Exhibit 10.1
EXECUTION COPY
TRANSITION SERVICES
AGREEMENT
by and among
VERIZON INFORMATION TECHNOLOGIES
LLC
and
IDEARC MEDIA CORP.
TRANSITION SERVICES
AGREEMENT
Transition Services Agreement (this
“ Agreement ”), dated as of November 17, 2006,
by and among Verizon Information Technologies LLC (“
Supplier ”) and Idearc Media Corp. (“
SpinCo ”).
RECITALS
AGREEMENT
NOW THEREFORE, in consideration of
the mutual promises and covenants contained herein, the parties
agree as follows.
ARTICLE I
DEFINITIONS
Capitalized terms used in this
Agreement but not defined herein shall have the meanings given them
in the Distribution Agreement. Other capitalized terms, as used
herein, have the meanings set forth below or elsewhere in this
Agreement.
“ Accessed Information
” means information in the possession of Supplier or its
Affiliates (other than information that is provided by SpinCo) that
is accessed by, or otherwise made available to, SpinCo, its
employees or contractors in connection with the Transition Services
to be provided hereunder (whether or not such information was
intended to be accessed by or made available to SpinCo).
“ Agreement ” has
the meaning set forth in the preamble hereto.
“ Change ” has
the meaning set forth in Section 3.2(b) hereto.
“ Change of Control
” means ( i ) any transaction or series of
transactions in which any person or group (within the meaning of
Rule 13d-5 under the Securities Exchange Act and Sections 13(d) and
14(d) of the Securities Exchange Act) that is a direct or indirect
“beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act), acquires by way of a stock issuance,
stock purchase, tender offer, merger, consolidation or other
business combination or otherwise, greater than 50% of the total
voting power entitled to vote in the election of directors of
SpinCo, ( ii ) any merger, consolidation,
reorganization or other business combination with a Person in which
SpinCo does not survive, ( iii ) any merger,
consolidation, reorganization or other business combination in
which SpinCo survives, but the shares of common stock outstanding
of SpinCo or its ultimate controlling Affiliate immediately prior
to such merger, consolidation, reorganization or other business
combination represent 50% or less of the voting power of SpinCo
after such merger, consolidation, reorganization or other business
combination
and ( iv ) any transaction or series
of transactions in which assets comprising more than 50% of the
total assets of SpinCo and its Subsidiaries (in value) are sold to
another Person.
“ Change Request
” has the meaning set forth in Section 3.2(b)
hereto.
“ Conforming Change
” has the meaning set forth in Section 3.2(a)
hereto.
“ Distribution
Agreement ” means that distribution agreement dated as of
November 13, 2006 by and between Verizon Communications Inc. and
Idearc Inc., as amended from time to time.
“ Fixed Monthly Service
Fee ” has the meaning set forth in Section 2.1(a)
hereto.
“ Force Majeure Event
” has the meaning set forth in Section 21.14
hereto.
“ Initial Payment
” has the meaning set forth in Section 5.2(a)
hereto.
“ Schedules ” has
the meaning set forth in Section 2.1 hereof.
“ Service Fee ”
has the meaning set forth in Section 2.5 hereto.
“ Service Modification
” has the meaning set forth in Section 3.2(b)
hereto.
“ Single Point of
Contact ” has the meaning set forth in Section 10.1
hereto.
“ Special Services
” has the meaning set forth in Section 2.3
hereto.
“ Special Services Fees
” has the meaning set forth in Section 2.3
hereto.
“ Supplier ” has
the meaning set forth in the preamble hereto.
“ Supplier License Fees
” has the meaning set forth in Section 2.2
hereto.
“ SpinCo ” has
the meaning set forth in the preamble hereto.
“ Third Party Vendor
Costs ” has the meaning set forth in Section 2.2
hereto.
“ Transition Service
” has the meaning set forth in Section 2.1
hereto.
“ Unit Based Service
Fee ” has the meaning set forth in Section 2.1
hereto.
“ Verizon ” means
Verizon Communications Inc. and its Affiliates (for the avoidance
of doubt, neither SpincCo nor its subsidiaries shall be deemed to
be Affiliates of Verizon Communications Inc.)
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ARTICLE II
TRANSITION
SERVICES
2.1. Transition Services and
Fees . Following the Closing, and subject to the terms and
conditions hereof, Supplier shall arrange for, procure, aggregate
and otherwise cause its Affiliates and their employees and agents
to provide to SpinCo and its Affiliates for use in the Spinco
Business during the term hereof, the services listed on the
schedules (the “Schedules”) attached hereto and made a
part hereof (collectively, the “ Transition Services
” and each service, a “ Transition Service
”). The Schedules include, for each Transition Service, (
i ) a description of the service (or group of related
services) to be performed, ( ii ) significant
performance requirements of Supplier or its Affiliates and SpinCo
and other special terms and conditions relating directly to the
services to be performed, and ( iii ) the base service
fee or methodology to calculate the base service fee to be paid to
Supplier, including monthly fixed payments (a “ Fixed
Monthly Service Fee ”) or per unit fees or costs (a
“ Unit Based Service Fee ”) as applicable. In
the event of a conflict between the express terms and conditions of
a Schedule and the terms and conditions of this Agreement
(excluding for this purpose the Schedules), the express terms and
conditions of the Schedules will control.
2.2. Third Party Vendor Costs
. In order to provide the Transition Services, the parties
acknowledge and agree that it may be necessary for Supplier to pay
third party suppliers or vendors incremental or other costs and
expenses or new costs or expenses incidental to Supplier’s
providing transition support for SpinCo, including without
limitation, programming fees, Taxes, maintenance fees, initiation
and set up costs and license fees and costs associated with any
third party intellectual property (such fees, the “
Supplier License Fees ” and collectively with all
other amounts referred to in this Section 2.2, the “
Third Party Vendor Costs ”). Such amounts shall be
included in the amounts payable to Supplier pursuant to Article
V.
2.3. Special Services Fees .
SpinCo may request that Supplier or its Affiliates participate in
meetings, telephone calls, training or other consultations beyond
what is expressly provided for in the Schedules and which may be
(a) necessary for Supplier and its Affiliates or SpinCo to
perform their requirements as described in the Schedules,
(b) desirable to SpinCo in order to perform its requirements
described in the Schedules or (c) desirable to SpinCo in
connection with the usage of the Verizon Proprietary Software (all
such services in clauses, the “ Special Services
”). Supplier and its Affiliates shall provide reasonable
services as requested following the Closing until the end of the
term of this Agreement, at the rate of $89 per hour (such fees for
Special Services the “ Special Services Fees
”)
In addition to any amounts payable
pursuant to the preceding paragraph, SpinCo shall reimburse the
Supplier for all reasonable out-of-pocket travel related costs
(which shall
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be incurred in accordance with Supplier’s
travel and expense policies) in connection with providing any
Special Services hereunder.
2.4. Service Fee . Supplier
shall administer this Agreement with respect to the delivery of
Transition Services. As more fully described in Article X and
subject to specific arrangements set forth in the Schedules,
Supplier will coordinate all communications, questions and problem
resolution with respect to all Transition Services. SpinCo shall
pay Supplier for Unit Based Service Fees, Special Service Fees,
Fixed Monthly Service Fees and Third Party Vendor Costs , as
applicable, for each Transition Service as hereinafter described in
Article V (collectively, the “ Service Fee ”).
Without limiting the obligation of SpinCo under Article V, Supplier
shall be responsible to pay its Affiliates for any Transition
Services or Special Services provided and third party vendors for
Third Party Vendor Costs. The Service Fee is exclusive of any
Taxes.
2.5. Performance by SpinCo .
SpinCo agrees to perform in a timely fashion those tasks, and to
provide the personnel, facilities and accurate information, as are
expressly set forth in the Schedules. In addition, SpinCo agrees to
use commercially reasonable efforts to cooperate with Supplier and
its Affiliates, and to perform in a timely fashion, those
additional commercially reasonable tasks directly related to the
Transition Services which Supplier may request.
ARTICLE III
SCOPE OF SERVICES;
CHANGES
3.1. General Scope .
Transition Services include only services and functions as were
provided to support the domestic operations of Verizon Information
Services Inc. and its subsidiaries (collectively,
“VIS”), as applicable, on the date immediately prior to
the Closing Date, unless the service descriptions on the Schedules
specifically indicate otherwise. Unless specifically set forth on
the Schedules or specifically allowed or agreed pursuant to the
provisions hereof, neither Supplier nor its Affiliates will provide
any additional, modified, general or customized
services.
3.2. Changes in Scope
.
(a) The parties acknowledge and
agree that Supplier and its Affiliates shall initially provide the
Transition Services utilizing systems and databases used to support
the domestic operations and business of VIS immediately prior to
the Closing Date and will generally adhere to the policies,
practices and methodologies used to support the domestic operations
and business of VIS immediately prior to the Closing Date, except
for those policies, practices and methodologies that Supplier
determines are no longer applicable due to the fact that SpinCo is
no longer an affiliate of Verizon. During the term of this
Agreement, Supplier may at any time modify the Transition Services,
as necessary or desirable, to allow for continued or conforming use
of the then-existing systems and databases and to allow for
continued or conforming adherence to the then-existing policies,
practices and
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methodologies, which Supplier or its Affiliates
then use to provide similar services to Supplier’s Affiliates
(each, a “Conforming Change”), provided that the
Conforming Change complies with applicable Law and Spinco shall not
be charged for any additional costs in connection with the
implementation of such Conforming Change. Prior to the
implementation of a Conforming Change, Supplier will provide SpinCo
with written notice of such change.
(b) During the term, in addition to
the Conforming Changes, the parties may, in accordance with the
procedures specified in this Article III, ( i
) mutually agree in writing to modify the terms and conditions
relating to any of the Transition Services (a “ Service
Modification ”) or ( ii ) mutually agree in
writing upon the terms and conditions relating to the provision of
services that are in addition to any Transition Services (an
“ Additional Service ”). In the event either of
the parties desires a Service Modification or an Additional Service
(in each case, a “ Change ”), the party
requesting the Change shall deliver a written description of the
proposed Change (each, a “ Change Request ”) to
the other party’s Single Point of Contact (as defined in
Article X).
(c) All Change Requests by either
party must be consented to by the other party’s Single Point
of Contact in writing before either party has any obligation with
respect to the proposed Change. Either party may decline to consent
to any Change Request for any reason in its sole
discretion.
(d) If a Conforming Change occurs or
a Change Request is approved in accordance with this Article III,
the definition of Transition Services and The Schedules will be
deemed amended to reflect the implementation of the Conforming
Change or Change Request as well as any other terms and conditions
agreed upon by the parties in writing.
ARTICLE IV
INTELLECTUAL PROPERTY; ACCESS TO
INFORMATION
4.1. Third Party Intellectual
Property . SpinCo understands that certain rights and licenses
to use third party intellectual property are required to provide
Transition Services, and that, except as specifically contemplated
by the Intellectual Property Agreement, SpinCo shall not be
entitled to have possession of or use the Company’s or its
Subsidiaries’ third party intellectual property after Closing
unless SpinCo or its Affiliates have separate licenses from the
third parties. Supplier’s obligations hereunder to provide
Transition Services that require third party intellectual property
are subject to such third party granting Supplier a valid and
enforceable license (or waiving the requirement to obtain a
license) to use its intellectual property for the purposes
described in the Agreement. Supplier will use its commercially
reasonable efforts (without any obligation to make any payments
except to the extent reimbursed hereunder) to obtain such licenses
or waivers, or if such licenses or waivers cannot be obtained, to
attempt to provide such Transition Services in a manner that does
not cause it or SpinCo to infringe on such third party’s
rights (so long as
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such other manner does not disrupt
Supplier’s operations or cause it to incur any cost that will
not be reimbursed hereunder).
4.2. Confidential
Information/Publicity
(a) Confidential Information means
information that is disclosed or made available by or on behalf of
a Party hereto or its Affiliates ( collectively the
“Disclosing Party”) to the other Party (together with
its directors, officers, employees and authorized contractors, the
“Receiving Party”) in connection with either
Party’s performance of its obligations and duties or exercise
of its rights pursuant to this Agreement. Confidential Information
may be disclosed in written or other tangible form (including on
magnetic media) or by oral, visual or other means.
(b) Confidential Information does
not include any information which:
(i) prior to, at, or after Receiving
Party’s receipt, is published or becomes otherwise known by
or available to the public through no act or omission by Receiving
Party in violation hereof or other wrongful act;
(ii) is provided to Receiving Party
without restriction by a person or entity (other than Disclosing
Party) who has a bona fide right to make such information available
without restriction;
(iii) is independently developed by
or on behalf of Receiving Party without use of the Confidential
Information of Disclosing Party; or
(iv) is made available to the
Receiving Party pursuant to the terms of other commercial
agreements entered into by Verizon, on the one hand and SpinCo, on
the other.
For the avoidance of doubt,
(X) Accessed Information, (Y) information in any form,
that is received or learned by SpinCo (as a result of the receipt
of services hereunder) regarding Verizon’s employees,
Verizon’s customers or potential customers, whether in
personally identifiable for or not, and (Z) Verizon
“CPNI” (as that term is or may subsequently be defined
in the Communications Act of 1934, as amended (the
“Act”) shall be deemed to be Supplier Confidential
Information. In addition to any restrictions under this Agreement
SpinCo’s access to, and use of Verizon CPNI shall be subject
to the requirements and restrictions on use contained in the
Act.
4.3. During the term of this
Agreement and for a period of three (3) years from the date of
its expiration or termination or the expiration or termination of
all extensions thereto (and for an indefinite period as to Verizon
CPNI),, the Receiving Party agrees to maintain in strict confidence
all Confidential Information.
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4.4. Receiving Party will use the
Confidential Information only for the specific purposes set forth
in the Schedules attached to this Agreement. Receiving Party will
not, without obtaining Disclosing Party’s prior written
consent, use a Disclosing Party’s Confidential Information
for the marketing of services to the Disclosing Party or its
Affiliates, nor will Receiving Party use the Disclosing
Party’s Confidential Information in order to contact
Disclosing Party’s customers or employees (other than in
connection with contractual relationships between the Parties)
without obtaining the Disclosing Party’s prior written
consent. The Receiving Party will use, and will take reasonable
steps to arrange for other persons authorized to receive the
Disclosing Party’s Confidential Information to use, the same
degree of care to protect the Disclosing Party’s Confidential
Information as it uses to protect its own confidential information,
but in no event less than a reasonable degree of care.
Notwithstanding any provision in this agreement to the contrary,
neither Party nor any of its respective Affiliates shall intercept,
collect, retain or otherwise use the content of any Confidential
Information except as is reasonably necessary to carry out the
terms of this Agreement, is otherwise permitted by this Agreement,
or pursuant to a valid order of a judicial or other competent
authority.
4.5. Except as expressly provided in
this Agreement, a Receiving Party shall not have any rights of use
or ownership in the Confidential Information. The Disclosing Party
makes no representation and warranty as to accuracy or completeness
of any Confidential Information, all of which is provided on an
“as is” basis. Except as expressly provided in this
Agreement, all Confidential Information of a Disclosing Party shall
remain the property of such Disclosing Party and shall either be
returned by the Receiving Party to the Disclosing Party or
destroyed upon request of the Disclosing Party. Upon such request,
any abstracts, notes, memoranda or other documents containing any
Confidential Information or any description, summary or analysis of
any Confidential Information of the Disclosing Party shall be
delivered to the Disclosing Party by the Receiving Party, or at the
option of the Receiving Party, destroyed, provided that the
Receiving Party provides written certification of such destruction
signed by an officer of the Receiving Party upon written request of
Disclosing Party. Notwithstanding any return of Confidential
Information, all Confidential Information, including oral
Confidential Information, will continue to be subject to the
provisions of this Agreement. Notwithstanding the foregoing, a
Receiving Party may retain copies of such Confidential Information
in accordance with policies and procedures implemented by such
persons in order to comply with applicable laws, regulations or
other legal requirements; provided however that the provisions of
this Agreement limiting use and disclosure of Confidential
Information shall continue to apply, notwithstanding the expiration
of the term of this Agreement, so long as a Receiving Party retains
copies of such Information.
4.6. In the event that a Receiving
Party is requested or becomes legally compelled (by oral questions,
interrogatories, requests for information or documents, subpoena,
investigative demand, or similar process) to disclose any of the
Confidential Information, the Receiving Party will promptly provide
the Disclosing Party with notice so
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that the Disclosing Party may seek a protective
order or other appropriate remedy or waive compliance with the
provisions of this Agreement. If, in the absence of a protective
order or other remedy or waiver, the Receiving Party is, in the
opinion of its counsel, legally compelled to disclose such
Confidential Information to any tribunal or else stand liable for
contempt or suffer other censure or penalty, the Receiving Party
will furnish only that portion of the Confidential Information
which is legally required to be furnished and will exercise its
commercially reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded such Confidential
Information.
4.7. Each Party acknowledges that
any disclosure or misappropriation of the other Party’s
Confidential Information in violation of this Agreement could cause
irreparable harm, the amount of which may be extremely difficult to
determine, thus potentially making any remedy at law or in damages
inadequate. Each Party agrees that money damages might not be a
sufficient remedy for any breach or threatened breach of this
Article IV by a Receiving Party, its Affiliates or their respective
officers, employees or contractors and that the Disclosing Party
shall be entitled, as may be determined by a court of competent
jurisdiction, to specific performance and injunctive or other
equitable relief in the event of any such breach or threatened
breach, in addition to all other remedies available to the
Disclosing Party at law or in equity.
4.8. Except as expressly provided
for in this Agreement and the Schedules hereto, the Accessed
Information may not be copied, stored in electronic form or
distributed or made available to any persons or parties other than
designated SpinCo employees; provided, however, that SpinCo may
provide access to the Accessed Information to specific contract
employees or consultants who (a) are identified in a writing
delivered to Supplier in advance of such access; (b) have
agreed in writing to be bound by all of the use and non-disclosure
obligations and restrictions of this agreement; and (c) will
be accessing the Accessed Information through equipment that is
under the supervision and control of SpinCo. SpinCo will be liable
for any breach of the provisions of this Article IV by its
officers, employees or contractors. In the event that SpinCo
becomes aware of an unpermitted third party disclosure of
Confidential Information hereunder, SpinCo shall promptly notify
Verizon of such disclosure, and cooperate in the response and
remediation of the disclosure. SpinCo will at all times comply with
the systems access, security and privacy policies established from
time to time by Verizon. SpinCo will adopt an employee code of
conduct, in form and substance reasonably satisfactory to Verizon,
which includes policies governing the safeguarding and use of
third-party information.
4.9. In addition to the foregoing,
SpinCo acknowledges that there may be circumstances where in SpinCo
or its employees and authorized contractors are provided with the
technical ability to access information in or functions of systems
or databases of Supplier, but which Supplier has not agreed to
permit SpinCo to in fact access to execute. Accordingly, where
Supplier has instructed SpinCo as to the appropriate scope of
access to information in Supplier systems and databases, or the
appropriate scope of functions which
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SpinCo may execute, SpinCo acknowledges that it
would be a material breach of this Agreement for SpinCo, its
employees or contractors to either access information or to execute
functions in excess of the permission granted by Supplier. Supplier
further reserves the right to implement additional logical or
technical restrictions, or segregation of databases, systems or
functions, as it deems necessary to meet legal, regulatory or
contractual obligations of Supplier, or to adhere to then-current
corporate policies, provided however, that Supplier’s actions
under this provision shall not affect Supplier’s obligations
to deliver service as otherwise specified in this
Agreement.
ARTICLE V
PAYMENT FOR TRANSITION
SERVICES
5.1. Service for First Partial
Month and First Full Month and Payment .
(a) Within thirty (30) calendar
days after the end of the first full calendar month of the term of
this Agreement, each full month of the term thereafter and any
partial month thereafter, Supplier shall invoice SpinCo in arrears
for ( i ) the aggregate Unit Based Service Fees,
Special Service Fees, the Fixed Monthly Service Fees and Third
Party Vendor Costs covering all Transition Services provided in the
immediately preceding calendar month, or a pro-rata portion of such
fees for any partial month and ( ii ) any Taxes arising
from or relating to such payments. SpinCo shall pay each such
invoice, less any amounts disputed in writing, within fifteen
(15) business days of receipt.
(b) If SpinCo in good faith disputes
owing any amount stated on an invoice, it shall notify Supplier in
writing stating the amount of the dispute and giving the reasons
for the dispute. The dispute shall be resolved pursuant to the
provisions of Article XVIII below.
(c) All payments by SpinCo under
this Agreement shall be in U.S. dollars by wire transfer of
immediately available funds to Supplier&
