Management Consulting Agreement - Dex Media West LLC and The Carlyle Group
MANAGEMENT CONSULTING AGREEMENT
This Management Consulting Agreement (the "Agreement") is made
as of September 9, 2003, by and among Dex Media West LLC, a Delaware limited
liability company (the "Company"), and TC Group, LLC, a Delaware limited
liability company ("Carlyle").
RECITALS:
WHEREAS, Carlyle, by and through its officers, employees,
agents, representatives and affiliates, has expertise in the areas of corporate
management, finance, product strategy, investment, acquisitions and other
matters relating to the business of the Company; and
WHEREAS, the Company desires to avail itself of the expertise
of Carlyle in the aforesaid areas, in which it acknowledges the expertise of
Carlyle.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing recitals and
the covenants and conditions herein set forth, the parties hereto agree as
follows:
1. APPOINTMENT.
The Company hereby appoints Carlyle to render the advisory and
consulting services described in Section 2 hereof for the term of this
Agreement.
2. SERVICES.
(a) During the term of this Agreement, Carlyle
shall render to the Company, by and through such of Carlyle's officers,
employees, agents, representatives and affiliates as Carlyle, in its sole
discretion, shall designate, in cooperation with the Chief Executive Officer,
from time to time, advisory, consulting and other services (the "Oversight
Services") in relation to the operations of the Company, strategic planning,
domestic marketing and financial oversight and including, without limitation,
advisory and consulting services in relation to the selection, retention and
supervision of independent auditors, the selection, retention and supervision of
outside legal counsel, the selection, retention and supervision of investment
bankers or other financial advisors or consultants and the structuring and
implementation of equity participation plans, employee benefit plans and other
incentive arrangements for certain key executives of the Company.
(b) The parties hereto acknowledge that certain
events will require Carlyle to render services beyond the scope of activities
which the parties contemplate as part of the Oversight Services and for which
Carlyle shall be entitled to additional compensation hereunder. It is expressly
agreed that the Oversight Services shall not include Investment
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Banking Services. "Investment Banking Services" means investment banking,
financial advisory or any other services rendered by Carlyle to the Company in
connection with any acquisitions and divestitures by the Company or any of its
subsidiaries, including, without limitation, the sale of substantially all or
any portion of the assets of the Company, whether by a sale of assets, the
equity interests of the Company, merger or otherwise, and the acquisition or
sale of any subsidiary, division or service area of the Company, or (iii) the
public or private sale of debt or equity interests of the Company, or any of its
affiliates or any similar financing transactions. The Oversight Services and the
Investment Banking Services shall be referred to herein as the "Services."
3. FEES.
(a) In consideration of the performance of the
Oversight Services contemplated by Section 2(a) hereof, the Company agrees to
pay to Carlyle (i) a closing fee of $20,000,000 and (ii) an aggregate per annum
fee (the "Fee"), continuing until such time as this Agreement is terminated in
accordance with Section 6, an amount equal to $1,000,000 per annum. The Fee
shall be payable quarterly in advance beginning on the Closing Date (as such
term is defined in the Purchase Agreement by and among Qwest Dex, Inc., Qwest
Services Corporation, Qwest Communications International Inc. and Dex Holdings
LLC dated as of August 19, 2002). Fee payments shall be non-refundable.
(b) In consideration of any Investment Banking
Services provided to the Company, Carlyle shall be entitled to receive
additional reasonable compensation as agreed upon by the parties hereto and
approved by a majority of the members of the board of directors of the Company.
4. OUT-OF-POCKET EXPENSES.
In addition to the compensation payable to Carlyle pursuant to
Section 3 hereof, the Company shall, at the direction of Carlyle, pay directly,
or reimburse Carlyle for, its reasonable Out-of-Pocket Expenses. For the
purposes of this Agreement, the term "Out-of-Pocket Expenses" shall mean the
amounts actually paid by Carlyle in cash in connection with its performance of
the Services, including, without limitation, reasonable (i) fees and
disbursements (including underwriting fees) of any independent auditors, outside
legal counsel, consultants, investment bankers, financial advisors and other
independent professionals and organizations, (ii) costs of any outside services
or independent contractors such as financial printers, couriers, business
publications or similar services and (iii) transportation, per diem, telephone
calls, word processing expenses or any similar expense not associated with its
ordinary operations. All reimbursements for Out-of-Pocket Expenses shall be made
promptly upon or as soon as practicable after presentation by Carlyle to the
Company of the statement in connection therewith.
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5. INDEMNIFICATION.
The Company will indemnify and hold harmless Carlyle and its
officers, employees, agents, representatives, members and affiliates (each being
an "Indemnified Party") from and against any and all losses, costs, expenses,
claims, damages and liabilities (the "Liabilities") to which such Indemnified
Party may become subject under any applicable law, or any claim made by any
third party, or otherwise, to the extent they relate to or arise out of the
performance of the Services contemplated by this Agreement or the engagement of
Carlyle pursuant to, and the performance by Carlyle of the Services contemplated
by, this Agreement. The Company will reimburse any Indemnified Party for all
reasonable costs and expenses (including reasonable attorneys' fees and
expenses) as they are incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim for which the
Indemnified Party would be entitled to indemnification under the terms of the
previous sentence, or any action or proceeding arising therefrom, whether or not
such Indemnified Party is a party hereto, provided that, subject to the
following sentence, the Company shall be entitled to assume the defense thereof
at its own expense, with counsel satisfactory to such Indemnified Party in its
reasonable judgment. Any Indemnified Party may, at its own expense, retain
separate counsel to participate in such defense, and in any action, claim or
proceeding in which the Company, on the one hand, and an Indemnified Party, on
the other hand, is, or is reasonably likely to become, a party, such Indemnified
Party shall have the right to employ separate counsel at the Company's expense
and to control its own defense of such action, claim or proceeding if, in the
reasonable opinion of counsel to such Indemnified Party, a conflict or potential
conflict exists between the Company, on the one hand, and such Indemnified
Party, on the other hand, that would make such separate representation
advisable. The Company agrees that it will not, without the prior written
consent of the applicable Indemnified Party, settle, compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated hereby (if any Indemnified Party
is a party thereto or has been actually threatened to be made a party thereto)
unless such settlement, compromise or consent includes an unconditional release
of the applicable Indemnified Party and each other Indemnified Party from all
liability arising or that may arise out of such claim, action or proceeding.
Provided that the Company is not in breach of its indemnification obligations
hereunder, no Indemnified Party shall settle or compromise any claim subject to
indemnification hereunder without the consent of the Company. The Company will
not be liable under the foregoing indemnification provision to the extent that
any loss, claim, damage, liability, cost or expense is determined by a court, in
a final judgment from which no further appeal may be taken, to have resulted
solely from the gross negligence or willful misconduct of Carlyle. If an
Indemnified Party is reimbursed hereunder for any expenses, such reimbursement
of expenses shall be refunded to the extent it is finally judicially determined
that the Liabilities in question resulted solely from the gross negligence or
willful misconduct of Carlyle.
6. TERMINATION.
This Agreement shall be in effect on the date hereof and shall
continue until such time as Carlyle or one or more of its affiliates
collectively control, in the aggregate, less than 10% of the equity interests of
the Company, or such earlier time as the Company and Carlyle
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may mutually agree. The provisions of Sections 5 and 8 and otherwise as the
context so requires shall survive the termination of this Agreement.
7. OTHER ACTIVITIES.
Nothing herein shall in any way preclude Carlyle or its
officers, employees, agents, representatives, members or affiliates from
engaging in any business activities or from performing services for its own
account or for the account of others, including for companies that may be in
competition with the business conducted by the Company.
8. GENERAL.
(a) No amendment or waiver of any provision of
this Agreement, or consent to any departure by either party from any such
provision, shall be effective unless the same shall be in writing and signed by
the parties to this Agreement, and, in any case, such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b) This Agreement and the rights of the parties
hereunder may not be assigned without the prior written consent of the parties
hereto; provided, however, that Carlyle may, at its sole discretion, assign or
transfer its duties or interests hereunder to its affiliates.
(c) Any and all notices hereunder shall, in the
absence of receipted hand delivery, be deemed duly given when mailed, if the
same shall be sent by registered or certified mail, return receipt requested,
and the mailing date shall be deemed the date from which all time periods
pertaining to a date of notice shall run. Notices shall be addressed to the
parties at the following addresses:
If to Carlyle: TC Group LLC
c/o The Carlyle Group
520 Madison Avenue
41st Floor
New York, NY 10022
Attention: James A. Attwood, Jr.
If to the Company: Dex Media West LLC
198 Inverness Drive West
Englewood, CO 80112
Attention: Chief Executive Officer
(d) This Agreement shall constitute the entire
agreement between the parties with respect to the subject matter hereof, and
shall supersede all previous oral and written (and all contemporaneous oral)
negotiations, commitments, agreements and understandings relating hereto.
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(e) This Agreement shall be governed by, and
enforced in accordance with, the laws of the State of New York (excluding the
choice of law principles thereof). Each of the Parties hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of New York and of the United States of America, in each case
located in the County of New York, in any action or proceeding arising out of or
relating to this Agreement. This Agreement shall inure to the benefit of, and be
binding upon, Carlyle and the Company (including any present or future
subsidiaries of the Company that are not signatories hereto), and their
respective successors and assigns.
(f) This Agreement may be executed in multiple
counterparts, and by different parties on separate counterparts. Each set of
counterparts showing execution by all parties shall be deemed an original, and
shall constitute one and the same instrument.
(g) The waiver by any party of any breach of
this Agreement shall not operate as or be construed to be a waiver by such party
of any subsequent breach.
[signature page to follow]
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers or agents as set
forth below.
DEX MEDIA WEST LLC
By: /s/ George Burnett
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Name: George Burnett
Title: CEO and President
TC GROUP, LLC
By: TCG Holdings, L.L.C.,
its Managing Member
By: /s/ James A. Attwood, Jr.
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Name: James A. Attwood, Jr.
Title: Managing Director