders are required to be secured equally and ratably with respect to the Collateral or any other collateral security for the Credit Agreement Obligations pursuant to the Equal and Ratable Requirements of the Indenture but are not deemed so secured pursuant to the terms of this Agreement or any other Security Document, this Agreement or such other Security Document, as applicable, shall be deemed amended to the extent necessary to comply with the Equal and Ratable Requirements of the Indenture; and (b) to the extent the Holders are secured with respect to the Collateral or any other collateral security for the Credit Agreement Obligations pursuant to this Agreement or any other Security Document to a greater extent than is required by the Equal and Ratable Requirements of the Indenture, this Agreement or such other Security Document, as applicable, shall be deemed amended in order to provide the Holders only those rights and security interests with respect to the Collateral or collateral security as are required by the Equal and Ratable Requirements of the Indenture. 3.6 Classification of Credit Agreement Obligations. The Credit Agreement Obligations secured by the Collateral pursuant to Section 3.1 shall be classified or reclassified from time to time as having been incurred in reliance on Section 4.09(c)(1) of the Indenture, and the Credit Agreement Obligations secured pursuant to Section 3.2 shall be classified or reclassified from time to time as having been incurred in reliance on any paragraph of Section 4.09 of the Indenture other than paragraph (c)(1) thereof. Any mandatory repayments made under the Credit Agreement with Net Available Cash (as defined in the Indenture) from Asset Sales (as defined in the Indenture) shall be deemed applied first to obligations outstanding under the Credit Agreement secured by the Second Priority Interest and second to obligations outstanding under the Credit Agreement secured by the First Priority Interest. SECTION 4. REPRESENTATIONS AND WARRANTIES To induce the Credit Agreement Secured Parties to enter into the Credit Agreement and to induce the Credit Agreement Secured Parties to make and continue their respective extensions of credit 11 to the Borrower under the Credit Agreement, each Grantor hereby represents and warrants to the Collateral Agent and each Secured Party that: 4.1 Title; No Other Liens. Except for the security interests granted to the Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Credit Agreement, such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. No financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except such as have been filed in favor of the Collateral Agent, for the benefit of the Secured Parties pursuant to this Agreement or as are permitted by the Credit Agreement. For the avoidance of doubt, it is understood and agreed that any Grantor may, as part of its business, grant licenses to third parties to use Intellectual Property owned or developed by a Grantor. For purposes of this Agreement and the other Loan Documents, such licensing activity shall not constitute a "Lien" on such Intellectual Property. Each Secured Party understands that any such licenses may be exclusive to the applicable licensees, and such exclusivity provisions may limit the ability of the Collateral Agent to utilize, sell, lease or transfer the related Intellectual Property or otherwise realize value from such Intellectual Property pursuant hereto. 4.2 Perfected First Priority Lien. (a) The First Priority Interest granted or continued pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule 3 (which, in the case of all filings and other documents referred to on said Schedule, have been delivered to the Collateral Agent in completed and duly executed form) will constitute valid perfected security interests in all of the Collateral in favor of the Collateral Agent, for the ratable benefit of the Credit Agreement Secured Parties, as collateral security for the Credit Agreement Obligations (provided, that in no event shall the First Priority Interest at any time secure an amount in excess of (i) principal amounts outstanding under the Credit Agreement up to the First Lien Secured Amount and accrued interest and fees thereon plus (ii) any other Credit Agreement Obligations permitted by the Indenture to be secured on a first priority basis), enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for unrecorded Liens permitted by the Credit Agreement which have priority over the Liens on the Collateral by operation of law. (b) Perfected Second Priority Lien. The Second Priority Interest granted pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule 3 (which, in the case of all filings and other documents referred to on said Schedule, have been delivered to the Collateral Agent in completed and duly executed form) will constitute valid perfected security interests in all of the Collateral in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, as collateral security for the Secured Obligations, enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor and (b) are prior to all other Liens on the Collateral in existence on the date hereof except for the First Priority Interest and Liens permitted by the Credit Agreement that have priority over the Liens on the Collateral granted hereby by operation of law. 4.3 Jurisdiction of Organization; Chief Executive Office. On the date hereof, such Grantor's jurisdiction of organization, identification number from the jurisdiction of organization (if any), and the location of such Grantor's chief executive office or sole place of business or principal residence, as the case may be, are specified on Schedule 4. Such Grantor has furnished to the Collateral Agent a certified charter, certificate of incorporation or other organizational document and a long-form good standing certificate as of a date which is recent to the date hereof. 4.4 Farm Products. None of the Collateral constitutes, or is the Proceeds of, Farm Products. 12 4.5 Investment Property. (a) The shares of Pledged Stock pledged by such Grantor hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by such Grantor or, in the case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign Subsidiary Voting Stock of each relevant Issuer. (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable. (c) Each of the Pledged Notes constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (d) Such Grantor is the record and beneficial owner of, and has good and marketable title to, the Investment Property pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interests created or continued by this Agreement. 4.6 Receivables. (a) No amount payable to such Grantor under or in connection with any Receivable is evidenced by any Instrument or Chattel Paper which has not been delivered to the Collateral Agent. (b) None of the obligors on any Receivables is a Governmental Authority. (c) The amounts represented by such Grantor to the Secured Parties from time to time as owing to such Grantor in respect of the Receivables will at such times be accurate. 4.7 Intellectual Property. (a) Schedule 5 lists all Copyrights, Trademarks, Patents and applications for the foregoing owned by such Grantor in its own name on the date hereof and all Copyright Licenses, Patent Licenses and Trademark Licenses. (b) On the date hereof, all material Intellectual Property is valid, subsisting, unexpired and enforceable, has not been abandoned and, to the knowledge of such Grantor, does not infringe the intellectual property rights of any other Person. (c) Except as set forth in Schedule 5 hereto, on the date hereof, none of the Intellectual Property is the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor. (d) No holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of, or such Grantor's rights in, any Intellectual Property in any respect that could reasonably be expected to have a Material Adverse Effect. (e) No action or proceeding is pending, or, to the knowledge of such Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question the validity of any Intellectual Property or such Grantor's ownership interest therein, or (ii) which, if adversely determined, would have a material adverse effect on the value of any Intellectual Property. 4.8 Deposit Accounts, Securities Accounts . Schedule 6 hereto sets forth each Deposit Account or Securities Account in which any Grantor has any interest on the date hereof. 13 SECTION 5. COVENANTS Each Grantor covenants and agrees with the Collateral Agent for the benefit of the Secured Parties that, from and after the date of this Agreement until the Secured Obligations shall have been paid in full, no Letter of Credit shall be outstanding and the Commitments shall have terminated: 5.1 Delivery of Instruments, Certificated Securities and Chattel Paper. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument, Certificated Security or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall be immediately delivered to the Collateral Agent, duly indorsed in a manner satisfactory to the Collateral Agent, to be held as Collateral pursuant to this Agreement. 5.2 Maintenance of Insurance. (a) Such Grantor will maintain, with financially sound and reputable companies, insurance policies (i) insuring the Inventory and Equipment against loss by fire, explosion, theft and such other casualties as may be reasonably satisfactory to the Collateral Agent and (ii) to the extent requested by the Collateral Agent, insuring such Grantor against liability for personal injury and property damage relating to such Inventory and Equipment, such policies to be in such form and amounts and having such coverage as may be reasonably satisfactory to the Collateral Agent. (b) All such insurance shall (i) provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective unless the insurer gives at least 30 days notice to the Collateral Agent, (ii) name the Collateral Agent as insured party or loss payee, as applicable, and (iii) be reasonably satisfactory in all other respects to the Collateral Agent. (c) The Borrower shall deliver to the Collateral Agent a report of a reputable insurance broker with respect to such insurance substantially concurrently with each delivery of the Borrower's audited annual financial statements and such supplemental reports with respect thereto as the Collateral Agent may from time to time reasonably request. 5.3 Payment of Obligations. Such Grantor will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all taxes, assessments and governmental charges or levies imposed upon the Collateral or in respect of income or profits therefrom, as well as all claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books of such Grantor and such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 5.4 Maintenance of Perfected Security Interest; Further Documentation. (a) Such Grantor shall maintain the security interests created by this Agreement as perfected security interests having the priorities described in Section 4.2 and shall defend such security interests against the claims and demands of all Persons whomsoever, subject to the rights of such Grantor under the Loan Documents to dispose of the Collateral. (b) Such Grantor will furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the assets and property of such Grantor and such other reports in connection therewith as the Collateral Agent may reasonably request, all in reasonable detail. (c) At any time and from time to time, upon the written request of the Collateral Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, and have 14 recorded, such further instruments and documents and take such further actions as the Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, (i) filing any financing or continuation statements under the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction with respect to the security interests created hereby and (ii) in the case of Investment Property, Deposit Accounts, Letter-of-Credit Rights and any other relevant Collateral, taking any actions necessary to enable the Collateral Agent to obtain "control" (within the meaning of the applicable Uniform Commercial Code) with respect thereto. Notwithstanding anything in this Agreement to the contrary (other than with respect to (i) Investment Property and (ii) Deposit Accounts and Securities Accounts), no Grantor shall be required to take any actions to perfect or maintain the Collateral Agent's security interest with respect to any personal property Collateral which (i) cannot be perfected or maintained by filing a financing statement under the Uniform Commercial Code and (ii) has a fair market value which, together with the value of all other personal property Collateral of all Grantors with respect to which a security interest is not perfected or maintained in reliance on this sentence, does not exceed $2,500,000. (d) Subject to Section 5.11, such Grantor will not establish any additional Deposit Accounts or Securities Accounts without executing and delivering, concurrently with the establishment of such account, a control agreement in form and substance satisfactory to the Collateral Agent and the related depositary bank or securities intermediary, as the case may be, in order to perfect the security interests of the Collateral Agent in such account under the Uniform Commercial Code. 5.5 Changes in Locations, Name, etc. Such Grantor will not, except upon 15 days' prior written notice to the Collateral Agent and delivery to the Collateral Agent and the Administrative Agent of all additional executed financing statements and other documents reasonably requested by the Collateral Agent or the Administrative Agent to maintain the validity, perfection and priority of the security interests provided for herein: (i) change its jurisdiction of organization or the location of its chief executive office or sole place of business or principal residence from that referred to in Section 4.3; or (ii) change its name. 5.6 Notices. Such Grantor will advise the Collateral Agent and the Administrative Agent promptly, in reasonable detail (which notice shall specify that it is being delivered pursuant to this Section), of: (a) any Lien (other than security interests created or continued hereby or Liens permitted under the Credit Agreement) on any of the Collateral which would adversely affect the ability of the Collateral Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event which could reasonably be expected to have a material adverse effect on the aggregate value of the Collateral or on the security interests created hereby. 5.7 Investment Property. (a) If such Grantor shall become entitled to receive or shall receive any certificate (including, without limitation, any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Collateral Agent for the benefit of the Secured Parties, hold the same in trust for the Collateral Agent for the benefit 15 of the Secured Parties and deliver the same forthwith to the Collateral Agent in the exact form received, duly indorsed by such Grantor to the Collateral Agent, if required, together with an undated stock power covering such certificate duly executed in blank by such Grantor and with, if the Collateral Agent so requests, signature guaranteed, to be held by the Collateral Agent, subject to the terms hereof, as additional collateral security for the Secured Obligations. Any sums paid upon or in respect of the Investment Property upon the liquidation or dissolution of any Issuer shall be paid over to the Collateral Agent to be held by it hereunder as additional collateral security for the Secured Obligations, and in case any distribution of capital shall be made on or in respect of the Investment Property or any property shall be distributed upon or with respect to the Investment Property pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Collateral Agent, be delivered to the Collateral Agent to be held by it hereunder as additional collateral security for the Secured Obligations. If any sums of money or property so paid or distributed in respect of the Investment Property shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Collateral Agent, hold such money or property in trust for the Collateral Agent for the benefit of the Secured Parties, segregated from other funds of such Grantor, as additional collateral security for the Secured Obligations. (b) Without the prior written consent of the Collateral Agent, such Grantor will not (i) vote to enable, or take any other action to permit, any Issuer to issue any Capital Stock of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any Capital Stock of any nature of any Issuer, except to the extent permitted by the Credit Agreement, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property or Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreement), (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Investment Property or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement and the Liens permitted by the Credit Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of such Grantor or the Collateral Agent to sell, assign or transfer any of the Investment Property or Proceeds thereof. (c) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Investment Property issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Collateral Agent promptly in writing of the occurrence of any of the events described in Section 5.7(a) with respect to the Investment Property issued by it and (iii) the terms of Sections 6.3(c) and 6.6 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 6.3(c) or 6.6 with respect to the Investment Property issued by it. 5.8 Receivables. (a) Other than in the ordinary course of business consistent with its past practice, such Grantor will not (i) grant any extension of the time of payment of any Receivable, (ii) compromise or settle any Receivable for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Receivable, (iv) allow any credit or discount whatsoever on any Receivable or (v) amend, supplement or modify any Receivable in any manner that could reasonably be expected to adversely affect the value thereof. (b) Such Grantor will deliver to the Collateral Agent a copy of each material demand, notice or document received by it that questions or calls into doubt the validity or enforceability of more than 5% of the aggregate amount of the then outstanding Receivables. 5.9 Intellectual Property. (a) Except to the extent any Grantor reasonably determines that any Intellectual Property is no longer used or useful in its business, such Grantor (either itself or through 16 licensees) will (i) continue to use commercially each material Trademark in order to maintain such Trademark in full force free from any claim of abandonment for non-use, (ii) maintain as in the past the quality of products and services offered under such Trademark, (iii) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable Requirements of Law, (iv) not adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark unless the Collateral Agent, for the ratable benefit of the Secured Parties, shall obtain perfected security interests in such mark pursuant to this Agreement (with such priorities as are contemplated in Section 3), and (v) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby such Trademark may become invalidated or impaired in any way. (b) Such Grantor (either itself or through licensees) will not do any act, or omit to do any act, whereby any material Patent may become forfeited, abandoned or dedicated to the public. (c) Such Grantor (either itself or through licensees) (i) will employ each material Copyright and (ii) will not (and will not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any material portion of the Copyrights may become invalidated or otherwise impaired. Such Grantor will not (either itself or through licensees) do any act whereby any material portion of the Copyrights may fall into the public domain. (d) Such Grantor (either itself or through licensees) will not do any act that knowingly uses any material Intellectual Property to infringe the intellectual property rights of any other Person. (e) Such Grantor will notify the Collateral Agent immediately if it knows, or has reason to know, that any application or registration relating to any material Intellectual Property may become forfeited, abandoned or dedicated to the public, or of any final or non-appealable adverse determination or development (including, without limitation, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court or tribunal in any country) regarding such Grantor's ownership of, or the validity of, any material Intellectual Property or such Grantor's right to register the same or to own and maintain the same. (f) Whenever such Grantor, either by itself or through any agent, employee, licensee or designee, shall file an application for the registration of any Intellectual Property with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, such Grantor shall report such filing to the Collateral Agent within five Business Days after the last day of the fiscal quarter in which such filing occurs. Upon request of the Collateral Agent, such Grantor shall execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers as the Collateral Agent may request to evidence the Collateral Agent's security interests in any Copyright, Patent or Trademark and the goodwill and general intangibles of such Grantor relating thereto or represented thereby. (g) Such Grantor will take all reasonable and necessary steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of the material Intellectual Property, including, without limitation, filing of applications for renewal, affidavits of use and affidavits of incontestability. (h) In the event that any material Intellectual Property is infringed, misappropriated or diluted by a third party, such Grantor shall (i) take such actions as such Grantor shall reasonably deem appropriate under the circumstances to protect such Intellectual Property and (ii) if such Intellectual 17 Property is of material economic value, promptly notify the Collateral Agent after it learns thereof and sue for infringement, misappropriation or dilution, to seek appropriate relief and to recover any and all damages for such infringement, misappropriation or dilution. 5.10 Commercial Tort Claims. Such Grantor shall advise the Collateral Agent promptly of any Commercial Tort Claim held by such Grantor in excess of $1,000,000 and shall promptly execute a supplement to this Agreement in form and substance satisfactory to the Collateral Agent to grant security interests in such Commercial Tort Claim to the Collateral Agent for the benefit of the Secured Parties in the manner and having the priorities described in Section 3. 5.11 Deposit Accounts, Securities Accounts. No Grantor shall establish or maintain a Deposit Account or Securities Account for which such Grantor has not delivered to the Collateral Agent a control agreement executed by all parties relevant thereto, provided that the Grantors shall not be required to enter into control agreements with respect to any Deposit Accounts or Securities Accounts having an aggregate balance of less than $1,000,000. 5.12 Unrestricted Subsidiaries. The Borrower shall not, and shall not permit any of its Subsidiaries to, designate any Subsidiary of the Borrower which is a Loan Party as an "Unrestricted Subsidiary" for purposes of the Indenture. SECTION 6. REMEDIAL PROVISIONS 6.1 Certain Matters Relating to Receivables. (a) After an Event of Default has occurred and is continuing, the Collateral Agent shall have the right to make test verifications of the Receivables in any manner and through any medium that it reasonably considers advisable, and each Grantor shall furnish all such assistance and information as the Collateral Agent may require in connection with such test verifications. (b) The Collateral Agent hereby authorizes each Grantor to collect such Grantor's Receivables. The Collateral Agent may curtail or terminate said authority at any time after the occurrence and during the continuance of an Event of Default. If required by the Collateral Agent, upon the request of the Required Lenders or the Administrative Agent, at any time after the occurrence and during the continuance of an Event of Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within two Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Collateral Agent if required, in the Collateral Account, subject to withdrawal by the Collateral Agent for the account of the Secured Parties only as provided in Section 7.4, and (ii) until so turned over, shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Grantor. Each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit. (c) At the Collateral Agent's request, upon the occurrence and during the continuance of an Event of Default, each Grantor shall deliver to the Collateral Agent all original and other documents evidencing, and relating to, the agreements and transactions which gave rise to the Receivables, including, without limitation, all original orders, invoices and shipping receipts. 6.2 Communications with Obligors; Grantors Remain Liable. (a) The Collateral Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event of Default and after prior notice to the Grantors communicate with obligors under the Receivables 18 to verify with them to the Collateral Agent's satisfaction the existence, amount and terms of any Receivables. (b) After the occurrence and during the continuance of an Event of Default and at the direction of the Administrative Agent, the Collateral Agent in its own name or in the name of others may, and upon the request of the Collateral Agent each Grantor shall, notify obligors on the Receivables that the Receivables have been assigned to the Collateral Agent for the benefit of the Secured Parties and that payments in respect thereof shall be made directly to the Collateral Agent. (c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Receivables to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. Neither the Collateral Agent nor any Secured Party shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent nor any Secured Party of any payment relating thereto, nor shall the Collateral Agent or any Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times. 6.3 Pledged Stock. (a) Unless an Event of Default shall have occurred and be continuing and the Collateral Agent shall have given notice to the relevant Grantor of the Collateral Agent's intent to exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive all cash dividends paid in respect of the Pledged Stock and all payments made in respect of the Pledged Notes, in each case paid in the normal course of business of the relevant Issuer and consistent with past practice, to the extent permitted in the Credit Agreement, and to exercise all voting and corporate or other organizational rights with respect to the Investment Property; provided, however, that no vote shall be cast or corporate or other organizational right exercised or other action taken which, in the Administrative Agent's reasonable judgment, would result in any violation of any provision of the Credit Agreement, this Agreement or any other Loan Document. (b) If an Event of Default shall occur and be continuing and the Collateral Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Collateral Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Investment Property and make application thereof to the Secured Obligations in such order as the Collateral Agent may determine, and (ii) any or all of the Investment Property shall be registered in the name of the Collateral Agent or its nominee, and the Collateral Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Investment Property at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Investment Property as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or other organizational structure of any Issuer, or upon the exercise by any Grantor or the Collateral Agent of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit and deliver any and all of the Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent may determine), all without liability except to account for property actually received by it, but the Collateral Agent shall have no duty 19 to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. (c) Each Grantor hereby authorizes and instructs each Issuer of any Investment Property pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Collateral Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) upon delivery of any notice to such effect pursuant to Section 6.3(a), pay any dividends or other payments with respect to the Investment Property directly to the Collateral Agent. 6.4 Proceeds to be Turned Over To Collateral Agent. In addition to the rights of the Collateral Agent and the Secured Parties specified in Section 6.1 with respect to payments of Receivables, if an Event of Default shall occur and be continuing, and the Collateral Agent, upon the request of the Administrative Agent, shall have given notice thereof to the Grantors, all Proceeds received by any Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Collateral Agent and the Secured Parties, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Collateral Agent, if required). All Proceeds received by the Collateral Agent hereunder shall be held by the Collateral Agent in a Collateral Account maintained under its sole dominion and control in accordance with Section 7.1. All Proceeds while held by the Collateral Agent in a Collateral Account (or by such Grantor in trust for the Secured Parties) shall continue to be held as collateral security for all the Secured Obligations and shall not constitute payment thereof until applied as provided in Section 7.4. 6.5 Code and Other Remedies. If an Event of Default shall occur and be continuing, upon the request of the Administrative Agent or the Required Lenders, the Collateral Agent, on behalf of the Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Collateral Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of any Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Any Secured Party shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. Each Grantor further agrees, at the Collateral Agent's request, to assemble the Collateral and make it available to the Collateral Agent at places which the Collateral Agent shall reasonably select, whether at such Grantor's premises or elsewhere. The Collateral Agent shall apply the net proceeds of any action taken by it pursuant to this Section 6.5, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Secured Parties hereunder, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Secured Obligations, in such order as the Collateral Agent may elect, and only after such application and after the payment by the 20 Collateral Agent of any other amount required by any provision of law, including, without limitation, Section 9-615(a)(3) of the New York UCC, need the Collateral Agent account for the surplus, if any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against the Secured Parties arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition. 6.6 Registration Rights. (a) If the Collateral Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Section 6.5, and if in the opinion of the Collateral Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Collateral Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Collateral Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each Grantor agrees to cause such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Collateral Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (c) Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section 6.6 valid and binding and in compliance with any and all other applicable Requirements of Law. Each Grantor further agrees that a breach of any of the covenants contained in this Section 6.6 will cause irreparable injury to the Collateral Agent and the Secured Parties, that the Collateral Agent and the Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 6.6 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreement. 6.7 Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay the Secured Obligations and the fees and 21 disbursements of any attorneys employed by the Collateral Agent or any Secured Party to collect such deficiency. SECTION 7. THE COLLATERAL ACCOUNT; DISTRIBUTIONS 7.1 The Collateral Account. At such time as the Collateral Agent deems appropriate, there shall be established and, at all times thereafter until this Agreement shall have terminated, the Collateral Agent shall maintain a separate collateral account under its sole dominion and control (the "Collateral Account"). All moneys which are received by the Collateral Agent or any agent or nominee of the Collateral Agent in respect of the Collateral, whether in connection with the exercise of the remedies provided in this Agreement or any Security Document, shall be deposited in the Collateral Account and held by the Collateral Agent as part of the Collateral and applied in accordance with the terms of this Agreement. 7.2 Control of Collateral Account. All right, title and interest in and to the Collateral Account shall vest in the Collateral Agent, and funds on deposit in the Collateral Account shall constitute part of the Collateral. The Collateral Account shall be subject to the exclusive dominion and control of the Collateral Agent. 7.3 Investment of Funds Deposited in Collateral Account. The Collateral Agent may, but is under no obligation to, invest and reinvest moneys on deposit in the Collateral Account at any time in Permitted Investments. All such investments and the interest and income received thereon and the net proceeds realized on the sale or redemption thereof shall be held in the Collateral Account and constitute Collateral. The Collateral Agent shall not be responsible for any diminution in funds resulting from such investments or any liquidation prior to maturity. 7.4 Application of Moneys. (a) The Collateral Agent shall have the right at any time to apply moneys held by it in the Collateral Account to the payment of due and unpaid Collateral Agent Fees. (b) All remaining moneys held by the Collateral Agent in the Collateral Account or received by the Collateral Agent with respect to the Collateral shall, to the extent available for distribution (it being understood that the Collateral Agent may liquidate investments prior to maturity in order to make a distribution pursuant to this Section 7.4), be distributed by the Collateral Agent on each Distribution Date in the following order of priority (with such distributions being made by the Collateral Agent to the respective representatives for the Secured Parties as provided in Section 7.4(d), and each such representative shall be responsible for insuring that amounts distributed to it are distributed to its Secured Parties in the order of priority set forth below): First: to the Collateral Agent for any unpaid Collateral Agent Fees and then to any Secured Party which has theretofore advanced or paid any Collateral Agent Fees constituting administrative expenses allowable under Section 503(b) of the Bankruptcy Code, an amount equal to the amount thereof so advanced or paid by such Secured Party and for which such Secured Party has not been reimbursed prior to such Distribution Date, and, if such moneys shall be insufficient to pay such amounts in full, then ratably (without priority of any one over any other) to such Secured Parties in proportion to the amounts of such Collateral Agent Fees advanced by the respective Secured Parties and remaining unpaid on such Distribution Date; Second: to any Secured Party which has theretofore advanced or paid any Collateral Agent Fees other than such administrative expenses described in clause First above, an amount 22 equal to the amount thereof so advanced or paid by such Secured Party and for which such Secured Party has not been reimbursed prior to such Distribution Date, and, if such moneys shall be insufficient to pay such amounts in full, then ratably (without priority of any one over any other) to such Secured Parties in proportion to the amounts of such Collateral Agent Fees advanced by the respective Secured Parties and remaining unpaid on such Distribution Date; Third, to the Credit Agreement Secured Parties, the amount then due and owing and remaining unpaid in respect of the Credit Agreement Obligations secured by the First Priority Interest, pro rata among the parties to which such Credit Agreement Obligations are then due and owing based on the respective amounts thereof, until such Credit Agreement Obligations are paid or cash collateralized (to the extent not then due and payable) in full; provided that in no event shall the aggregate amount distributed under clauses Third and Fourth of this Section 7.4 exceed (i) principal amounts outstanding under the Credit Agreement up to the First Lien Secured Amount and accrued interest and fees thereon plus (ii) any other Credit Agreement Obligations permitted by the Indenture to be secured on a first priority basis; Fourth (this clause being applicable only if an Event of Default shall have occurred and be continuing), to the Credit Agreement Secured Parties, the amount of unpaid principal, interest, fees, charges, costs and expenses in respect of the Credit Agreement Obligations secured by the First Priority Interest, pro rata among the parties holding such Credit Agreement Obligations based on the respective amounts thereof, until such Credit Agreement Obligations are paid or cash collateralized (to the extent not then due and payable) in full; provided that in no event shall the aggregate amount distributed under clauses Third and Fourth of this Section 7.4 exceed (i) principal amounts outstanding under the Credit Agreement up to the First Lien Secured Amount and accrued interest and fees thereon plus (ii) any other Credit Agreement Obligations permitted by the Indenture to be secured on a first priority basis; Fifth (this clause being applicable only if an Event of Default shall have occurred and be continuing), to the Secured Parties, in respect of the Second Priority Interest, the amount of unpaid principal, interest, fees, charges, costs and expenses in respect of the Secured Obligations, pro rata among the parties holding such Secured Obligations based on the respective amounts thereof (after giving effect to any distributions made under clauses Third and Fourth of this Section 7.4), until such Secured Obligations are paid or cash collateralized (in the case of Credit Agreement Obligations not then due and payable) in full; and Sixth, any balance remaining after the Secured Obligations shall have been paid or cash collateralized in full, no Letters of Credit shall be outstanding and the Commitments shall have terminated shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same. (c) The term "unpaid" as used in clause Third, Fourth and Fifth of Section 7.4(b) refers: (i) in the absence of a bankruptcy proceeding with respect to the relevant Grantor(s), to all amounts of Credit Agreement Obligations or Secured Obligations, as the case may be, outstanding as of a Distribution Date, and (ii) during the pendency of a bankruptcy proceeding with respect to the relevant Grantor(s), to all amounts allowed (within the meaning of Title 11 of the United States Code entitled "Bankruptcy") by the bankruptcy court in respect of Credit Agreement Obligations or Secured Obligations, as the case may be, as a basis for 23 distribution (including estimated amounts, if any, allowed in respect of contingent claims), to the extent that prior distributions (whether actually distributed or set aside pursuant to Section 7.5) have not been made in respect thereof. (d) The Collateral Agent shall make all payments and distributions under this Section 7.4 (i) on account of Credit Agreement Obligations to the Administrative Agent, pursuant to directions of the Administrative Agent, for re-distribution in accordance with the provisions of the Credit Agreement and (ii) on account of the Senior Note Obligations to the Trustee, pursuant to directions of the Trustee, for re-distribution in accordance with the provisions of the Indenture. 7.5 Application of Moneys Distributable to the Trustee. If at any time any moneys collected or received by the Collateral Agent pursuant to this Agreement are distributable pursuant to Section 7.4 to the Trustee, and if the Trustee shall notify the Collateral Agent in writing that no provision is made under the Indenture for the application by the Trustee of such moneys (whether because the Senior Note Obligations under the Indenture have not become due and payable or otherwise) and that the Indenture does not effectively provide for the receipt and the holding by the Trustee of such moneys pending the application thereof, then the Collateral Agent, after receipt of such notification, shall, at the direction of the Trustee, invest such amounts in Permitted Investments maturing within 90 days after they are acquired by the Collateral Agent or, in the absence of such direction, hold such moneys uninvested and shall hold all such amounts so distributable and all such investments and the net proceeds thereof in trust solely for the Trustee (in its capacity as trustee) and for no other purpose until such time as the Trustee shall request in writing the delivery thereof by the Collateral Agent for application pursuant to the Indenture, as applicable. 7.6 Collateral Agent's Calculations. In making the determinations and allocations required by Section 7.4, the Collateral Agent may conclusively rely upon information supplied by the Trustee as to the amounts of unpaid principal and interest and other amounts outstanding with respect to the Senior Note Obligations and information supplied by the Administrative Agent as to the amounts of unpaid principal and interest and other amounts outstanding with respect to the Credit Agreement Obligations, and the Collateral Agent shall have no liability to any of the Secured Parties for actions taken in reliance on such information, provided that nothing in this sentence shall prevent any Grantor from contesting any amounts claimed by any Secured Party in any information so supplied. All distributions made by the Collateral Agent pursuant to Section 7.4 shall be (subject to any decree of any court of competent jurisdiction) final (absent manifest error), and the Collateral Agent shall have no duty to inquire as to the application by the Administrative Agent or the Trustee of any amounts distributed to them. 7.7 Pro Rata Sharing. If, through the operation of any bankruptcy, reorganization, insolvency or other laws or otherwise, the Collateral Agent's security interests hereunder and under the other Security Documents is enforced with respect to some, but not all, of the Secured Obligations then outstanding, the Collateral Agent shall nonetheless apply the proceeds of the Collateral for the benefit of the holders of the Secured Obligations which have been enforced in the proportions and subject to the priorities specified herein after giving effect thereto. To the extent that the Collateral Agent distributes Proceeds collected with respect to Secured Obligations held by one holder to or on behalf of Secured Obligations held by a second holder, the first holder shall be deemed to have purchased a participation in the Secured Obligations held by the second holder, or shall be subrogated to the rights of the second holder to receive any subsequent payments and distributions made with respect to the portion thereof paid or to be paid by the application of such Proceeds. 24 SECTION 8. AGREEMENTS WITH THE COLLATERAL AGENT 8.1 Delivery of Secured Debt Agreements. On the date hereof, the Borrower shall deliver to the Collateral Agent true and complete copies of each Secured Debt Agreement as in effect on the date hereof. The Borrower shall deliver to the Collateral Agent, promptly upon the execution thereof, (i) a true and complete copy of all amendments, modifications or supplements to any Secured Debt Agreement entered into after the date hereof, and (ii) a true and complete copy of any new Secured Debt Agreement entered into after the date hereof. 8.2 Information as to Secured Parties. The Borrower shall deliver to the Collateral Agent on the date hereof and quarterly hereafter, and from time to time upon request of the Collateral Agent, a list setting forth as of a date not more than 10 days prior to the date of such delivery the aggregate unpaid principal amount of the Secured Obligations. The Borrower shall promptly notify the Collateral Agent of each change in the identity or address of the Administrative Agent or the Trustee. 8.3 Compensation and Expenses. Each Grantor, jointly and severally, agrees to pay to the Collateral Agent, from time to time upon demand, (i) reasonable compensation (which shall not be limited by any provision of law in regard to compensation of fiduciaries or of a trustee of an express trust) for its services hereunder and for administering the Collateral and (ii) all of the fees, costs and expenses of the Collateral Agent (including, without limitation, the reasonable fees and disbursements of its counsel, advisors and agents) (A) arising in connection with the preparation, execution, delivery, modification, and termination of this Agreement, each other Security Document, or the enforcement of any of the provisions hereof or thereof, (B) incurred or required to be advanced in connection with the administration of the Collateral, the sale or other disposition of Collateral and the preservation, protection or defense of the Collateral Agent's rights under this Agreement, each other Security Document, and in and to the Collateral, (C) incurred by the Collateral Agent in connection with the removal of the Collateral Agent pursuant to Section 9.11 or (D) the failure by any Grantor to perform or observe any of the provisions of this Agreement or any other Security Document. Such fees, costs and expenses are intended to constitute expenses of administration under any other bankruptcy law relating to creditors' rights generally. The obligations of the Grantors under this Section 8.3 shall survive the termination of the other provisions of this Agreement and the other Security Documents and the resignation or removal of the Collateral Agent hereunder. 8.4 Stamp and Other Similar Taxes. Each Grantor, jointly and severally, agrees to indemnify and hold harmless the Collateral Agent and each Secured Party from any present or future claim for liability for any stamp or any other similar tax, and any penalties or interest with respect thereto, which may be assessed, levied or collected by any jurisdiction in connection with this Agreement, any other Security Document or any Collateral. The obligations of the Grantors under this Section 8.4 shall survive the termination of the other provisions of this Agreement and the other Security Documents and the resignation or removal of the Collateral Agent hereunder. 8.5 Filing Fees, Excise Taxes, Etc. Each Grantor, jointly and severally, agrees to pay or to reimburse the Collateral Agent for any and all payments made by the Collateral Agent in respect of all search, filing, recording and registration fees, taxes, excise taxes and other similar imposts which may be payable or determined to be payable in respect of the execution and delivery of this Agreement and the other Security Documents. The obligations of the Grantors under this Section 8.5 shall survive the termination of the other provisions of this Agreement and the other Security Documents and the resignation or removal of the Collateral Agent hereunder. 8.6 Indemnification. Each Grantor, jointly and severally, agrees (a) to pay or reimburse the Collateral Agent for all of its out-of-pocket costs and expenses incurred in connection with the 25 development, preparation and execution of this Agreement and the other Security Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the reasonable fees and disbursements of counsel to the Collateral Agent and filing and recording fees and expenses, with statements with respect to the foregoing to be submitted to the Borrower prior to the Closing Date (in the case of amounts to be paid on the Closing Date), and from time to time thereafter on a quarterly basis or such other periodic basis as the Collateral Agent shall deem appropriate, (b) to pay or reimburse the Collateral Agent for all of its out-of-pocket costs and expenses incurred in connection with any amendment, supplement or modification to this Agreement and the other Security Documents and any other documents prepared in connection herewith or therewith, (c) to pay or reimburse each Secured Party and the Collateral Agent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Security Documents and any such other documents (including, without limitation, in connection with any action taken with respect to the Collateral), including the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Secured Party and of counsel to the Collateral Agent, (d) to pay, indemnify, and hold each Secured Party and the Collateral Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Security Documents and any such other documents, and (e) to pay, indemnify, and hold each Secured Party and the Collateral Agent and their respective officers, directors, employees, affiliates, agents, trustees, advisors and controlling persons (each, an "Indemnitee") harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Security Documents and any such other documents, including any of the foregoing relating to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of any Group Member or any of the Properties and the reasonable fees and expenses of legal counsel in connection with claims, actions or proceedings by any Indemnitee against any Loan Party under any Security Document (all the foregoing in this clause (e), collectively, the "Indemnified Liabilities"), provided, that the Borrower shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee. Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. The obligations of the Grantors under this Section 8.6 shall survive the termination of the other provisions of this Agreement and the other Security Documents and the resignation or removal of the Collateral Agent hereunder. 8.7 Collateral Agent's Lien. Notwithstanding anything to the contrary in this Agreement or in any other Security Document, as security for the payment of the Collateral Agent Fees (i) the Collateral Agent is hereby granted a lien upon all Collateral and (ii) the Collateral Agent shall have the right to use and apply any of the funds held by the Collateral Agent in the Collateral Account to cover such Collateral Agent Fees. 26 SECTION 9. THE COLLATERAL AGENT 9.1 Collateral Agent's Appointment as Attorney-in-Fact, etc. (a) Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following: (i) in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any and all such moneys due under any Receivable or with respect to any other Collateral whenever payable; (ii) in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Collateral Agent's security interest in such Intellectual Property (and the associated goodwill) and general intangibles of such Grantor relating thereto or represented thereby; (iii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof; (iv) execute, in connection with any sale provided for in Section 6.5 or 6.6, any indorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and (v) (1) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct; (2) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (3) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (4) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (5) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (6) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (8) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes, and do, at the Collateral Agent's option and such Grantor's expense, at any time, or from time to time, all acts and things which the Collateral Agent deems necessary to protect, preserve or realize upon the 27 Collateral and Collateral Agent's security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do. Anything in this Section 9.1(a) to the contrary notwithstanding, the Collateral Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 9.1(a) unless an Event of Default shall have occurred and be continuing. (b) If any Grantor fails to perform or comply with any of its agreements contained herein, the Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. (c) The expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 9.1, together with interest thereon at the rate applicable hereto under Section 4.5(c) of the Credit Agreement, from the date of payment by the Collateral Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Collateral Agent on demand. (d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 9.2 Appointment of Collateral Agent as Agent for the Secured Parties. (a) By acceptance of the benefits of this Agreement and the Security Documents, each Secured Party shall be deemed irrevocably (i) to consent to the appointment of the Collateral Agent as its agent hereunder and under the Security Documents, (ii) to confirm that the Collateral Agent shall have the authority to act as the exclusive agent of such Secured Party for enforcement of any provisions of this Agreement and the Security Documents against any Grantor or the exercise of remedies hereunder or thereunder, (iii) to agree that such Secured Party shall not take any action to enforce any provisions of this Agreement or any Security Document against any Grantor or to exercise any remedy hereunder or thereunder and (iv) to agree to be bound by the terms of this Agreement and the Security Documents. (b) The Collateral Agent hereby agrees that it holds and will hold all of its right, title and interest in, to and under the Security Documents and the Collateral granted to the Collateral Agent thereunder whether now existing or hereafter arising under and subject to the conditions set forth in this Agreement; and the Collateral Agent further agrees that it will hold such Collateral for the benefit of the Secured Parties, for the enforcement of the payment of all Secured Obligations and as security for the performance of and compliance with the covenants and conditions of this Agreement and each of the Security Documents. 9.3 Duty of Collateral Agent. The Collateral Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account. No Secured Party nor any of its officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Collateral Agent and the Secured Parties hereunder are solely to protect the Collateral Agent's and the Secured Parties' interests in the Collateral and shall not impose any duty upon the Collateral Agent or any Secured Party to exercise any such powers. The Collateral Agent and the Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees 28 or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. 9.4 Execution of Financing Statements. Pursuant to any applicable law, each Grantor authorizes the Collateral Agent to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral without the signature of such Grantor in such form and in such offices as the Collateral Agent determines appropriate to perfect the security interests of the Collateral Agent under this Agreement. Each Grantor authorizes the Collateral Agent to use the collateral description "all personal property" in any such financing statement. Each Grantor hereby ratifies and authorizes the filing by the Collateral Agent of any financing statement with respect to the Collateral made prior to the date hereof. 9.5 Authority of Collateral Agent. Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and the other Secured Parties, be governed by this Agreement and by such other agreements as may exist from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority. 9.6 Exculpatory Provisions. (a) The Collateral Agent shall not be responsible in any manner whatsoever for the correctness of any recitals, statements, representations or warranties in any Secured Debt Agreement, all of which are made solely by the Grantors. The Collateral Agent makes no representations as to the existence, genuineness, value or condition of any of the Collateral or any part thereof, or as to the title of the Grantors thereto or as to the security afforded or intended to be afforded by this Agreement and the other Security Documents, or as to the validity, execution (except its execution), enforceability, legality or sufficiency of this Agreement and the other Security Documents or the Secured Obligations or as to the validity, perfection, priority or enforceability of the liens or security interests in any of the Collateral created or intended to be created by this Agreement, or as to the validity or sufficiency of the Collateral or this Agreement, or as to insuring the Collateral or as to the payment of taxes, charges, assessments or liens upon the Collateral or otherwise as to the maintenance of the Collateral, and the Collateral Agent shall incur no liability or responsibility in respect of any such matters. (b) The Collateral Agent shall not be required to ascertain or inquire as to the performance by the Grantors of any of the covenants or agreements contained herein, in the other Security Documents or in any Secured Debt Agreement. Whenever it is necessary, or in the opinion of the Collateral Agent advisable, for the Collateral Agent to ascertain the amount of Secured Obligations then held by Secured Parties, the Collateral Agent may rely on a certificate of the Administrative Agent (in the case of the Credit Agreement Obligations) or the Trustee (in the case of the Senior Note Obligations), and if the Administrative Agent (in the case of the Credit Agreement Obligations) or the Trustee (in the case of the Senior Note Obligations) shall not give such information to the Collateral Agent, the Collateral Agent shall be entitled to withhold distributions hereunder to the Administrative Agent (on behalf of the Credit Agreement Secured Parties) or the Trustee (on behalf of the Holders), as applicable (in which case distributions to those Persons who have supplied such information to the Collateral Agent shall be calculated by the Collateral Agent using, for those Persons who have not supplied such information, the list then most recently delivered by the Borrower pursuant to Section 8.2), and the amount so calculated to be distributed to the Person who fails to give such information shall be held in trust for such Person until such information is received by the Collateral Agent, whereupon on the next Distribution Date the amount distributable to such Person shall be recalculated using such information and distributed to it. 29 Nothing in the preceding sentence shall prevent any Grantor from contesting any amounts claimed by any Secured Party in any certificate so supplied. (c) The Collateral Agent shall be under no obligation or duty to take any action under this Agreement or any other Security Document or otherwise if taking such action (i) would subject the Collateral Agent to a tax in any jurisdiction where it is not then subject to a tax or (ii) would require the Collateral Agent to qualify to do business in any jurisdiction where it is not then so qualified, unless the Collateral Agent shall receive security or indemnity satisfactory to it against such tax (or equivalent liability), or any liability resulting from such qualification, in each case as results from the taking of such action under this Agreement or any other Security Document. (d) The Collateral Agent shall have the same rights with respect to any Secured Obligation held by it as any other Secured Party and may exercise such rights as though it were not the Collateral Agent hereunder, and it and its Affiliates may accept deposits from, lend money to, provide services to and generally engage in any kind of banking or trust business with, any of the Grantors as if it were not the Collateral Agent. (e) The Collateral Agent shall not be liable for any action taken or omitted to be taken in accordance with this Agreement or any other Security Document except for its own gross negligence or willful misconduct (as determined by a final and nonappealable decision of a court of competent jurisdiction). (f) The permissive right of the Collateral Agent to take any action under this Agreement or any other Security Document shall not be construed as a duty to so act. 9.7 Delegation of Duties. The Collateral Agent may execute any of the trusts or powers hereof and perform any duty hereunder, or under any other Security Document either directly or by or through agents or attorneys-in-fact. The Collateral Agent shall be entitled to advice of counsel concerning all matters pertaining to such trusts, powers and duties. The Collateral Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it without gross negligence or willful misconduct. 9.8 Reliance by Collateral Agent. (a) Whenever in the administration of this Agreement, or any other Security Document the Collateral Agent shall deem it necessary or desirable that a factual matter be proved or established in connection with the Collateral Agent taking, suffering or omitting any action hereunder or thereunder, such matter (unless other evidence in respect thereof is herein specifically prescribed) may be deemed to be conclusively proved or established by a certificate of a Responsible Officer delivered to the Collateral Agent, and such certificate shall be full warrant to the Collateral Agent for any action taken, suffered or omitted in reliance thereon. (b) The Collateral Agent may, at the expense of the Grantors, consult with counsel, and any opinion of counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in accordance therewith. The Collateral Agent shall have the right at any time to seek instructions concerning the administration of this Agreement or any other Security Document from any court of competent jurisdiction. Any opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate of a Responsible Officer or representations made by a Responsible Officer in a writing delivered to the Collateral Agent. (c) The Collateral Agent may conclusively rely upon, and shall be fully protected in acting upon or failing to act as a consequence of, any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order, bond or other paper or document which it believes in good faith is 30 genuine and has been signed or presented by the proper party or parties or, in the case of cables, telecopies and telexes, to have been sent by the proper party or parties. In the absence of its own gross negligence or willful misconduct, the Collateral Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any such certificates, opinions or other information and need not investigate any fact or matter stated therein. (d) The Collateral Agent shall not be under any obligation to exercise any of the rights or powers vested in the Collateral Agent by this Agreement or by any other Security Document, unless the Collateral Agent shall have been provided adequate security and indemnity against the costs, expenses and liabilities which may be incurred by the Collateral Agent, its agents and its counsel in the exercise of any such right or power or in compliance with such request or direction, including such reasonable advances as may be requested by the Collateral Agent. (e) Upon any application or demand by any of the Grantors to the Collateral Agent to take or permit any action under any of the provisions of this Agreement or any other Security Document, the Borrower shall furnish to the Collateral Agent a certificate of a Responsible Officer stating that all conditions precedent, if any, provided for in this Agreement, in any other Security Document or in any Secured Debt Agreement relating to the proposed action have been complied with, and in the case of any such application or demand as to which the furnishing of any document is specifically required by any provision of this Agreement, any other Security Document or any Secured Debt Agreement relating to such particular application or demand, such additional document shall also be furnished. 9.9 Limitations on Duties of Collateral Agent. (a) The Collateral Agent shall be obligated to perform such duties and only such duties as are specifically set forth in this Agreement, or any other Security Document, and no implied covenants or obligations shall be read into this Agreement, or any other Security Document against the Collateral Agent. By acceptance of the benefits under this Agreement, the Holders shall be deemed to have agreed that they shall not be entitled to, and shall not, (i) direct the actions of the Collateral Agent hereunder or under any Security Document, (ii) have the right to consent to any amendment, supplement, waiver or other modification to this Agreement or any Security Document, (iii) take any action, or commence any legal proceeding seeking, to require, compel or cause the Collateral Agent to enforce any of the provisions of this Agreement or any Security Document against any Grantor or to exercise any remedy hereunder or thereunder, (iv) take any action, or commence any legal proceeding seeking, to prevent or enjoin the Collateral Agent from taking any action (including, without limitation, the enforcement of any provisions of this Agreement or any Security Document against any Grantor, the exercise of any remedy hereunder or thereunder, the release of any Security Document, the consent to any amendment or modification of this Agreement or any Security Document or the grant of any waiver hereunder or thereunder), or refraining from taking any such action, in accordance with this Agreement or any Security Document, as the case may be, or (v) otherwise take any action, or commence any legal proceeding seeking, to delay, hinder or otherwise impair the Collateral Agent in taking any such action in accordance with this Agreement or any Security Document. By acceptance of the benefits under this Agreement, the Holders, as Secured Parties, will be deemed to have acknowledged and agreed that the provisions of the preceding sentence are intended to induce the Credit Agreement Secured Parties to permit such Persons to be Secured Parties under this Agreement and under the Security Documents and are being relied upon by the Credit Agreement Secured Parties as consideration therefor. (b) Except as herein otherwise expressly provided, the Collateral Agent shall not be under any obligation to take any action that is discretionary under the provisions of this Agreement or of any other Security Document. The Collateral Agent shall make available for inspection and copying by the Administrative Agent and the Trustee each certificate or other paper furnished to the Collateral Agent by 31 any of the Grantors under or with respect to this Agreement, any other Security Document or the Collateral. (c) No provision of this Agreement, or any other Security Document shall be deemed to impose any duty or obligation on the Collateral Agent to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the Collateral Agent shall be unqualified or incompetent, to perform any such act or acts or to exercise any such right, power, duty or obligation or if such performance or exercise would constitute doing business by the Collateral Agent in such jurisdiction or impose a tax on the Collateral Agent by reason thereof or to risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder. 9.10 Moneys to be Held in Trust. All moneys received by the Collateral Agent under or pursuant to any provision of this Agreement, or any other Security Document (except Collateral Agent Fees) shall be held in trust for the purposes for which they were paid or are held. The Collateral Agent shall not be liable for interest on any money or assets received by it except as the Collateral Agent may agree in writing. 9.11 Resignation and Removal of the Collateral Agent. (a) The Collateral Agent may at any time, by giving written notice to the Borrower, the Administrative Agent and the Trustee, resign and be discharged of the responsibilities hereby created, such resignation to become effective upon (i) the appointment of a successor Collateral Agent, (ii) the acceptance of such appointment by such successor Collateral Agent and (iii) the approval of such successor Collateral Agent evidenced by one or more instruments signed by the Administrative Agent and (in the absence of an Event of Default) the Borrower (such consent not to be unreasonably withheld). If no successor Collateral Agent shall be appointed and shall have accepted such appointment within 60 days after the Collateral Agent gives the aforesaid notice of resignation, the Collateral Agent, the Borrower, the Administrative Agent, the Trustee or any Secured Party may apply to any court of competent jurisdiction to appoint a successor Collateral Agent to act until such time, if any, as a successor Collateral Agent shall have been appointed as provided in this Section 9.11. Any successor so appointed by such court shall immediately and without further act be superseded by any successor Collateral Agent appointed by the Administrative Agent as provided in Section 9.11(b). The Administrative Agent may at any time upon giving 10 days' prior written notice thereof to the Collateral Agent (with a copy to the Trustee), remove the Collateral Agent for any reason or no reason at all and appoint a successor Collateral Agent, such removal to be effective upon the acceptance of such appointment by the successor. The Collateral Agent shall be entitled to the Collateral Agent Fees to the extent incurred or arising, or relating to events occurring, before such resignation or removal or in connection with actions taken in accordance with Section 9.11(b). (b) If at any time the Collateral Agent shall resign or be removed or otherwise become incapable of acting, or if at any time a vacancy shall occur in the office of the Collateral Agent for any other cause, a successor Collateral Agent may be appointed by the Administrative Agent with the consent of the Borrower (in the absence of an Event of Default), which consent shall not be unreasonably withheld. The powers, duties, authority and title of the predecessor Collateral Agent shall be terminated and canceled without procuring the resignation of such predecessor and without any other formality (except as may be required by applicable law) than appointment and designation of a successor in writing duly acknowledged and delivered to the predecessor and the Borrower. Such appointment and designation shall be full evidence of the right and authority to make the same and of all the facts therein recited, and this Agreement shall vest in such successor, without any further act, deed or conveyance, all the estates, properties, rights, powers, trusts, duties, authority and title of its predecessor; but such predecessor shall, nevertheless, on the written request of the Administrative Agent, the Borrower, or the successor, execute and deliver an instrument transferring to such successor all the estates, properties, 32 rights, powers, trusts, duties, authority and title of such predecessor hereunder and shall deliver all Collateral held by it or its agents to such successor. Should any deed, conveyance or other instrument in writing from any Grantor be required by any successor Collateral Agent for more fully and certainly vesting in such successor the estates, properties, rights, powers, trusts, duties, authority and title vested or intended to be vested in the predecessor Collateral Agent, any and all such deeds, conveyances and other instruments in writing shall, on request of such successor, be executed, acknowledged and delivered by such Grantor. If such Grantor shall not have executed and delivered any such deed, conveyance or other instrument within 10 days after it received a written request from the successor Collateral Agent to do so, or if Event of Default has occurred and is continuing, the predecessor Collateral Agent may execute the same on behalf of such Grantor. Such Grantor hereby appoints any predecessor Collateral Agent as its agent and attorney to act for it as provided in the next preceding sentence. 9.12 Status of Successor Collateral Agent. Every successor Collateral Agent appointed pursuant to Section 9.11(b) shall be a bank or trust company in good standing and having power to act as Collateral Agent hereunder, incorporated under the laws of the United States of America or any State thereof or the District of Columbia and having its principal corporate trust office within the 48 contiguous States and shall also have capital, surplus and undivided profits of not less than $100,000,000, if there be such an institution with such capital, surplus and undivided profits willing, qualified and able to accept the trust hereunder upon reasonable or customary terms. 9.13 Merger of the Collateral Agent. Any corporation into which the Collateral Agent may be merged, or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Collateral Agent shall be a party, shall be Collateral Agent under this Agreement without the execution or filing of any paper or any further act on the part of the parties hereto. 9.14 Co-Collateral Agent; Separate Collateral Agent. (a) If at any time or times it shall be necessary or prudent in order to conform to any law of any jurisdiction in which any of the Collateral shall be located, or to avoid any violation of law or imposition on the Collateral Agent of taxes by such jurisdiction not otherwise imposed on the Collateral Agent, or the Collateral Agent shall be advised by opinion of counsel that it is necessary or prudent in the interest of the Secured Parties, or the Collateral Agent shall deem it desirable for its own protection in the performance of its duties hereunder, the Collateral Agent and each of the Grantors shall execute and deliver all instruments and agreements necessary or proper to constitute another bank or trust company, or one or more persons approved by the Collateral Agent and the Grantors, either to act as Collateral Agent or co-Collateral Agents of all or any of the Collateral under this Agreement, jointly with the Collateral Agent originally named herein or therein or any successor Collateral Agent, or to act as separate collateral agent or collateral agents of any of the Collateral. If any of the Grantors shall not have joined in the execution of such instruments and agreements within 10 days after it receives a written request from the Collateral Agent to do so, or if an Event of Default shall have occurred and is continuing, the Collateral Agent may act under the foregoing provisions of this Section 9.14(a) without the concurrence of such Grantors and execute and deliver such instruments and agreements on behalf of such Grantors. Each of the Grantors hereby appoints the Collateral Agent as its agent and attorney to act for it under the foregoing provisions of this Section 9.14(a) in either of such contingencies. (b) Every separate Collateral Agent and every co-Collateral Agent, other than any successor Collateral Agent appointed pursuant to Section 9.14(b), shall, to the extent permitted by law, be appointed and act and be such, subject to the following provisions and conditions: (i) all rights, powers, duties and obligations conferred upon the Collateral Agent in respect of the custody, control and management of moneys, papers or securities shall be exercised solely by the Collateral Agent or any agent appointed by the Collateral Agent; 33 (ii) all rights, powers, duties and obligations conferred or imposed upon the Collateral Agent hereunder shall be conferred or imposed and exercised or performed by the Collateral Agent and such separate Collateral Agent or separate Collateral Agents or co-Collateral Agent or co-Collateral Agents, jointly, as shall be provided in the instrument appointing such separate Collateral Agent or separate Collateral Agents or co-Collateral Agent or co-Collateral Agents, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Collateral Agent shall be incompetent or unqualified to perform such act or acts, or unless the performance of such act or acts would result in the imposition of any tax on the Collateral Agent which would not be imposed absent such joint act or acts, in which event such rights, powers, duties and obligations shall be exercised and performed by such separate Collateral Agent or separate Collateral Agents or co-Collateral Agent or co-Collateral Agents; (iii) no power given hereby to, or which it is provided herein or therein may be exercised by, any such co-Collateral Agent or co-Collateral Agents or separate Collateral Agent or separate Collateral Agents shall be exercised hereunder or thereunder by such co-Collateral Agent or co- Collateral Agents or separate Collateral Agent or separate Collateral Agents except jointly with, or with the consent in writing of, the Collateral Agent, anything contained herein to the contrary notwithstanding; (iv) no Collateral Agent hereunder shall be personally liable by reason of any act or omission of any other Collateral Agent hereunder; and (v) the Borrower and the Collateral Agent, at any time by an instrument in writing executed by them jointly, may accept the resignation of or remove (for any reason or no reason at all) any such separate Collateral Agent or co-Collateral Agent and, in that case by an instrument in writing executed by them jointly, may appoint a successor to such separate Collateral Agent or co-Collateral Agent, as the case may be, anything contained herein to the contrary notwithstanding. If the Borrower shall not have joined in the execution of any such instrument within 10 days after it receives a written request from the Collateral Agent to do so, or if an Event of Default has occurred and is continuing, the Collateral Agent shall have the power to accept the resignation of or remove any such separate Collateral Agent or co-Collateral Agent and to appoint a successor without the concurrence of the Borrower, the Borrower hereby appointing the Collateral Agent its agent and attorney to act for it in such connection in such contingency. If the Collateral Agent shall have appointed a separate Collateral Agent or separate Collateral Agents or co-Collateral Agent or co-Collateral Agents as above provided, the Collateral Agent may at any time, by an instrument in writing, accept the resignation of or remove any such separate Collateral Agent or co Collateral Agent and the successor to any such separate Collateral Agent or co-Collateral Agent shall be appointed by the Borrower and the Collateral Agent, or by the Collateral Agent alone pursuant to this Section 9.14(b). 9.15 Treatment of Payee or Indorsee by Collateral Agent. (a) The Collateral Agent may treat the registered holder or, if none, the payee or indorsee of any promissory note or debenture evidencing a Secured Obligation as the absolute owner thereof for all purposes and shall not be affected by any notice to the contrary, whether such promissory note or debenture shall be past due or not. (b) Any Person (other than the Administrative Agent and the Trustee) that shall be designated as the duly authorized representative of one or more Secured Parties to act as such in connection with any matters pertaining to this Agreement, any other Security Document or the Collateral shall present to the Collateral Agent such documents, including, without limitation, opinions of counsel, as the Collateral Agent may reasonably require, in order to demonstrate to the Collateral Agent the authority of such Person to act as the representative of such Secured Parties. 34 9.16 Existing Deposit Account Control Agreements. Deutsche Bank Trust Company Americas acknowledges and agrees that to the extent it is a party to any control agreement with respect to any Deposit Accounts or Securities Accounts of any Grantor, it shall exercise its rights as a secured party thereunder in its capacity as Collateral Agent for the benefit of the Secured Parties and shall distribute any amounts received with respect thereto in accordance with the terms and conditions of this Agreement (including, without limitation, Section 7.4). SECTION 10. MISCELLANEOUS 10.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except with the consent of the Collateral Agent and in accordance with Section 11.1 of the Credit Agreement. 10.2 Notices. All notices, requests and demands to or upon the Administrative Agent or any Grantor hereunder shall be effected in the manner provided for in Section 11.2 of the Credit Agreement; provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth on Schedule 1 or such other address specified in writing to the Administrative Agent in accordance with such Section. All notices, requests and demands to or upon the Collateral Agent shall be effected in the manner provided for in Section 11.2 of the Credit Agreement and shall be addressed to the Collateral Agent at 60 Wall Street, New York, New York 10005. All notices, requests and demands to or upon the Trustee or any Holder shall be effected in the manner provided for in Section 11.2 of the Credit Agreement and shall be addressed to it (or, in the case of any Holder, to it care of the Trustee) at 101 Barclay Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust Department or at such other address provided by the Borrower to the Collateral Agent pursuant to Section 8.2. 10.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Collateral Agent nor any Secured Party shall by any act (except by a written instrument pursuant to Section 10.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent or any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Collateral Agent or any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Collateral Agent or such Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 10.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay or reimburse the Collateral Agent and each Secured Party for all its costs and expenses incurred in collecting against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement and the other Loan Documents to which such Guarantor is a party, including, without limitation, the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to the Collateral Agent and each Secured Party. (b) Each Guarantor agrees to pay, and to save the Collateral Agent and the Secured Parties harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all 35 stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. (c) Each Guarantor agrees to pay, and to save the Collateral Agent and the Secured Parties harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to Section 11.5 of the Credit Agreement. (d) The agreements in this Section 10.4 shall survive repayment of the Secured Obligations and all other amounts payable under the Credit Agreement and the other Loan Documents. 10.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Collateral Agent and the Secured Parties and their successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent. 10.6 Set-Off. Each Grantor hereby irrevocably authorizes the Collateral Agent and each Credit Agreement Secured Party at any time and from time to time, without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Secured Party to or for the credit or the account of such Grantor, or any part thereof in such amounts as the Collateral Agent or such Credit Agreement Secured Party may elect, against and on account of the obligations and liabilities of such Grantor to the Collateral Agent or such Credit Agreement Secured Party hereunder and claims of every nature and description of the Collateral Agent or such Credit Agreement Secured Party against such Grantor, in any currency, whether arising hereunder, under the Credit Agreement, any other Loan Document or otherwise, as the Collateral Agent or such Credit Agreement Secured Party may elect, whether or not the Collateral Agent or such Credit Agreement Secured Party has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. The Collateral Agent and each Credit Agreement Secured Party shall notify such Grantor promptly of any such set-off and the application made by the Collateral Agent or such Credit Agreement Secured Party of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Collateral Agent and each Credit Agreement Secured Party under this Section 10.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Collateral Agent and each Credit Agreement Secured Party may have. 10.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 10.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or 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. 10.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 36 10.10 Integration. This Agreement and the other Loan Documents represent the agreement of the Grantors, the Collateral Agent and the Secured Parties with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Collateral Agent or any Secured Party relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Loan Documents. 10.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 10.12 Submission To Jurisdiction; Waivers. Each Grantor and each of the Holders hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Grantor at its address referred to in Section 10.2 or at such other address of which the Collateral Agent shall have been notified pursuant thereto; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages. 10.13 Acknowledgements. Each Grantor hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party; (b) neither the Collateral Agent nor any other Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Collateral Agent and the Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Secured Parties or among the Grantors and the Secured Parties. 37 10.14 Additional Grantors. Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to Section 7.10 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex I hereto. 10.15 Releases. (a) At such time as the Loans and the other Credit Agreement Obligations (other than Credit Agreement Obligations in respect of Specified Hedge Agreements) shall have been paid in full and the Commitments have been terminated, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request and sole expense of any Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any Collateral held by the Collateral Agent hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination. (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreement, then the Collateral Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. At the request and sole expense of the Borrower, a Subsidiary Guarantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement; provided that the Borrower shall have delivered to the Collateral Agent, at least ten Business Days prior to the date of the proposed release, a written request for release identifying the relevant Subsidiary Guarantor and the terms of the sale or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a certification by the Borrower stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents. (c) Upon receipt by the Collateral Agent from the Administrative Agent of a written notice stating that the Credit Agreement Obligations consisting of outstanding principal amounts of Loans under the Credit Agreement are less than the First Lien Secured Amount, the security interests created by Section 3.2 shall terminate forthwith. (d) The Collateral Agent will, at any time, upon the written instruction of the Administrative Agent, at the sole expense of the relevant Grantor, execute and deliver to the relevant Grantor all releases or other documents reasonably necessary or desirable for the release of the Liens created by the Security Documents on the Collateral specified by the Administrative Agent in such instruction (provided that the Administrative Agent may not direct the Collateral Agent to release the liens created by Section 3.2 without simultaneously releasing the liens created by Section 3.1 unless the Credit Agreement Obligations consisting of outstanding principal amounts of Loans under the Credit Agreement are less than the First Lien Secured Amount). The Administrative Agent may give such instructions at any time, whether or not at any such time any or all of the Secured Obligations are still outstanding. (e) On the Closing Date, the security interest created pursuant to the certain Mortgage, Security Agreement and Assignment, dated as of February 2, 2004, among the Borrower, as grantor, and Deutsche Bank Trust Company Americas, in its capacity as Administrative Agent, with respect to the undivided 6.25% interest of the Borrower with respect to Cessna 560 aircraft bearing manufacturer's serial number 560-0336 and U.S. Registration No. N336QS and two Pratt & Whitney Canada, Inc. JT15D-5D aircraft engines bearing manufacturer's serial numbers PCE500158 and PCE500155 shall terminate (and the last sentence of Section 5.4(c) shall be applicable thereto). 38 10.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 39 IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and Collateral Agreement to be duly executed and delivered as of the date first above written. DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent By: /s/ Scottye Lindsey ------------------------------------- Name: Scottye Lindsey Title: Director 40 R.H. DONNELLEY CORPORATION By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President, General Counsel & Corporate Secretary R.H. DONNELLEY INC. By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President, General Counsel & Corporate Secretary R.H. DONNELLEY APIL, INC. By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING, INC. By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President GET DIGITAL SMART.COM, INC. By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President 41 R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS PARTNERSHIP By: R.H. Donnelley Publishing & Advertising of Illinois Holdings, LLC, its managing partner By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President DONTECH II PARTNERSHIP By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President DONTECH HOLDINGS, LLC By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President R.H. DONNELLEY PUBLISHING & ADVERTISING OF ILLINOIS HOLDINGS, LLC By: /s/ Robert J. Bush ------------------------------------- Name: Robert J. Bush Title: Vice President EX-99.1 13 l09401aexv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 [RHDONNELLEY LOGO] NEWSrelease CONTACT: James M. Gruskin 800/497-6329 R.H. DONNELLEY COMPLETES ACQUISITION OF SBC COMMUNICATIONS' DIRECTORY PUBLISHING BUSINESS IN ILLINOIS AND NW INDIANA CARY, N.C., September 1, 2004 -- R.H. Donnelley Corporation (NYSE:RHD) today announced that it has completed the acquisition of SBC Communications Inc.'s (NYSE: SBC) directory publishing business in Illinois and Northwest Indiana, for $1.41 billion in cash, after working capital adjustments and the settlement of a $30 million liquidation preference related to the DonTech partnership. As part of the transaction, RHD has also acquired SBC's interest in DonTech, the partnership for local sales into the Illinois and Northwest Indiana SBC yellow pages. Under the terms of the transaction, RHD received a 50-year exclusive license to publish SBC-branded directories in Illinois and Northwest Indiana. RHD and SBC also signed a separate five-year agreement under which RHD will sell local advertising onto SMARTpages.com in Illinois and Northwest Indiana. RHD now controls and publishes 389 yellow page directories serving 260,000 local and national advertisers. "This transaction completes our transformation into a fully integrated yellow pages publishing and directional media company and gives us control over all of our assets," said David C. Swanson, RHD's Chairman and Chief Executive Officer. "As owner-operators, we will be able to fully leverage our experienced management team to direct all aspects of our business, and expect to capitalize on market opportunities in Illinois using the same business processes that have succeeded in our Sprint operations." The acquired business will be integrated into Donnelley Media alongside the former Sprint Publishing and Advertising business acquired last year. Donnelley Media is led by industry veteran Peter J. McDonald, who also directed the integration of the Sprint directory publishing business. Prior to re-joining RHD in 2002, McDonald was President of SBC Directory Operations and also served as President of DonTech, RHD's partnership in Illinois with SBC, in the mid-1990s. ABOUT R.H. DONNELLEY R.H. Donnelley is a leading yellow pages publisher and directional media company. Directional media is where consumers go to find who sells the goods and services they are ready to purchase. R.H. Donnelley publishes approximately 260 directories under the Sprint Yellow Pages(R) brand in 18 states, with major markets including Las Vegas, Orlando, and Lee County, Florida. The Company also offers online city guides and search web sites in these major markets under the Best Red Yellow Pages brand at www.bestredyp.com. In addition, R.H. Donnelley also publishes 129 SBC directories under the SBC(R) Yellow Pages brand in Illinois and Northwest Indiana. R.H. Donnelley serves more than 260,000 local and national advertisers. For more information, please visit R.H. Donnelley at www.rhd.com. Safe Harbor Provision Certain statements contained in this press release regarding R.H. Donnelley's future operating results or performance or business plans or prospects and any other statements not constituting historical fact are "forward-looking statements" subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Where possible, the words "believe," "expect," "anticipate," "should," "will," "planned," "estimated," "potential," "goal," "outlook," and similar expressions, as they relate to R.H. Donnelley or its management, have been used to identify such forward-looking statements. Regardless of any identifying phrases, these statements and all other forward-looking statements reflect only R.H. Donnelley's current beliefs and assumptions with respect to future business plans, prospects, decisions and results, and are based on information currently available to R.H. Donnelley. Accordingly, the statements are subject to significant risks, uncertainties and contingencies which could cause R.H. Donnelley's actual operating results, performance or business plans or prospects to differ materially from those expressed in, or implied by, these statements. Such risks, uncertainties and contingencies are described in detail in Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K for the year ended December 31, 2003, as well as the Company's other periodic filings with the Securities and Exchange Commission, and in summary and without limitation include the following: (1) our ability to meet our substantial debt service obligations; (2) restrictive covenants under the terms our debt and convertible preferred stock agreements; (3) usage of print yellow pages directories and changes in technology; (4) competition in the yellow pages industry and other competitive media; (5) our ability to successfully integrate the business recently acquired from SBC; (6) reliance on and extension of credit to small- and medium-sized businesses; (7) dependence on third party providers of printing, distribution and delivery services and the sale of advertising to national accounts; (8) general economic conditions and consumer sentiment in our markets; and (9) fluctuations in the price and availability of paper. -----END PRIVACY-ENHANCED MESSAGE-----