Sales Agency Agreement

SALES AGENCY AGREEMENT


THIS AGREEMENT, entered into as of the 27th day of April, 2000, is by and among R. H. Donnelley Inc. (f/k/a The Reuben H. Donnelley Corporation), a Delaware corporation ("Donnelley"), Centel Directory Company, a Delaware corporation ("Centel"), and CenDon, L.L.C., a Delaware limited liability company ("CenDon"). Donnelley, Centel and CenDon are referred to in this Agreement collectively as the "parties" or individually as a "party", as the context requires. "Publisher" shall mean CenDon on and before December 31, 2004, and Centel thereafter.


RECITALS:


A. Centel and Donnelley have caused CenDon, L.L.C. (the "Company") to be formed as a limited liability company under the Delaware Limited Liability Company Act and, as required thereunder, Centel and Donnelley entered into a Limited Liability Company Agreement, of even date herewith (the "LLC Agreement").


B. Donnelley and Centel are parties to The CenDon Partnership Agreement dated May 5, 1988, as amended to date (the "Partnership Agreement"), which established The CenDon Partnership, a general partnership in which the parties are partners (the "Partnership").


C. The Partnership has entered into directory agreements and amendments thereto with the telephone operating company Affiliates of Centel identified in Exhibit A to the LLC Agreement (the "Centel Operating Companies"), which generally provide for the publication of telephone directories distributed within defined geographic areas (the "Directory Agreements"). Copies of the Directory Agreements and all amendments thereto are attached to the LLC Agreement as Exhibit B.


D. The parties desire to convert the Partnership into the Company by transferring to the Company all of their right, title and interest in the Partnership, thereby causing the Partnership to cease to exist and all of its assets and liabilities to be transferred to the Company.


E. The parties desire to appoint Donnelley as exclusive sales agent and to specify the sales agency services that Donnelley shall perform with respect to the Directories (as defined below) published following the Effective Date (as defined below), in accordance with the terms of the LLC Agreement and this Sales Agency Agreement.


IN CONSIDERATION of the covenants set forth in this Agreement, the sufficiency and adequacy of which are acknowledged by each party, Donnelley, Centel and CenDon agree as follows:


1. FORMATION OF CENDON. Effective as of the Effective Date, Donnelley and Centel shall transfer to CenDon all of their right, title and interest in the Partnership, and CenDon shall continue the business of the Partnership, hold all Partnership assets and assume all Partnership liabilities. The business of the Partnership after the Effective Date shall cease. 2. SALES AGENCY, SERVICES, AND FUNCTIONS.


2.1 GRANT OF EXCLUSIVE SALES AGENCY. During the term of this Agreement, and subject to the terms hereof, Donnelley shall have the exclusive right and obligation to solicit and sell:


(a) all local and foreign print advertising for inclusion in
the Directories, as defined in this Agreement, other than National
Yellow Pages Service or equivalent national advertising that may be
sold by other national yellow pages selling companies, or their
equivalent ("NYPS advertising");


(b) all local and foreign electronic advertising, other than
NYPS advertising, for inclusion in an electronic yellow pages directory
offered by Publisher to its advertising customers as a product or
service ancillary to print advertising sold for inclusion in the
Directories; and


(c) all local and foreign advertising associated with the
Hotel/Motel Program as such Program is presently constituted and
operated by the Partnership as reflected in the "CenDon Operating
Practices" issued November 30, 1999 (attached hereto as Schedule 2.1
(c)), which Program shall continue to be managed substantially as a
local advertising program.


(d) Notwithstanding the foregoing, Donnelley's exclusive right
and obligation to solicit and sell foreign advertising into the
Directories shall not apply to foreign advertising customers located
within the primary distribution area of any classified telephone
directory, other than the Directories, published by Publisher or an
Affiliate (as such term is defined in Section 12(d)) of Publisher for
general distribution to telephone subscribers; provided, however, that
Donnelley shall maintain an exclusive right to solicit and sell foreign
advertising to existing customers of Donnelley regardless of their
location within the primary distribution area of any classified
telephone directories (other than the Directories) published by
Publisher or one of its Affiliates. As used herein, "existing customers
of Donnelley" means directory advertising customers to which Donnelley
has sold advertising into the Directories during the last publication
cycle preceding the Effective Date.


2.2 SALES AND PUBLISHING SERVICES. Pursuant to the schedules incorporated into this Agreement, and subject to the terms of this Agreement, Donnelley shall provide certain services to Publisher as follows:


(a) ADVERTISING SALES AND SUPPORT SERVICES. As more
specifically identified in the Advertising Sales and Customer Support
Services Schedule attached hereto as Schedule 2.2(a), Donnelley agrees
to provide telephone directory advertising sales and customer support
services to Publisher on a fully-dedicated basis. As used herein, "a
fully-dedicated basis" shall mean that employees of Donnelley assigned
to work on the Directories shall not have assignments or
responsibilities for publications other than the Directories, except
that Donnelley employees who are assigned to work on the Directories
may be utilized to work on publications other than the Directories,
provided


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that (i) such utilization has either been provided for in the
applicable Annual Performance Plan (as defined herein) or, if such
deployment is not contemplated in the Annual Performance Plan, has been
reviewed and approved in writing by Publisher, and (ii) such deployment
or utilization is not reasonably projected to have an adverse effect on
the operations, sales, or revenues of the Directories. Donnelley may
also request other arrangements on a case-by-case basis, subject to the
written approval of Publisher, which shall not be unreasonably
withheld. Publisher shall consent to arrangements requested by
Donnelley hereunder so long as Donnelley can reasonably demonstrate no
dilution of efforts towards Publisher's sales revenue objectives and
commitment of resources in accordance with the Annual Performance Plan
(as defined herein).


(b) PUBLISHER ASSUMPTION OF SALES SUPPORT FUNCTIONS. Publisher
shall have the right to assume responsibility for certain sales and
customer support functions, as identified, and in accordance with the
time period specified, in Schedule 2.2(b). The Parties will cooperate
and take all reasonable measures to ensure an orderly transition of the
assumed sales support and related services and functions to Publisher.
Publisher shall reimburse Donnelley for those expenses of the type
identified on Schedule 2.2(b) that are reasonably incurred by Donnelley
in connection with its cooperation in the orderly transition of these
services and functions.


2.3 PUBLISHER FUNCTIONS. Subject to the terms of this Agreement, Publisher shall be responsible for the publisher functions identified in the Publisher Functions Schedule attached hereto as Schedule 2.3.


2.4 PROPOSAL AND BID RIGHTS. If any Affiliate of Publisher proposes to sell telephone directory advertising for an electronic Classified Telephone Directory as may be permitted by Section 12 of this Agreement, Publisher shall use reasonable efforts to cause such Affiliate to present Donnelley with the opportunity to submit a proposal or bid to sell local advertising into such product offering. Such Affiliate may determine whether to utilize Donnelley for such services in its sole discretion, and Donnelley's rights hereunder are merely the right to present the proposal or bid. If such Affiliate determines to use Donnelley for such services, such services will be provided under a sales services agreement having terms, conditions and covenants mutually acceptable to such Affiliate and Donnelley. Nothing in this Section 2.4 shall be construed to give Donnelley any preference over any third party or other Affiliates of Publisher with respect to such services or any right of first refusal or right of first offer with respect thereto.


3. SCOPE OF RELATIONSHIP.


3.1 THE DIRECTORIES. The telephone directories (the "Directories") subject to this Agreement are those telephone directories published by the Partnership immediately prior to the Effective Date pursuant to the Directory Agreements, which are identified in Schedule 3.1. The Directories also shall mean and include any other printed or electronic directory or related product made subject to this Agreement by the mutual agreement of the parties, which shall be made by written instrument signed by both parties. With respect to the Directories, the parties agree as follows:


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(a) In the event Publisher elects during the term of this
Agreement to exercise its right to re-scope, over-scope, under-scope,
reconfigure, substitute, or otherwise alter the Directories in
existence as of the date of this Agreement, then this Agreement shall
be applicable to such succeeding, re-scoped, over-scoped, under-scoped,
reconfigured, substituted or otherwise altered directories.


(b) If the Publisher re-scopes, over-scopes, under-scopes,
reconfigures, substitutes, or otherwise alters the Directories, to
include the addition of exchange areas outside the current geographic
scope of the Directories as depicted in Schedule 3.1 (b) hereto (the
"Current Area"), Donnelley shall have the exclusive right and
obligation to provide directory services under this Agreement for all
re-scopings, re-configurations and substitutions of the Directories
that include exchanges within the Current Area .


(c) It shall not be considered to be a re-scoping,
over-scoping, under-scoping, reconfiguration, substitution, or
alteration of the Directories for the Publisher to publish one or more
directories of general distribution that have ten percent (10%) or less
of each of their primary distribution scheduled for delivery in the
Current Area ("Other Directories"), provided that all of the Current
Area continues to be covered by the Directories and that such Other
Directories are not intended to be, or have the practical effect of
being, a substitute in whole or in part for any of the Directories.
Except as provided for in the following sentence, Publisher in its sole
discretion shall determine from whom it will request directory services
for the Other Directories. With respect to the solicitation and sale of
advertising for publication in such Other Directories, Donnelley shall
have the exclusive right and obligation to solicit telephone
subscribers within the Current Area for the sale of advertising to be
published by Publisher in such Other Directories


(d) Notwithstanding the exclusive sales agency granted
Donnelley under this Agreement, Publisher shall have the right, but not
an obligation, to engage in reciprocal selling arrangements with third
parties encompassing the Directories and other telephone directories
that are distributed primarily in geographic areas outside the primary
distribution area of the Directories, provided that (a) Donnelley shall
be allowed to retain its exclusive selling rights and related
commissions for any foreign advertising accounts included in the
Directories at the time the reciprocal selling arrangement is
established, and (b) Publisher shall not be permitted to accept from
other than Donnelley advertising sold to a telephone subscriber that is
billed to a telephone number located within the Current Area. In the
event Publisher elects to engage in such arrangements and unless
otherwise agreed upon in writing by the Parties, Donnelley will be
compensated and shall provide to Publisher sales agency services with
respect to advertising sold into such other telephone directories
consistent with the following terms: for any advertising sold by a
third party sales agent into the Directories during the term hereof,
Donnelley shall receive no compensation; and for advertising sold by
Donnelley into directories (other than the Directories) that are
published by or on behalf of Publisher's Affiliates, Donnelley shall be
compensated at the applicable commission rate under this Agreement. In
the event Publisher elects to engage in one or more reciprocal selling
arrangements, Publisher shall promptly notify Donnelley in writing of
such fact, which notice shall disclose the nature of the arrangement.
Within sixty (60) days after notification, the Parties shall


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consummate the specific terms governing Donnelley's provision of sales
agency services with respect to the disclosed reciprocal selling
arrangement, consistent with the requirements of this paragraph. The
terms governing the arrangement shall be reduced to a writing signed by
the Parties.


3.2 PUBLISHING RIGHTS. The parties acknowledge that the Centel Operating Companies are regulated local exchange telecommunications carriers ("LECs"), and that LECs may from time-to-time acquire, sell, trade, or otherwise dispose of local exchange areas, and that contractual relationships of LECs may be subject to direction by regulatory authorities. Accordingly, the parties agree as follows:


(a) MAINTAINING PUBLISHING RIGHTS. Publisher shall use its
reasonable best efforts to maintain its right to publish the
Directories for each of the Centel Operating Companies throughout the
term of this Agreement ("publishing rights"). Donnelley agrees to
cooperate with Publisher in any reasonable effort undertaken by
Publisher to maintain its publishing rights. In supporting Publisher's
efforts to maintain its publishing rights, Donnelley shall bear its own
internal costs of providing such support. In the event Donnelley incurs
costs for external legal services or external consultative services,
Publisher shall reimburse Donnelley for such external costs that are
reasonably incurred and authorized in advance by Publisher. As part of
its publishing rights, Publisher shall use its reasonable best efforts
to acquire (on a non-exclusive, but timely basis) from the Centel
Operating Companies all listing information and service orders needed
to publish the Directories, subject to any regulatory and other
restrictions the Centel Operating Companies place on the release of
such information.


(b) AFFILIATES. In the event Publisher loses its right to
publish the Directories for any of the Centel Operating Companies'
exchange areas covered thereby and an Affiliate of Publisher acquires
the right to publish telephone directories for the Centel Operating
Companies covering those exchange areas, Publisher shall cause such
Affiliate to enter into a sales agency agreement substantially on the
same terms and conditions as contained in this Agreement with respect
to such exchange areas (the "Affiliate Agreement"), it being the intent
of the parties in such case to preserve Donnelley's benefit of the
bargain under this Agreement. Donnelley shall be obligated to promptly
negotiate and enter into the Affiliate Agreement in accordance with the
terms of this Section 3.2 (b). Upon the execution of the Affiliate
Agreement, the exchange areas covered thereby shall be deleted from
this Agreement.


(c) REGULATORY ACTION. If, during the term of this Agreement,
Publisher loses its right to publish the Directories for any of the
Centel Operating Companies' exchange areas covered thereby because of
regulatory action, such exchange areas shall be deleted from this
Agreement, subject to the terms of this Section 3.2(c). Notwithstanding
the foregoing or anything else to the contrary contained herein, in the
event of any regulatory action which results, directly or indirectly,
in the sale, exchange or transfer (with or without consideration) of
exchange areas covered by this Agreement from any of the Centel
Operating Companies to any (i) Affiliate of Publisher, then such
transfer shall be covered by Section 3.2(b) above, or (ii) third party
that is not an Affiliate of Publisher, then such transfer shall be
covered by Section 3.2(d) below. Publisher shall promptly


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notify Donnelley of all areas covered by this Agreement for which
rights are to be lost as soon as practicable following such fact being
known to Publisher.


1. Upon receipt by Donnelley of notice from Publisher
of such deletion of any exchange area covered by this
Agreement, Donnelley shall have the right to: give written
notice to Publisher (a "Termination Notice") to terminate this
Agreement in its entirety within (90) days of Publisher's
notice of exchanges to be deleted due to lost publishing
rights (the Termination Notice to be effective for Directories
with canvasses with start dates six (6) months from the date
of such notice). In the event Donnelley does not give
Publisher a Termination Notice in accordance with the
foregoing, this Agreement shall continue in full force and
effect with respect to the exchange areas then remaining over
which Publisher continues to maintain a right to publish
Directories on behalf of the Centel Operating Companies.


2. With respect to the non-compete provisions of
Section 12 hereof (the "Noncompete Provision"), the Parties
agree as follows in the event of a loss of Publisher's right
to publish the Directories: If Donnelley elects to terminate
this Agreement in its entirety by giving a Termination Notice
to Publisher as hereinabove provided, the Noncompete Provision
shall not survive such termination. If Donnelley does not so
terminate this Agreement, then the Noncompete Provision shall
remain in effect, except that such provision thereafter shall
not apply with respect to any exchanges that are deleted from
this Agreement.


3. For purposes of this Agreement, Publisher shall
not be deemed to have lost its right to publish the
Directories for any Centel Operating Company exchange area
covered thereby if Publisher's right has been formally and
officially suspended or terminated by regulatory action,
provided (i) Publisher diligently pursues, or requests that
the applicable Centel Operating Company pursue, the retention
or restoration of such right pursuant to the process
prescribed by the appropriate regulatory agency, and such
other legal, equitable or injunctive legal action which may be
available to Publisher or the applicable Centel Operating
Company and which Publisher or the applicable Centel Operating
Company reasonably deems advisable to pursue, and (ii)
Publisher continues to receive Directory advertising revenues
from such exchange areas without material reduction resulting
from such regulatory action, other than reductions of
Directory advertising revenues attributable to such regulatory
action that continue for less than an aggregate of three (3)
months at any time during the term of this Agreement.


4. In the event such right is retained or restored
during the term of this Agreement, the exchange areas subject
to such right will continue to be subject to this Agreement.
In the event Publisher or the applicable Centel Operating
Company fails to retain or restore such right pursuant to the
prescribed regulatory process and such other legal, equitable
or injunctive legal action which may be available to Publisher
or the applicable Centel Operating Company and


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which Publisher or the applicable Centel Operating Company
reasonably deems advisable to pursue, such right shall be
deemed lost. Donnelley agrees to cooperate with Publisher or
the applicable Centel Operating Company in any reasonable
effort made by Publisher to so retain or restore such rights.
In supporting Publisher's efforts to maintain its publishing
rights, Donnelley shall bear its own internal costs of
providing such support. In the event Donnelley incurs costs
for external legal services or external consultative services,
Publishing shall reimburse Donnelley for such external costs
that are reasonably incurred and authorized in advance by
Publisher.


(d) SALES TO THIRD PARTIES. In the event all or any portion of
any Centel Operating Company's exchange areas covered by the
Directories are sold, exchanged, or otherwise transferred to another
person or entity (the "acquiror"), Publisher shall cause the Centel
Operating Company(s) engaged in such transaction to assign its rights
to, and require an assumption of, the applicable Directory Agreement(s)
by the acquiror, to the extent the Directory Agreement(s) relates to
the sold, exchanged, or transferred exchange area.


1. Alternatively, the acquiror shall be permitted to
negotiate and enter into a separate directory publishing
agreement with Publisher, on terms comparable to the Directory
Agreement(s) with respect to the acquired exchange areas, for
which Donnelley shall provide services and receive
compensation in accordance and consistent with this Agreement.
If such an alternative directory publishing agreement is
consummated, then the Centel Operating Company exchange areas
covered thereby may be sold, exchanged, or transferred free
and clear of any obligations under the Directory Agreement(s)
or this Agreement.


2. In lieu of the foregoing provisions of this
Section 3.2(d), if the Centel Operating Company(s) offers to
subject to the Directory Agreement(s) exchange areas
comparable to the sold, exchanged, or transferred exchange
areas in terms of economic value and geographic location, it
will have the right (subject to Donnelley's prior written
consent, not to be unreasonably withheld) to substitute those
exchange areas under the Directory Agreement(s) and the sold,
exchanged, or transferred exchanges thereafter will not be
subject to, or encumbered by, the Directory Agreement(s) or
this Agreement. Donnelley may not reasonably withhold consent
to the substitution of exchange areas as contemplated herein,
unless (i) the substituted exchange areas reasonably are
projected not to produce sales revenues comparable to the
sales revenues expected to be produced by the sold, exchanged,
or transferred exchange areas, or (ii) Donnelley reasonably
demonstrates that its costs of providing services required by
this Agreement for the substituted exchange areas would be
materially increased over the costs of providing those
services to the sold exchange areas, and Publisher elects not
to absorb such increased costs, or (iii) Donnelley is
contractually precluded (by contract or applicable law) from
serving as Publisher's sales agent in any of the substituted
exchange areas.


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(e) DIRECTORY AGREEMENTS. The parties acknowledge that the
terms of the Directory Agreements end on December 31, 2004 and that
Centel will replace the Directory Agreements so that Centel's right to
publish the Directories is coterminous with this Agreement. Centel
shall cause the Centel Operating Companies to enter into replacement
agreements, that extend Centel's right to publish the Directories at
least through the term of this Agreement. Donnelley agrees to assist,
at Centel's sole cost and expense, Centel's effort to renegotiate or
replace the Directory Agreements to the extent reasonably requested by
Centel. Publisher shall have the right, at any time during the term of
this Agreement, to make any modifications to the terms of the Directory
Agreements that it deems necessary or advisable, provided (a) Publisher
preserves its right to publish the Directories in accordance with the
terms of this Section 3.2, and (b) those modifications do not have a
material, adverse impact on Donnelley's compensation or the ...