Commitment Letter for Acquisition Financing between R.H. Donnelley Corporation and J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A.
Summary
R.H. Donnelley Corporation is entering into an agreement with J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A. to secure financing for its planned acquisition of another company, referred to as "Delta." The agreement outlines the lenders' commitment to provide various credit facilities and assist with related financial transactions, including the redemption of preferred stock, repurchase offers for outstanding bonds, and necessary amendments to existing credit agreements. The commitment is subject to certain conditions and is intended to ensure the acquisition and related transactions are fully funded at closing.
EX-10.6 8 l16285aexv10w6.txt EXHIBIT 10.16 COMMITMENT LETTER Exhibit 10.6 (J.P. MORGAN LOGO) J.P. MORGAN SECURITIES INC. 270 Park Avenue New York, New York 10017 JPMORGAN CHASE BANK, N.A. 270 Park Avenue New York, New York 10017 October 2, 2005 Commitment Letter R.H. Donnelley Corporation 1001 Winstead Drive Cary, North Carolina 27513 Attention: Steven Blondy Ladies and Gentlemen: R.H. Donnelley Corporation ("you" or the "Company") has advised J.P. Morgan Securities Inc. ("JPMorgan") and JPMorgan Chase Bank, N.A. ("JPMCB" and, together with JPMorgan, the "Commitment Parties") that it intends to enter into a merger agreement (the "Merger Agreement") pursuant to which it will acquire (the "Acquisition") all of the outstanding capital stock of the company separately identified to us as "Delta" (the "Target") from the existing holders of such capital stock (the "Sellers"). We understand that the Acquisition will be effected by merging (the "Merger") the Target with and into a newly formed subsidiary of the Company with such newly formed subsidiary being the survivor of the Merger. You have also advised us of the following in connection with the Acquisition: (a) you intend to redeem your outstanding 8% redeemable convertible cumulative preferred stock (the "Preferred Stock"); (b) the consummation of the Acquisition will trigger a requirement to offer (the "Change of Control Offers") to repurchase the outstanding bonds of the Target and its subsidiaries described on Schedule I hereto (collectively, the "Delta Bonds") at a purchase price equal to 101% of the outstanding principal amount thereof or, in the case of the Target's 9% Senior Discount Notes due 2013, at 101% of the Accreted Value (as defined in the applicable indenture); (c) the consummation of the Acquisition and other transactions contemplated hereby will require consents and other amendments (the "Delta Credit Agreement Amendments") under the Credit Agreement, dated as of November 8, 2002 (as amended, the "Delta East Credit Agreement") and the Credit Agreement, dated as of September 9, 2003 (as amended, the "Delta West Credit Agreement" and, together with the Delta East Credit Agreement, the "Delta Credit Agreements"), in each case as described on Schedule II and other such amendments necessary or appropriate to consummate the Acquisition and the other transactions contemplated hereby 2 as may be mutually agreed; and (d) you will seek approval of amendments (the "RHD Credit Agreement Amendments" and, together with the Delta Credit Agreement Amendments, the "Amendments") to the existing Amended and Restated Credit Agreement, dated as of September 1, 2004 (as amended, the "RHD Credit Agreement") with your subsidiary R.H. Donnelley Inc. ("RHD") as described on Schedule III and other such amendments necessary or appropriate to consummate the Acquisition and the other transactions contemplated hereby as may be mutually agreed. References herein to the "Transaction" shall include the financings described herein, including, without limitation, the redemption of the Preferred Stock and the Change of Control Offers, and all other transactions related to the Transaction, including, without limitation, the Acquisition. The borrower under the Delta West Credit Agreement is referred to herein as "Delta West", and the borrower under the Delta East Credit Agreement is referred to herein as "Delta East". You have further advised us that you propose to finance the Transaction and the related fees and expenses from the following sources: (a) the issuance of at least 36.3 million new shares of common stock of the Company valued at approximately $2,359,500,000, based on the September 20, 2005 closing price of $65 per share, to the Sellers (the "New Equity"); (b) $503,000,000 from incremental senior secured term loan facilities (the "Incremental Tranche B Delta West Facility") to be made available under the Delta West Credit Agreement; (c) $1,842,000,000 (as such amount may be increased in connection with the Company Bond Backstop (as defined below)) in cash proceeds from either (i) the issuance by the Company of senior notes (the "Company Holdco Notes") in a public offering or Rule 144A private placement or (ii) in the event the Company is unable to issue the full amount of the Company Holdco Notes at or prior to the time the Acquisition is consummated, borrowings under a senior bridge facility of the Company (the "Company Holdco Facility"); and (d) $250,000,000 in cash proceeds from either (i) the issuance by the Target of senior notes (the "Target Holdco Notes" and, together with the Company Holdco Notes, the "Holdco Notes") in a public offering or Rule 144A private placement or (ii) in the event the Target is unable to issue the full amount of the Target Holdco Notes at or prior to the time the Acquisition is consummated, borrowings under a senior bridge facility of the Target (the "Target Holdco Facility"; together with the Company Holdco Facility, the "Holdco Facilities"; and the Holdco Facilities, together with the Incremental Tranche B Delta West Facility, the "Credit Facilities"). It is understood that the Change of Control Offers will be commenced prior to the Closing Date (as defined in the Term Sheets) and that any funding required in connection with the Change of Control Offers will occur on the Closing Date. We also understand that you are considering making an offer to repurchase the outstanding 8.875% Senior Notes of RHD (the "RHD Bond Repurchase"), which would be financed with an incremental term loan facility (the "Incremental RHD Facility") in an aggregate amount equal to $325,000,000 (plus the amount of any premiums paid in connection with the RHD Bond Repurchase) and with substantially the same terms and conditions as those applicable to the Tranche A-2 Term Loans (as defined in the RHD Credit Agreement) outstanding thereunder. You have requested that (a) JPMorgan agree to act as the sole lead arranger and sole bookrunner for the Credit Facilities, (b) JPMCB commit to provide the Credit Facilities, (c) JPMorgan agree to assist in obtaining the consents required (the "Required Bank Consents") in connection with the approval of the Amendments, (d) JPMCB agree to offer to acquire commitments and/or loans of Non-Consenting Lenders (as defined below) in connection with the solicitation of the Required Bank Consents as described below, (e) JPMCB commit to provide the financing required to fund any purchases required to be made pursuant to the Change of Control Offers (the "Put Financing") and (f) JPMorgan agree to act as sole lead arranger and sole bookrunner for the Incremental RHD Facility. It is understood and agreed that any Put Financing shall, at JPMCB's option, after consultation with the Company, be comprised of (a) an increase to the Delta Credit Agreements, (b) an increase to the Company Holdco Facility and/or the Target Holdco Facility, (c) an increase in the amount of Holdco Notes, (d) borrowings under bridge 3 facilities (the "Delta Bridge Facilities" and, together with the Holdco Facilities, the "Bridge Facilities") at Delta East and/or Delta West, as the case may be, and/or (e) the purchase or issuance of notes with the same terms and conditions as the notes tendered pursuant to the associated Change of Control Offer (any Put Financing described in clauses (a), (b) and (d) above is referred to herein as a "Bank Put Financing"), provided that any Put Financing and any other Facility (as defined below) shall be in compliance with all other debt instruments and credit agreements of the Company, the Target and their respective subsidiaries. In addition, to the extent the 6.875% Senior Notes due 2013 of the Company (the "Existing Company Bonds") need to be refinanced in connection with the Transaction, it is understood and agreed that the Company Holdco Facility or the Company Holdco Notes shall be increased by an amount equal to $300,000,000 (the "Company Bond Backstop") to finance the tender of the Existing Company Bonds. JPMorgan is pleased to advise you that it is willing to act as the sole lead arranger and sole bookrunner for the Credit Facilities and any Bank Put Financing, and JPMCB is pleased to advise you of its commitment to provide the entire amount of the Credit Facilities and any Put Financing. This Commitment Letter and the Summaries of Terms and Conditions attached as Exhibits A, B, C, D, E and F hereto (the "Term Sheets") set forth the principal terms and conditions on and subject to which JPMCB is willing to make available the Credit Facilities and any Put Financing. It is agreed that JPMorgan will act as the sole lead arranger and sole bookrunner in respect of the Credit Facilities and any Bank Put Financing, and that JPMCB will act as the sole administrative agent in respect of the Credit Facilities and any Bank Put Financing. JPMorgan is also pleased to advise you that it is willing to act as (a) the sole lead arranger and the sole bookrunner for the Amendments, any Acquired Facilities (as defined below) and any Refinanced Facilities (as defined below) and, as such, it will use its commercially reasonable efforts to solicit the Required Bank Consents and (b) the sole lead arranger and the sole bookrunner for the Incremental RHD Facility and, as such, to use its commercially reasonable efforts to arrange a syndicate of Lenders (as defined below) to provide the Incremental RHD Facility and to obtain any consents required under the RHD Credit Agreement in connection therewith. In the event that, notwithstanding JPMorgan's efforts pursuant to clause (a) of the preceding sentence, one or more lenders which are parties to the Delta Credit Agreements or the RHD Credit Agreement, as applicable (the "Existing Lenders"), and whose consent is required for the Amendments to become effective, are not willing to approve the Amendments (each, a "Non-Consenting Lender"), JPMCB is pleased to advise you of its commitment (a) to offer to acquire (and, if such offer is accepted, to acquire) by assignment on the Closing Date (as defined in the Term Sheets) at par and pursuant to customary documentation sufficient commitments and/or loans of Non-Consenting Lenders necessary to cause the Amendments to become effective (any such commitments and/or loans so acquired by assignment, the "Acquired Facilities") or (b) if one or more Non-Consenting Lenders whose consent is required for the Amendments to become effective are unwilling to assign their commitments and/or loans to JPMCB pursuant to the preceding clause (a), to refinance the Delta Credit Agreements and/or the RHD Credit Agreement, as applicable, upon the terms and subject to the conditions set forth or referred to in this Commitment Letter (the "Refinanced Facilities" and together with the Credit Facilities, the Acquired Facilities, the Incremental RHD Facility and any Bank Put Financing, the "Facilities") (it being understood, in each case, that, concurrently with the consummation of the Acquisition, the terms of the Acquired Facilities or the Refinanced Facilities, as the case may be, will be amended in the manner contemplated by this Commitment Letter but will otherwise be on substantially the same terms as the Delta Credit Agreements or the RHD Credit Agreement, as applicable). You agree that, as a condition to the commitments and agreements hereunder, no other agents, co-agents or arrangers will be appointed, no other titles will be awarded and no compensation (other than that expressly contemplated by the Term Sheets and Fee Letter referred to below) will be paid 4 in connection with the Credit Facilities, the Amendments or any Bank Put Financing unless you and we shall so agree. JPMorgan intends to syndicate the Facilities to a group of financial institutions (together with JPMCB and the Existing Lenders (other than Non-Consenting Lenders), the "Lenders") identified by us in consultation with you. JPMorgan intends to commence syndication efforts in respect of the Facilities and solicitation efforts in respect of the Amendments promptly following the execution of the Merger Agreement, and you agree actively to assist JPMorgan in completing a syndication and solicitation satisfactory it. Your assistance in respect of our syndication and solicitation efforts shall include (a) your using commercially reasonable efforts to ensure that the syndication and solicitation efforts benefit from your existing lending and investment banking relationships, (b) direct contact between your senior management and advisors and the proposed Lenders, (c) assistance in the preparation of a Confidential Information Memorandum and other marketing materials to be used in connection with the syndication and solicitation efforts and (d) the hosting, with JPMorgan, of one or more meetings of prospective Lenders. You also agree that, at your expense, you will work with JPMorgan to procure, on or prior to the commencement of general syndication of the Facilities, a rating for the Facilities (after giving effect to the Transaction) by Moody's Investors Service, Inc. and Standard & Poor's Ratings Group. JPMorgan will manage, in consultation with you, all aspects of the syndication and solicitation efforts, including decisions as to the selection of institutions to be approached and when they will be approached, when their commitments or approvals will be accepted, which institutions will participate, the allocations of the commitments among the Lenders and the amount and distribution of fees among the Lenders. To assist JPMorgan in its syndication and solicitation efforts, you agree promptly to prepare and provide to JPMorgan all information with respect to the Company and the Transaction, including all financial information and projections through 2011 (such projections, together with all other forward-looking information, collectively called the "Projections"), as we may reasonably request in connection with the arrangement and syndication of the Facilities and the approval of the Amendments. At our request, you also agree to assist in the preparation of a version of the information package and presentation consisting exclusively of information and documentation that is either publicly available or not material with respect to you and your affiliates and any of your or their securities for purposes of United States federal and state securities laws. You hereby represent and covenant that (a) to the best of your knowledge, all written information other than the Projections (the "Information") that has been or will be made available to us by you or any of your representatives, when taken as a whole, is or will be true and correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made and (b) the Projections that have been or will be made available to us by you or any of your representatives, have been or will be prepared in good faith based upon assumptions believed by you to be reasonable at the time prepared (it being understood that Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, and that no assurance is given that such Projections will be realized). You agree to supplement the Information and Projections from time to time until the Closing Date so that the representations in the preceding sentence remain correct. You understand that in arranging and syndicating the Facilities and in soliciting the approval of the Amendments we may use and rely on the Information and the Projections without independent verification thereof. As consideration for JPMCB's commitment hereunder and JPMorgan's agreement to perform the services described herein, you agree to pay, or to cause the applicable Borrower to pay, to the Commitment Parties the nonrefundable fees set forth in the Term Sheets and in the Fee Letter dated the 5 date hereof and delivered herewith (the "Fee Letter"), which fees and other expenses required to be paid on or before the Closing Date may be netted out of any initial funding under the Facilities. Each Commitment Party's commitments and agreements hereunder are subject to (a) such Commitment Party's satisfaction that since June 30, 2005, no event has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on (i) the business, results of operations or financial condition of the Target and its subsidiaries, taken as a whole (provided, however, that with respect to this clause (i), material adverse effect will be deemed not to include effects to the extent resulting from (A) changes in or relating to the United States economy or United States financial, credit or securities markets in general or (B) changes in or relating to the industries in which the Target operates or the markets for any of the Target's products or services in general, which changes in the case of clauses (A) and (B) do not affect the Target to a materially disproportionate degree relative to other entities operating in such markets or industries or serving such markets) or (ii) the ability of the Target to consummate the transactions contemplated by the Merger Agreement in the manner contemplated thereby, (b) the negotiation, execution and delivery of definitive documentation with respect to the Facilities and the Amendments, the terms and conditions of which shall be consistent with the terms set forth in this Commitment Letter and the Term Sheets, including the funding conditions attached hereto as Exhibit F, and in a form reasonably satisfactory to the Administrative Agent and the Lenders (the "Credit Documentation"), it being understood that there shall be no conditions to closing or the initial funding other than conditions expressly set forth in this Commitment Letter and the Term Sheets, and the Commitment Parties agree to provide Credit Documentation, including financial covenants, in such form that the terms thereof do not impair availability of the Credit Facilities on the Closing Date or result in an immediate or likely default thereunder at or immediately after the Closing Date, and (c) the other conditions set forth in Exhibit F. You agree that during the syndication of the Facilities or the solicitation of approvals for the Amendments that there shall be no competing offering, placement or arrangement of any debt securities or bank financing by or on behalf of you or your subsidiaries or the Target or any of its subsidiaries. You agree (a) to indemnify and hold harmless each Commitment Party, its affiliates and its and its affiliates' officers, directors, employees, advisors and agents (each, an "Indemnified Person") as set forth in Annex A hereto and (b) to reimburse each Commitment Party and its affiliates on demand for all reasonable out-of-pocket expenses (including due diligence expenses, syndication expenses, consultant's fees and expenses, travel expenses, and reasonable fees, charges and disbursements of counsel) incurred in connection with the Facilities or the Amendments and any related documentation (including this Commitment Letter, the Term Sheets, the Fee Letter and the definitive financing documentation) or the administration, amendment, modification or waiver thereof. No Indemnified Person shall be liable (i) for any damages arising from the use by unauthorized persons of Information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted by such persons except to the extent resulting from the gross negligence or willful misconduct of such Indemnified Person or (ii) for any special, indirect, consequential or punitive damages in connection with the Facilities or the Amendments. You acknowledge that each Commitment Party and its affiliates (the term "Commitment Party" as used below in this paragraph being understood to include such affiliates) may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which you may have conflicting interests regarding the Transaction and otherwise. Such Commitment Party will not use confidential information obtained from you by virtue of the Transaction or its other relationships with you in connection with the performance by such Commitment Party of services for other companies, and such Commitment Party will not furnish any such information to other 6 companies. You also acknowledge that such Commitment Party has no obligation to use in connection with the Transaction, or to furnish to you, confidential information obtained from other companies. This Commitment Letter shall not be assignable by you without the prior written consent of each Commitment Party (and any purported assignment without such consent shall be null and void), is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto and the Indemnified Persons. This Commitment Letter may not be amended or waived except by an instrument in writing signed by you and each of us. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Commitment Letter by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter and the Fee Letter are the only agreements that have been entered into among us with respect to the Facilities and the Amendments and set forth the entire understanding of the parties with respect thereto. This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York. This Commitment Letter is not intended to create a fiduciary relationship among the parties hereto. This Commitment Letter is delivered to you on the understanding that neither this Commitment Letter, the Term Sheets or the Fee Letter nor any of their terms or substance shall be disclosed, directly or indirectly, by you to any other person except (a) to your officers, agents and advisors who are directly involved in the consideration of this matter, (b) as may be compelled in a judicial or administrative proceeding (in which case you agree to inform us promptly thereof) or as otherwise required by law or (c) in the case of the Commitment Letter and Term Sheets only, on a confidential basis, to the Sellers and the advisors to the Board of Directors of the Target (it being understood that the Fee Letter may not be disclosed). The compensation, reimbursement, indemnification and confidentiality provisions contained herein and in the Fee Letter shall remain in full force and effect regardless of whether definitive financing documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or the JPMCB's commitment hereunder. You hereby irrevocably submit to the non-exclusive jurisdiction of any court of the State of New York located in the Borough of Manhattan in the City of New York or the United States District Court for the Southern District of the State of New York, or any appellate courts from any thereof, for the purpose of any suit, action or other proceeding arising out of this Commitment Letter, the Fee Letter, the Amendments or any of the agreements or transactions contemplated hereby, which is brought by or against you and you (i) hereby irrevocably agree that all claims in respect of any such suit, action or proceeding may be heard and determined in any such court and (ii) hereby agree not to commence any action, suit or proceeding relating to this Commitment Letter, the Fee Letter or any such other agreements or transactions other than in such court except to the extent mandated by applicable law. You hereby waive any objection that you may now or hereafter have to the venue of any such suit, action or proceeding in any such court or that such suit, action or proceeding was brought in an inconvenient court and agree not to plead or claim the same. You hereby acknowledge that you have been advised by counsel in the negotiation, execution and delivery of this Commitment Letter, the Fee Letter and the other agreements and transactions contemplated hereby, that no Commitment Party has any fiduciary relationship with or fiduciary duty to you or any other person arising out of or in connection with this Commitment Letter, the Fee Letter or any of the other agreements or transactions contemplated hereby and that no Commitment Party has been retained to advise or has advised you or any other person regarding the wisdom, prudence or advisability of entering into or consummating the Facilities. YOU HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS COMMITMENT LETTER, THE FEE LETTER 7 OR ANY OF THE OTHER AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM RELATING THERETO. Each of the Lenders hereby notifies you that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law on October 26, 2001) (the "Patriot Act"), it is required to obtain, verify and record information that identifies the Company and its subsidiaries (including Target and its subsidiaries), which information includes names and addresses and other information that will allow such Lender to identify the Company and its subsidiaries in accordance with the Patriot Act. If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms hereof and of the Term Sheets and the Fee Letter by returning to us executed counterparts hereof and of the Fee Letter not later than 12:00 p.m., New York City time, on October 3, 2005. JPMCB's commitment and the JPMorgan's agreements herein will automatically expire at such time in the event that we have not received such executed counterparts in accordance with the immediately preceding sentence. If you do so execute and deliver to us this Commitment Letter and the Fee Letter, JPMCB agrees to hold its commitment available for you until the earliest of (i) the termination of the Merger Agreement, (ii) the consummation of the Acquisition without the funding of the Facilities or the Holdco Notes and (iii) 5:00 p.m., New York City time, on June 30, 2006. We are pleased to have been given the opportunity to assist you in connection with this important financing. Very truly yours, J.P. MORGAN SECURITIES INC. By: /s/ Richard Gabriel ------------------------------------ Name: Richard P. Gabriel ---------------------------------- Title: Vice President --------------------------------- JPMORGAN CHASE BANK, N.A. By: /s/ Gary Spevack ------------------------------------ Name: Gary Spevack ---------------------------------- Title: Vice President --------------------------------- Accepted and agreed to as of the date first written above by: R.H. DONNELLEY CORPORATION By: /s/ Jennifer Apker --------------------------------- Name: Jennifer Apker ------------------------------- Title: Vice President and Treasurer ------------------------------ Annex A Capitalized terms used and not otherwise defined herein are used with the meanings attributed thereto in the Commitment Letter dated October 2, 2005 (the "Commitment Letter") from J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A., to R.H. Donnelley Corporation (the "Indemnifying Party") of which these Indemnification Provisions form an integral part. To the fullest extent permitted by applicable law, the Indemnifying Party agrees that it will indemnify and hold harmless each Indemnified Person from and against any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements and any and all actions, suits, proceedings and investigations in respect thereof and any and all reasonable legal or other costs, expenses and disbursements in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation, the costs, expenses and disbursements, as and when incurred, of investigating, preparing or defending any such action, proceeding or investigation (whether or not in connection with litigation in which such Indemnified Person is a party) and including, without limitation, any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements, resulting from any negligent act or omission of such Indemnified Person), directly or indirectly, caused by, relating to, based upon, arising out of or in connection with (i) the Transaction, (ii) the Commitment Letter, the Fee Letter, the Facilities or the Amendments, or (iii) any untrue statement or alleged untrue statement of a material fact contained in, or omissions or alleged omissions in, information furnished by the Indemnifying Party or any of its subsidiaries or affiliates to any of the Indemnified Persons or any other person in connection with the Transaction or the Commitment Letter, provided, however, such indemnity agreement shall not apply with respect to an Indemnified Person to any portion of any such loss, claim, damage, obligation, penalty, judgment, award, liability, cost, expense or disbursement to the extent it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily from the gross negligence or willful misconduct of such Indemnified Person. These Indemnification Provisions shall be in addition to any liability which the Indemnifying Party may have to the Indemnified Persons. If any action, suit, proceeding or investigation is commenced, as to which any of the Indemnified Persons proposes to demand indemnification, it shall notify the Indemnifying Party with reasonable promptness, provided, however, that any failure by any of the Indemnified Persons to so notify the Indemnifying Party shall not relieve the Indemnifying Party from its obligations hereunder. Each Commitment Party, on behalf of the Indemnified Persons, shall have the right to retain counsel of its choice to represent the Indemnified Persons, and the Indemnifying Party shall pay the fees, expenses and disbursement of such counsel, and such counsel shall, to the extent consistent with its professional responsibilities, cooperate with the Indemnifying Party and any counsel designated by the Indemnifying Party. The Indemnifying Party shall be liable for any settlement of any claim against any of the Indemnified Persons made with its written consent, which consent shall not be unreasonably withheld. Without the prior written consent of the relevant Indemnified Person, the Indemnifying Party shall not settle or compromise any claim, permit a default or consent to the entry of any judgment in respect thereof. In order to provide for just and equitable contribution, if a claim for indemnification pursuant to these Indemnification Provisions is made but is found by a judgment of a court of competent jurisdiction (not subject to further appeal) that such indemnification may not be enforced in such case, even though the express provisions hereof provided for indemnification in such case, then the Indemnifying Party, on the one hand, and the Indemnified Persons, on the other hand, shall contribute to the losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and 2 disbursements to which the Indemnified Persons may be subject in accordance with the relative benefits received by the Indemnifying Party, on the one hand, and the Indemnified Persons, on the other hand, and also the relative fault of the Indemnifying Party, on the one hand, and the Indemnified Persons, on the other hand, in connection with the statements, acts or omissions which resulted in such losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements and the relevant equitable considerations shall also be considered. No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any other person who is not also found liable for such fraudulent misrepresentation. Notwithstanding the foregoing, none of the Indemnified Persons shall be obligated to contribute any amount hereunder that exceeds the amount of fees previously received by such Indemnified Person pursuant to the Commitment Letter and the Fee Letter. Neither expiration or termination of the JPMCB's commitment under the Commitment Letter or funding or repayment of the loans under the Facilities shall affect these Indemnification Provisions which shall remain operative and in full force and effect. Schedule I Outstanding Bonds of Delta and Its Subsidiaries "Delta East Bonds": Delta Media East 9.875% Senior Notes due 2009 ($450,000,000) Delta Media East 12.125% Senior Subordinated Notes due 2012 ($341,250,000) "Delta West Bonds": Delta Media West 8.5% Senior Notes due 2010 ($385,000,000) Delta Media West 9.875% Senior Subordinated Notes due 2013 ($761,800,000) Delta Media West 5.875% Senior Notes due 2011($300,000,000) "Delta Inc. Bonds": Delta Media Inc. 9.0% Senior Discount Notes due 2013 ($389,000,000 and $361,000,000) Delta Media Inc. 8.0% Senior Notes due 2013 ($500,000,000) Schedule II 1. Amend change of control. 2. Amend to permit repurchase of bonds tendered in Change of Control Offers and to permit backstop facilities (to the extent refinancing or basket provisions not available). 3. Amend to include Incremental Tranche B Delta West Facility. 4. Amend to permit new Target bonds (to the extent baskets not available). 5. Amend Delta West Credit Agreement to permit upstreaming of proceeds of incremental debt (to the extent baskets not available). (Section 6.08). 6. Waiver of cross-defaults resulting from Change of Control Offers will be required. (Section 9.02). 7. Amend financial covenants to the extent necessary or appropriate to reflect the capital structure contemplated hereby. 8. The amendments/waiver mentioned above require approval of Required Lenders (i.e., more than 50% approval). Schedule III 1. Amend passive holding company provisions to allow for acquisition of Target. (Sections 8.8, 8.16 and 9(l)). 2. Amend to permit new Company bonds. (Sections 8.2 and 9(l)). 3. Amend to permit negative pledge in new Company bonds. (Section 8.14). 4. Amend financial covenants. (Section 8.1). 5. The amendments mentioned above require approval of Required Lenders (i.e., more than 50% approval). (Section 11.1). EXHIBIT A DELTA WEST INCREMENTAL TRANCHE B FACILITY Summary of Principal Terms and Conditions ---------- R.H. Donnelley Corporation (the "Company") has indicated that it intends to enter into a merger agreement (the "Merger Agreement") pursuant to which the Company will acquire (the "Transaction") the outstanding capital stock of the company separately identified to us as "Delta" (the "Target") from the existing holders of such capital stock (the "Sellers"). Unless otherwise defined herein, terms which are defined in the Commitment Letter to which this Term Sheet is attached are used herein as so defined. Set forth below is a statement of the terms and conditions for the Incremental Tranche B Delta West Facility to be used to finance a portion of the Transaction:
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EXHIBIT B R.H. DONNELLEY CORPORATION SENIOR FACILITY Summary of Terms and Conditions ---------- R.H. Donnelley Corporation (the "Company") has indicated that it intends to enter into a merger agreement (the "Merger Agreement") pursuant to which the Company will acquire (the "Transaction") the outstanding capital stock of the company separately identified to us as "Delta" (the "Target") from the existing holders of such capital stock (the "Sellers"). Unless otherwise defined herein, terms which are defined in the Commitment Letter to which this Term Sheet is attached are used herein as so defined. Set forth below is a statement of the terms and conditions for the Company Holdco Facility to be used to finance a portion of the Transaction, including without limitation to fund a tender for the Existing Company Bonds, in the event that the Company is unable to issue the full amount of Company Holdco Notes at or prior to the time that the Acquisition is consummated:
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Annex I to Exhibit B Summary of Terms and Conditions of Exchange Notes Capitalized terms used but not defined herein have the meanings given in the Summary of Terms and Conditions of the Company Holdco Facility to which this Annex I is attached.
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EXHIBIT C DELTA SENIOR FACILITY Summary of Terms and Conditions ---------- R.H. Donnelley Corporation (the "Company") has indicated that it intends to enter into a merger agreement (the "Merger Agreement") pursuant to which the Company will acquire (the "Transaction") the outstanding capital stock of the company separately identified to us as "Delta" (the "Target") from the existing holders of such capital stock (the "Sellers"). Unless otherwise defined herein, terms which are defined in the Commitment Letter to which this Term Sheet is attached are used herein as so defined. Set forth below is a statement of the terms and conditions for the Target Holdco Facility to be used to finance a portion of the Transaction in the event the Target is unable to issue the full amount of the Target Holdco Notes at or prior to the time the Acquisition is consummated:
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Annex I to Exhibit C Summary of Terms and Conditions of Exchange Notes Capitalized terms used but not defined herein have the meanings given in the Summary of Terms and Conditions of the Target Holdco Facility to which this Annex I is attached.
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EXHIBIT D DELTA EAST DELTA EAST BRIDGE FACILITY Summary of Terms and Conditions ---------- R.H. Donnelley Corporation (the "Company") has indicated that it intends to enter into a merger agreement (the "Merger Agreement") pursuant to which the Company will acquire (the "Transaction") the outstanding capital stock of the company separately identified to us as "Delta" (the "Target") from the existing holders of such capital stock (the "Sellers"). Unless otherwise defined herein, terms which are defined in the Commitment Letter to which this Term Sheet is attached are used herein as so defined. Set forth below is a statement of the terms and conditions for the Delta East Bridge Facility to be used to finance a portion of the Transaction, including without limitation to fund Change of Control Offers for existing Delta East Bonds (as defined in Schedule I to the Commitment Letter):
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Annex I to Exhibit D Summary of Terms and Conditions of Exchange Notes Capitalized terms used but not defined herein have the meanings given in the Summary of Terms and Conditions of the Delta East Bridge Facility to which this Annex I is attached.
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EXHIBIT E DELTA WEST DELTA WEST BRIDGE FACILITY Summary of Terms and Conditions ---------- R.H. Donnelley Corporation (the "Company") has indicated that it intends to enter into a merger agreement (the "Merger Agreement") pursuant to which the Company will acquire (the "Transaction") the outstanding capital stock of the company separately identified to us as "Delta" (the "Target") from the existing holders of such capital stock (the "Sellers"). Unless otherwise defined herein, terms which are defined in the Commitment Letter to which this Term Sheet is attached are used herein as so defined. Set forth below is a statement of the terms and conditions for the Delta West Bridge Facility to be used to finance a portion of the Transaction, including without limitation to fund Change of Control Offers for existing Delta West Bonds (as defined in Schedule I to the Commitment Letter):
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Annex I to Exhibit E Summary of Terms and Conditions of Exchange Notes Capitalized terms used but not defined herein have the meanings given in the Summary of Terms and Conditions of the Delta West Bridge Facility to which this Annex I is attached.
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EXHIBIT F The availability of each of the Facilities shall be subject to the satisfaction of the following conditions. Capitalized terms used but not defined herein have the meanings given in the Term Sheets. (a) Each applicable party shall have executed and delivered the Credit Documentation. (b) The Acquisition shall be or shall have been consummated in accordance with the Merger Agreement (which consummation shall occur substantially simultaneously with the Closing Date and the funding of the Incremental Tranche B Delta West Facility and, if applicable, the Holdco Facilities), and no material provision of the Merger Agreement shall have been waived, amended, supplemented or otherwise modified in a manner that is material and adverse to the Commitment Parties without the consent of the Administrative Agent, the terms of which consent shall not be unreasonably withheld or delayed. (c) Representations and warranties in respect of due authorization, execution and delivery of the Credit Documentation; legality, validity, binding effect and enforceability of the Credit Documentation; execution and delivery of the Credit Documentation and consummation of the Transaction not violating material laws; and validity and perfection of the security interests in the collateral (subject to liens permitted by the Credit Documentation) shall be true and correct in all material respects, subject in each case to customary exceptions or qualifications. (d) The Administrative Agent shall have received the results of a recent lien search in each relevant jurisdiction with respect to the Company and its subsidiaries (including the Target and its subsidiaries), and such search shall reveal no liens on any of the assets of the Company and its subsidiaries (including the Target and its subsidiaries) except for liens permitted by the credit documentation and existing bonds or credit agreements or liens to be discharged on or prior to the Closing Date pursuant to documentation satisfactory to the Administrative Agent. (e) All documents and instruments required to perfect or continue the Administrative Agent's security interest in the collateral under the Facilities, to the extent applicable, (including delivery of stock certificates and undated stock powers executed in blank) shall have been executed and be in proper form for filing, subject only to exceptions satisfactory to the Administrative Agent. (f) The Administrative Agent shall have received such legal opinions (including opinions (i) from counsel to the Company and its subsidiaries and (ii) from such special and local counsel as may be reasonably required by the Administrative Agent), corporate delivery documents, certificates and instruments as are customary for transactions of this type. (g) As a condition to the funding of the Holdco Facilities, each of the Company and the Target shall have delivered preliminary offering memoranda or preliminary prospectuses relating to the Holdco Notes usable in a customary high-yield road show and the investment bank engaged to place the Holdco Notes shall have been afforded an opportunity following the receipt of such documentation to attempt to place the Holdco Notes with qualified purchasers thereof.
