PUBLISHING AGREEMENT

Exhibit 10.2

EXECUTION COPY

PUBLISHING AGREEMENT

among

VERIZON COMMUNICATIONS INC.,

VERIZON SERVICES CORP.

and

IDEARC MEDIA CORP.

Dated as of November 17, 2006

Table of Contents

 

 

i

Table of Contents

(continued)

 

 

ii

PUBLISHING AGREEMENT

This Publishing Agreement (this “Agreement”) is entered into as of November 17, 2006, but shall not be effective until the Effective Time, among Idearc Media Corp. (“Publisher”), Verizon Communications Inc. (“Verizon”) and Verizon Services Corp. (“Service Corp.”) on behalf of the telephone operating companies listed on Schedule A (collectively, the “TOCs” and together with Parent and Service Corp., the “Verizon Parties”). Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in Article I.

RECITALS

WHEREAS, Verizon and Idearc Inc. (“Spinco”), Publisher’s ultimate parent company, have entered into the Distribution Agreement, dated as of November 13, 2006 (the “Distribution Agreement”), pursuant to which (i) Verizon shall separate the Spinco Assets (as defined in the Distribution Agreement) from the Verizon Assets (as defined in the Distribution Agreement), (ii) in exchange for the contribution to Spinco, directly or indirectly, of the Spinco Assets, Spinco shall issue to Verizon the Spinco Common Stock (as defined in the Distribution Agreement) and the Spinco Exchange Debt (as defined in the Distribution Agreement) and cash and (iii) Verizon shall distribute all of the issued and outstanding shares of Spinco Common Stock to Verizon’s stockholders;

WHEREAS, the TOCs have the right to offer and provide local telephone service in the Service Areas (as defined below);

WHEREAS, the TOCs are required to publish directories and deliver directories containing listings of certain residential and business Subscribers (as defined below) in each Service Area pursuant to (i) interconnection and similar agreements with CLECs (as defined below), LECs (as defined below) and Resellers (as defined below) and other providers of Telecommunication Services, (ii) tariffs and (iii) laws, rules, regulations and orders of certain Governmental Entities, in each case as the same may be in effect from time to time (such requirements pursuant to all of the foregoing, the “Publishing Obligation”);

WHEREAS, in connection with and furtherance of, and as consideration for, the performance by Publisher of its obligations set forth herein, Verizon has agreed to allow Publisher to use the Licensed Marks (as defined in the Branding Agreement, dated as of the date hereof, between Verizon Licensing Company and Publisher (the “Branding Agreement”)) on the terms and conditions set forth in the Branding Agreement; and

WHEREAS, the Verizon Parties desire that Publisher fulfill and Publisher is willing to fulfill the Publishing Obligation on behalf of the TOCs, in each case on the terms and conditions set forth herein and in the Branding Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants, representations, warranties and agreements herein contained, the Parties intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 General Rules of Construction. For all purposes of this Agreement: (i) the terms defined in this Agreement include the plural as well as the singular; (ii) all references in this Agreement to designated “Recitals”, “Articles”, “Sections” and other subdivisions are to the designated Recitals, Articles, Sections and other subdivisions of the body of this Agreement; (iii) pronouns of either gender or neuter include, as appropriate, the other pronoun forms; (iv) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; (v) “or” is not exclusive; (vi) “including” and “includes” shall be deemed to be followed by “but not limited to” and “but is not limited to,” respectively; (vii) any definition of or reference to any law, agreement, instrument or other document herein shall, unless expressly stated to the contrary, be construed as referring to such law, agreement, instrument or other document as from time to time amended, supplemented or otherwise modified; and (viii) any definition of or reference to any statute shall be construed as referring also to any rules and regulations promulgated thereunder.

Section 1.2 Definitions. The following definitions shall apply within this Agreement.

“Action” means any action, complaint, petition, investigation, suit or other proceeding, whether administrative, civil or criminal, in law or in equity, or before any arbitrator or Governmental Entity.

“Activity Default Notice” has the meaning set forth in Section 6.2(d).

“Additional Legal Requirement” means any change in any Legal Requirement or any new or additional Legal Requirement; provided that, for purposes of determining whether there has been any increase in Publisher’s cost of fulfilling the Publishing Obligation, no change in any Legal Requirement and no new or additional Legal Requirement that requires or has the effect of requiring Publisher to engage (or not to engage) in any practice in which Publisher engaged (or refrained from engaging) prior to such change in such Legal Requirement or such new or additional Legal Requirement shall be an Additional Legal Requirement.

 

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“Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, a specified Person. The term “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) means the possession of the power to direct the management and policies of the referenced Person through ownership of more than 50% of the voting power in the referenced Person. A Person shall become an Affiliate of a Party at such time as it obtains control of, or becomes controlled by, or falls under common control with, such Party, and shall no longer be an Affiliate of such Party from and after the date that it ceases to control, be controlled by or be under common control with, such Party. For the avoidance of doubt, none of Spinco or any of its subsidiaries shall be considered to be an Affiliate of Verizon, and none of Verizon or any of its subsidiaries shall be considered to be an Affiliate of Spinco, in each case from and after the Effective Date.

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. Section 101 et seq.), as amended from time to time, and any successor statute.

“Billing and Collection Agreement” means the Billing and Collection Agreement, dated as of the date hereof, between Verizon Services Corp. and Verizon Corporate Services Group Inc., each on behalf of certain of its affiliates and Publisher.

“Branding Agreement” has the meaning set forth in the fifth Recital.

“Breach Resolution Process” has the meaning set forth in Section 6.1(a).

“Change of Control” means: (i) an acquisition by any Person or group of Persons of the voting stock of the referenced Person in a transaction or series of transactions, if immediately thereafter such acquiring Person or group has, or would have, beneficial ownership of more than 50% of the combined voting power of the referenced Person’s then outstanding voting stock, including any such acquisition by way of a merger, consolidation or reorganization (including under the Bankruptcy Code), or series of such related transactions, involving the referenced Person, (ii) a sale, assignment or other transfer of all or substantially all of the referenced Person’s assets or (iii) a confirmation of any plan of reorganization or liquidation under, or sale of assets pursuant to, the Bankruptcy Code, any out-of-court recapitalization or reorganization transaction or exchange offer, in any case in which more than 50% of such Person’s outstanding equity securities are issued in exchange for all or a significant portion of such Person’s outstanding debt or other securities, or a deed in lieu of foreclosure or any other remedy or right at law or contract by which substantially all of such Person’s equity securities or assets are surrendered, assigned or otherwise transferred to another Person.

 

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“Claims” means any and all claims, causes of action, demands, complaints, disputes, liabilities, obligations, losses, damages, deficiencies, penalties, settlements, judgments, actions, proceedings and suits of whatever kind and nature.

“CLEC” means a competitive local exchange carrier.

“Commercial Agreements” means this Agreement, the Non-Competition Agreement, the Branding Agreement, the Billing and Collection Agreement, the Listings License Agreement and the Intellectual Property Agreement.

“Confidential Information” means, with respect to any Party, all information and documentation of such Party, including confidential and/or proprietary technical or business information, confidential marketing and business plans and customer lists; provided that Confidential Information does not include information which (i) is or becomes publicly known or available through no breach of this Agreement by the receiving Party, (ii) is rightfully acquired by the receiving Party free of restrictions on its disclosure or (iii) is independently developed by a Party without the use of or reference to any Confidential Information of the other Party.

“Cost Change Dispute Notice” has the meaning set forth in Section 3.10(e).

“Cost Change Statement” has the meaning set forth in Section 3.10(c).

“Cost Savings Amount” has the meaning set forth in Section 3.10(b)(iii).

“Courtesy Classified Listing” means one appearance of a business Subscriber’s name, address and business telephone number in the classified section of the Yellow Pages for such Subscriber’s Scoped Area.

“Default Notice” has the meaning set forth in Section 6.1(a).

“Directory Default Notice” has the meaning set forth in Section 6.2(b).

“Directory Product” means a telephone directory product consisting principally of searchable (e.g., by alphabet letter or category of products or services) multiple telephone listings and/or classified advertisements that is delivered or otherwise made available to end users in tangible media (e.g., paper directories, CD-ROM), electronic media (e.g., Internet) or digital media (e.g., PDA download).

“Distribution Agreement” has the meaning set forth in the first Recital.

“Effective Date” means the Distribution Date (as defined in the Distribution Agreement).

 

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“Effective Time” means immediately after the Distribution (as defined in the Distribution Agreement).

“Employee Matters Agreement” means the Employee Matters Agreement, dated as of the date hereof, between Verizon and Spinco.

“Extended Area Listings” or “EAS Listings” means extended area listings provided by LECs, CLECs or Resellers other than any of the Verizon Parties, for areas outside the applicable Service Area that are within a local calling area which is in part within such Service Area and are Legally Required to be included in a directory distributed to Subscribers in such Service Area.

“Generic Phone Service Pages” has the meaning set forth in Section 3.3(a)(i).

“Governmental Entity” means any government or any agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether Federal, state or local, domestic or foreign.

“ILEC” has the meaning set forth in Section 3.8(a).

“Incremental Listings Costs” means any (i) one-time costs Publisher may incur in implementing any systems changes necessitated by the inclusion of non-wireline listings of subscribers of Other Service Providers because such listings are of a new type and (ii) actual and incremental increase in Publisher’s costs of fulfilling the Publishing Obligation incurred because the inclusion of such listings causes the total number of listings in the Primary Directories to exceed the number of listings set forth on Schedule 1.1A, as adjusted to take into account the addition or disposition of any Service Areas pursuant to Section 3.8.

“Indemnified Party” has the meaning set forth in Section 5.5.

“Indemnifying Party” has the meaning set forth in Section 5.5.

“Intellectual Property Agreement” means the Intellectual Property Agreement, dated as of the date hereof, between Verizon Licensing Company and Publisher.

“LEC” means a local exchange carrier.

“Legal Requirements” means (i) the contractual obligations of Verizon or any of its Subsidiaries related to directories under interconnection and similar agreements or other contracts relating to Telecommunication Services entered into between Verizon or any of its Subsidiaries and any Other Service Providers and (ii) any order, injunction, decree, statute, law, ordinance, principle of common law, rule, tariff, regulation, settlement agreement, arbitration ruling or custom and practice of any applicable regulatory agency related to directories and applicable to Verizon or any of its

 

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Subsidiaries as a LEC (but not any of the foregoing that is of general applicability to businesses), in each case as now existing and as may exist at any time during the term of this Agreement (and any renewals or extensions thereof).

“Legally Required” means that a specified action is necessary in order to satisfy or otherwise fulfill one or more of the Legal Requirements or Additional Legal Requirements.

“Licensed Marks” has the meaning set forth in the Branding Agreement.

“Listings License Agreement” means the Listings License Agreement, dated as of the date hereof, between the Verizon telephone operating companies listed in Exhibit 1 thereto and Publisher.

“Loss” means any cost, damage, disbursement, expense, liability, loss, obligation, penalty or settlement, including interest or other carrying costs, legal, accounting and other professional fees and expenses incurred in the investigation, collection, prosecution and defense of claims and amounts paid in settlement, that may be imposed on or otherwise incurred or suffered by the referenced Person.

“Material Change” means, with respect to any Primary Directory containing White Pages, (i) a change in the Publication date of such Primary Directory of more than three months, (ii) a change in the Scoped Area of such Primary Directory that has the effect of adding or removing a number of listings equal to more than 20% of the listings of such Primary Directory, (iii) a change in the media of such Primary Directory (e.g., from paper to CD-ROM), (iv) charging any fee for a copy of such Primary Directory or delivery thereof (unless a fee is charged for such Primary Directory as of the Effective Time) or (v) other major changes relating to other aspects of the Publication of such Primary Directory that would reasonably be expected to have an impact of similar magnitude on the Subscribers; provided that a separation or combination of any White Pages and any Yellow Pages that does not also involve any of the changes described above shall not be a Material Change.

“Material Default” means, with respect to either Party, a breach of any material term, condition, covenant or obligation of this Agreement, for any reason other than those described in Article VIII, that is so material and continuing that it has the effect of abrogating such Party’s performance and the other Party’s enjoyment of the benefits under this Agreement taken as a whole, including an uncured breach of Section 9.7 with respect to assignment of this Agreement as a whole.

“New Customer” means a Subscriber to local phone service who does not currently have any local exchange service and specifically excludes customers who are changing their service from one LEC to another.

 

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“Non-Competition Agreement” means the Non-Competition Agreement, dated as of the date hereof, between Verizon and Publisher.

“Notice of Claim” has the meaning set forth in Section 5.5.

“Open Access Termination” has the meaning set forth in Section 3.9.

“Other Default” means a breach or violation of or default under this Agreement that is not a Material Default, Service Area Default or Primary Directory Default.

“Other Service Providers” means CLECs, LECs, Resellers or other providers of Telecommunication Services with whom the Verizon Parties have interconnection or similar agreements or other contracts.

“Other Subscriber List Information” means a list of the names, addresses, telephone numbers, and primary advertising classifications (as such classifications are assigned at the time of establishment of service) of non-Verizon Subscribers (i.e., the Subscribers of certain Other Service Providers providing such service in the applicable Service Area) that Verizon is Legally Required to publish in its directories, as supplied to Publisher by Verizon, as well as