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