Exhibit 10.1

 

AMENDED AND RESTATED
STANDSTILL AGREEMENT

 

This Amended and Restated Standstill Agreement (this “Agreement”) is made as of
January     , 2010 by and between SuperMedia Inc., a Delaware corporation
formerly known as Idearc Inc. (the “Company”), and Paulson & Co. Inc., a
Delaware corporation (“Paulson & Co.”), for its own account for the limited
purposes set forth herein, and on behalf of the investment funds and accounts
managed by Paulson & Co. listed on Schedule A to this Agreement (the “Standby
Purchasers” and together with Paulson & Co., “Paulson”).

 

R E C I T A L S

 

WHEREAS, pursuant to (a) the Standby Purchase Agreement (the “Standby Purchase
Agreement”), dated as of December 31, 2009, by and between the Company and
Paulson & Co. (on behalf of the Standby Purchasers), and (b) the Company’s and
its domestic subsidiaries’ Chapter 11 plan of reorganization (the “Plan”),
Paulson was issued shares of the Company’s new common stock, $.01 par value (the
“New Common Stock”), which shares represent approximately 17.4% of the New
Common Stock issued and outstanding as of the date of this Agreement;

 

WHEREAS, as a condition to the Standby Purchase Agreement, the Company and
Paulson & Co. (on behalf of the Standby Purchasers) entered into a Standstill
Agreement (the “Original Agreement”), dated as of December 31, 2009, pursuant to
which Paulson and the Company defined certain agreements between the Company and
Paulson in its capacity as a stockholder of the Company;

 

WHEREAS, Paulson and the Company desire to amend and restate the Original
Agreement in full by entering into this Agreement;

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

1.             BOARD REPRESENTATION.

 

(A)           THE COMPANY AGREES THAT IF PAULSON BENEFICIALLY OWNS 17.0% OR MORE
OF THE THEN ISSUED AND OUTSTANDING SHARES OF NEW COMMON STOCK AT ANY TIME PRIOR
TO JUNE 30, 2010, PAULSON SHALL BE ENTITLED DURING SUCH PERIOD TO NOMINATE ONE
INDIVIDUAL (SUCH INDIVIDUAL, AND ANY SUCCESSOR TO SUCH INDIVIDUAL AS
CONTEMPLATED IN SECTION 1(A)(III), THE “PAULSON NOMINEE”) FOR ELECTION AS A
MEMBER OF THE BOARD OF DIRECTORS OF THE COMPANY (THE “BOARD”); AND SPECIFICALLY
THE COMPANY AGREES TO:

 

(I)            AS PROMPTLY AS PRACTICABLE AND IN NO EVENT LATER THAN TEN DAYS
FOLLOWING THE NOMINATION OF THE PAULSON NOMINEE AS CONTEMPLATED IN THIS
SECTION 1, (1) INCREASE THE SIZE OF THE BOARD BY ONE SEAT AND (2) APPOINT THE
PAULSON

 

 

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NOMINEE AS A DIRECTOR OF THE COMPANY WHOSE TERM SHALL EXPIRE ON THE EARLIER OF
(A) SUCH TIME, IF ANY, AS PAULSON CEASES TO BENEFICIALLY OWN 17.0% OR MORE OF
THE ISSUED AND OUTSTANDING SHARES OF NEW COMMON STOCK FOR A PERIOD OF 30
CONSECUTIVE DAYS AND (B) AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD IN
2011, SUBJECT TO RE-ELECTION OR RE-APPOINTMENT OF THE PAULSON NOMINEE AS
PROVIDED IN SECTIONS 1(A)(II) AND 1(A)(III), RESPECTIVELY;

 

(II)           UNLESS PAULSON HAS AT ANY TIME PRIOR TO THE TERMINATION DATE
CEASED TO BENEFICIALLY OWN 17.0% OR MORE OF THE ISSUED AND OUTSTANDING SHARES OF
NEW COMMON STOCK FOR A PERIOD OF 30 CONSECUTIVE DAYS, AT EACH ANNUAL MEETING OF
STOCKHOLDERS OF THE COMPANY TO BE HELD PRIOR TO THE TERMINATION DATE, THE
COMPANY (1) WILL CAUSE THE SLATE OF NOMINEES STANDING FOR ELECTION, AND
RECOMMENDED BY THE BOARD, AT EACH SUCH MEETING TO INCLUDE THE PAULSON NOMINEE,
(2) WILL NOMINATE AND REFLECT IN THE PROXY STATEMENT ON SCHEDULE 14A FOR EACH
SUCH MEETING THE NOMINATION OF THE PAULSON NOMINEE FOR ELECTION AS A DIRECTOR OF
THE COMPANY AT EACH SUCH MEETING, AND (3) CAUSE ALL PROXIES RECEIVED BY THE
COMPANY TO BE VOTED IN THE MANNER SPECIFIED BY SUCH PROXIES AND, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW AND STOCK EXCHANGE RULES, CAUSE ALL PROXIES FOR
WHICH A VOTE IS NOT SPECIFIED TO BE VOTED FOR THE PAULSON NOMINEE; AND

 

(III)          IF THE PAULSON NOMINEE CEASES TO BE A DIRECTOR OF THE COMPANY
OTHER THAN DUE TO PAULSON CEASING TO BENEFICIALLY OWN 17.0% OR MORE OF THE
ISSUED AND OUTSTANDING SHARES OF NEW COMMON STOCK FOR A PERIOD OF 30 CONSECUTIVE
DAYS AT ANY TIME PRIOR TO THE TERMINATION DATE, PAULSON MAY PROPOSE TO THE
COMPANY A REPLACEMENT NOMINEE FOR ELECTION AS A DIRECTOR OF THE COMPANY, IN
WHICH EVENT SUCH INDIVIDUAL SHALL BE APPOINTED TO FILL THE VACANCY CREATED AS A
RESULT OF THE PRIOR PAULSON NOMINEE CEASING TO BE A DIRECTOR OF THE COMPANY.

 

(B)           THE COMPANY AGREES THAT PROMPTLY FOLLOWING THE APPOINTMENT OR
ELECTION OF THE PAULSON NOMINEE, THE COMPANY WILL, UPON WRITTEN REQUEST BY
PAULSON, CAUSE THE PAULSON NOMINEE TO BE INCLUDED AS A MEMBER OF ANY COMMITTEE
OF THE BOARD ON WHICH THE PAULSON NOMINEE IS ELIGIBLE TO SERVE UNDER APPLICABLE
LAW OR STOCK EXCHANGE OR MARKET POLICY.  PAULSON AND THE COMPANY AGREE THAT AT
ALL TIMES THE FOLLOWING ACTIONS WILL REQUIRE APPROVAL OF A MAJORITY OF DIRECTORS
OF THE COMPANY WHO ARE INDEPENDENT OF PAULSON AND MANAGEMENT OF THE COMPANY,
WHICH INDEPENDENT DIRECTORS MAY COMPRISE A COMMITTEE OF THE BOARD: (I) THE
AMENDMENT OR WAIVER OF ANY PROVISION OF THIS AGREEMENT, (II) CONSENT TO THE
ASSIGNMENT OF PAULSON’S RIGHTS UNDER THIS AGREEMENT OR CONSENT TO THE RELIEF OF
PAULSON’S OBLIGATIONS UNDER THIS AGREEMENT, (III) THE AMENDMENT OR WAIVER OF ANY
PROVISION OF THE RIGHTS AGREEMENT (DEFINED IN SECTION 4(A)) OR THE REGISTRATION
RIGHTS AGREEMENT, DATED AS OF DECEMBER 31, 2009, BETWEEN THE COMPANY, PAULSON
AND THE HOLDERS OF NEW COMMON STOCK FROM TIME TO TIME PARTY THERETO, IN EACH
CASE TO THE EXTENT ANY SUCH AMENDMENT OR WAIVER AFFECTS PAULSON, AND
(IV) REDEMPTION OF THE RIGHTS ISSUED UNDER THE RIGHTS AGREEMENT.

 

(C)           PAULSON WILL PROVIDE, AS PROMPTLY AS REASONABLY PRACTICABLE, ALL
INFORMATION RELATING TO THE PAULSON NOMINEE (AND OTHER INFORMATION, IF ANY) TO
THE EXTENT REQUIRED UNDER APPLICABLE LAW TO BE INCLUDED IN ANY PROXY STATEMENT
OF THE COMPANY AND

 

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IN ANY OTHER SOLICITATION MATERIALS TO BE DELIVERED TO STOCKHOLDERS OF THE
COMPANY IN CONNECTION WITH A STOCKHOLDERS MEETING AS CONTEMPLATED BY
SECTION 1(A)(II).

 

(D)           AS OF THE DATE OF THIS AGREEMENT AN INDIVIDUAL NOMINATED BY
PAULSON HAS BEEN APPOINTED TO THE BOARD AND SUCH NOMINEE IS THE PAULSON NOMINEE.

 

2.             VOTING.  PAULSON AGREES THAT UNTIL THE TERMINATION DATE:

 

(A)           IT WILL CAUSE TO BE PRESENT, IN PERSON OR REPRESENTED BY PROXY,
ALL VOTING SECURITIES THAT PAULSON BENEFICIALLY OWNS AT ALL STOCKHOLDER MEETINGS
OF THE COMPANY SO THAT ALL VOTING SECURITIES THAT PAULSON BENEFICIALLY OWNS MAY
BE COUNTED FOR THE PURPOSES OF DETERMINING THE PRESENCE OF A QUORUM AT SUCH
MEETINGS;

 

(B)           IF AND FOR SO LONG AS PAULSON BENEFICIALLY OWNS IN EXCESS OF 22.5%
OF THE THEN ISSUED AND OUTSTANDING SHARES OF NEW COMMON STOCK, ON ANY AND ALL
MATTERS SUBMITTED TO A VOTE OF THE HOLDERS OF NEW COMMON STOCK PAULSON (1) MAY
VOTE UP TO 22.5% OF THE SHARES OF NEW COMMON STOCK THEN ISSUED AND OUTSTANDING
IN ITS DISCRETION, AND (2) SHALL VOTE, OR CAUSE TO BE VOTED, ANY SHARES OF NEW
COMMON STOCK THAT PAULSON BENEFICIALLY OWNS IN EXCESS OF SUCH 22.5% IN THE SAME
PROPORTION AS THE OTHER HOLDERS OF NEW COMMON STOCK VOTE THEIR SHARES OF NEW
COMMON STOCK WITH RESPECT TO SUCH MATTERS; PROVIDED, THAT NOTWITHSTANDING THE
FOREGOING:

 

(I)            WITH RESPECT TO THE ELECTION OF NOMINEES TO THE BOARD, PAULSON
(1) MAY VOTE UP TO 12.5% OF THE THEN ISSUED AND OUTSTANDING SHARES OF NEW COMMON
STOCK IN ITS DISCRETION AT THE ANNUAL MEETING OF THE STOCKHOLDERS OF THE COMPANY
TO BE HELD IN 2011, (2) MAY VOTE UP TO 17.0% OF THE THEN ISSUED AND OUTSTANDING
SHARES OF NEW COMMON STOCK IN ITS DISCRETION AT EACH ANNUAL MEETING OF THE
STOCKHOLDERS OF THE COMPANY TO BE HELD PRIOR TO THE TERMINATION DATE (OTHER THAN
THE ANNUAL MEETING TO BE HELD IN 2011), AND (3) SHALL VOTE, OR CAUSE TO BE
VOTED, ANY SHARES OF NEW COMMON STOCK THAT PAULSON BENEFICIALLY OWNS IN EXCESS
OF SUCH 12.5% AND 17.0%, AS APPLICABLE, IN THE SAME PROPORTION AS OTHER HOLDERS
OF SHARES OF NEW COMMON STOCK VOTE THEIR SHARES OF NEW COMMON STOCK WITH RESPECT
TO THE ELECTION OF NOMINEES TO THE BOARD AT EACH ANNUAL MEETING OF THE
STOCKHOLDERS OF THE COMPANY HELD PRIOR TO THE TERMINATION DATE; PROVIDED, THAT
IN ALL CASES, PAULSON MAY VOTE ALL OF ITS SHARES OF NEW COMMON STOCK IN FAVOR OF
THE ELECTION OF THE PAULSON NOMINEE;

 

(II)           WITH RESPECT TO A PROPOSED CHANGE OF CONTROL TRANSACTION THAT
PAULSON DESIRES TO VOTE IN FAVOR OF, PAULSON MAY VOTE ALL SHARES OF NEW COMMON
STOCK THAT PAULSON BENEFICIALLY OWNS IN FAVOR OF SUCH CHANGE OF CONTROL
TRANSACTION IF SUCH CHANGE OF CONTROL TRANSACTION TREATS PAULSON AND ITS
AFFILIATES THE SAME AS ALL OTHER HOLDERS OF NEW COMMON STOCK AND IF PURSUANT TO
SUCH CHANGE OF CONTROL TRANSACTION PAULSON WILL DISPOSE OF ITS SHARES OF NEW
COMMON STOCK;

 

(III)          WITH RESPECT TO A PROPOSED CHANGE OF CONTROL TRANSACTION THAT
PAULSON DOES NOT DESIRE TO VOTE IN FAVOR OF, BUT WHICH CHANGE OF CONTROL

 

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TRANSACTION HAS BEEN RECOMMENDED BY THE BOARD FOR APPROVAL BY THE COMPANY’S
STOCKHOLDERS, PAULSON (1) MAY VOTE UP TO 27.5% OF THE THEN ISSUED AND
OUTSTANDING SHARES OF NEW COMMON STOCK IN RESPECT OF SUCH CHANGE OF CONTROL
TRANSACTION IN ITS SOLE DISCRETION, AND (2) SHALL VOTE, OR CAUSE TO BE VOTED,
ANY SHARES OF NEW COMMON STOCK THAT PAULSON BENEFICIALLY OWNS IN EXCESS OF SUCH
27.5% IN THE SAME PROPORTION AS THE OTHER HOLDERS OF NEW COMMON STOCK VOTE THEIR
SHARES OF NEW COMMON STOCK WITH RESPECT TO SUCH CHANGE OF CONTROL TRANSACTION;
AND

 

(IV)          NOTWITHSTANDING SECTIONS 2(B)(II) AND (III), EXCEPT AS PROVIDED IN
THE IMMEDIATELY SUCCEEDING SENTENCE, IF PAULSON OR AN AFFILIATE OF PAULSON HAS
ANY INTEREST IN THE PERSON OR PERSONS (OTHER THAN THE COMPANY) THAT IS A PARTY
IN A CHANGE OF CONTROL TRANSACTION (OTHER THAN A DEBT INTEREST) OR IF SUCH
CHANGE OF CONTROL TRANSACTION TREATS PAULSON OR ITS AFFILIATES DIFFERENTLY THAN
ALL OTHER HOLDERS OF NEW COMMON STOCK, THEN PAULSON SHALL VOTE, OR CAUSE TO BE
VOTED, ALL SHARES OF NEW COMMON STOCK THAT PAULSON BENEFICIALLY OWNS IN THE SAME
PROPORTION AS THE HOLDERS OF NEW COMMON STOCK WHO DO NOT HAVE AN INTEREST IN ANY
PERSON OR PERSONS (OTHER THAN THE COMPANY) THAT IS A PARTY IN SUCH CHANGE OF
CONTROL TRANSACTION VOTE THEIR SHARES OF NEW COMMON STOCK WITH RESPECT TO SUCH
CHANGE OF CONTROL TRANSACTION.  NOTWITHSTANDING THE FOREGOING, PAULSON SHALL NOT
BE SUBJECT TO THE RESTRICTIONS SET FORTH IN THIS SECTION 2(B)(IV) PRIOR TO THE
TERMINATION DATE AT SUCH TIME, IF ANY, AS PAULSON SHALL BENEFICIALLY OWN LESS
THAN 17.0% OF THE THEN ISSUED AND OUTSTANDING SHARES OF NEW COMMON STOCK FOR A
PERIOD OF 30 CONSECUTIVE DAYS.

 

(C)           PAULSON AGREES THAT WITH RESPECT TO THE VOTING OF SHARES OF ITS
NEW COMMON STOCK OVER WHICH PAULSON HAS DISCRETION AS CONTEMPLATED IN
SECTION 2(B), PAULSON SHALL VOTE CONTEMPORANEOUSLY WITH THE VOTING BY OTHER
STOCKHOLDERS OF THE COMPANY.  PAULSON AGREES THAT WITH RESPECT TO THE VOTING OF
SHARES OF ITS NEW COMMON STOCK OVER WHICH PAULSON DOES NOT HAVE DISCRETION AS
CONTEMPLATED IN SECTION 2(B), PAULSON SHALL TAKE SUCH ACTION AS MAY BE NECESSARY
TO CAUSE SUCH SHARES OF NEW COMMON STOCK TO BE AUTOMATICALLY VOTED IN ACCORDANCE
WITH THE TERMS OF SECTION 2(B).

 

(D)           AS OF THE DATE OF THE ORIGINAL AGREEMENT, PAULSON REVOKED ANY AND
ALL OTHER PROXIES AND VOTING AGREEMENTS GIVEN BY PAULSON WITH RESPECT TO THE
VOTING SECURITIES AND CAUSED, AND WILL CAUSE, ITS AFFILIATES TO REVOKE ANY AND
ALL PROXIES AND VOTING AGREEMENTS GIVEN BY ANY SUCH AFFILIATE WITH RESPECT TO
THE VOTING SECURITIES.

 

3.             STANDSTILL.

 

(A)           PAULSON HEREBY AGREES THAT UNTIL THE EARLIER OF (X) SUCH TIME, IF
ANY, AS PAULSON BENEFICIALLY OWNS LESS THAN 17.0% OF THE THEN ISSUED AND
OUTSTANDING SHARES OF NEW COMMON STOCK FOR A PERIOD OF 30 CONSECUTIVE DAYS AND
(Y) THE TERMINATION DATE, NEITHER PAULSON NOR ANY OF ITS AFFILIATES WILL, ACTING
ALONE, AS PART OF A “GROUP” (WITHIN THE MEANING OF SECTION 13(D)(3) OF THE
EXCHANGE ACT) OR OTHERWISE IN CONCERT WITH ANY OTHER PERSON, UNLESS SPECIFICALLY
REQUESTED IN WRITING BY THE BOARD ON AN UNSOLICITED BASIS:

 

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(I)            AFTER THE PURCHASE PERIOD (AS DEFINED BELOW), ACQUIRE, OR AGREE
TO ACQUIRE, OFFER TO ACQUIRE, OR SEEK OR PROPOSE TO ACQUIRE BENEFICIAL OWNERSHIP
OF ANY NEW COMMON STOCK OR ANY RIGHTS OR OPTIONS TO ACQUIRE ANY NEW COMMON STOCK
(INCLUDING FROM A THIRD PERSON); OR

 

(II)           INITIATE, PROPOSE, FINANCE, NEGOTIATE, SEEK TO EFFECT, GUARANTEE
THE FINANCING OF, ASSIST ANY OTHER PERSON  IN OBTAINING FINANCING FOR, OR
KNOWINGLY CAUSE (1) ANY PROXY CONTEST OR OTHER PROPOSAL TO OBTAIN BOARD
REPRESENTATION, (2) ANY STOCKHOLDER PROPOSAL, WHETHER MADE PURSUANT TO
RULE 14A-8 OR RULE 14A-4 UNDER THE EXCHANGE ACT OR OTHERWISE OR (3) ANY CHANGE
OF CONTROL TRANSACTION, EXCEPT THAT PAULSON MAY DO ANY OF THE FOREGOING WITH
RESPECT TO A PROPOSED CHANGE OF CONTROL TRANSACTION IF SUCH PROPOSED CHANGE OF
CONTROL TRANSACTION IS SUBJECT TO THE VOTING REQUIREMENTS SET FORTH IN
SECTION 2(B); OR

 

(III)          EXCEPT WITH RESPECT TO A PROPOSED CHANGE OF CONTROL TRANSACTION
EXPRESSLY SUBJECT TO THE VOTING REQUIREMENTS SET FORTH IN SECTION 2(B),
“SOLICIT” (WITHIN THE MEANING OF RULE 14A-1(L) UNDER THE EXCHANGE ACT) ANY
PROXIES TO VOTE, OR SEEK TO INFLUENCE ANY OTHER PERSON WITH RESPECT TO THE
VOTING OF ANY VOTING SECURITIES ON ANY OF THE MATTERS SET FORTH IN
SECTION 3(A)(II); OR

 

(IV)          EXCEPT WITH RESPECT TO A PROPOSED CHANGE OF CONTROL TRANSACTION
EXPRESSLY SUBJECT TO THE VOTING REQUIREMENTS SET FORTH IN SECTION 2(B), TAKE ANY
ACTION THAT WOULD REQUIRE THE COMPANY UNDER APPLICABLE LAW, RULE OR STOCK
EXCHANGE POLICY TO MAKE A PUBLIC ANNOUNCEMENT REGARDING ANY OF THE MATTERS SET
FORTH IN SECTION 3(A)(II); OR

 

(V)           EXCEPT WITH RESPECT TO A PROPOSED CHANGE OF CONTROL TRANSACTION
EXPRESSLY SUBJECT TO THE VOTING REQUIREMENTS SET FORTH IN SECTION 2(B), FORM,
JOIN OR PARTICIPATE IN ANY “GROUP” (WITHIN THE MEANING OF SECTION 13(D)(3) OF
THE EXCHANGE ACT) WITH RESPECT TO ANY VOTING SECURITIES; OR

 

(VI)          NOMINATE AN INDIVIDUAL OR INDIVIDUALS FOR ELECTION TO THE BOARD AT
ANY MEETING (OR BY WRITTEN CONSENT IN LIEU OF A MEETING) OF STOCKHOLDERS OF THE
COMPANY, OTHER THAN AS EXPRESSLY PROVIDED IN THIS AGREEMENT WITH RESPECT TO THE
PAULSON NOMINEE, OR EFFECT OR ATTEMPT TO EFFECT THE REMOVAL OF ANY MEMBERS OF
THE BOARD (OTHER THAN THE PAULSON NOMINEE); PROVIDED, THAT COMPLIANCE BY PAULSON
WITH THE PROVISIONS OF SECTIONS 1 OR 2(B) SHALL NOT CONSTITUTE A VIOLATION OF
THIS PROVISION; OR

 

(VII)         OTHER THAN AS EXPRESSLY PROVIDED IN THIS AGREEMENT WITH RESPECT TO
THE PAULSON NOMINEE, DIRECTLY OR INDIRECTLY SEEK TO ELECT, APPOINT OR OTHERWISE
PLACE (OR SEEK TO HAVE ELECTED, APPOINTED OR OTHERWISE PLACED) A REPRESENTATIVE
OF PAULSON ON THE BOARD, IT BEING THE EXPRESS AGREEMENT OF PAULSON AND THE
COMPANY THAT PAULSON SHALL BE ENTITLED TO ONLY ONE SEAT ON THE BOARD, SUBJECT TO
THE CONDITIONS SET FORTH IN THIS AGREEMENT, PRIOR TO THE TERMINATION DATE; OR

 

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(VIII)        SEEK TO CALL, OR TO REQUEST THE CALL OF, A SPECIAL MEETING OF THE
STOCKHOLDERS OF THE COMPANY; OR

 

(IX)           DEPOSIT ANY SECURITIES OF THE COMPANY INTO A VOTING TRUST, OR
SUBJECT ANY SECURITIES OF THE COMPANY TO ANY AGREEMENT OR ARRANGEMENT WITH
RESPECT TO THE VOTING OF SUCH SECURITIES (OTHER THAN PURSUANT TO SECTION 2 OF
THIS AGREEMENT), OR OTHER AGREEMENT OR ARRANGEMENT HAVING SIMILAR EFFECT TO
WHICH, IN EACH CASE, A PERSON WHO IS NOT AN AFFILIATE OF PAULSON IS A PARTY; OR

 

(X)            EXECUTE ANY WRITTEN STOCKHOLDER CONSENT WITH RESPECT TO THE
COMPANY, EXCEPT IN ACCORDANCE WITH SECTION 2 OF THIS AGREEMENT; OR

 

(XI)           EXCEPT WITH RESPECT TO A PROPOSED CHANGE OF CONTROL TRANSACTION
EXPRESSLY SUBJECT TO THE VOTING REQUIREMENTS SET FORTH IN SECTION 2(B), SEEK OR
REQUEST PERMISSION TO DO ANY OF THE FOREGOING, MAKE, INITIATE, TAKE OR
PARTICIPATE IN ANY DEMAND, REQUEST, ACTION (LEGAL OR OTHERWISE) OR PROPOSAL TO
AMEND, WAIVE OR TERMINATE ANY PROVISION OF THIS AGREEMENT; OR

 

(XII)          DISCLOSE ANY INTENTION, PLAN OR ARRANGEMENT INCONSISTENT WITH THE
FOREGOING.

 

(B)           NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SECTION 3, THE
PARTIES TO THIS AGREEMENT ACKNOWLEDGE AND AGREE THAT:

 

(I)            AT ANY TIME PRIOR TO SEPTEMBER 30, 2010 (THE “PURCHASE PERIOD”),
PAULSON MAY ACQUIRE BENEFICIAL OWNERSHIP OF ADDITIONAL SHARES OF NEW COMMON
STOCK; PROVIDED, THAT IN NO EVENT, BEFORE, DURING OR AFTER THE PURCHASE PERIOD,
MAY PAULSON ACQUIRE OR BENEFICIALLY OWN IN EXCESS OF 45% OF THE SHARES OF NEW
COMMON STOCK THEN ISSUED AND OUTSTANDING (INCLUSIVE OF THE SHARES OF NEW COMMON
STOCK ISSUED TO PAULSON BY THE COMPANY ON THE EFFECTIVE DATE IN EXCHANGE FOR ALL
OF THE CLASS 3 AND CLASS 4 CLAIMS OF PAULSON PURSUANT TO THE PLAN); PROVIDED
FURTHER, THAT PAULSON MAY ACQUIRE BENEFICIAL OWNERSHIP OF ADDITIONAL SHARES OF
NEW COMMON STOCK (INCLUDING AFTER THE PURCHASE PERIOD) PURSUANT TO PAULSON’S
EXERCISE OF ITS PREEMPTIVE RIGHTS SET FORTH IN SECTION 11, SUBJECT TO THE 45%
BENEFICIAL OWNERSHIP LIMITATION SET FORTH ABOVE IN THIS SECTION 3(B)(I);

 

(II)           THE PROVISIONS OF SECTION 3(A) SHALL NOT RESTRICT THE ACTIONS OF
PAULSON TAKEN IN RESPECT OF A CHANGE OF CONTROL TRANSACTION THE TERMS OF WHICH
REQUIRE AS A CONDITION TO CONSUMMATION OF SUCH CHANGE OF CONTROL TRANSACTION
COMPLIANCE WITH THE APPLICABLE VOTING RESTRICTIONS SET FORTH IN SECTIONS
2(B)(II), (III) AND (IV) (AND WHICH CONDITION IS NOT WAIVED); AND

 

(III)          THE PROVISIONS OF SECTION 3(A) WILL NOT LIMIT IN ANY RESPECT
PAULSON’S ABILITY TO PRIVATELY MAKE PROPOSALS TO THE BOARD WITH RESPECT TO ANY
OF THE ACTIONS, ACTIVITIES, OR MATTERS OTHERWISE RESTRICTED BY SECTION 3(A).

 

4.             NON-INTERFERENCE.

 

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(A)           THE COMPANY WILL NOT, BY AMENDMENT OF ITS AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION (THE “CHARTER”), ITS AMENDED AND RESTATED BYLAWS
(THE “BYLAWS”), OR ITS RIGHTS AGREEMENT (THE “RIGHTS AGREEMENT”), OR THROUGH ANY
OTHER MEANS, CIRCUMVENT OR SEEK TO CIRCUMVENT THE OBSERVANCE OR PERFORMANCE BY
THE COMPANY OF ANY OF ITS OBLIGATIONS UNDER THE TERMS OF THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, BY CHALLENGING IN ANY MANNER THE TERMS OF THE
CHARTER, THE BYLAWS, OR THE RIGHTS AGREEMENT OR THE VALIDITY OR ENFORCEABILITY
OF THIS AGREEMENT ON ANY GROUNDS (INCLUDING AS BEING AGAINST PUBLIC POLICY, AS
HAVING BEEN IMPROPERLY INDUCED OR OTHERWISE), WHETHER BY THE INITIATION OF ANY
LEGAL PROCEEDING FOR SUCH PURPOSE, OR BY THE INTERVENTION, PARTICIPATION OR
ATTEMPTED INTERVENTION OR PARTICIPATION IN ANY MANNER IN ANY OTHER LEGAL
PROCEEDING INITIATED BY ANOTHER PERSON OR OTHERWISE.  PAULSON HEREBY CONSENTS TO
THE AMENDMENT TO THE BYLAWS IN THE FORM OF EXHIBIT A ATTACHED TO THIS AGREEMENT.

 

(B)           PAULSON WILL NOT BY ANY MEANS, CIRCUMVENT OR SEEK TO CIRCUMVENT
THE OBSERVANCE OR PERFORMANCE BY PAULSON OF ANY OF ITS OBLIGATIONS UNDER THE
TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, BY CHALLENGING IN ANY
MANNER THE TERMS OF THE  CHARTER, THE BYLAWS, OR THE RIGHTS AGREEMENT OR THE
VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT ON ANY GROUNDS (INCLUDING AS BEING
AGAINST PUBLIC POLICY, AS HAVING BEEN IMPROPERLY INDUCED OR OTHERWISE), WHETHER
BY THE INITIATION OF ANY LEGAL PROCEEDING FOR SUCH PURPOSE, OR BY THE
INTERVENTION, PARTICIPATION OR ATTEMPTED INTERVENTION OR PARTICIPATION IN ANY
MANNER IN ANY OTHER LEGAL PROCEEDING INITIATED BY ANOTHER PERSON OR OTHERWISE.

 

(C)           NOTWITHSTANDING THE FOREGOING, THE COMPANY AND PAULSON EACH
ACKNOWLEDGES AND AGREES THAT THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION
OF THE CHARTER OR THE BYLAWS WILL NOT CONSTITUTE OR GIVE RISE TO A BREACH OF
SECTION 1(A)(I) OF THIS AGREEMENT OR A RIGHT OF EITHER THE COMPANY OR PAULSON TO
TERMINATE THIS AGREEMENT BASED ON SUCH BREACH.

 

(D)           THE COMPANY AGREES THAT UNTIL THE EARLIER OF (X) SUCH TIME, IF
ANY, AS PAULSON BENEFICIALLY OWNS LESS THAN 17.0% OF THE THEN ISSUED AND
OUTSTANDING SHARES OF NEW COMMON STOCK FOR A PERIOD OF 30 CONSECUTIVE DAYS AND
(Y) THE TERMINATION DATE, WITHOUT THE PRIOR WRITTEN CONSENT OF PAULSON & CO., IF
PAULSON (AS DEFINED IN THE RIGHTS AGREEMENT) HAS NOT BECOME AN ACQUIRING PERSON
(AS DEFINED IN THE RIGHTS AGREEMENT), NEITHER THE COMPANY NOR THE RIGHTS AGENT
(AS DEFINED IN THE RIGHTS AGREEMENT) SHALL MODIFY, SUPPLEMENT OR AMEND
SECTION 1(T) OF THE RIGHTS AGREEMENT OR OTHERWISE MODIFY, SUPPLEMENT OR AMEND
THE RIGHTS AGREEMENT IN ANY MANNER THAT WOULD ADVERSELY AFFECT THE RIGHTS,
INTERESTS, DUTIES OR OBLIGATIONS OF PAULSON (AS DEFINED IN THE RIGHTS AGREEMENT)
UNDER THE RIGHTS AGREEMENT IN A MANNER THAT RELATES TO THE DETERMINATION AS TO
WHETHER PAULSON (AS DEFINED IN THE RIGHTS AGREEMENT) IS A “GRANDFATHERED PERSON”
(AS DEFINED IN THE RIGHTS AGREEMENT) OR “ACQUIRING PERSON” (AS DEFINED IN THE
RIGHTS AGREEMENT) UNDER THE RIGHTS AGREEMENT.

 

5.             PUBLICITY.  NEITHER THE COMPANY NOR PAULSON WILL, DIRECTLY OR
INDIRECTLY, MAKE OR ISSUE OR CAUSE TO BE MADE OR ISSUED ANY DISCLOSURE,
ANNOUNCEMENT OR STATEMENT (INCLUDING WITHOUT LIMITATION THE FILING OF ANY
DOCUMENT OR REPORT WITH THE SEC OR ANY OTHER GOVERNMENTAL AGENCY OR ANY
DISCLOSURE TO ANY JOURNALIST, MEMBER OF THE MEDIA OR SECURITIES ANALYST)
CONCERNING

 

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THE OTHER PARTY OR ANY OF ITS RESPECTIVE PAST, PRESENT OR FUTURE GENERAL
PARTNERS, MANAGERS, DIRECTORS, OFFICERS OR EMPLOYEES, WHICH DISPARAGES ANY OF
SUCH PARTY’S RESPECTIVE PAST, PRESENT OR FUTURE GENERAL PARTNERS, MANAGERS,
DIRECTORS, OFFICERS OR EMPLOYEES AS INDIVIDUALS (RECOGNIZING THAT EACH PARTY
WILL BE FREE TO (A) COMMENT IN GOOD FAITH REGARDING THE BUSINESS OF THE OTHER
PARTY, PROVIDED ANY SUCH COMMENT SHALL NOT OTHERWISE VIOLATE THE TERMS OF THIS
AGREEMENT, AND (B) AFTER CONSULTATION WITH COUNSEL, MAKE ANY DISCLOSURE THAT IT
DETERMINES IN GOOD FAITH IS REQUIRED TO BE MADE UNDER APPLICABLE LAW).

 

6.             PAULSON’S REPRESENTATIONS AND WARRANTIES.  PAULSON REPRESENTS AND
WARRANTS TO THE COMPANY THAT:

 

(A)           THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY
PAULSON HAVE BEEN DULY AND VALIDLY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION
ON THE PART OF PAULSON; THIS AGREEMENT HAS BEEN DULY EXECUTED BY PAULSON, IS A
VALID AND BINDING AGREEMENT OF PAULSON, AND IS ENFORCEABLE AGAINST PAULSON IN
ACCORDANCE WITH ITS TERMS, EXCEPT AS ENFORCEABILITY MAY BE LIMITED BY
BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM AND OTHER SIMILAR LAWS
RELATING TO OR AFFECTING CREDITORS’ RIGHTS GENERALLY OR BY GENERAL EQUITABLE
PRINCIPLES (REGARDLESS OF WHETHER SUCH ENFORCEABILITY IS CONSIDERED IN A
PROCEEDING IN EQUITY OR AT LAW); AND

 

(B)           THE EXECUTION, DELIVERY AND PERFORMANCE BY PAULSON OF THIS
AGREEMENT DOES NOT VIOLATE OR CONFLICT WITH OR RESULT IN A BREACH OF OR
CONSTITUTE (OR WITH NOTICE OR LAPSE OF TIME OR BOTH CONSTITUTE) A DEFAULT OR
RESULT IN THE CREATION OR IMPOSITION OF, OR GIVE RISE TO, ANY LIEN, CHARGE,
RESTRICTION, CLAIM, ENCUMBRANCE OR ADVERSE PENALTY OF ANY NATURE WHATSOEVER
UNDER PAULSON’S ORGANIZATIONAL DOCUMENTS OR UNDER ANY AGREEMENT OR INSTRUMENT TO
WHICH PAULSON IS A PARTY OR BY WHICH ANY OF ITS PROPERTIES OR ASSETS IS BOUND OR
UNDER ANY LAW OR ANY ORDER OF ANY COURT OR OTHER AGENCY OF GOVERNMENT.

 

7.             COMPANY’S REPRESENTATIONS AND WARRANTIES.  THE COMPANY REPRESENTS
AND WARRANTS TO PAULSON THAT:

 

(A)           THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY THE
COMPANY HAVE BEEN DULY AND VALIDLY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION
ON THE PART OF THE COMPANY; THIS AGREEMENT HAS BEEN DULY EXECUTED BY THE
COMPANY, IS A VALID AND BINDING AGREEMENT OF THE COMPANY, AND IS ENFORCEABLE
AGAINST THE COMPANY IN ACCORDANCE WITH ITS TERMS, EXCEPT AS ENFORCEABILITY MAY
BE LIMITED BY BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM AND OTHER
SIMILAR LAWS RELATING TO OR AFFECTING CREDITORS’ RIGHTS GENERALLY OR BY GENERAL
EQUITABLE PRINCIPLES (REGARDLESS OF WHETHER SUCH ENFORCEABILITY IS CONSIDERED IN
A PROCEEDING IN EQUITY OR AT LAW);

 

(B)           THE EXECUTION, DELIVERY AND PERFORMANCE BY THE COMPANY OF THIS
AGREEMENT DOES NOT VIOLATE OR CONFLICT WITH OR RESULT IN A BREACH OF OR
CONSTITUTE (OR WITH NOTICE OR LAPSE OF TIME OR BOTH CONSTITUTE) A DEFAULT OR
RESULT IN THE CREATION OR IMPOSITION OF, OR GIVE RISE TO, ANY LIEN, CHARGE,
RESTRICTION, CLAIM, ENCUMBRANCE OR ADVERSE PENALTY OF ANY NATURE WHATSOEVER
UNDER THE CHARTER, THE BYLAWS OR UNDER ANY AGREEMENT OR INSTRUMENT TO WHICH THE
COMPANY IS A PARTY OR BY WHICH ANY OF ITS PROPERTIES OR ASSETS IS BOUND OR UNDER
ANY LAW OR ANY ORDER OF ANY COURT OR OTHER AGENCY OF GOVERNMENT; AND

 

8

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(C)           UPON CONFIRMATION OF THE PLAN, THE NEW COMMON STOCK WILL BE THE
ONLY AUTHORIZED AND OUTSTANDING CLASS OF CAPITAL STOCK OF THE COMPANY.

 

8.             CERTAIN DEFINITIONS.  AS USED IN THIS AGREEMENT, THE FOLLOWING
TERMS HAVE THE MEANINGS INDICATED:

 

(A)           THE TERM “ACCREDITED INVESTOR” MEANS AN “ACCREDITED INVESTOR,” AS
SUCH TERM IS DEFINED IN REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF
1933, AS AMENDED.

 

(B)           THE TERM “AFFILIATE” MEANS, WITH RESPECT TO ANY PERSON, ANY OTHER
PERSON, DIRECTLY OR INDIRECTLY, CONTROLLING, CONTROLLED BY, OR UNDER COMMON
CONTROL WITH, SUCH PERSON.  FOR PURPOSES OF THIS DEFINITION, THE TERM “CONTROL”
(INCLUDING THE CORRELATIVE TERMS “CONTROLLING”, “CONTROLLED BY” AND “UNDER
COMMON CONTROL WITH”) MEANS THE POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER
TO DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND POLICIES OF A PERSON,
WHETHER THROUGH THE OWNERSHIP OF VOTING SECURITIES, BY CONTRACT OR OTHERWISE.

 

(C)           WHETHER A PERSON “BENEFICIALLY OWNS” OR “BENEFICIALLY OWNED,” IS
THE “BENEFICIAL OWNER” OF OR HAS “BENEFICIAL OWNERSHIP” OF SECURITIES FOR THE
PURPOSES OF THIS AGREEMENT SHALL BE DETERMINED IN THE SAME MANNER AS THAT SET
FORTH FOR DETERMINING A BENEFICIAL OWNER OF A SECURITY UNDER RULE 13D-3 OF THE
EXCHANGE ACT, EXCEPT THAT A PERSON WILL ALSO BE DEEMED TO BE THE BENEFICIAL
OWNER OF ALL SECURITIES WHICH SUCH PERSON HAS THE RIGHT TO ACQUIRE PURSUANT TO
THE EXERCISE OF ANY RIGHTS IN CONNECTION WITH ANY SECURITIES OR ANY AGREEMENT,
REGARDLESS OF WHEN SUCH RIGHTS MAY BE EXERCISED AND WHETHER THEY ARE
CONDITIONAL.

 

(D)           THE TERM “CHANGE OF CONTROL TRANSACTION” MEANS ANY TRANSACTION OR
SERIES OF RELATED TRANSACTIONS THAT RESULTS IN ANY OF THE FOLLOWING: (I) ANY
PERSON OR “GROUP” (WITHIN THE MEANING OF SECTION 13(D)(3) OF THE EXCHANGE ACT)
IS OR BECOMES THE BENEFICIAL OWNER, DIRECTLY OR INDIRECTLY, OF VOTING SECURITIES
OF THE COMPANY REPRESENTING AT LEAST A MAJORITY OF THE COMBINED VOTING POWER OF
THE COMPANY’S THEN OUTSTANDING SECURITIES; (II) DURING ANY PERIOD OF TWO
CONSECUTIVE YEARS (NOT INCLUDING ANY PERIOD PRIOR TO THE EXECUTION OF THIS
AGREEMENT), INDIVIDUALS WHO AT THE BEGINNING OF SUCH PERIOD CONSTITUTE THE BOARD
(TOGETHER WITH ANY NEW DIRECTOR WHOSE ELECTION BY THE BOARD OR NOMINATION FOR
ELECTION BY THE COMPANY’S STOCKHOLDERS WAS APPROVED BY A VOTE OF AT LEAST
TWO-THIRDS OF THE DIRECTORS THEN STILL IN OFFICE WHO EITHER WERE DIRECTORS AT
THE BEGINNING OF THE PERIOD OR WHOSE ELECTION OR NOMINATION FOR ELECTION WAS
PREVIOUSLY SO APPROVED) CEASE FOR ANY REASON TO CONSTITUTE AT LEAST A MAJORITY
OF THE MEMBERS OF THE BOARD; AND (III) A SALE OR DISPOSITION BY THE COMPANY OF
ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY AND ITS SUBSIDIARIES TAKEN
AS A WHOLE (INCLUDING THE STOCK OF ANY SUBSIDIARIES OF THE COMPANY).

 

(E)           THE TERM “DEBT INTEREST” MEANS AN INTEREST AS A HOLDER OF
INDEBTEDNESS, WHICH INDEBTEDNESS (I) IS NOT CONVERTIBLE OR EXCHANGEABLE FOR
EQUITY, (II) HAS NO VOTING RIGHTS ON MATTERS SUBMITTED TO THE STOCKHOLDERS OF
THE ISSUER OF SUCH INDEBTEDNESS

 

9

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(INCLUDING THE ELECTION OF DIRECTORS), AND (III) DOES NOT RESULT IN PAULSON OR
ITS AFFILIATES BEING DEEMED TO BE AN AFFILIATE OF THE ISSUER OF SUCH
INDEBTEDNESS.

 

(F)            THE TERM “EFFECTIVE DATE” MEANS THE EFFECTIVE DATE OF THE PLAN
PURSUANT TO THE TERMS THEREOF.

 

(G)           THE TERM “EQUITY SECURITIES” MEANS NEW COMMON STOCK OR EQUITY
SECURITIES CONVERTIBLE INTO OR EXERCISABLE OR EXCHANGEABLE FOR NEW COMMON STOCK,
BUT EXCLUDING EXEMPTED SECURITIES.

 

(H)           THE TERM “EXCHANGE ACT” MEANS THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED.

 

(I)            THE TERM “EXEMPTED SECURITIES” MEANS NEW COMMON STOCK OR EQUITY
SECURITIES CONVERTIBLE INTO OR EXERCISABLE OR EXCHANGEABLE FOR NEW COMMON STOCK
ISSUED (I) AS CONSIDERATION FOR ANY ASSET, RIGHT, ENTITY OR BUSINESS ACQUIRED BY
THE COMPANY OR ANY OF ITS SUBSIDIARIES, INCLUDING IN CONNECTION WITH A MERGER,
EXCHANGE OFFER, JOINT VENTURE, LICENSE TRANSACTION OR EXCHANGE OF SHARES,
(II) IN ACCORDANCE WITH ANY STOCK OPTION OR OTHER EQUITY-BASED COMPENSATION PLAN
OF THE COMPANY OR ITS SUBSIDIARIES OR UPON EXERCISE, CONVERSION OR EXCHANGE OF
ANY STOCK OPTION OR OTHER EQUITY INTEREST ISSUED THEREUNDER, (III) AS A DIVIDEND
OR OTHER DISTRIBUTION TO EQUITYHOLDERS OF THE COMPANY GENERALLY, (IV) IN
CONNECTION WITH A STOCK SPLIT OR (V) IN CONNECTION WITH THE EXCHANGE, EXERCISE
OR CONVERSION OF ANY EQUITY INTEREST THAT IS OUTSTANDING (1) IMMEDIATELY UPON
THE DATE OF THIS AGREEMENT, (2) THEREAFTER, SO LONG AS PAULSON HAD AN
OPPORTUNITY TO EXERCISE THE PREEMPTIVE RIGHTS GRANTED TO PAULSON WITH RESPECT TO
THE UNDERLYING EQUITY INTEREST OR (3) THEREAFTER, TO THE EXTENT THAT SUCH EQUITY
INTEREST WAS ISSUED PURSUANT TO ANY OF CLAUSES (I), (II), (III) OR (IV).

 

(J)            THE TERM “PERSON” WILL BE INTERPRETED BROADLY TO INCLUDE, WITHOUT
LIMITATION, ANY CORPORATION, COMPANY, “GROUP” (WITHIN THE MEANING OF
SECTION 13(D)(3) OF THE EXCHANGE ACT), PARTNERSHIP, LIMITED LIABILITY COMPANY,
OTHER ENTITY OR INDIVIDUAL.

 

(K)           THE TERM “TERMINATION DATE” MEANS DECEMBER 31, 2013.

 

(L)            THE TERM “VOTING SECURITIES” MEANS SECURITIES OF THE COMPANY WITH
THE POWER TO VOTE WITH RESPECT TO THE ELECTION OF DIRECTORS GENERALLY,
INCLUDING, WITHOUT LIMITATION, THE NEW COMMON STOCK.

 

9.             NOTICES.  ALL NOTICES, DEMANDS OR OTHER COMMUNICATIONS TO BE
GIVEN OR DELIVERED UNDER OR BY REASON OF THE PROVISIONS OF THIS AGREEMENT SHALL
BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN GIVEN WHEN DELIVERED PERSONALLY
TO THE RECIPIENT OR SENT TO THE RECIPIENT BY FACSIMILE (IF SENT BY FACSIMILE
PRIOR TO 5:00 P.M. LOCAL TIME OF THE RECIPIENT ON A BUSINESS DAY OR, IF NOT, ON
THE NEXT BUSINESS DAY), OR ONE BUSINESS DAY AFTER DEPOSIT WITH A REPUTABLE
OVERNIGHT COURIER SERVICE (CHARGES PREPAID), OR THREE BUSINESS DAYS AFTER BEING
MAILED TO THE RECIPIENT BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED AND POSTAGE PREPAID.  SUCH NOTICES, DEMANDS AND OTHER COMMUNICATIONS
SHALL BE SENT TO THE COMPANY AND PAULSON AT THE FOLLOWING ADDRESSES:

 

10

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If to the Company:

 

SuperMedia Inc.
2200 West Airfield Drive
P. O. Box 619810
DFW Airport, Texas 75261
Attention: Cody Wilbanks
Facsimile: (972) 453 -6869

 

with copies to (which shall not constitute notice):

 

Fulbright & Jaworski L.L.P.

2200 Ross Avenue, Suite 2800

Dallas, Texas 75201

Attention: Glen J. Hettinger

Facsimile: (214) 855-8200

 

If to Paulson:

 

Paulson & Co. Inc.

1251 Avenue of the Americas, 50th Floor

New York, New York  10020

Attention: Daniel B. Kamensky

Facsimile: (212) 977-9505

 

with copies to (which shall not constitute notice):

 

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

New York, New York 10036

Attention:

 

Andrew Hulsh

 

 

Fred Hodara

Facsimile:

 

(212) 872-1002

 

10.          EXPIRATION.  THIS AGREEMENT SHALL EXPIRE ON THE TERMINATION DATE,
SUBJECT TO SECTION 12(A).

 

11.          PREEMPTIVE RIGHTS.

 

(A)           SO LONG AS PAULSON AND ITS CONTROLLED AFFILIATES BENEFICIALLY OWN
IN EXCESS OF 20% OF THE SHARES OF NEW COMMON STOCK THEN OUTSTANDING, AND SUBJECT
TO THE TERMS AND CONDITIONS OF SECTION 11(B), THE COMPANY SHALL NOT ISSUE
ADDITIONAL EQUITY SECURITIES (AN “ISSUANCE”) UNLESS, PRIOR TO SUCH ISSUANCE, THE
COMPANY NOTIFIES PAULSON IN WRITING OF THE PROPOSED ISSUANCE AND GRANTS TO
PAULSON, OR AT PAULSON’S ELECTION, ONE OR MORE OF ITS AFFILIATES, THE RIGHT (THE
“RIGHT”) TO SUBSCRIBE FOR AND PURCHASE IN WHOLE OR IN PART, AT THE SAME PRICE
AND UPON THE SAME TERMS AND CONDITIONS AS SET FORTH IN THE NOTICE OF SUCH
ISSUANCE, A PORTION OF SUCH ADDITIONAL EQUITY SECURITIES PROPOSED TO BE ISSUED
IN THE

 

11

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ISSUANCE SUCH THAT IMMEDIATELY AFTER GIVING EFFECT TO THE ISSUANCE AND THE
EXERCISE OF THE RIGHT (INCLUDING, FOR PURPOSES OF THIS CALCULATION, THE ISSUANCE
OF SHARES OF NEW COMMON STOCK UPON CONVERSION, EXCHANGE OR EXERCISE OF ANY
EQUITY SECURITY ISSUED IN THE ISSUANCE AND SUBJECT TO THE RIGHT), THE SHARES OF
NEW COMMON STOCK THAT PAULSON AND ITS AFFILIATES BENEFICIALLY OWN (ROUNDED TO
THE NEAREST WHOLE SHARE) SHALL REPRESENT THE SAME PERCENTAGE OF THE AGGREGATE
NUMBER OF SHARES OF NEW COMMON STOCK OUTSTANDING AS WAS BENEFICIALLY OWNED BY
PAULSON AND ITS AFFILIATES IMMEDIATELY PRIOR TO THE ISSUANCE.  IN THE EVENT
EQUITY SECURITIES ARE ISSUED AS PART OF A UNIT WITH OTHER SECURITIES, THE RIGHT
WILL APPLY TO SUCH UNIT AND NOT SEPARATELY TO ANY COMPONENT OF SUCH UNIT.

 

(B)           THE RIGHT MAY BE EXERCISED BY PAULSON, OR, AT PAULSON’S ELECTION,
ONE OR MORE OF ITS AFFILIATES, AS THE CASE MAY BE, PROVIDED THAT THE PERSON
EXERCISING THE RIGHT MUST (I) BE AN ACCREDITED INVESTOR AND (II) DELIVER WRITTEN
NOTICE TO THE COMPANY OF SUCH EXERCISE OF THE RIGHT WHICH IS RECEIVED BY THE
COMPANY WITHIN 20 BUSINESS DAYS AFTER THE DATE ON WHICH PAULSON RECEIVES NOTICE
FROM THE COMPANY OF THE PROPOSED ISSUANCE.  THE CLOSING OF THE PURCHASE AND SALE
PURSUANT TO THE EXERCISE OF THE RIGHT SHALL OCCUR ON THE DATE SCHEDULED BY THE
COMPANY FOR THE ISSUANCE, WHICH MAY NOT BE EARLIER THAN TEN BUSINESS DAYS AND NO
LATER THAN 60 BUSINESS DAYS AFTER THE COMPANY RECEIVES NOTICE OF THE EXERCISE OF
THE RIGHT.

 

(C)           NOTHING IN THIS SECTION 11 SHALL BE DEEMED TO PREVENT ANY PERSON
FROM PURCHASING FOR CASH OR THE COMPANY FROM ISSUING ANY ADDITIONAL EQUITY
SECURITIES WITHOUT FIRST COMPLYING WITH THE PROVISIONS OF THIS SECTION 11;
PROVIDED THAT, (I) THE BOARD HAS DETERMINED IN GOOD FAITH THAT (A) THE COMPANY
NEEDS A PROMPT CASH INVESTMENT, (B) NO ALTERNATIVE FINANCING ON TERMS NO LESS
FAVORABLE TO THE COMPANY IN THE AGGREGATE THAN SUCH PURCHASE IS AVAILABLE ON A
NO LESS TIMELY BASIS, AND (C) THE DELAY CAUSED BY COMPLIANCE WITH THE PROVISIONS
OF THIS SECTION 11 IN CONNECTION WITH SUCH INVESTMENT WOULD BE REASONABLY LIKELY
TO MATERIALLY ADVERSELY AFFECT THE COMPANY; (II) THE COMPANY GIVES PROMPT NOTICE
TO PAULSON OF SUCH INVESTMENT AS SOON AS PRACTICABLE, AND IN ANY EVENT AT LEAST
FIVE BUSINESS DAYS PRIOR TO THE CONSUMMATION OF SUCH INVESTMENT; AND (III) THE
PURCHASING HOLDER OR THE COMPANY ENABLES PAULSON TO EXERCISE ITS RIGHTS TO
PURCHASE ITS PRO RATA SHARE AS PROMPTLY AS PRACTICABLE FOLLOWING THE INITIAL
PROMPT CASH INVESTMENT.  FOR PURPOSES OF THIS SECTION 11(C), THE TERM “PRO RATA
SHARE” SHALL BE BASED ON PAULSON’S AND ITS AFFILIATES’ BENEFICIAL OWNERSHIP OF
OUTSTANDING EQUITY SECURITIES RELATIVE TO THE TOTAL NUMBER OF OUTSTANDING EQUITY
SECURITIES, IN EACH CASE PRIOR TO THE ISSUANCE BY THE COMPANY OF EQUITY
SECURITIES IN THE TRANSACTION CONTEMPLATED BY THIS SECTION 11(C).

 

12.          MISCELLANEOUS.

 

(A)           SURVIVAL.  THE REPRESENTATIONS AND WARRANTIES, COVENANTS AND
AGREEMENTS CONTAINED IN THIS AGREEMENT SHALL SURVIVE THE EXECUTION OF THIS
AGREEMENT AND ANY INVESTIGATION AT ANY TIME BY OR ON BEHALF OF PAULSON OR THE
COMPANY.  THE PROVISIONS OF SECTION 11 AND, TO THE EXTENT NECESSARY FOR THE
INTERPRETATION OR ENFORCEMENT OF SECTION 11, SECTIONS 8, 9 AND 12, OF THIS
AGREEMENT SHALL SURVIVE THE EXPIRATION OF THIS AGREEMENT.

 

12

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(B)           ENTIRE AGREEMENT.  THIS AGREEMENT CONTAINS THE ENTIRE AGREEMENT
BETWEEN THE PARTIES HERETO CONCERNING THE SUBJECT MATTER HEREOF AND SUPERSEDES
ALL PRIOR WRITTEN AND PRIOR OR CONTEMPORANEOUS ORAL AGREEMENTS BETWEEN THE
PARTIES WITH RESPECT TO SUCH MATTERS.

 

(C)           AMENDMENT.  THE AGREEMENTS SET FORTH IN THIS AGREEMENT MAY BE
MODIFIED OR WAIVED ONLY BY A SEPARATE WRITING BY THE COMPANY AND PAULSON
EXPRESSLY SO MODIFYING OR WAIVING SUCH AGREEMENTS.

 

(D)           NO WAIVER.  NO FAILURE OR DELAY BY THE COMPANY IN EXERCISING ANY
RIGHT, POWER OR PRIVILEGE HEREUNDER SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL
ANY SINGLE OR PARTIAL EXERCISE THEREOF PRECLUDE ANY OTHER OR FURTHER EXERCISE
THEREOF OR THE EXERCISE OF ANY RIGHT, POWER OR PRIVILEGE HEREUNDER.

 

(E)           ASSIGNMENT.  ANY ASSIGNMENT OR ATTEMPTED ASSIGNMENT OF THIS
AGREEMENT BY PAULSON WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY SHALL BE
VOID.

 

(F)            SEVERABILITY.  IF ANY TERM, PROVISION, COVENANT OR RESTRICTION OF
THIS AGREEMENT IS HELD BY A COURT OF COMPETENT JURISDICTION TO BE INVALID, VOID
OR UNENFORCEABLE, THE REMAINDER OF THE TERMS, PROVISIONS, COVENANTS AND
RESTRICTIONS OF THIS AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT AND SHALL
IN NO WAY BE AFFECTED, IMPAIRED OR INVALIDATED.

 

(G)           SPECIFIC PERFORMANCE.  THE PARTIES HERETO AGREE THAT MONEY DAMAGES
WOULD NOT BE A SUFFICIENT REMEDY FOR ANY BREACH OF THIS AGREEMENT AND THAT EACH
OF THE PARTIES HERETO SHALL BE ENTITLED TO SPECIFIC PERFORMANCE AND INJUNCTIVE
OR OTHER EQUITABLE RELIEF AS A REMEDY FOR ANY SUCH BREACH, AND EACH PARTY
FURTHER AGREES TO WAIVE ANY REQUIREMENT FOR THE SECURITY OR POSTING OF ANY BOND
IN CONNECTION WITH SUCH REMEDY.  SUCH REMEDY SHALL NOT BE DEEMED TO BE THE
EXCLUSIVE REMEDY FOR BREACH OF THIS AGREEMENT BUT SHALL BE IN ADDITION TO ALL
OTHER REMEDIES AVAILABLE AT LAW OR EQUITY.

 

(H)           THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH,
AND ENFORCED BY THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE LAWS THAT
MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
THE PARTIES HERETO (I) IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF DELAWARE FOR ANY SUITS, ACTIONS OR PROCEEDINGS ARISING
OUT OF OR RELATED TO THIS AGREEMENT AND IRREVOCABLY WAIVE ALL OBJECTIONS TO SUCH
JURISDICTION, INCLUDING, WITHOUT LIMITATION, ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM, (II) AGREE THAT THIS AGREEMENT HAS BEEN ENTERED INTO IN EXPRESS RELIANCE
UPON 6 DEL. C. SS. 2708, AND (III) IRREVOCABLY AND UNCONDITIONALLY CONSENT TO
SERVICE OF PROCESS IN, SUBMIT TO THE EXCLUSIVE JURISDICTION OF, AND AGREE TO
APPEAR IN, THE COURT OF CHANCERY IN THE STATE OF DELAWARE IN WILMINGTON,
DELAWARE, WITH RESPECT

 

13

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TO ALL ACTIONS AND PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREBY.

 

13.          AMENDMENT AND RESTATEMENT.  THIS AGREEMENT AMENDS AND RESTATES AND
REPLACES IN FULL THE ORIGINAL AGREEMENT.

 

*   *   *   *

 

14

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.

 

 

SUPERMEDIA INC.

 

 

 

By:

 

/s/ Samuel D. Jones

 

 

 

 

 

Name:

 

Samuel D. Jones

 

 

 

 

 

Title:

 

Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

PAULSON & CO. INC.

 

FOR ITS OWN ACCOUNT FOR THE LIMITED PURPOSE OF AGREEING TO BE BOUND SOLELY BY
SECTIONS 2, 3, 4(B), 4(C) AND, TO THE EXTENT NECESSARY FOR THE INTERPRETATION OR
ENFORCEMENT OF ANY OF THE FOREGOING, SECTIONS 8, 9, 10 AND 12 OF THIS AGREEMENT

 

 

 

 

 

By:

 

/s/ Stuart Mercer

 

 

 

 

 

Name:

 

Stuart Mercer

 

 

 

 

 

Title:

 

Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

 

PAULSON & CO. INC.

 

ON BEHALF OF INVESTMENT FUNDS AND ACCOUNTS MANAGED BY IT

 

 

 

 

 

By:

 

/s/ Stuart Mercer

 

 

 

 

 

Name:

 

Stuart Mercer

 

 

 

 

 

Title:

 

Authorized Signatory

 

 

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SCHEDULE A

 

Paulson Recovery Master Fund Ltd.

c/o Paulson & Co. Inc.

1251 Ave of the Americas

New York, NY  10020  USA

 

 

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Exhibit A

 

Amendment to Bylaws

 

 

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