EXHIBIT 10.2 NON-COMPETITION AGREEMENT

 

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                                                                    EXHIBIT 10.2

 

                            NON-COMPETITION AGREEMENT

 

         THIS NON-COMPETITION AGREEMENT (this "Agreement") is effective as of

this 1st day of September, 2004, by and between R. H. Donnelley Corporation, a

Delaware corporation, and SBC Communications Inc., a Delaware corporation.

 

         Capitalized terms not herein defined shall have the meanings assigned

in the Directory Services License Agreement, dated as of the date hereof (the

"Directory Services License Agreement"), by and among R. H. Donnelley

Corporation, R.H. Donnelley Publishing & Advertising of Illinois Partnership

(f/k/a The APIL Partners Partnership), an Illinois general partnership, DonTech

II Partnership, an Illinois general partnership, Ameritech Corporation, a

Delaware corporation and a direct wholly owned subsidiary of SBC Communications

Inc., and SBC Directory Operations, Inc., a Delaware corporation and a direct

wholly owned subsidiary of SBC Communications Inc.

 

                                    RECITALS:

 

         A. On the date of this Agreement, R. H. Donnelley Corporation, or one

of its wholly owned Subsidiaries, is acquiring (i) from API, 1% of the

outstanding partnership interests in APIL Partners and (ii) from API's wholly

owned subsidiary APIL, (a) 99% of the outstanding partnership interests in APIL

Partners, (b) 47% of the outstanding partnership interests in DonTech I, and (c)

50% of the outstanding partnership interests in DonTech II, pursuant to the

Purchase Agreement;

 

         B. The Purchase Agreement provides that RHD and SBC (the "Parties")

will enter into this Agreement as a condition to the closing of the transactions

contemplated by the Purchase Agreement;

 

         C. Pursuant to the terms of the Purchase Agreement, on the date of this

Agreement, R. H. Donnelley Corporation, APIL Partners, DonTech II, Ameritech

Corporation and SBC Directory Operations, Inc. are entering into the Directory

Services License Agreement in order to provide for the continued production,

publication and distribution of Print Directories by Publisher following the

closing of the transactions contemplated by the Purchase Agreement;

 

         D. SBC acknowledges that the agreements and covenants contained in this

Agreement are essential to protect the benefits that RHD expects to receive

pursuant to the transactions contemplated by the Purchase Agreement and the

Directory Services License Agreement; and

 

         E. SBC acknowledges that the agreements and covenants contained in this

Agreement were a material inducement to RHD's agreement to enter into the

Purchase Agreement and the other agreements contemplated by the Purchase

Agreement and the Directory Services License Agreement.

 

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                                     AGREEMENT

 

         NOW, THEREFORE, in consideration of the premises and the mutual

representations, warranties, covenants and agreements set forth in this

Agreement and the consummation of the transactions contemplated by the Purchase

Agreement, the Parties agree as follows:

 

                                    ARTICLE 1

 

                              TERM AND TERMINATION

 

         SECTION 1.1 TERM. This Agreement will terminate immediately and without

any further action when the Directory Services License Agreement expires at the

end of the Term, is terminated by or on behalf of SBC Directory Operations in

accordance with its terms or is terminated by or on behalf of Publisher in

accordance with its terms or otherwise; provided, however, that notwithstanding

the foregoing (i) in the event of a termination of the Directory Services

License Agreement pursuant to Section 9.4 or 10.1(a) thereof, this Agreement

shall remain in effect to the extent and for the periods specified in Section

9.4(d) and 10.1(a)(iv) thereof, respectively, and (ii) no termination or

expiration of this Agreement will release SBC from liability for any prior

breaches of any provision of this Agreement.

 

                                    ARTICLE 2

 

                            EXCLUSIVITY AND NON-COMPETE

 

         SECTION 2.1 PRINT DIRECTORIES.

 

         (a) Exclusivity. Publisher will have the exclusive right to (i) publish

and distribute Print Directories and use the Licensed Marks in the Territory as

contemplated in the Directory Services License Agreement and the other

Commercial Agreements and (ii) solicit and sell Local and National yellow pages

and white pages advertising for inclusion in such Print Directories. As used

with respect to Print Directories, (i) "National" yellow pages and white pages

advertising will have the same meaning as provided for such term under the

current Yellow Pages Integrated Media Association ("YPIMA") minimum standards,

and (ii) "Local" yellow pages and white pages advertising shall mean all such

advertising that does not constitute National (as so defined).

 

         (b) Non-Compete. Until the termination of this Agreement, neither SBC

nor any of its Subsidiaries will directly or indirectly engage in, manage,

operate or have any profit or other equity interest (other than less than 5% of

a Person) in any Person (other than pursuant to the Directory Services License

Agreement) that engages in the business of (i) producing, publishing or

distributing any Print Directories in the Territory, or (ii) soliciting or

selling Local or National yellow pages or white pages advertising for inclusion

in any Print Directories published or distributed in the Territory; provided,

however, if the RHD Entities cease at any time to publish and distribute any

Print Directory in the Territory, SBC may publish and distribute, or cause to be

published and

 

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distributed, such directory to the extent necessary to comply with the Legal and

Regulatory Requirements.

 

         (c) Permitted Activities. Notwithstanding Sections 2.1(a) and 2.1(b) of

this Agreement, neither RHD's exclusivity rights nor SBC's non-compete

obligations described therein will prohibit (i) any SBC Entity from (A)

producing, publishing or distributing (or selling advertising for inclusion in)

industrial guides (other than the Illinois Industrial Guide) in the Territory so

long as such products do not materially compete with and are not significant

substitutes for Print Directories currently published by Publisher or (B) (1)

managing, operating or having any profit or other equity interest in a Certified

Marketing Representative ("CMR") with respect to the sale of National yellow

pages and white pages advertising or (2) earning and collecting a CMR commission

with respect to the sale of National yellow pages and white pages advertising,

or (ii) the SBC Entities from soliciting or selling Telco-Sold White Pages

Products. The Parties hereby agree to terminate, or cause to be terminated, on

the date hereof the agreements set forth on Exhibit A with respect to street

address directories outside of the Territory sold by DonTech II (and RHD agrees

to transfer, or cause to be transferred, all relevant records for such street

address directories to SBC Directory Operations).

 

         SECTION 2.2 EXISTING IYP DIRECTORIES.

 

         (a) Non-Compete. Until the termination of this Agreement, neither SBC

nor any of its Subsidiaries will directly or indirectly engage in, manage,

operate or have any profit or equity interest (other than less than 5% of a

Person) in any Person (other than pursuant to the IYP Reseller Agreement) that

engages in the business of soliciting or selling Local IYP Advertising for

inclusion in Existing IYP Directories. Furthermore, until the termination of

this Agreement, SBC will not license the Licensed Marks or any other mark

relating to any SBC Telco, any Existing IYP Directory or any Future Electronic

Directory for which Publisher is acting as exclusive sales agent in the

Territory, to a third party (or Cingular or any of its Subsidiaries) for use in

connection with soliciting and selling Local IYP Advertising for inclusion in

Existing IYP Directories or, in the case of Cingular or any of its Subsidiaries,

in Future Electronic Directories, except for incidental use ancillary to any

solicitation and sales of Local IYP Advertising by a third party for which SBC

does not receive any incremental monetary consideration.

 

         (b) Local and National IYP Advertising.

 

                  (i) "Local IYP Advertising" means, any advertising, which for

         this purpose shall include any unpaid listings, to be included in any

         Existing IYP Directory or Future Electronic Directory which is

         solicited from an advertiser physically located in the Territory (each,

         an "Advertiser"), other than any such advertising which (x) promotes

         (A) services to be rendered substantially outside the Territory or (B)

         products, if such advertising substantially directs potential

         purchasers to one or more business establishments or sales personnel

         physically located outside the Territory and (y) is solicited from an

         Advertiser who at the time of such solicitation has, or has a binding

         contract to place, advertisements in

 

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         two or more other IYP or electronic directories, and "National IYP

         Advertising" will mean all such advertising which is solicited from an

         Advertiser that does not constitute Local IYP Advertising; provided,

         however, that for five years from the date of this Agreement (the "Five

         Year Period") any advertising to be included in any Existing IYP

         Directory or Future Electronic Directory which is solicited from an

         Advertiser who at the time of such solicitation (i) had previously

         purchased advertising included in SMARTpages (as defined in the IYP

         Reseller Agreement) shall be deemed to be Local IYP Advertising or (ii)

         (A) has Local white or yellow page advertising in a then current Print

         Directory or a binding contract to place such advertising in the next

         publication of a Print Directory shall be deemed to be Local IYP

          Advertising or (B) has National white or yellow page advertising in a

         then current Print Directory or a binding contract to place such

         advertising in the next publication of a Print Directory shall be

         deemed to be National IYP Advertising; and provided, further, that

         except to the extent otherwise provided in clause (ii) of the foregoing

         proviso, if at any time YPIMA or any successor directory industry

         association officially adopts, or subsequently amends, provisions which

         define or establish distinctions between local and national Directory

         Advertising for inclusion in IYP or other electronic directories

         (excluding Print Directories), then the foregoing definitions of "Local

         IYP Advertising" and "National IYP Advertising" will be replaced with

         such definitions or will be amended to reflect such distinctions, as

         applicable. The date on which such definitions or distinctions first

         become effective is referred to herein as the "New Regulation Date."

 

                  (ii) Unless the New Regulation Date shall have occurred, a

         reasonable time prior to the end of the Five Year Period, the parties

         to the Directory Services License Agreement will negotiate in good

         faith any revisions to such definitions which they deem appropriate or

         desirable and in so doing will give significant weight to any industry

         standards which may have developed which define or distinguish between

         local and national advertising in the context of Existing IYP

         Directories and/or Future Electronic Directories as they may evolve

         with changing technologies and practices; provided, however, that the

          foregoing shall not obligate either party to agree to any such

         revisions. During the term of the Directory Services License Agreement,

         the parties will negotiate in good faith policies and procedures (which

         must be consistent with the spirit and principles of the definitions in

         Section 2.2(b)(i) above, except that the first proviso to such

         definitions shall not be given effect for any period after the Five

         Year Period) that will be used to determine whether and to what extent

         IYP advertising which promotes services to be performed or products to

         be sold both inside and outside the Territory is Local IYP Advertising

         or National IYP Advertising (as the definitions