-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V0cUo3WwgaXMU/e5tP1OfRHJJPjXpCO9GzJN1e/L2bxDCZxU5MM7jzCW7+Q9FPIw Y1fK5cVWfOC5l7tOxes5iA== 0000927356-97-001160.txt : 19971007 0000927356-97-001160.hdr.sgml : 19971007 ACCESSION NUMBER: 0000927356-97-001160 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970919 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971006 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CSG SYSTEMS INTERNATIONAL INC CENTRAL INDEX KEY: 0001005757 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 470783182 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-27512 FILM NUMBER: 97691220 BUSINESS ADDRESS: STREET 1: 7887 EAST BELLEVIEW AVE STREET 2: SUITE 1000 CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3037962850 MAIL ADDRESS: STREET 1: 5251 DTC PARKWAY SUITE 625 CITY: ENGLEWOOD STATE: CO ZIP: 80111 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) October 6, 1997 (September 19, 1997) CSG SYSTEMS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) DELAWARE 0-27512 47-0783182 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 7887 East Belleview, Suite 1000 Englewood, Colorado 80111 (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: (303) 796-2850 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On August 10, 1997, CSG Systems International, Inc. (the "Company") signed a 15-year exclusive contract with a Tele-Communications, Inc. ("TCI") affiliate to consolidate 13 million TCI subscribers onto the Company's customer care and billing systems (the "15-Year Contract"). TCI also purchased certain software products of the Company under the 15-Year Contract. On August 10, 1997, the Company also entered into an agreement with TCI affiliates to acquire certain SUMMITrak assets, a client/server, open systems, in-house customer care and billing system developed by TCI and currently in Beta testing. The SUMMITrak assets purchased consisted primarily of software, hardware, people and intellectual property. Both the SUMMITrak asset purchase agreement and the 15- Year Contract closed and became effective September 19, 1997. The purchase price for the SUMMITrak assets was $106 million in cash at closing, up to $26 million in various contingent payments, and warrants to purchase up to 1.5 million shares of the Company's common stock, with the contingent payments and warrants based upon the achievement of certain milestones by TCI specified in the SUMMITrak asset purchase agreement. The SUMMITrak asset acquisition was funded with a $190.0 million debt facility with Banque Paribas, which consisted of a $150.0 million term facility and a $40.0 million revolving facility. The proceeds from the term facility were used to pay the $106 million purchase price at closing, retire the Company's existing debt of $27.5 million, and pay transaction costs of $3.4 million. The remaining proceeds will be used for general corporate needs. No amounts were drawn on the revolving facility at closing. Currently, the Company has approximately 4 million of TCI's subscribers on its systems. The 15-Year Contract replaces the previous agreement with the TCI affiliates which originally covered such subscribers. Under the 15-Year Contract, the Company and TCI plan to consolidate the 13 million subscribers under an agreed upon conversion schedule. Converting multiple sites under an aggressive time schedule poses certain risks. Factors affecting the conversion schedule include the frequency and severity of database discrepancies, installation of compatible hardware, network and software products, as well as the availability and cooperation of qualified personnel from all the parties involved in the conversion. TCI's minimum financial commitments under the 15- Year Contract are subject to certain performance criteria by the Company. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of businesses acquired. None. (b) Pro forma financial information. Pro forma financial information for the Company reflecting the SUMMITrak asset purchase is not currently available and will be filed as soon as practicable, but no later than December 5, 1997. (c) Exhibits. The following exhibits are included: 2.19* Restated and Amended CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and TCI Cable Management Corporation, dated August 10, 1997. 2.20 Asset Purchase Agreement between CSG Systems International, Inc. and TCI SUMMITrak of Texas, Inc., TCI SUMMITrak, L.L.C., and TCI Technology Ventures, Inc., dated August 10, 1997. 2.21 Contingent Warrant to Purchase Common Stock between CSG Systems International, Inc. and TCI Technology Ventures, Inc., dated September 19, 1997. 2.22 Royalty Warrant to Purchase Common Stock between CSG Systems International, Inc. and TCI Technology Ventures, Inc., dated September 19, 1997. 2.23 Registration Rights Agreement between CSG Systems International, Inc. and TCI Technology Ventures, Inc., dated September 19, 1997. 2.24 Loan Agreement among CSG Systems, Inc. and CSG Systems International, Inc. as co-borrowers, and certain lenders and Banque Paribas, as Agent, dated September 18, 1997. _________________ * Portions of the exhibit have been omitted pursuant to an application for confidential treatment, and the omitted portions have been filed separately with the Commission. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CSG SYSTEMS INTERNATIONAL, INC. Dated: October 6, 1997 By: /s/ Randy Wiese --------------- ------------------------------ Randy Wiese Controller (Principal Accounting Officer) CSG SYSTEMS INTERNATIONAL, INC. Exhibit Index
Exhibit Number Description - ------- ----------- 2.19* Restated and Amended CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and TCI Cable Management Corporation, dated August 10, 1997. 2.20 Asset Purchase Agreement between CSG Systems International, Inc. and TCI SUMMITrak of Texas, Inc., TCI SUMMITrak, L.L.C., and TCI Technology Ventures, Inc., dated August 10, 1997. 2.21 Contingent Warrant to Purchase Common Stock between CSG Systems International, Inc. and TCI Technology Ventures, Inc., dated September 19, 1997. 2.22 Royalty Warrant to Purchase Common Stock between CSG Systems International, Inc. and TCI Technology Ventures, Inc., dated September 19, 1997. 2.23 Registration Rights Agreement between CSG Systems International, Inc. and TCI Technology Ventures, Inc., dated September 19, 1997. 2.24 Loan Agreement among CSG Systems, Inc. and CSG Systems International, Inc. as co-borrowers, and certain lenders and Banque Paribas, as Agent, dated September 18, 1997.
_________________ * Portions of the exhibit have been omitted pursuant to an application for confidential treatment, and the omitted portions have been filed separately with the Commission. EX-2.19 2 MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT EXHIBIT 2.19 Pages where confidential treatment has been requested are stamped "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission," and places where information has been redacted have been marked with (***). RESTATED AND AMENDED CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT This RESTATED AND AMENDED CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT (the "Master Agreement") is entered into this 10th day of August, 1997, between CSG Systems, Inc., a Delaware corporation with offices at 2525 North 117th Avenue, Omaha, Nebraska 68164 ("CSG"), and TCI Cable Management Corporation., a Colorado corporation with offices at 5619 DTC Parkway, Englewood, Colorado 80111-3000, (the "Customer"), and restates and amends that certain CSG Master Subscriber Management System Agreement by and between the parties dated August 1, 1997. CSG and Customer agree as follows: Subject to the terms and conditions of this Master Agreement, Customer hereby agrees to purchase and/or license from CSG its subscriber management system solution utilizing the CSG services and products which are identified, provided and/or licensed as set forth in the attached Schedules which are hereby incorporated into and made a part of this Master Agreement by this reference, including, but not necessarily limited to: * Schedule A - CSG's CCS system for subscriber wireline video, wireline ---------- telephony and high speed data/Internet billing management (the "CCS Services"). * Schedule AA - CSG's personal computer based System ("CableMax"). ----------- * Schedule B - CSG technical and consulting services (the "Technical ---------- Services"). * Schedule C - CSG's ACSR Telephony, CSG Vantage(TM), ACSR(TM), and Computer ---------- Based Training add-on products (the "CCS Products"). * Schedule D - Fees ---------- * Schedule E - CSG's data warehouse product ("CSG VantagePoint(TM)") ---------- * Schedule F - CSG's Print and Mail services, including CSG's Enhanced ----------- Statement Presentation(TM) Services (the "Print and Mail Services"). * Schedule G - Incorporated Third Party Software and Licenses and Third Party ---------- Rights * Schedule Q - CSG's ISP Domain middleware software ("ISP Domain") ---------- * Schedule R - CSG's usage handling system (the "Usage Handling System") ---------- The CCS Services, the Technical Services, the Print and Mail Services, and any other CSG service subsequently provided in an executed Schedule attached to this Master Agreement are collectively referred to in this Master Agreement as the "Services". CSG's CableMax, CSG Vantage(TM), ACSR Telephony, ACSR(TM), and Computer Based Training add-on products, VantagePoint(TM), ISP Domain, the Usage Handling System, and any other CSG product subsequently licensed to Customer in an executed Schedule attached to this Master Agreement are collectively referred to in this Master Agreement as the "Products". CSG agrees to license the SummiTrak(TM) and IPPV computer programs and services to Customer, upon commercially reasonable terms and conditions mutually agreeable to the parties, to be negotiated in good faith. CSG acknowledges and agrees that subject to the terms of this Master Agreement, upon reasonable notice by Customer, Customer may convert its subscribers on SummiTrak to the CCS Services. GENERAL TERMS AND CONDITIONS CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES 1. FEES AND EXPENSES. The Products and Services will be provided for the fees set forth on Schedule D. Customer shall also reimburse CSG for reasonable out- ---------- of-pocket expenses, including travel and travel-related expenses that are consistent with CSG's standard travel reimbursement policies, incurred by CSG in connection with CSG's performance of its obligations under this Master Agreement. 2. INVOICES. Unless otherwise provided herein, Customer shall pay amounts due hereunder within forty five (45) days after receipt of invoice therefor. Any amount not paid and not disputed in good faith when due shall thereafter bear interest until paid at a rate equal to the lesser of one and one-half percent (1 1/2%) per month or the maximum rate allowed by applicable law. 3. TAXES. All amounts payable by Customer to CSG under this Master Agreement are exclusive of any applicable value added, use, sales, service, property or other taxes, tariffs or contributions that may be assessable by a governmental agency in connection with this Agreement. Customer will pay any such applicable value added, use, sales, service, property or other taxes, tariffs or contributions, in addition to the amount due and payable. Customer will promptly furnish CSG with the official receipt of payment of these taxes to the appropriate taxing authority. Notwithstanding the foregoing, Customer is not responsible for paying or reimbursing CSG for corporate franchise tax, capital tax, net worth tax or tax measured by reference to CSG's net income. 4. ADJUSTMENT TO FEES. Except as otherwise set forth in Schedule D, CSG shall ---------- not adjust any of the fees specified in Schedule D or otherwise specified in ---------- Schedules hereto prior to January 1, 1998. Thereafter, upon forty five (45) days prior written notice thereof, CSG may increase such fees annually by an amount equal to the greater of (i) three percent (3%), or (ii) 100 percent of the percentage increase in the Consumer Price Index, Urban Consumers, All Cities Averaged 1982-84 Equals 100, during the prior calendar year as published by the U.S. Department of Labor or any successor index (the "CPI"), plus one half percent (1/2%), for the purpose of this subsection 4(ii). 5. SHIPMENT. CSG will ship the Products, any Incorporated Third Party Software, and any other third party software from its distribution center, subject to delays reasonably beyond CSG's control. Customer will select the method of shipment via tape or by electronic file transfer for Customer's account. The license granted to the Products as set forth in the Schedule(s) commences upon CSG's delivery of the Products to the carrier for shipment to Customer. Upon timely notice by Customer to CSG, CSG will promptly replace, at CSG's expense, any Products that are lost or damaged while in route to Customer. 6. EQUIPMENT. (a) Equipment Lease. --------------- (i) System Sites. CSG agrees to provide Customer, at no cost to Customer, ------------ for each System Site that used the CCS Services prior to July, 1997: (A) two (2) printers with ratings as follows:
Number of Subscribers Per System Site 200cps 400cps 410 1pm --------------------------------------- ------ ------ ------- under 12,000 1 1 0 12,000 - 17,000 1 0 1 17,001 - 50,000 0 1 1 over 50,000 0 0 2
(B) one CRT terminal for each 2,000 subscribers or any portion thereof; and one communication controller (except for System Sites with fewer than 12,000 subscribers). (ii) Satellite Offices. Satellite Offices of System Sites can have access ----------------- to the CCS Services by using a remote dial-up terminal. The remote dial-up terminal requires a protocol converter located at its System Site Office. The charges for the protocol converter, remote dial-up terminal, and the communication lines will be the responsibility of Customer. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES (iii) Additional Equipment. In the event Customer elects for CSG to provide -------------------- equipment in addition to that set forth in this Section 6(a), then Customer agrees to purchase the equipment and pay the fees set forth in Schedule D or if ---------- the fees are not set forth in Schedule D for a particular piece of equipment, ---------- CSG's then current rates for such equipment. (iv) Risk of Loss. Upon installation of the equipment at Customer's location ------------ and during the periods while Customer is using the equipment, (including any relocation by Customer), all risk of loss associated with theft or damage to the equipment shall be Customer's responsibility, reasonable wear and tear excepted. (v) Limitation of Liability for Equipment. Except as expressly provided in ------------------------------------- this Section 6, CSG shall not be liable for any loss or damage claimed to have resulted from the use of the equipment and maintenance of the equipment or to be related in any way to the transactions to which this Section 6 relates, regardless of the form of action. Customer shall indemnify and hold CSG harmless for any and all liability, loss, claim or damage to persons or property arising out of Customer's possession, operation or use of the equipment or arising out of the negligence of Customer, its employees or agents. (vi) Ownership of the Equipment. Unless CSG transfers the equipment to -------------------------- Customer pursuant to Section 6(a)(iii) above, Customer hereby agrees that CSG is and shall be the owner of the equipment provided pursuant to this Section 6(a). CSG shall have free and complete access to the equipment at all reasonable times upon providing Customer reasonable notice of CSG's desire to inspect the equipment. Accordingly, CSG shall be responsible for all property taxes reasonably documented associated with the equipment provided by CSG under this Section 6. (vii) Care and Use of the Equipment. Customer shall care for the equipment ----------------------------- and not use or permit it to be used for any purpose for which the equipment is not designed or reasonably suited. CSG will reasonably cooperate with Customer in the assignment and assumption of any third party vendor maintenance agreements. (viii) Confirmation of Equipment. At least annually, CSG shall notify ------------------------- Customer and provide Customer with an inventory of all CSG's equipment located at Customer's System Sites. Customer hereby agrees to review such inventory and confirm the model number, serial number and manufacturer of the equipment located at each of Customer's System Sites. In the event a discrepancy exists between the inventory provided by CSG and the review performed by Customer, then Customer shall notify CSG promptly of such discrepancy. In addition, upon request of CSG, an authorized representative from Customer shall certify, in writing, as to the accuracy of the review performed by Customer based on the inventory that was provided by CSG. (b) Equipment Transfer. ------------------ (i) In consideration of the amounts previously paid under the lease agreements between Customer and CSG, CSG will transfer to Customer, as of the Effective Date (as defined in Section 15), all equipment previously furnished by CSG to Customer under the Billing Agreement as defined in Section 35. CSG provides the equipment "AS-IS". CSG will reasonably cooperate with Customer to obtain the assignment of the manufacturers warranties with respect to such equipment, if any, provided that such cooperation is at no cost to CSG. After the Effective Date, Customer shall be responsible for maintaining all of the Equipment acquired from CSG herein. CSG hereby agrees that Customer will be the owner of the equipment and be responsible for all property taxes associated with such equipment. (ii) On or after the Effective Date, CSG agrees to promptly provide Customer a list detailing the equipment to be acquired under this Section 6(b). (c) Maintenance of Equipment. Through the Effective Date, Customer shall be ------------------------ responsible for maintaining all of the equipment provided to Customer under this Section 6, reasonable wear and tear excepted. (d) Disclaimer of Warranties. THE EQUIPMENT SET FORTH IN THIS SECTION 6 MAY ------------------------ HAVE MANUFACTURER'S WARRANTIES ASSOCIATED WITH IT. TO THE EXTENT CSG RECEIVES ANY SUCH WARRANTY, CSG SHALL, SUBJECT TO SECTION 6(b)(i) ALLOW IT TO BE EXTENDED TO CUSTOMER; PROVIDED, HOWEVER, CUSTOMER EXPRESSLY UNDERSTANDS AND AGREES, NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THAT: (i) CSG IS NOT THE MANUFACTURER OF THE EQUIPMENT WHICH IS THE SUBJECT OF THIS AGREEMENT; (ii) CSG MAKES AND CUSTOMER RECEIVES NO WARRANTY EXPRESS OR IMPLIED REGARDING THE EQUIPMENT PROVIDED HEREUNDER CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES AND THERE ARE EXPRESSLY EXCLUDED ALL WARRANTIES OF MERCHANTABILTIY AND FITNESS FOR A PARTICULAR PURPOSE FOR SUCH EQUIPMENT; AND (iii) CSG SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER ANY PROVISION OF THIS AGREEMENT INCLUDING, BUT NOT LIMITED TO, SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY, PUNITIVE, AND/OR INCIDENTAL AND/OR ANY OTHER DAMAGES OF ANY TYPE OR KIND FOR THE EQUIPMENT FURNISHED HEREUNDER. 7. PRODUCTS WARRANTIES AND REMEDIES. (a) Limited Warranty. Except as provided in this Section 7 and Sections 8, 9, ---------------- and 10, CSG warrants that (i) the Products and Services will conform to CSG's published specifications in effect on the date of delivery, (ii) the Products and Services will perform in a certified "Designated Environment" (as defined in the applicable Schedules, attached hereto) substantially as described in the accompanying Documentation for a period of ninety (90) days after the date of delivery (the "Warranty Period"), and (iii) the Services will be performed in accordance with customary industry standards and in a good workmanlike manner. Notwithstanding the foregoing, if Customer modifies VantagePoint by altering any of the source code provided by CSG, this limited warranty will be void as it relates to VantagePoint. Except as set forth in Schedule G, CSG provides all ---------- third party software including the "Incorporated Third Party Software" (as defined in Section 8), AS IS. Customer agrees that CSG shall have no liability to Customer for any damages, however designated, with respect to providing all or any portion of the Purchased Assets, as that term is defined in the Asset Purchase Agreement, by and between CSG and "TCI," (as such term is defined therein) of even date herewith (the "Purchase Agreement"); provided, however, that Customer shall not be deemed to have waived its rights under this Master Agreement if the damages arise solely from CSG's enhancements, modifications or combination of the Purchased Assets with other Products and Services provided by CSG. Customer acknowledges that (i) the Products and the Incorporated Third Party Software may not satisfy all of Customer's requirements and (ii) the use of the Products and the Incorporated Third Party Software may not be uninterrupted or error-free. Customer further acknowledges that (i) the fees set forth in Schedule D and other charges contemplated under this Master Agreement ---------- are based on the limited warranty, disclaimers and limitation of liability specified in this Section and Sections 8, 9, 10, 13 and 14, and (ii) such charges would be substantially higher if any of these provisions were unenforceable. (b) Remedies Relating to Product and Services. In case of breach of warranty ----------------------------------------- set forth in Section 7(a) above relating to Products and Services or any other duty related to the quality of the Products or Services, CSG or its representative will correct or replace any defective Product or Service or, if not practicable, CSG will accept the return of the defective Product and refund to Customer (i) the amount actually paid to CSG allocable to the defective Product, and (ii) a pro rata share of the maintenance fees that Customer actually paid to CSG for the period that such Product was not usable. Any claim for a breach of Services must be submitted to CSG within ninety (90) days of the event giving rise to the claim. All Products and Services shall be deemed accepted by Customer unless a timely claim is made to CSG. Customer acknowledges that this Section 7(b) sets forth Customer's exclusive remedy, and CSG's exclusive liability, for any breach of Section 7(a) warranty or other duty related to the quality of the Products or Services. THE REMEDIES SET FORTH IN THIS PARAGRAPH ARE SUBJECT TO THE "LIMITATION OF REMEDIES" SET FORTH BELOW IN SECTION 13. (c) CSG Legal Rights. CSG represents and warrants that except as otherwise ---------------- specifically provided in Schedule G, (i) CSG owns or otherwise has the right to ----------- license all U.S. patents, copyrights, trade secrets and other proprietary rights in or to the Products and Services, (ii) the Products and Services do not infringe a U.S. patent, copyright, trade secret or other proprietary right owned by a third person, (iii) CSG possesses the legal right and authority to execute and perform this Agreement and (iv) its execution and performance will not violate any other material agreement or obligation by which CSG may be bound. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES (d) Customer Legal Rights. Customer on its own behalf, and on behalf of its --------------------- subsidiaries and Affiliates (as defined below), represents and warrants that (i) it possesses the legal right and authority to execute and perform this Master Agreement and (ii) its execution and performance will not violate any other material agreement or obligation by which Customer or its subsidiaries and Affiliates may be bound; provided, however, that Customer will not be required to perform or adhere to the provisions of Section 31 with respect to such Existing Customer Agreements until such Existing Customer Agreements are terminated pursuant to Section 7(e). For the purposes of this Agreement, Affiliates shall mean any cable or cable service provider (i) in which Customer exercises exclusive management control or otherwise has the ability to direct the engagement of outside vendors or service providers or (ii) in which Customer owns, directly or indirectly, 40% or more of the equity interest, unless Customer reasonably demonstrates that it does not have the powers described in Section 7(d)(i) despite such equity ownership. (e) Existing Customer Agreements. Existing Customer Agreements mean those ---------------------------- agreements that, unless terminated, would violate Customers representations and warranties contained in Section 7(d)(ii). Except for the Existing Customer Agreements that relate directly to the implementation, delivery or support of Customer's digital products and services, Customer agrees that (i) Customer will not renew any Existing Customer Agreement and (ii) Customer will use its best efforts to terminate all other Existing Customer Agreements, but only in strict accordance with their terms or pursuant to such other terms agreeable to the parties to such Existing Customer Agreement, if required by such Existing Customer Agreement. In no event will the Existing Customer Agreements affect the terms and conditions of Exhibit A-1 or the Minimum set forth in Section 30. CSG will use reasonable efforts to (i) execute an agreement with Customer for print and mail services for such affected wireline video subscribers and provide the print and mail services to such affected wireline video subscribers within ninety (90) days of the termination date of the applicable Existing Customer Agreement and (ii) execute an agreement with Customer for wireline telephony services for such affected subscribers and to provide the wireline telephony services to such affected subscribers within one hundred and eighty (180) days of the termination date of the applicable Existing Customer Agreement. (f) Further Assurances. CSG and Customer each agree that it will not take any ------------------ action on or after the Effective Date that would cause any of their representations set forth in this Section 7 to be materially untrue. (g) Indemnity. Each party will promptly notify the other if any claim is --------- brought against it that arises from a breach of the other party's representations and warranties set forth in Section 7(c), 7(d) or 7(f) above, as applicable. The breaching party will indemnify the other party with respect to such claim pursuant to Section 12 below. 8. INCORPORATED THIRD PARTY SOFTWARE OR THIRD PARTY RIGHTS. Customer acknowledges that the Products incorporate certain third party computer programs and documentation (the "Incorporated Third Party Software") and/or the Products are licensed and the Services are offered under certain third party patent, copyright or other rights (the "Third Party Rights"), which are subject to the additional or alternative terms and conditions set forth in Schedule G, as ---------- applicable (the "Incorporated Licenses"). Customer will execute the additional documents that such vendors may reasonably require to enable CSG to deliver the Incorporated Third Party Software to Customer. Except as otherwise provided in Schedule G, CSG makes no warranty and provides no indemnity with respect to the - ---------- Incorporated Third Party Software or the Third Party Rights. The fees for all Incorporated Third Party Software are the responsibility of CSG unless otherwise specified on Schedule D. ---------- 9. OTHER THIRD PARTY SOFTWARE. Customer acknowledges that CSG will deliver the System together with certain third party software other than Incorporated Third Party Software, and that Customer's rights and obligations with respect to such other third party software are subject to the license terms accompanying the specific item of third party software. CSG is not a party to any license between Customer and any licensor of such third party software, and CSG makes no warranty and provides no indemnity with respect thereto. The fees for all other third party software are the responsibility of CSG unless otherwise specified on Schedule D. - ---------- CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES 10. TECHNICAL SERVICES WARRANTY. CSG represents and warrants that (i) CSG will perform the Technical Services in a good workmanlike manner and (ii) the Deliverables as defined in Schedule B will substantially conform to the ---------- applicable specifications set forth in any executed Statement of Work attached to Schedule B for a period of ninety days after the date of completion of the ---------- Deliverables as set forth on the applicable Statement of Work. In case of breach of this Technical Services' warranty or any other legal duty to Customer for the Technical Services, CSG's exclusive liability, and Customer's exclusive remedy, will be to obtain (i) the reperformance of the Technical Service or the correction or replacement of the Deliverable or (ii) if CSG determines that such remedies are not practicable, a refund of the Project Fees (as defined in Schedule B) allocable to such Technical Service or Deliverable. ALL OTHER - ---------- WARRANTIES OR CONDITIONS, WHETHER EXPRESS OR IMPLIED (INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE, TITLE), ARE HEREBY DISCLAIMED. 11. REPORTING. With respect solely to Oracle, on a quarterly basis, within thirty (30) days of the end of every calendar quarter, Customer shall provide CSG with a quarterly report setting forth the number of concurrent users of the Products and any Incorporated Third Party Software by setting forth the number of workstations/seats utilizing each of the Products and any Incorporated Third Party Software. 12. INDEMNITY. (a) Except as provided in Schedule G and Sections 7 and 14, CSG (i) warrants ---------- that the Services, Products and all components thereof, including any Incorporated Third Party Software, as delivered to Customer, and their use in the manner described by this Agreement, do not and will not infringe upon any right, tradename, trademark, copyright, patent, trade secret or other intellectual property right of any third party and (ii) agrees that if any action based upon a breach of the warranty contained in the preceding sentence is instituted against Customer based upon a claim that the Services, Products or any component thereof, including any Incorporated Third Party Software, infringe any right, tradename, trademark, copyright, patent, or other intellectual property right ("Infringement Action"), CSG shall, for and on behalf of Customer, indemnify Customer for any losses, damages, claims or liabilities awarded to a third party and resulting from such infringement and shall defend Customer at CSG's expense against such Infringement Action. CSG's liability hereunder is contingent upon: (i) Customer promptly notifying CSG in writing of said Infringement Action; and (ii) CSG having sole control of the defense of any such claim and any settlement negotiations. To the extent such Infringement Action solely involves the Services, Products, or any component thereof, including any Incorporated Third Party Software, CSG shall have sole control of the defense and any settlement negotiations. CSG will not voluntarily enter into any injunction without Customer's consent, which shall not be unreasonably withheld. To the extent such Infringement Action involves the Services, Products or any component thereof, including any Incorporated Third Party Software, as well as other Customer subject matter, CSG and Customer agree to cooperate in the defense and any settlement negotiations in such Infringements Action; provided that, in the event CSG and Customer cannot reach agreement then CSG shall have sole control over only that portion of the Infringement Action involving Services, Products and all components thereof, including any Incorporated Third Party Software, and Customer shall have sole control over the remaining portions of such Infringement Action at its sole risk and expense, including without limitation the payment of any damages awarded. For the purpose of this Section 12, if as a result of an Infringement Action, CSG fails to perform the material terms of this Master Agreement, then the provisions of this Section 12 shall apply. CSG shall, at its sole cost and expense, procure for Customer another vendor providing the same or similar services as CSG and CSG shall pay all reasonable costs and expenses in connection with such procurement and conversion to such vendor; provided, however, that CSG's obligation hereunder is expressly conditioned upon the following; (i) Customer pays to CSG all of the costs and fees that would have been due hereunder had there been no Infringement Action; and (ii) CSG has sole control over the negotiation of the terms, conditions and fees associated with such substitute vendor. (b) CSG shall have no liability to Customer for any infringement action or claim which would not have occurred but for, and which is based upon or arises out of; (i) any modification of the Products by Customer without the express written permission of CSG; or (ii) any use of the Products in combination with (A) any other system, equipment or software which is not furnished by CSG or approved by CSG in writing or (B) any peripheral equipment, such as PCs, printers or communication devices, which may reasonably be anticipated to be used by Customer. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES (c) If any action in instituted against CSG based upon a claim that any materials such as artwork or inserts provided by Customer to CSG infringe a United States patent, copyright or trademark, Customer shall, for and on behalf of CSG, defend and indemnify such action at Customer's expense, provided CSG promptly notifies Customer in writing of said action and Customer has sole control of the defense and any settlement negotiations. (d) If an Infringement Action may be or has been asserted, Customer will permit CSG, at CSG's option and expense, to (i) procure the right to continue using the Product, or (ii) replace or modify the Product to eliminate the infringement while providing functionally equivalent performance. (e) For purposes of this Section 12, the term "third party" shall be deemed to be any entity other than Customer, any entity controlled by, controlling or under common control of Customer ("Customer Affiliates"), or any entity in which a Customer Affiliate has any ownership or other control interest. (f) This Section 12 shall be the sole and exclusive liability of CSG and remedy of Customer relating to an Infringement Action. 13. LIMITATION OF REMEDIES. EXCEPT AS EXPRESSLY PROVIDED IN THIS MASTER AGREEMENT, ALL WARRANTIES, CONDITIONS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES WITH RESPECT TO THE PRODUCTS, THE INCORPORATED THIRD PARTY SOFTWARE, OTHER THIRD PARTY SOFTWARE, AND THE SERVICES, WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR WRITTEN STATEMENTS BY CSG, ITS AGENTS OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY, SATISFACTION, OR FITNESS FOR PARTICULAR PURPOSE) ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED. CUSTOMER ACKNOWLEDGES AND AGREES THAT THE PRODUCTS AND SERVICES BEING PROVIDED ARE NOT WARRANTED TO BE ERROR-FREE. 14. NO CONSEQUENTIAL DAMAGES. UNDER NO CIRCUMSTANCES WILL EITHER PARTY OR ITS RELATED PERSONS BE LIABLE TO THE OTHER PARTY OR CSG'S LICENSORS AND VENDORS BE LIABLE TO CUSTOMER FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON THE OTHER PARTY'S CLAIMS OR THOSE OF ITS CUSTOMERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA, GOODWILL, USE OF MONEY OR USE OF THE PRODUCTS, RESULTING REPORTS, THEIR ACCURACY OR THEIR INTERPRETATION, INTERRUPTION IN USE OR AVAILABILITY OF DATA, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS), ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY, BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE; PROVIDED, HOWEVER, THAT FOR THE PURPOSES OF THIS SECTION, AN AWARD OF CONSEQUENTIAL DAMAGES TO A THIRD PARTY IN A FINAL JUDGMENT AGAINST CUSTOMER OR CSG SHALL BE DEEMED TO BE ACTUAL DAMAGES FOR THE PURPOSES OF SECTION 12. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS MASTER AGREEMENT, IN NO EVENT WILL THE AGGREGATE LIABILITY WHICH CSG OR CUSTOMER, THEIR LICENSORS OR THEIR VENDORS MAY INCUR IN ANY ACTION OR PROCEEDING EXCEED FORTY FOUR MILLION DOLLARS ($44,000,000). DESPITE THE FOREGOING EXCLUSION AND LIMITATION, THIS SECTION WILL NOT APPLY TO THE EXTENT THAT APPLICABLE LAW SPECIFICALLY REQUIRES LIABILITY. THE PRECEDING TWO SENTENCES SHALL NOT APPLY TO NOR LIMIT THE RIGHTS AND OBLIGATIONS OF CSG AND CUSTOMER SET FORTH IN SECTION 12 AND 44. FOR THE PURPOSE OF THIS SECTION 14, THE TERM "THIRD PARTY" SHALL BE ANY ENTITY OTHER THAN CUSTOMER, ANY ENTITY CONTROLLED BY, CONTROLLING OR UNDER COMMON CONTROL OF CUSTOMER ("CUSTOMER AFFILIATES"), OR ANY ENTITY IN WHICH A CUSTOMER AFFILIATE HAS ANY OWNERSHIP OR OTHER CONTROL INTEREST. 15. TERM. This Master Agreement shall be effective on and as of the Closing, as that term is defined in Section 4 of the Purchase Agreement (the "Effective Date"). Unless terminated pursuant to Section 16 and 17, this Master Agreement shall continue until December 31, 2012 but in any case the term of this Master Agreement shall extend for the term of any license granted under an executed Schedule hereto; provided, however, that, such extension shall relate solely to those provisions of the Master Agreement that survive pursuant to Section 20 hereof. The term of any specific license for the Products and the term for any specific Services to be provided shall be set forth in the Schedules attached hereto and shall be effective from the date set forth therein and continue as provided for therein, unless terminated pursuant to Section 17 of this Master Agreement. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES 16. ANNUAL TECHNICAL AUDIT. CSG and Customer shall annually designate and split the costs of a third party (the "Auditor") with significant knowledge and background in the customer care and billing industry for wireline video subscribers (the "Industry") to conduct a technical audit of the Products and Services provided by CSG under this Master Agreement (the "Audit"). The Auditor shall issue a report as to whether such Products and Services, taken as a whole, do not include features and functionalities that have become standard in the Industry (the "Innovations"). The Auditor will conduct said Audit and issue its report simultaneously to the parties within 45 days of the parties' request for the Audit. Customer may request that CSG incorporate such Innovations into its Products and Services pursuant to a Statement of Work (as contemplated under Schedule B). For Audits conducted up to and including the fourth anniversary of - ---------- this Master Agreement, CSG shall have until the fifth anniversary of this Agreement, or such other time period mutually agreeable to the parties, to incorporate such Innovation recommended by the Auditor, in accordance with the terms and conditions contained in the applicable Statement of Work. For Audits conducted after the fifth anniversary of this Master Agreement up to and including the ninth anniversary of this Agreement, CSG shall have until the tenth anniversary of this Agreement, or such other time period mutually agreeable to the parties, to incorporate such Innovation recommended by the Auditor, in accordance with the terms and conditions contained in the applicable Statement of Work. Notwithstanding the foregoing, CSG will use commercially reasonable efforts to incorporate such Innovations in a shorter period of time. In the event that CSG fails to incorporate such Innovations within the applicable schedule set forth in this Section, then CSG shall release Customer from the exclusivity requirements contained in this Master Agreement, but only to the extent necessary for Customer to obtain such Innovation from a third party, but only if such third party is able to provide such Innovations on commercially reasonable terms and conditions and subject to the deadlines imposed upon CSG under this Section. In such event, CSG will provide Customer with reasonable assistance in connection with the incorporation of such Innovation obtained from said third party. Should CSG's failure to incorporate the Innovations under the terms and conditions of this Section cause the value to Customer of the Products and Services specified in Section 31, taken as a whole, to be substantially and materially reduced in a manner that substantially frustrates the business purpose of this Master Agreement or has a material adverse affect on Customer's business as a whole, then Customer may terminate this Agreement immediately upon notice to CSG, subject to the escalation provisions of Section 34(a). 17. TERMINATION. This Master Agreement or any one or more of the Schedules attached hereto may be terminated for cause as follows: (a) If either party materially or repeatedly defaults in the performance of their respective material obligations hereunder, except for Customer's obligation to pay fees, and fails either to substantially cure such default within thirty (30) days after receiving written notice specifying the default or, for those defaults which cannot reasonably be cured within thirty (30) days, fails to promptly commence curing such default and thereafter fails to proceed with all due diligence to substantially cure such default, then the party not in default may, by giving at least ninety 90 days written notice to the defaulting party, terminate this Master Agreement or any one or more of its Schedules. (b) If Customer fails to pay when due any amounts not disputed in good faith owed hereunder, then CSG may, after giving sixty (60) business days' written notice thereof to Customer, terminate this Master Agreement or at CSG's option, CSG may terminate any one or more of the Schedules attached hereto. (c) In the event that either party hereto becomes or is declared insolvent or bankrupt, is the subject of any proceedings related to its liquidation, insolvency or for the appointment of a receiver or similar officer for it, makes an assignment for the benefit of all or substantially all of its creditors, or enters into an agreement for the composition, extension or readjustment of all or substantially all of its obligations, then the other party hereto may, by giving written notice thereof to such party, terminate this Master Agreement as of the date specified in such notice of termination. (d) At the fifth and tenth year anniversary of this Agreement, in the event that CSG has materially or repeatedly failed to substantially comply with its material obligations hereunder taken as a whole, then, subject to the escalation provisions of Section 34(a), the Customer may terminate this Master Agreement immediately upon notice to CSG, without further obligation or liability, except for matters that relate to events or actions that occurred prior to said termination. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES (e) Upon the termination of the Master Agreement or any one or more of the Schedules attached hereto, for any reason, all rights granted to Customer under this Master Agreement or the terminated Schedule(s) will cease, and Customer will promptly (i) purge all the Products from the Designated Environment and all of Customer's other computer systems, storage media and other files; (ii) destroy the Products and all copies thereof; (iii) deliver to CSG an affidavit which certifies that Customer has complied with these termination obligations; and (iv) pay to CSG all fees that are due and not reasonably disputed, pursuant to this Master Agreement, including, without limitation, the aggregate Minimum fees otherwise due and payable by Customer pursuant to the terms of this Master Agreement, unless CSG terminates this Master Agreement other than as the result of Customer's breach thereof or Customer terminates this Master Agreement for a material uncured breach by CSG. Notwithstanding the foregoing, if only one or more of the Schedules are terminated, Customer must comply with the requirements of this paragraph only with respect to the specific Products set forth in the terminated Schedule(s). 18. TERMINATION ASSISTANCE. Upon expiration or earlier termination of this Master Agreement or termination of Schedule A by either party for any reason, ---------- CSG will provide Customer, reasonable termination assistance for up to ninety (90) days relating to the transition to another vendor. This termination assistance will be provided to Customer at CSG's then standard published rates provided to CSG's sales force unless CSG has materially defaulted under the terms of this Master Agreement in which case the termination assistance will be provided to Customer at no charge. If this Master Agreement expires or is terminated earlier by CSG in accordance with the terms of this Master Agreement, then Customer will pay CSG, in advance, on the first day of each calendar month and as a condition to CSG's obligation to provide termination assistance to Customer during that month, an amount equal to CSG's reasonable estimate of the total amount payable to CSG for such termination assistance for that month. In the event of a conflict between this Section and Section 4 of Schedule A, then ---------- Section 4 of Schedule A shall govern. ---------- 19. CONFIDENTIALITY. (a) Definition. Customer and CSG will provide to each other or will come into ---------- possession information relating to each other's business, CSG's Products and Services and the Incorporated Third Party Software which is considered confidential (the "Confidential Information"). Customer acknowledges that confidentiality restrictions are imposed by CSG's licensors or vendors. Confidential Information shall include, without limitation, all of Customer's and CSG's trade secrets, and all know-how, design, invention, plan or process and Customer's data and information relating to Customer's and CSG's respective business operations, services, products, research and development, CSG's vendors' or licensors' information and products, and all other information that is marked "confidential" or "proprietary" prior to or upon disclosure, or which, if disclosed orally, is identified by the disclosing party at the time as being confidential or proprietary and is confirmed by the disclosing party as being Confidential Information in writing within thirty (30) days after its initial disclosure. (b) Restrictions. Each party shall use its reasonable best efforts to maintain ------------ the confidentiality of such Confidential Information and not show or otherwise disclose such Confidential Information to any third parties, including, but not limited to, independent contractors and consultants, except as to those that have executed a non-disclosure agreement reasonably acceptable to CSG, without the prior written consent of the disclosing party. Each party shall use the Confidential Information solely for purposes of performing its obligations under this Master Agreement. Each party shall indemnify the other for any loss or damage the other party may sustain as a result of the wrongful use or disclosure by such party (or any employee, agent, licensee, contractor, assignee or delegate of the other party) of its Confidential Information. Customer and CSG will not allow the removal or defacement of any confidentiality or proprietary notice placed on any CSG documentation or products. The placement of copyright notices on these items will not constitute publication or otherwise impair their confidential nature. (c) Disclosure. Neither party shall have any obligation to maintain the ---------- confidentiality of any Confidential Information which: (i) is or becomes publicly available by other than unauthorized disclosure by the receiving party; (ii) is independently developed by the receiving party; (iii) is received from a third party who has lawfully obtained such Confidential Information without a confidentiality restriction, (iv) was already known to Customer or CSG on a non- confidential basis, as evidenced by the recipient's records, prior to the disclosure to the other; or (v) is at any time furnished to a third party by either party without restrictions on the third party's right to disclose. If required by any court of competent jurisdiction or other governmental authority, the receiving party may disclose to such authority, data, information or materials involving or pertaining to Confidential Information to the extent required by such order or authority, provided that the receiving party shall first have used its best efforts to obtain a protective order or other protection reasonably satisfactory to the disclosing party sufficient to maintain the confidentiality of such data, information CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES or materials. If an unauthorized use or disclosure of Confidential Information occurs, the parties will take all steps which may be available to recover the documentation and/or products and to prevent their subsequent unauthorized use or dissemination. (d) Limited Access. Each party shall limit the use and access of Confidential -------------- Information to such party's bona fide employees or agents, or consultants (who have executed a non-disclosure agreement reasonably acceptable to CSG), including independent auditors and required governmental agencies, who have a need to know such information for purposes of conducting the receiving party's business and who agree to comply with the use and non-disclosure restrictions applicable to the products and documentation under this Master Agreement. If requested, receiving party shall cause such individuals to execute appropriate confidentiality agreements in favor of the disclosing party. Each party shall notify all employees and agents who have access to Confidential Information or to whom disclosure is made that the Confidential Information is the confidential, proprietary property of the disclosing party and shall instruct such employees and agents to maintain the Confidential Information in confidence. 20. SURVIVAL. Termination of this Master Agreement shall not impair either party's then accrued rights, obligations, liabilities or remedies. Notwithstanding any other provisions of this Master Agreement to the contrary, the terms and conditions of Sections 3, 7, 8, 9, 10, 12, 13, 14, 15, 17, 18, 19, 20, 21, 22, 24, 28, 30, 33(b) and 34 shall survive the termination or expiration of this Master Agreement. With respect to licenses granted to Customer pursuant to any Schedule to this Master Agreement, the following Sections of the Master Agreement shall survive for the term of such licenses: 7, 8, 9, 10, 12, 13, 14, 17, 19, 22, 28, 33(b) and 34. 21. NATURE OF RELATIONSHIP. CSG, in furnishing Services and licensing Products to Customer hereunder, is acting only as an independent contractor. CSG does not undertake by this Master Agreement or otherwise to perform any obligation of Customer, whether regulatory or contractual, or to assume any responsibility for Customer's business or operations. Customer understands and agrees that CSG may perform similar services for third parties and license same or similar products to third parties. Nothing in this Master Agreement shall be deemed to constitute a partnership, joint venture, or joint employer between CSG and Customer. Neither party shall hold itself out as having any authority to enter into any contract or create any obligation or liability on behalf of or binding upon the other party. 22. OWNERSHIP. All trademarks, service marks, patents, copyrights, trade secrets and other proprietary rights in or related to the Products, the "Deliverables" as defined under Schedule B, the Incorporated Third Party ---------- Software and other third party software (collectively the "Software Products") are and will remain the exclusive property of CSG or its licensors, whether or not specifically recognized or perfected under applicable law. Customer will not take any action that jeopardizes CSG's or its licensor's proprietary rights or acquire any right in the Software Products, except the limited use rights specified in the Schedules to this Master Agreement Except as otherwise explicitly set forth in writing between CSG and Customer, CSG or its licensor will own all rights in any copy, translation, modification, adaptation or derivation of the Software Products, including any improvement or development thereof. Customer will obtain, at CSG's request, the execution of any instrument that may be appropriate to assign these rights to CSG or its designee or perfect these rights in CSG's or its licensor's name. 23. RESTRICTED RIGHTS. Use, duplication or disclosure by the U.S. Government or any of its agencies is subject to restrictions set forth in the Commercial Computer Software and Commercial Computer Software Documentation clause at DFARS 227.7202 and/or the Commercial Computer Software Restricted Rights clause at FAR 52.227.19(c) CSG Systems, Inc., 2525 North 117th Street, Omaha, Nebraska 68164. 24. INSPECTION. (a) CSG. During the term of this Master Agreement and for twelve (12) months --- after its termination or expiration for any reason, CSG, Customer or their representative may, upon prior notice to the other party, inspect the files, computer processors, equipment and facilities of Customer during normal working hours to verify Customer's compliance with this Master Agreement. While conducting such inspection, CSG, Customer or their representative will be entitled to copy any item that Customer may possess in violation of this Master Agreement; provided, however, if there is a disparagement as to whether there is a violation, or if such items as subject to third party rights or otherwise confidential, Customer will segregate them pending a resolution of the issue. (b) Customer. During the term of this Master Agreement and for a period of -------- twelve (12) months after its termination or expiration for any reason, Customer may, upon no less than thirty (30) days prior notice to CSG and during CSG's normal business hours, conduct an audit of CSG's records regarding Reimbursable Expenses and hourly charges. Such audit shall CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES be at Customer's expense and conducted by an independent third party auditor reasonably acceptable to CSG (the "Auditor") and at all times such Auditor shall be accompanied by CSG personnel. During such audit, the Auditor shall comply with and abide by all CSG workplace and security requirements. In the event that such audit reveals that CSG has overreported such costs and charges by more than five percent (5%) or one hundred thousand dollars ($100,000), whichever is greater, then CSG will reimburse Customer for the cost of such audit in addition to the amounts owed as revealed by such audit. Customer may exercise such audit right no more frequently than once per quarter. 25. FORCE MAJEURE. Neither party will be liable for any failure or delay in performing an obligation under this Master Agreement that is due to causes beyond its reasonable control, including, but not limited to, fire, explosion, epidemics, earthquake, lightening, failures or fluctuations in electrical power or telecommunications equipment, accidents, floods, acts of God, the elements, war, civil disturbances, acts of civil or military authorities or the public enemy, fuel or energy shortages, acts or omissions of any common carrier, strikes, labor disputes, regulatory restrictions, restraining orders or decrees of any court, changes in law or regulation or other acts of governmental, transportation stoppages or slowdowns or the inability to procure parts or materials. 26. ASSIGNMENT. Neither party may assign, delegate or otherwise transfer this Master Agreement or any of its rights or obligations hereunder without the other party's prior approval, which approval will not be unreasonably withheld or delayed. Any attempt to do so without such approval will be void. Customer may assign this Master Agreement, upon notice to CSG, to an entity controlling, controlled by or under common control with Customer, and CSG hereby consents to such assignment in advance. 27. NOTICES. Any notice or approval required or permitted under this Master Agreement will be given in writing and will be sent by telefax, courier or mail, postage prepaid, to the address specified below or to any other address that may be designated by prior written notice. Any notice or approval delivered by telefax (with answer back) will be deemed to have been received the day it is sent. Any notice or approval sent by courier will be deemed received one day after its date of posting. Any notice or approval sent by mail will be deemed to have been received on the 5th business day after its date of posting.
If to Customer: If to CSG: TCI Cable Management Corporation CSG Systems, Inc. 5619 DTC Parkway 7887 East Belleview, suite 880 Englewood, Colorado 80111-3000 Englewood, CO 80111 Tel: Fax: (303)488-3217 Tel: (303) 796-3955 Fax: (303) 796-2881 Attn.: President, with a copy to General Counsel Attn.: President, with a copy to General Counsel
28. SOURCE CODE AVAILABILITY AND SOURCE CODE ESCROW. (a) Upon the request of Customer, at CSG's sole cost and expense, CSG will add Customer as a beneficiary to CSG's Master Preferred Source Code Escrow Agreement ("Source Code Agreement") with the third party escrow agent Data Securities International, Inc. ("DSI"). If Customer is added as a beneficiary of the Source Code Agreement, in the event that CSG (i) files for protection under Chapter 7 of the bankruptcy laws of the United States of America or takes other steps to liquidate its assets for the purpose of discontinuing its business, (ii) ceases to provide maintenance and support for a Product unless a third party agrees to provide maintenance and support that is substantially equal to or better than the obligations set forth herein or (iii) this Master Agreement is terminated by Customer pursuant to the terms of Section 17; then, CSG agrees to furnish to Customer a copy of all source code, Documentation and related materials required to maintain, modify or correct the most current version of the Software for the CCS Products provided to Customer. Should Customer's use of the Software source code materials involve the practice of any invention covered by a patent, CSG shall not assert such patent against Customer. (b) Customer shall use such released source code and documentation only for maintenance of the Software for the CCS Products by Customer or a third party providing such maintenance for Customer. (c) Upon request, CSG will provide Customer a copy of the Source Code Agreement. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES 29. MOST FAVORED NATIONS. The charges and fees under this Master Agreement will be comparable to the charges and fees charged by CSG to other customers of like size and similar circumstances, who are subject to similar contract terms and conditions ("Similarly Situated Customers"). If CSG should enter into an agreement with a Similarly Situated Customer providing more favorable charges and fees for the same Products and Services, including those provided pursuant to a Statement of Work, this Master Agreement shall be deemed to provide the same terms and conditions to Customer as of the effective date of such third party agreement(s). 30. MINIMUM FEES. During the term of the Master Agreement, each month Customer shall be responsible for paying CSG the greater of the actual fees incurred during such month or the minimum amount of processing fees per month for CCS Services for wireline video, Internet and wireline telephony set forth in Schedule D (collectively, the "Minimum"). For the purposes of calculating the - ---------- Minimum under this Section 30, CSG shall credit the applicable Minimum by the amount of processing fees for each of the CCS Services for wireline video, Internet and wireline telephony contained on each subscriber account. CSG agrees to credit the Minimum for the CCS Services for wireline video by the amount of processing fees for the subscribers who utilized the CCS Services for wireline video under the Billing Agreement as of the termination date of the Billing Agreement ("Billing Agreement Subscribers"). If, after the Effective Date of this Master Agreement, Customer (i) sells or otherwise divests a System Site, and such System Site thereafter agrees to be bound by the terms of this Master Agreement or (ii) Customer acquires a subsidiary or Affiliate, and such subsidiary or Affiliate agrees to be bound by the terms of this Master Agreement, then CSG agrees to credit the applicable Minimum by the amount of processing fees for the subscribers associated with such subsidiary or Affiliate. Additionally, if, after the Effective Date, a System Site in which Customer owns at least 20% through equity ownership or contribution of assets (the "Partner") agrees to be bound by the terms of this Master Agreement prior to December 31, 1998, then CSG agrees to credit the applicable Minimum by the amount of processing fees for the subscribers associated with such Partner. Notwithstanding the foregoing, CSG shall not credit the Minimum for any System Site of any, subsidiary, Affiliate or Partner that obtained CCS Services for wireline video, Internet or wireline telephony services from CSG prior to their acquisition or divestiture by Customer, and who are brought under this Master Agreement, by the amount of processing fees for more than one million one hundred thousand (1,100,000) subscribers during the term of this Master Agreement; provided, however, that CSG shall credit the Minimum for the CCS Services for wireline video for the Billing Agreement Subscribers. Further, the parties have mutually agreed upon the fees for the Products and Services to be provided hereunder based upon certain assumed volumes of processing activity, and the length of the term of the Master Agreement. Customer acknowledges and agrees that, without the certainty of revenue promised by the commitments set forth in this Master Agreement, CSG would have been unwilling to provide the Products and Services at the fees set forth in the Master Agreement nor would it have entered into the Purchase Agreement. 31. EXCLUSIVITY. Subject to Section 7(e), Customer agrees that CSG shall be Customer's (which, for the purposes of this Section 31, includes any entity that controls Customer or that is controlled by Customer or in common control with Customer or its Affiliates) sole and exclusive provider of Products and Services related to Customer's offerings of wireline video, all Internet/high speed data services, residential wireline telephony services, and print and mail services. With respect to the exclusivity of residential wireline telephony services, the entity must be majority owned and managed by Customer. With respect to all other Products and Services that are not connected to or required to be used in conjunction with the CCS Services and which are otherwise offered to Customer by CSG under the terms of this Master Agreement, (collectively, the "Ancillary Services"), CSG shall be a preferred provider of Customer. Customer will use reasonable efforts to use, and cause its subsidiaries, Affiliates and Partners to use, the Ancillary Services, subject to mutually agreeable terms and conditions. 32. INSURANCE. CSG will be solely responsible for obtaining and maintaining appropriate insurance coverage for its activities under this Master Agreement as reasonably requested by Customer, including, but not limited to, comprehensive general liability (bodily injury and property damage) insurance and professional liability insurance. 33. MISCELLANEOUS. (a) Notice. All notices or approvals required or permitted under this Master ------ Agreement must be given in writing. Any waiver or modification of this Master Agreement will not be effective unless executed in writing and signed by CSG. This Master Agreement will bind Customer's and CSG's successors-in-interest. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES (b) Choice of Law. This Master Agreement will be governed by and interpreted ------------- in accordance with the laws of Colorado, USA, to the exclusion of its conflict of laws provisions. (c) Severability. If any provision of this Master Agreement is held to be ------------ unenforceable, in whole or in part, such holding will not affect the validity of the other provisions of this Master Agreement. (d) Entire Agreement. This Master Agreement, together with the Schedules, ---------------- Exhibits and attachments hereto which are hereby incorporated into this Master Agreement, constitutes the complete and entire statement of all conditions and representations of the agreement between CSG and Customer with respect to its subject matter and supersedes all prior writings or understandings, including the proposals of the parties. (e) Waiver. Except as contemplated under Section 41, the waiver by either ------ party of a breach or violation of, or failure of either party to enforce, any provision of this Master Agreement shall not operate or be construed as a waiver of any subsequent breach or violation or relinquishment of any rights hereunder. 34. DISPUTE RESOLUTION (a) Escalation. In the event of any dispute between the parties (i) arising ---------- under Section 17(d), or (ii) not resolved through the monthly meetings contemplated under Section 37, the parties will promptly schedule a meeting of the Chief Executive Officers or other senior management officers of the parties to resolve their dispute. Such meeting shall establish a negotiation schedule of not less than thirty (30) days for the resolution of such dispute. (b) Arbitration. Any controversy or claim arising out of or relating to this ----------- Master Agreement or the existence, validity, breach or termination thereof, whether during or after its term and not resolved pursuant to Section 34(a), will be finally settled by compulsory arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA"), as modified or supplemented under this Section. (b) Proceeding. To initiate arbitration, either party will file the ---------- appropriate notice at the Regional Office of the AAA in Denver, Colorado. The arbitration proceeding will take place in Denver, Colorado. The parties will in good faith agree on a sole arbitrator. If the parties are unable to agree on an arbitrator, the arbitration panel will consist of three (3) arbitrators, one arbitrator appointed by each party and a third neutral arbitrator appointed by the two arbitrators designated by the parties. Any communication between a party and any arbitrator will be directed to the AAA for transmittal to the arbitrator. The parties expressly agree that the arbitrators will be empowered to, at either party's request, grant injunctive relief. (c) Award. The arbitral award will be the exclusive remedy of the parties for ----- all claims, counterclaims, issues or accountings presented or plead to the arbitrators. The award will (i) be granted and paid in U.S. dollars exclusive of any tax, deduction or offset and (ii) include interest from the date of that the award is rendered until it is fully paid, computed at the maximum rate allowed by applicable law. Judgment upon the arbitral award may be entered in any court that has jurisdiction thereof. Any additional costs, fees or expenses incurred in enforcing the arbitral award will be charged against the party that resists its enforcement. (d) Legal Actions. Nothing in this Section will prevent either party from ------------- seeking interim injunctive relief against the other party in the courts having jurisdiction over the other party. Nothing in this Section will prevent CSG from filing any debt collection action against Customer in the local courts. 35. RELEASE AND TERMINATION OF 1992 SUBSCRIBER BILLING SERVICE AGREEMENT. Except for obligations that explicitly survive pursuant to the terms thereof, Customer and CSG hereby release and discharge each other from any and all liabilities, claims, costs or expenses arising under or by virtue of the Subscriber Billing Services Agreement dated April 29, 1992 and any related or subsequent agreements and amendments (the "Billing Agreement") which Billing Agreement hereby is terminated and discharged. All amounts heretofore paid pursuant to the Billing Agreement shall be retained by the recipient, and neither Customer nor CSG shall be required to make any further payments or credits under the Billing Agreement, except those that have accrued through the Effective Date of this Agreement, or accrue through the result of passage of time, provided, however, the provision of this Section 35 shall not apply to any losses, claims, liabilities, loss, cost, damage or expense (including reasonably attorney fees) relating to (i) CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES CSG's obligations or liabilities under the Billing Agreement that relate to any liability, loss, cost, damage or expense (including reasonable attorneys' fees) to Customer for infringement upon any right, trademark, tradename, copyright, patent, trade secret or other intellectual property right; (ii) final judgment or awards entered against Customer or CSG that arise from matters instituted or initiated by third parties because of Customer's or CSG's non-performance or breach of the Billing Agreement or (iii) CSG's obligations or liabilities under the Billing Agreement relating to insurance required of it to be procured or carried. 36. ENHANCEMENTS AND UPDATES. CSG shall use best efforts to provide Customer Bulletins for Enhancements and Updates to ACSR and CSG Vantage (as defined in Schedule C) and Updates to the CCS Services (as defined in Schedule A) twenty - ---------- ---------- (20) days prior to the implementation date of such Enhancements and Updates but in no event less than fourteen (14) days prior to such implementation date. If CSG is unable to provide Customer Bulletins within the time frames set forth above, CSG and Customer shall conduct a meeting via teleconference as soon as reasonably possible prior to the implementation date to discuss the nature of the Enhancements and Updates. The parties will mutually determine the CSG personnel and the Customer personnel that shall attend such meetings. CSG agrees to implement Enhancements and Updates for ACSR and CSG Vantage and Updates for the CCS Services under a quarterly release schedule. However, the parties agree that CSG may need to implement Enhancements and Updates more frequently due to requests from Customer, regulatory needs of Customer or CSG's other customers, and modifications that need to be made to ACSR, CSG Vantage or the CCS Services to fix a bug or error. CSG agrees to assume all responsibility for implementing Enhancements and Updates for ACSR and CSG Vantage and Updates for the CCS Services; provided, however, that,(i) if a System Site is utilizing ACSR or CSG Vantage, CSG shall not be responsible for the successful implementation of Enhancements and Updates for such Products or the CCS Services if Customer is not utilizing ACSR or CSG Vantage with the Designated Environment and (ii) CSG may, from time to time, at no cost to Customer, require Customer's reasonable assistance with the implementation of such Enhancements and Updates. 37. MONTHLY MEETINGS. CSG and Customer shall conduct monthly meetings via teleconference to discuss all pending Statements of Work and all other issues that have arisen since the prior monthly meeting. The parties will mutually determine the CSG personnel and the Customer personnel that shall attend each meeting. 38. INCIDENT REPORTS. CSG and Customer will jointly develop a formal process for reporting and tracking software problems ("Incident Reports"), and the reporting of them to Customer on no less than a monthly basis, or as otherwise reasonably requested by Customer. The process will in no event be less than that proposed by CSG in Attachment 3 to the July 24, 1997, Response to Operational Service Requirements, which Attachment is hereby incorporated by reference. 39. CONTRACT ADMINISTRATOR. (a) Appointment of a Contract Administrator. For the purposes of the exercise --------------------------------------- of any discretion, right or obligation of or under this Agreement, Customer and CSG shall each designate a single contract administrator. The initial contract administrator for each party shall be as follows: CSG: Kris Schaff 2525 N. 117th Ave. Omaha, NE 68164 Tel: (402) 431-7020 Fax: (402) 431-7226 Customer: Ann Montgomery 4700 S. Syracuse Street 10th Floor Denver, CO 80237 Tel: (303) 267-4230 Fax: (303) 267-4267 Each party may change its contract administrator by giving ten (10) business days notice to the other party. Customer and CSG shall cause their respective contract administrators to be reasonably available for consultation in connection CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES with this Master Agreement. Neither Customer nor CSG shall exercise any direct control or supervision over employees or agents of the other party. (b) Appointment of Technical Coordinators. For the purposes of supervising the ------------------------------------- technical requirements under this Master Agreement relating to the Products and Services provided hereunder, Customer and CSG shall each designate a full time employee as a technical coordinator. The initial technical coordinator for each party shall be as follows: CSG: Director of National Accounts 2525 N. 117th Ave. Omaha, NE 68164 Tel: (402) 431- Fax: (402) 431- Customer: Clark Parr 5619 DTC Pkwy. Englewood, CO 80111 Tel: (303) 267-550_ Fax: (303) __________ Each party may change its technical coordinator by giving ten (10) business days notice to the other party. 40. DISASTER RECOVERY. The disaster recovery plan for the mainframe in Denver, Colorado is set forth in Attachment 1 attached hereto. The disaster recovery plan for CSG's production facility in Omaha, Nebraska is set forth in Attachment 2 attached hereto. 41. SERVICE LEVELS. CSG agrees to provide Customer with the service levels for the Services set forth in Attachment 3 (the "Performance Standards"). Customer will review CSG's service levels annually within thirty (30) days of each anniversary of this Agreement. Within thirty (30) days of each such annual review, Customer shall disclose to CSG in writing (i) all instances in which Customer knows or should have known, without independent inquiry, that CSG has failed to meet the applicable Performance Standard (the "Performance Default") and (ii) for each Performance Default in which no monetary penalty is specified in the Performance Standards, all instances that Customer knows or should have known, without independent inquiry, that CSG has failed to correct the Performance Default within the cure period specified in the applicable Performance Standard. Any obligation of CSG contained in the Performance Standards that Customer knows or should have known, without independent inquiry, and not reported by Customer as provided hereunder shall be deemed accepted by Customer. For any Performance Default indicated on Attachment 3 providing for the Performance Default to be noted without monetary penalty, to the extent such are instances are known or should have been known to Customer, without independent inquiry, Customer will raise at the monthly meeting contemplated under Section 37, and may take such Performance Default into account by Customer in exercising its termination rights pursuant to Section 17(d). 42. ACCEPTANCE TESTING. CSG will make available to Customer at least two (2) methods of testing and accepting Enhancements and Updates to ACSR and Updates to the CCS Services. The first method will provide a test prior to implementation whereby Customer would be afforded access to a test region on the mainframe to enter transactions and review output. CSG will, at no cost to Customer and no later than March 31, 1998, provide Customer with a designated test region to be used solely by Customer. In the event that material defects are found, the code will be corrected prior to implementing the code into the production environment. Secondly, for features that are parameter driven, Customer may choose to turn such features on in one or two more System Sites, or within the Customer production test system to beta test the feature and ensure it meets the quality standards required by the Master Agreement. If defects are uncovered, CSG will repair such defects and provide any recovery services. Once testing is complete, functionality may then be made available to all Customer System Sites; provided, however, that subject to Attachment 3, CSG may implement Enhancements and Updates to ACSR and Updates to the CCS Services prior to the completion of testing if CSG needs to implement such Enhancements and Updates for all of its customers. If System Site testing is not possible, CSG and Customer will participate in a conference call pursuant to Section 37. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES 43. ELECTRONIC EXCHANGE OF DATA. CSG will provide data electronically via the current methods supported for the fees as outlined in this Master Agreement. Should Customer require an additional method not currently supported by CSG, Customer will use the Statement Of Work process outlined in this Master Agreement to request this additional method. 44. PAY PER VIEW LIABILITY. Notwithstanding anything to the contrary in this Master Agreement and except for claims, damages, losses or expenses incurred by Customer relating to Infringement Actions, CSG's total liability for any and all claims, damages, losses or expenses incurred by Customer solely because of CSG's processing of pay per view information shall be One Million Dollars ($1,000,000) per day in the aggregate. CSG and Customer agree to obtain insurance in form and amounts reasonably sufficient to cover Customer's damages and losses arising from breach of its obligations with respect to the pay per view services offered under this Master Agreement, including loss of revenue, if such can be obtained on commercially reasonable terms and conditions. CSG and Customer shall equally share and be responsible for the cost of such insurance. CSG's liability under this Section shall be expressly limited to those amounts that are actually insured pursuant to any applicable CSG policy(ies). If applicable insurance cannot be procured with terms, conditions and prices mutually satisfactory to Customer and CSG (such agreement and consent thereto not to be unreasonably withheld by either party), then the parties agree that CSG's sole liability and Customer's sole remedy for processing pay per view events shall be governed by Attachment 3 to this Master Agreement. 45. PERFORMANCE GUARANTEE BY CUSTOMER. Subject to the approval by Customer's Board of Directors, TCI Communications, Inc., or a substitute guarantor reasonably acceptable to CSG, shall guarantee the performance of Customer of its obligations and agreements under this Master Agreement. THIS AGREEMENT IS NOT EFFECTIVE UNTIL SIGNED ON BEHALF OF BOTH PARTIES. IN WITNESS WHEREOF, the parties have executed this Master Agreement the day and year first above written. CSG SYSTEMS, INC. TCI CABLE MANAGEMENT CORPORATION ("CSG") ("CUSTOMER") BY: /S/ JOHN P. POGGE BY: /S/ GARY K. BRACKEN ------------------------- --------------------------- NAME: JOHN P. POGGE NAME: GARY K. BACKEN ------------------------- --------------------------- Title: EXECUTIVE VICE PRESIDENT TITLE: SENIOR VICE PRESIDENT ------------------------- --------------------------- TCI Communications, Inc. hereby guarantees the performance of Customer and its obligations and agreements under this Master Agreement. BY: /S/ GARY K. BRACKEN ------------------------- Name: GARY K. BRACKEN ------------------------- Title: SENIOR VICE PRESIDENT ------------------------- CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES ATTACHMENT 1 ------------ FDT DISASTER RECOVERY MANAGEMENT SUMMARY ---------------------------------------- The management of First Data Corporation is committed to the implementation of a reliable contingency plan, and has authorized funding of the plan described here. This contingency plan should, in concept and as verified through yearly tests, demonstrate First Data's determination and ability to recover from any event or disaster that would incapacitate the First Data Technologies (FDT) Host Data Center for an extended period of time. FDT currently supports 5 clients: HBO&C - Health care billing provider TSSG - Mutual funds processor TPS - Payment processor EFTPS - Electronic Federal Tax Payment System CSG Inc. - Cable TV billing to 17MM subscribers It is FDT's commitment to recover the Data Centers production environment within the given time for its clients. Listed below are the products which are covered in this plan with the required time to turn the systems over to each client is: HBO&C 18 Hours - Client base 2 TSSG 20 Hours - Dreyfus IPS 20 Hours - Cash Management, MoneyGram, MoneyOrder/Official Check, Utility Bill EFTPS 20 Hours - Entire product CSG Inc. 16 Hours - CCS (cable product), SMS (Prodigy), TVRO (TV Receive Only) The differences in recovery time for FDT is due to the amount of effort put into each client is different. The required tasks are outlined in a later section of this plan. After the systems are turned over to each client, they must perform their recovery tasks as it relates to forward recovery, system validation and testing. The FDT clients commitment to their clients to have the systems up and functioning is: HBO&C 10-30 Days TSSG 24 Hours IPS 24 Hours EFTPS 24 Hours CSG Inc. 48 Hours The FDT Host Data Center Contingency Plan for Disaster Recovery provides for the processing of client critical business workload at the Comdisco Recovery Center in North Bergen, New Jersey, using off site backup copies of critical application systems data sets. The current capacity of the Comdisco facility is sufficient for us to run the critical jobs of our clients for the first six weeks. As soon as processing is established at Comdisco, a determination will be made as to whether additional equipment will be needed at the North Bergen site to adequately handle longer term load requirements. Extra data storage devices, tape drives, communication gear, and even central processing mainframes (CPUs) can be acquired and installed in a matter of hours or days to handle the anticipated load during a protracted remote-processing period. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES ATTACHMENT 1 ------------ Operation of the Comdisco remote facility will be handled entirely by our FDT personnel. A Hotsite Restoration Team (HRT), composed of specialists in each of six functional areas, will travel to North Bergen at the earliest opportunity to set up the normal FDC Host Data Center environment. The HRT will then operate the Comdisco data center for approximately the first 24 hours and be relieved by a second wave of FDC personnel who will take over. The HRT has practiced its recovery procedures several times, and conducts "disaster recovery tests" once a year to maintain and improve its proficiency. Experience has shown that using Comdisco for a backup facility is an economical, clean, and easily managed solution that eliminates conflict of interest situations. Our experience with them to date has been very satisfactory, and they continue to increase their capacity to handle our large data processing requirements. Listed below is a summary of actions which the details are contained in FDC's plan: - - Operations Manager contacts the Executive Vice President of Data Center Operations that a potential disaster has occurred - - The EVP will contact all direct reports and the Disaster Recovery Coordinator - - The team will perform a damage assessment and report a recommendation - - If the recommendation is to declare a disaster, the EVP must contact the Executive Vice President of FDC for approval - - Declare disaster by contacting the hotsite and offsite vendors - - Notify and mobilize teams to appropriate locations - - Ship all required documentation and system tapes to the hotsite - - Reload system at hotsite by restoring system software and customer data - - Activate backup Telecommunications lines and make necessary hardware/software connections - - Activate CICS/DB2/IDMS regions and perform required operational functions - - Notify clients that the production environment is available for processing - - If necessary, prepare to utilize coldsite if outage is greater than 6 weeks - - Order, install, and test hardware at coldsite - - Migrate Data Center to coldsite - - Rebuild Denver Data Center by ordering, installing, and testing hardware at the Denver location - - Migrate Data Center to Denver location - - Write Management summary CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES ATTACHMENT 2 ------------ CONTINGENCY BACKUP PLAN - ----------------------- Executive Summary Plan. CSG Systems has developed a Contingency Backup Plan with First Data Resources (FDR) in Omaha, NE. In the event of a disaster to CSG's production facility, CSG will contact FDR Customer Support Center for declaration. They will, in turn, notify FDR's Card Product Services Group (CPSG) - Output Services facility. Output Services will be ready to accommodate CSG Systems within 24 hours after CSG has supplied contractual verbal and written notification. CSG will notify vendors to obtain forms and materials for transport to FDR's Output Services facility. CSG Systems is a customer of First Data Technologies (FDT) Data Center in Denver. FDT Denver transmits CSG's statement data to Omaha for printing. In the event of a disaster FDT Denver will transfer CSG's statement information to tape and coordinate delivery of those tapes to another First Data Technologies data center in Omaha. The tapes are loaded to the mainframe and spooled to FDR Output Services facility. FDR Output Services will use all available CSG customized statement forms. CSG may elect to use the generic forms, as necessary. During a disaster mode CSG will be inserting a generic remit envelope only into the statements, no bill stuffers or inserts. FDR Output Services will complete processing of statements for CSG Systems within 7 calendar days from date of receipt. CSG will notify clients 24 hours after FDR Output Services has been notified. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES ATTACHMENT 2 ------------ DISASTER RECOVERY OUTLINE - ------------------------- Declaration: * In the event of a disaster, CSG SYSTEMS will contact the First Data Resources (FDR) Customer Support Center to declare. The Customer Support Center will then notify First Data Technologies (FDT). * CSG SYSTEMS will be totally responsible for vendor notification - obtaining forms and materials from their vendors and having them transported to the FDR facility. * CSG SYSTEMS and FDR will meet to formulate the timeframes. FDT must be ready to accommodate CSG SYSTEMS no more than 24 hours after CSG SYSTEMS has supplied verbal and written notification. * All statements processed through the FDR facilities will be printed, inserted, and mailed within 7 days. * CSG will communicate to all customers that a disaster has been declared and we are operating under our disaster recovery plan. Telecom: * CSG SYSTEMS processes through FDT in Denver. * Upon disaster declaration, FDT Denver will put CSG Systems' statement information to tape and coordinate delivery of those tapes to FDT Omaha where they will be loaded onto the mainframe. * All jobs will be spooled to the FDR Mail Facility. FDR has three Mail Facilities in Omaha and work will be distributed by FDR to the appropriate location. Print Services: * CSG SYSTEMS will attempt to use all available custom forms, however, we may elect to use plain white forms and/or forms without logos. * Jobs will be on-line at the FDR Mail Facilities. * CSG SYSTEMS is currently running on IBM 3800 simplex, IBM 3900 duplex printers. Mail Verification Preparation Services (MVP): * Quality checks will be performed, looking for any flaws in statement presentation. * A Quality Control checklist will be used for job tracking. * CSG SYSTEMS will be responsible for special handling needs -processing holds, etc. FDR will make available space in their MVP department for processing these special handling products - work tables, regular office items, etc. Inserting Services: * Selective inserting will not be used. * Inserts will not be used. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES ATTACHMENT 2 ------------ Zip Sorting: * All processed mail pieces will be zip sorted. * FDR will provide CSG SYSTEMS and FDR Billing department a volume of work processed each day. * CSG SYSTEMS is wholly responsible for meeting the weight requirements set forth by the USPS. Production Services: * Will perform job reconciliation and postage payment functions. * Since there is no reprint capability form FDR location, FDR will need to provide a list of account numbers or damaged statements to CSG SYSTEMS for regeneration. CSG SYSTEMS will enter the information into their own system and reprint account information will be generated in tape form and forwarded to FDT- Omaha for loading onto the mainframe and spooling to printers. FDR will have 7 working days from the date of receipt to process these accounts. Production Control: * CSG SYSTEMS will have access to workspace, telephones, and fax machine to assist in the processing of special handling products. Warehousing: All incoming, receiving, and warehousing functions will be performed by existing FDR employees utilizing existing equipment (forklifts, etc.). CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." ATTACHMENT 3 CUSTOMER/CSG PERFORMANCE STANDARDS MATRIX -----------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ PERFORMANCE STANDARD PERFORMANCE DESCRIPTION STANDARD ASSUMPTIONS NOTES CURE PROCESS PENALTY - ------------------------------------------------------------------------------------------------------------------------------------ CCS Host System Monthly average Excludes nightly, If CSG fails to meet If after 60 day notice Availability of (***)% of the monthly and quarterly performance and opportunity to scheduled uptime, scheduled downtime. standard, Customer cure is given, and which includes CSG will use will provide CSG with performance standard PPV subsystem. reasonable best written notice of such is not then met, efforts to increase the non-performance and repeated monthly average to a 60 day period to nonperformance will (***)%. cure. be noted. - ------------------------------------------------------------------------------------------------------------------------------------ CCS Host System Monthly average Customer will Excludes nightly, If CSG fails to meet CSG will give Availability-High of (***)% of the pay an monthly and quarterly performance Customer credit for Availability Option scheduled uptime incremental scheduled downtime standard, Customer the incremental $(***) for the CICS $(**)/sub/month, will provide CSG with per subscriber fee for system, plus (***) million sub written notice of such (*******) during the (***)% uptime for minimum. non-performance and (*******) period the PPV Customer must a 30 day period to described above that subsystem decide by (*****) cure. Such cure may CSG fails to meet the for be exercised no more performance standard implementation frequently than (****) after the 30 day cure by 2/98. This per year without period. pricing expires penalty. (******). - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission" ATTACHMENT 3
- ----------------------------------------------------------------------------------------------------------------------------------- PERFORMANCE PERFORMANCE ASSUMPTIONS NOTES CURE PROCESS PENALTY STANDARD STANDARD DESCRIPTION - ----------------------------------------------------------------------------------------------------------------------------------- CCS System CSG will reduce to CSG will make best If CSG fails to meet If after 60 day Nightly Scheduled a monthly average efforts to reduce this performance notice Downtime of (***) minutes a to under (***) minutes standard, Customer and opportunity to day by (******) and by (*******). will provide CSG with cure is given, to a monthly written notice of such performance standard average of (***) non-performance and is not then met, minutes a day by a 60 day period to repeated (*******). cure. nonperformance will be noted. - ----------------------------------------------------------------------------------------------------------------------------------- CCS Conversion Available by (***) current PPV/Adjustments/Pay If CSG fails to meet Nonperformance will Backlog (***************) Customer ments will be performance be noted,and Automation monthend conversion completed by (****) standard, Customer (*********** conversions (see personnel will be (***) monthend. will provide CSG with ************ notes). available to work The date for work written notice of such ************ on project orders will be jointly non-performance and **********). determined by CSG a 30 day period to and TCI. cure. - ----------------------------------------------------------------------------------------------------------------------------------- CCS Statements (***)% of Customer will To begin (******) If CSG fails to meet If after 30 day Mailing statements in mail agree to cycle Excludes customer performance notice within (***) hours. placement requested holds and standard, Customer and opportunity to strategy as long reruns. Clock begins will provide CSG with cure is given, as customer at midnight the night written notice of such performance standard does not receive of cutoff. non-performance and is not then met, a prorate during a 30 day period to repeated conversion, cure. nonperformance will cycle spread or be noted. placement strategy. - -----------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." ATTACHMENT 3
- ------------------------------------------------------------------------------------------------------------------------------------ PERFORMANCE STANDARD PERFORMANCE DESCRIPTION STANDARD ASSUMPTIONS NOTES CURE PROCESS PENALTY - ------------------------------------------------------------------------------------------------------------------------------------ CCS Batch (***)% by (******) To begin (*****). If CSG fails to meet If after 30 day notice Generated Work CST Mon-Sat, by System has capability performance and opportunity to Order Availability (******) CST on to print workorders at standard, Customer cure is given, Sunday. predefined times for a will provide CSG with performance standard scheduled day's work. written notice of such is not then met, non-performance and repeated a 30 day period to nonperformance will cure. be noted. - ------------------------------------------------------------------------------------------------------------------------------------ Transaction Monthly average Network meets (******************* Response time If after 30 day notice Response Time of (***) seconds or specs for peak ******************** methods will be and opportunity to (CCS, ACSR and less, (***)% of the hour loads ******************** developed and cure is given, ACSR Telephony) time ******************** measured. performance standard ******) Complaints will be is not then met, verified by CSG and repeated Customer. If nonperformance will response time is be noted. exceeded, nonperformance will be noted, and CSG will use reasonable best efforts to cure within (************ ******************** *******************). - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." ATTACHMENT 3
PERFORMANCE PERFORMANCE ASSUMPTIONS NOTES CURE PROCESS PENALTY STANDARD STANDARD DESCRIPTION - ------------------------------------------------------------------------------------------------------------------------------------ Conversion (***)% of the time No spec To begin with If CSG fails to meet If after 30 days notice Downtime less than (***) changes (***) (*********) monthend performance and opportunity to hours after receipt days prior to conversions. Prior to standard, Customer cure is given, by CSG final tapes (*********) monthend will provide CSG with performance standard conversions, CSG will written notice of such is not then met, deliver (***)% within non-performance and repeated (****) days. CSG will a 30 day period to nonperformance will use reasonable best cure. result in a (********** efforts to meet the *********************** performance standard *********************** before (***********) *********************** monthend. *********************** *********************). - ------------------------------------------------------------------------------------------------------------------------------------ CCS Conversion (***)% of the data Excludes agreed If conversion does not CSG will (************ Balancing that is reported is upon exceptions balance to agreed ********************** balanced/ upon exceptions, ********************** reconciled to (********************* *********************) source system ********************** data. ********************** ********************). - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." ATTACHMENT 3
- ------------------------------------------------------------------------------------------------------------------------------------ PERFORMANCE PERFORMANCE ASSUMPTIONS NOTES CURE PROCESS PENALTY STANDARD STANDARD DESCRIPTION - ------------------------------------------------------------------------------------------------------------------------------------ Inbound calls to A Monthly If CSG fails to meet Customer will work PSC average of (***)% performance standard, with CSG until answered within Customer will provide performance average of (***) CSG with written notice standards are met. If seconds. of such non-performance standards are not met Voicemail calls and a 30 day period to more than (***) times returned within a cure. per year monthly average nonperformance will of(***) minutes be noted. If standards (***)% of the time. are not met more than (***) times per year in (***) consecutive years, repeated nonperformance will be noted. - ------------------------------------------------------------------------------------------------------------------------------------ Statements of 1. (***)% 1. SOW must be 1. Response includes 1. If Statement of 1. If an extension is Work responded to executed within development cost, Work request is not not acceptable to within (***) (***) days to estimated ongoing processed in Customer, business days, retain cost and estimated accordance with the nonperformance will (***)% within (***) implementation (*****************) performance be noted. business days, date. Statements implementation. standard, CSG will measured of Work to be contact Customer to 2. If the completion annually. initiated through 2. NA determine if an date is missed for accepted extension is more than (***) 2. Completing channels and acceptable to executed Statements executed defined process. Customer. of Work per year, Statement of Work repeated by completion 2. There are no 2. If Statement of nonperformance will date set forth in Customer Work is not completed be noted. Statement of originated scope pursuant to the Work. or requirements completion date set - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." ATTACHMENT 3
- ------------------------------------------------------------------------------------------------------------------------------------ changes during the forth in the executed process of Statement of Work, CSG performing the will contact Customer Services under the to determine if an Statement of Work. extension of the completion date is acceptable to Customer. - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES
"Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." ATTACHMENT 3 - ------------------------------------------------------------------------------------------------------------------------------------ PERFORMANCE PERFORMANCE ASSUMPTIONS NOTES CURE PROCESS PENALTY STANDARD STANDARD DESCRIPTION - ------------------------------------------------------------------------------------------------------------------------------------ Enhancement Received by Customer CSG will make best Based on complexity of If documentation documentation within (****) days efforts to meet a (***) changes in Enhancement, is received (***) of implementation day receipt documentation days for a quarterly (***)% of the time deliverables will be release, Customer will measured on a have the right (if (**********) basis. If needed) to delay the documentation is not quarterly release. received within (***) days, CSG will use reasonable best efforts to correct. If documentation is received less than (***) days more than (***) times per year, nonperformance will be noted. - ------------------------------------------------------------------------------------------------------------------------------------ CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES
SCHEDULE A CCS SUBSCRIBER BILLING SERVICES 1. CCS SERVICES. Subject to the terms and conditions of the Master Agreement and for the fees described in Schedule D, CSG will provide to Customer, and ---------- Customer will purchase from CSG, all of Customer's requirements for the customer care and billing data processing services (including, but not limited to, field management and dispatch, and exclusive of data transport service provided by Customer's network operating center), applications and other analog and digital video services, wireline residential telephony services, high speed data/Internet services for the video, telephony, high speed data/Internet subscribers set forth in Section 31 of the Master Agreement the ("CCS Services"). The CCS Services will provide Customer with an on-line terminal facility, service bureau access to CCS processing software, adequate computer time and other mechanical data processing services as more specifically described in the user documents set forth in Section 2 below. Customer's personnel shall enter all payments and non-monetary changes on terminal(s) located at Customer's offices, or provide CSG payment information on magnetic tape or electronic record in CSG's format. Customer may utilize the CCS Services to view ledger information, statement detail, perform adjustments, and record billing information on-line. ACSR Telephony services are described as set forth in Exhibit A-4. 2. DOCUMENTATION. CSG will provide Customer with the following user documents: the User Guide, User Data File Manual, User Training Manual, Conversion Manual, Operations Guide, and Customer Bulletins issued by CSG (the "Documentation"). CSG shall provide Customer with one set of User Guides and the User Data File manual for each System Site at no charge. Additional copies of such documentation may be purchased for the following rates: User Guides (1 set = 4 volumes) - $200; User Data File (one volume) - $50. The fees for all other Documentation are set forth in Schedule D. CSG and Customer acknowledge ---------- and agree that the Documentation describing the CCS Services is subject to ongoing review and modification from time to time. CSG agrees to pursue implementing electronic online documentation utilizing CD ROM technology and will use reasonable efforts to incorporate that technology in its documentation activities when the offering of such becomes technically possible and commercially reasonable. CSG and Customer agree to discuss utilizing Customer's intranet for the purpose of providing Documentation to the System Sites. CSG agrees to pursue modifying the Documentation in a more "user friendly" manner at the request of Customer; provided, however, that such modifications will not materially change the cost of labor, time and materials (including software and hardware), incurred by CSG in providing such modified Documentation. CSG and Customer will jointly review the documentation needs of Customer's System Sites and employees in order to make recommendations regarding such user-friendly modifications. 3. COMMUNICATIONS SERVICES AND FEES. Customer shall be responsible for obtaining, at Customer's expense, a data communications line from the CSG data processing center to each of Customer's System Sites as defined below, or alternatively, to Customer's network operating center. Customer shall pay all fees and charges in connection with the installation and use of and peripheral equipment related to the data communications line. At Customer's option, Customer may utilize CSG's network data communication services. The fees for CSG's network data communication services are set forth in Schedule D. "System ---------- Sites" are defined as Customer's system site locations identified in Exhibit A-1 attached hereto. From time-to-time, Customer may request this Schedule A be ---------- amended so that additional markets may be converted to the CCS Services and added as System Sites at a mutually agreeable conversion cost and upon a mutually agreeable conversion date. "Satellite Office" is defined as Customer premises other than its principal place of business with respect to a System Site (i) wherein communication equipment is located and (ii) which is connected to the System Site's central office by telephone line. 4. CONVERSION SERVICES AND FEES. Within thirty (30) days of the Effective Date of this Master Agreement, CSG and Customer shall establish a mutually agreeable schedule for converting Customer's System Sites. Such conversion schedule shall be attached hereto as Exhibit A-1. CSG and Customer agree to work together to complete the conversions for those System Sites listed on Exhibit A-1 within seventeen (17) months of the Effective Date of this Master Agreement; provided, however, that Customer provides CSG with all of the information reasonably necessary to complete such conversions in a timely manner. CSG warrants that it has the capacity to convert up to three million (3,000,000) subscribers involving approximately ten (10) to twelve (12) System Sites by December 31, 1997. CSG agrees that it has and will dedicate the knowledge, skills and facilities necessary to convert Customer's subscribers from Customer's third party billing vendors to the CCS Services, including any reasonable reformatting activities thereto. Subject to Section 7(e) of the Master Agreement, Customer agrees to convert all of its subscribers in existence as of the Effective Date of the Master Agreement pursuant to Exhibits A-1 and A-2. If, after the Effective Date, Customer CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES purchases, is assigned or otherwise acquires subscribers which are required to be converted to the CCS Services pursuant to Section 31 of the Master Agreement, Customer shall use best efforts to convert such subscribers to the CCS Services within one hundred and twenty (120) days of the effective date of such acquisition. CSG shall provide services as described on Exhibit A-2 attached hereto in connection with Customer's conversion of each System Site and for those added by mutual agreement of the parties to CSG's data processing system subsequent to the execution of this Master Agreement (the "Conversion Services"). Customer shall pay CSG the fees set forth in Schedule D for the ---------- performance of the Conversion Services. 5. DECONVERSION SERVICES AND FEES. If Customer sells, transfers, assigns or disposes of any of the assets of or any ownership or management interest in any System Site and such System Site deconverts from the CCS Services to another third party (the "Disposed Site(s)"), Customer agrees to pay CSG the per System Site deconversion tape fee set forth in Schedule D and the fees set forth in ---------- Schedule D for processing and deconverting subscribers, including on-line access - ---------- fees, which amounts shall be due and payable thirty (30) days prior to the intended deconversion of any such Disposed Site(s) from the CCS Services. CSG shall be under no obligation or liability to provide any deconversion tapes or records until all amounts due under this Master Agreement have been paid in full. 6. TRAINING. CSG and Customer will jointly develop a training plan for the conversion of Customer's System Sites within sixty (60) days of the Effective Date of the Master Agreement. Customer agrees to send qualified employees who will be fulfilling system-related job roles to those classes designed for their job roles before the conversion, in accordance with the job role and the classes reasonably required by CSG. In the event the employee does not fulfill the requirements of the class, Customer agrees to provide a replacement and said replacement will attend the required class or classes before conversion of that System Site. Customer may purchase additional instruction for classes taught at CSG's premises for CSG's then current rates. Customer may also purchase additional customized on-site training for CSG's then current rates. Customer shall be responsible for all transportation to and from CSG's training, and lodging and food for Customer's employees that attend the training. 7. OPTIONAL AND ANCILLARY SERVICES. At Customer's request, CSG shall provide optional and ancillary services, including but not limited to any services described on Schedule D or if such services are not described in Schedule D, at ---------- ---------- CSG's then current rates. Where applicable, such services shall be subject to the terms and conditions set forth in separately executed Schedules to the Master Agreement. 8. CUSTOMER INFORMATION. Any original documents, data and files provided to CSG hereunder by Customer ("Customer Data") are and shall remain Customer's property, and upon termination of this Master Agreement for any reason or deconversion of any System Site, such Customer Data shall be returned to Customer by CSG, subject to the payment of CSG's then-current published rates distributed to CSG's sales force for processing and delivering the Customer Data, any applicable deconversion fees required under Section 5 hereof and all unpaid charges not reasonably disputed for services and equipment, if any, including late charges incurred by Customer. Customer Data will not be utilized by CSG for any purpose other than those purposes related to rendering the services to Customer under the Master Agreement. Data to be returned to Customer includes, but is not limited to: Subscriber Master File (including Work Orders, Converters and General Ledger), Computer-Produced Reports (reflecting activity during period of 90 days immediately prior to Schedule A termination), House ---------- Master File, and any other related data or files held by CSG on behalf of Customer. Any archival tapes containing Customer Data shall be used solely for back-up purposes and shall not be disclosed to third parties without prior written consent of Customer, which Customer may withhold in its sole discretion. Customer shall pay CSG for all reasonable expenses relating to the return of Customer Data pursuant to this Section 8. In addition to CSG returning Customer Data upon termination of the Master Agreement or deconversion of any System Site pursuant to this Section, upon request by Customer at any time, CSG shall promptly return to Customer all Customer Data. If Customer elects for CSG to provide the Customer Data on CSG's standard format and media, Customer shall pay the fees for such Customer Data as set forth in Schedule D. If Customer elects ---------- for CSG to provide the Customer Data on a custom format, Customer shall provide such custom format pursuant to the terms, conditions and fees of a separately executed Statement of Work. No Customer Data shall be released to any third party without the prior written consent of Customer, which it may withhold in its sole discretion. 9. SUPPORT SERVICES. (a) CSG will provide Customer the support and maintenance of the CCS Services set forth in Exhibit A-3 (the "Support Services"). Included in the Support Services is support of the CCS Services via CSG's Product Support Center, Account Management, publication updates, and the fixes and updates that CSG may make generally available as part of CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES its maintenance and support packages (the "Updates"). Additionally, during the term of this Schedule A, CSG will provide Customer with up to forty (40) CSG ---------- personnel in the customer service department that are dedicated to providing services solely to Customer ("CSDs") in accordance with the following schedule: Customer shall receive 3.1 CSDs for each increment of one million (1,000,000) subscribers converted to the CCS Services. An account manager will be provided as part of the initial CSDs. (b) CSG will make available to Customer up to forty (40) technical full time equivalents that are dedicated to providing maintenance and development of the CCS Services solely to Customer ("Technical FTEs") in accordance with the following schedule: Customer shall receive 3.1 Technical FTEs for each increment of one million (1,000,000) subscribers converted to the CCS Services. CSG will allow Customer to set priorities related to the maintenance and development of the CCS Services for the Technical FTEs. The priorities of the Technical FTEs will be determined by Customer in the monthly meetings contemplated in Section 37 of the Master Agreement. 10. Term. The first day of the calendar month in which the CCS Services commence shall be referred to as the "Commencement Date." The CCS Services shall continue until December 31, 2012. AGREED AND ACCEPTED THIS 10TH DAY OF AUGUST, 1997, BY: CSG SYSTEMS, INC. ("CSG") TCI CABLE MANAGEMENT CORPORATION ("CUSTOMER") BY: /S/ JOHN. P. POGGE BY: /S/ GARY K. BRACKEN -------------------- ---------------------------- Exhibit A-1 SYSTEM SITES; Exhibit A-2 CONVERSION/IMPLEMENTATION SERVICES; Exhibit A-3 SUPPORT SERVICES; Exhibit A-4 ACSR TELEPHONY SERVICES; Exhibit A-5 HIGH SPEED DATA SERVICES CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT A-1 SYSTEM SITES ESTIMATED IMPLEMENTATION/CONVERSION DATE TO BE COMPLETED CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT A-2 CONVERSION/IMPLEMENTATION SERVICES ---------------------------------- TO BE COMPLETED CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT A-3 SUPPORT SERVICES FOR THE CCS SERVICES ------------------------------------- PRODUCT SUPPORT CENTER The customer Product Support Center provides Customer with advice, consultation and assistance to use CCS Services and diagnose and correct problems that Customer may encounter with the then-current version of CCS Services. CSG will offer the Product Support Center remotely by telephone, fax or other electronic communication eight hours a day, five days a week. Customer will bear all telephone and other expenses that it may incur in connection with the Product Support Center. ACCOUNT MANAGEMENT As part of the CSD FTEs contemplated under Section 9(a) of Schedule A, CSG will ---------- provide an account manager which will serve as Customer's liaison to all other CSG support services and will be responsible for ensuring customer satisfaction. The account manager will assist Customer with their use of the CCS Services and keep them abreast of new developments in CSG's products and services through periodic status reports, and for CSG's then current rates, occasional on-site visits if requested by Customer or as otherwise necessary for CSG to fulfill its obligations under the Master Agreement. UPDATES Subject to the terms set forth in this Schedule A, product Updates include ---------- corrections and the fixes and updates that CSG may make generally available. These Updates are delivered to Customer accompanied by bulletins describing the updates. Custom modifications are NOT included as Updates but rather are covered as Technical Services under Schedule B. ---------- PUBLICATIONS The customer will receive updates to all published Documentation for the CCS Services. CSG will provide such Documentation pursuant to Attachment 3 of the Master Agreement. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT A-4 (PAGE 1 OF 3) ACSR TELEPHONY SERVICES In addition to the services set forth in Schedule A, CSG shall provide Customer ---------- with the following ACSR Telephony Services: 1. E911 AND MASTER STREET ADDRESS GUIDE (MSAG) PROCESSING. CSG will provide time and cost estimates for modifications necessary to accommodate the required interface to Customer's selected provider. Provider requirements must be provided to CSG a minimum of 90 to 120 days prior to implementation of the selected interface to allow adequate lead time for development. 2. Directory Listing Information. CSG will provide time and cost estimates for modifications necessary to accommodate the required interface to Customer's selected provider. Provider requirements must be provided to CSG a minimum of 90 to 120 days prior to implementation of the selected interface to allow adequate lead time for development. 3. SERVICE NUMBER PORTABILITY. CSG will provide time and cost estimates for modifications necessary to accommodate the required interface to Customer's selected provider. Provider requirements must be provided to CSG a minimum of 90 to 120 days prior to implementation of the selected interface to allow adequate lead time for development. 4. CUSTOMER ACCOUNT RECORD EXCHANGE (CARE). CSG will provide time and cost estimates for modifications necessary to accommodate the required interface to Customer's selected provider. Provider requirements must be provided to CSG a minimum of 90 to 120 days prior to implementation of the selected interface to allow adequate lead time for development. 5. RATING. CSG shall classify and determine rates of message toll service charges, local exchange charges and general exchange charges for call records provided to CSG in accordance with the tariffs System Sites provide to CSG. CSG will provide time and cost estimates for new or changed rate plans. 6. LINE INFORMATION DATA BASE (LIDB). CSG will provide time and cost estimates for modifications necessary to accommodate the required interface to Customer's selected provider. Provider requirements must be provided to CSG a minimum of 90 to 120 days prior to implementation of the selected interface to allow adequate lead time for development. 7. TAR. CSG will provide time and cost estimates for modifications necessary to accommodate the required interface to Customer's selected provider. Provider requirements must be provided to CSG a minimum of 90 to 120 days prior to implementation of the selected interface to allow adequate lead time for development. 9. CMDS. CSG will provide time and cost estimates for modifications necessary to accommodate the required interface to Customer's selected provider. Provider requirements must be provided to CSG a minimum of 90 to 120 days prior to implementation of the selected interface to allow adequate lead time for development. 10. RESELLER APIS. An optional standard Application Program Interface (API) is available, for the fees set forth in Schedule D, providing a CSG standard ----------- formatted data interface intended for use in reselling existing telco services. In addition to any other Customer obligations set forth in Schedule A or the ---------- Master Agreement, Customer has the following obligations: 1. INFORMATION. System Sites shall provide CSG with any information which CSG deems reasonably necessary to perform the services under this Schedule A. System ---------- Sites shall provide a schedule of all tariffs and service charges to be used by CSG. In addition, System Sites shall provide the following specific information defined in the following items: CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT A-4 (Page 2 of 3) (a) Local Exchange Charges. Any Unit Sensitive Pricing (USP) table changes ---------------------- shall be provided to CSG at least five (5) days prior to the date on which such charges are to be applied by CSG to billing services. (b) Intralata Optional Calling Plans. Any additions, deletions and changes to -------------------------------- intralata optional calling plan tables shall be provided to CSG prior to the System Site toll cutoff date. System Sites shall notify CSG as soon as possible of the implementation of any new optional calling plans, and CSG will respond to System Sites with the implementation date of the new plan within twenty (20) days of being notified by the System Sites. (c) Rebills. Any information related to the rebilling of any intralata or ------- interlata toll messages shall be provided to CSG at least five (5) days prior to your toll cutoff date. (d) Interlata Billing, Rating and Optional Calling Plan Charges. System Sites ----------------------------------------------------------- shall notify CSG of the implementation of new or changes to existing billing formats, rating and optional calling plans. CSG will respond to System Sites with the implementation date of the new plan within twenty (20) days of being notified by the System Sites. If CSG receives any of the information defined in Section 1(a)-(d) above later than the defined periods, CSG will make every reasonable effort to include those changes in the current billing. If processing for the current month has progressed past the point at which these changes can be implemented, the changes will be implemented for the month following the current month. All parties agree to reasonably work together with the System Sites and the Carrier to complete such projects and data updates in a businesslike manner. 2. DATA. System Sites shall be responsible for making all necessary "AMA" data recorded on System Sites' switch available to CSG in the manner set forth in this Section 2. System Sites shall notify CSG of any proposed, actual or pending changes in the composition of the data stored on the switch of System Sites as soon as possible prior to the change. Such notice shall be required for any of the following: (a) A scheduled or unscheduled software change or upgrade to the System Sites switch and/or polling unit; (b) Scheduled or unscheduled maintenance to the switch and/or polling unit; (c) A scheduled or unscheduled change to the format (i.e. structure code changes) of the recorded data; (d) An addition or deletion of WATS recording numbers. Such notice shall be given by calling CSG's Computer Operations Support Department at (888) 274-2500 (extension 385) during normal business hours. 3. DATA TRANSFER. In addition to anything else set forth in this Schedule A, ---------- CSG and System Sites shall have the following responsibilities depending upon the means by which the data to be processed is transmitted to CSG. The parties shall initial below the method of data transfer to be used. (a) Polling. If CSG receives the data by polling the switch of System Sites, ------- the responsibilities shall be: (1) CSG shall poll System Sites' switch on a scheduled basis. (2) System Sites shall maintain their switch and connecting telephone line such that CSG can poll the data at any time. (3) System Sites shall retain all data on their switch for at least forty- five (45) days to provide data redundance to the data CSG has polled on a scheduled basis. (b) Tape. If System Sites transmit the data by sending the original magnetic ---- tape from the switch, the responsibilities shall be: CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT A-4 (PAGE 3 OF 3) (1) System Sites shall identify, by external labels, all magnetic tapes submitted to CSG with the name of System Site, the Sys/Prin number, the number of messages on the tape and beginning and ending tapes. (2) System Sites shall be responsible for the delivery of magnetic tapes to CSG. (3) CSG shall maintain a log containing the following information in relation to any magnetic tapes received from System Sites: the date received and the identifying matter on the external labels. (4) CSG shall store the magnetic tapes it receives from System Sites for sixty (60) days. After such period, CSG shall degauss and return the tapes to the System Sites. 4. REVIEW OF REPORTS. Customer will inspect and review all reports and output created from information transferred or delivered by CSG and reject all incorrect reports within one (1) business day after receipt thereof for daily reports and within three (3) business days after receipt thereof for other than daily reports. Failure to timely reject any report or output shall constitute acceptance thereof, and Customer shall be deemed to have waived its rights and assumed all risks with respect thereto. Customer will balance reports to proof and entry controls as well as the verification of master file information in order to maintain system integrity. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT A-5 (PAGE 1 OF 2) HIGH SPEED DATA SERVICES FUNCTIONALITY: - -------------- High Speed Data Services include: * Authorization and Deauthorization of high speed data services via workorder and equipment change transactions. * The ability to regenerate Password data on demand. * Password data will be printed on the initial hardcopy workorder. This will apply to first time cable modem customers. * The ability to communicate address and subscriber information updates to the modem controller. * System-generated delinquency processing can be established via site defined parameters. * The ability to refresh all modems on inventory on demand via a system download. * Support for Account Transfers. * Online transaction monitoring and error tracking. * Modems will be carried on the Converter Inventory System and will be treated as addressable equipment. This will allow a means for tracking the equipment via online transactions and CSG generated reports. * Parameters may be set to enforce specific business rules concerning the movement of modem cards from one status to another. * Provides a means to bill and deliver various levels of high speed data services using flat rate pricing parameters. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT A-5 (page 2 of 2) HIGH SPEED DATA SERVICES Network Support - CONFIGURATION AND RESPONSIBILITY: - --------------------------------------------------- Customer will be responsible of obtaining and paying for communication lines to enable access from cable site locations to CSG's host applications, databases and printing facility. Based on Customer's projected traffic and capacity needs, CSG will help determine the type and speed of each of CSG's connections as well as communications hardware requirements. CSG is responsible for all CSG owned or leased equipment as well as connectivity through CSG's managed network. Customer will be responsible for the maintenance and repair of its local area networks, "customer owned" equipment and associated network connectivity as well as any equipment, connectivity and associated hardware procured through its vendors. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES SCHEDULE AA CABLEMAX 1. LICENSE GRANT. For each of those System Sites set forth on Exhibit AA-1 which utilize CableMax, CSG grants to Customer a non-exclusive, nontransferable, license to use the CableMax computer software in machine readable object code, CSG's Support Programs (as defined below in Section 3) and related user documentation, which collectively constitute the "Licensed Programs" during the term of this Schedule AA for the fees set forth in Schedule D, and subject to ----------- ---------- the following terms and conditions. 2. USE OF LICENSED PROGRAMS. Customer shall have the right to: (a) Install the Licensed Programs in its own facility at the System Sites set forth on Exhibit AA-1; (b) use the Licensed Programs for purposes of serving the internal needs of the System Site where the Licensed Program is installed and the Satellite Offices; (c) make one copy of the Licensed Programs in machine-readable, object code form for non-productive backup purposes only, provided that CSG's proprietary legend is included; (d) Customer may not use, copy, decompose, reverse engineer, or modify the Licensed Programs, or any copy, adaptation, transcription, or merged portion thereof, for any purpose except as expressly authorized by CSG in this Schedule AA. No service bureau work, multiple user ----------- license, or time sharing arrangement is permitted, except as expressly authorized by CSG. Customer may not install the Licensed Programs at any location other than the locations set forth in Exhibit AA-1 without the prior written consent of CSG. "System Sites" are defined as Customer's system site locations identified in Exhibit AA-1 attached hereto. 3. SUPPORT PROGRAMS. CSG may provide Customer, from time to time, new releases of the Licensed Programs containing error corrections, and minor enhancements (the "Support Programs"). CSG shall provide Customer with one copy of each new release and Customer shall install all new releases issued by CSG. CSG shall have any obligation to support only the then current release and the immediately prior release of the Licensed Programs. 4. TELEPHONE ASSISTANCE. For those System Sites which utilize CableMax, CSG agrees to provide telephone assistance, adequately staffed, that Customer may, at Customer's expense, use to report problems and seek assistance in the use of the Licensed Programs. CSG agrees to provide such assistance during its normal working hours which are from 7:00 a.m. to 5:00 p.m. Central Time, Monday through Friday, excluding observed holidays. From 5:00 p.m. to 10:00 p.m. Central Time, Monday through Friday, excluding observed holidays, CSG shall provide technical assistance to Customer via pager at (402) 231-5341. 5. CABLEMAX REPORTS. For those System Sites that use CableMax, CSG agrees to provide Customer with the reports as set forth in the User's Reference Manual for such system. Customer shall receive the following management reports: Pay TV Combination Summary by MSO, Division and System; and Service Combination Summary by MSO, Division and System. CSG shall provide additional reports to Customer, in lieu of any of the specified reports, but only so long as such substituted report entails no material, incremental cost to CSG. 6. TERM. The first day of the calendar month in which CableMax commences shall be referred to as the "Commencement Date." Customer will convert all of the System Sites utilizing CableMax to CCS Services no later than June 1, 1999. AGREED AND ACCEPTED THIS 10TH DAY OF AUGUST, 1997, BY: CSG SYSTEMS, INC. ("CSG") TCI CABLE MANAGEMENT CORPORATION ("CUSTOMER") BY: /S/ JOHN P. POGGE BY: /S/ GARY K. BRACKEN ________________________ ____________________________ Exhibit AA-1 CABLEMAX SYSTEM SITES CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES Exhibit AA-1 CABLEMAX SYSTEM SITES TO BE COMPLETED CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES SCHEDULE B CSG TECHNICAL SERVICES ----------------------- 1. GENERAL. Subject to the terms and conditions of the Master Agreement and for the fees and expenses described below, Customer hereby hires CSG, and CSG hereby agrees, to provide the design, development and/or other consulting services described in the Statement of Works contemplated under Section 2, which may include services by CSG's Advanced Business Solutions division (collectively, the "Technical Services") to Customer as its independent contractor. 2. TECHNICAL SERVICES. (a) Reasonable Efforts. CSG will use its reasonable commercial efforts to ------------------ perform all Technical Services in a timely and professional manner satisfactory to Customer. (b) Projects Schedules. CSG and Customer will execute a schedule substantially ------------------ similar to Exhibit B-1 (the "Statement of Work") for each design, development and/or other consulting project that Customer wants CSG to undertake. CSG and Customer acknowledge that all Statement of Works will form an integral part of this Schedule B. ---------- (c) Location and Access. CSG may perform the Technical Services at Customer's ------------------- premises, CSG's premises or such other premises that Customer and CSG may deem appropriate. Customer will permit CSG to have reasonable access to Customer's premises, personnel and computer equipment for the purposes of performing the Technical Services at Customer's premises. (d) Insurance. CSG will be solely responsible for obtaining and maintaining --------- appropriate insurance coverage for its activities under this Schedule B as ---------- reasonably requested by Customer, including, but not limited to, comprehensive general liability (bodily injury and property damage) insurance and professional liability insurance. Such policies shall name Customer and its affiliates as additional named insured. Customer shall annually notify CSG of this obligation. (e) System Site Visit. Once per year, at no cost to Customer, CSG will provide ----------------- one System Site with one CSG employee for a period of three (3) business days to evaluate Customer's business processes with respect to the Services provided under the Master Agreement. 3. CONSIDERATION. (a) Project Fees. In consideration for performing the Technical Services, ------------ Customer will pay CSG the fees that are set forth in the applicable Statement of Work (the "Project Fees"). (b) Reimbursable Expenses. Unless otherwise contemplated under the Statement --------------------- of Work, Customer will reimburse CSG for the necessary and reasonable travel, lodging and related out-of-pocket expenses that CSG may incur in performing the Technical Services ("Reimbursable Expenses"). (c) Payment. Customer will pay the Project Fees to CSG according to the ------- applicable terms set forth in the Statement of Work. (d) Taxes. CSG will specify on all invoices issued to Customer any sales, use ----- or other tax that may be assessable in connection with this Schedule B. ---------- Pursuant to Section 3 of the Master Agreement, Customer will pay such taxes or provide CSG with any applicable certificate of exemption acceptable to the appropriate taxing authorities. 4. CSG RIGHTS. Customer acknowledges that all patents, copyrights, trade secrets or other proprietary rights in or to the work product that CSG may create for Customer under this Schedule B (the "Deliverables"), including, but ---------- not limited to, any ideas, concepts, inventions or techniques that CSG may use, conceive or first reduce to practice in connection with the Technical Services, are and will be the exclusive property of CSG, except as and to the extent otherwise specified in the applicable Statement of Work. During and after the term of this Schedule B, CSG and Customer will execute the instruments that may ---------- be reasonably appropriate or necessary to give full legal effect to this Section 4. 5. Delivery of Items. Upon the expiration or termination of this Schedule B ---------- for any reason, Customer will promptly pay CSG the Project Fees and Reimbursable Expenses that may be due and outstanding for the Technical Services and Deliverables that CSG has performed and are not reasonably disputed, and CSG will promptly deliver to Customer all notebooks, documentation and other items that contain, in whole or in part, any Confidential Information that Customer disclosed to CSG in performance of the Technical Services under this Schedule B. ---------- The Customer has the right to terminate any Statement of Work, Exhibit B-1, at any time and may withhold payment on any amounts reasonably disputed until final settlement. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES 6. TERM. The term of this Schedule B shall continue until December 31, 2012, ---------- but in any case will extend for the term of any executed Statement of Work. AGREED AND ACCEPTED THIS 10TH DAY OF AUGUST, 1997, BY: CSG SYSTEMS, INC. ("CSG") TCI CABLE MANAGEMENT CORPORATION ("CUSTOMER") BY: /S/ JOHN P. POGGE BY: /S/ GARY K. BRACKEN ------------------------- ---------------------------- EXHIBIT B-1.........SAMPLE STATEMENT OF WORK CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT B-1 STATEMENT OF WORK (SAMPLE FORM) THIS STATEMENT OF WORK is made as of _____________ 1997, between CSG SYSTEMS, INC. ("CSG"), and TCI CABLE MANAGEMENT CORPORATION ("Customer"), pursuant to Schedule B of the Master Agreement that CSG and Customer executed as of - ---------- _________________, 1997, and of which this Statement of Work forms an integral part. STAFFING: (NAMED Individuals, Level of Effort, commitments, etc.) - -------- OBJECTIVE: - --------- PROCEDURES: - ---------- TIMETABLE: Estimated Commencement Date:__________________________. - --------- Estimated Completion Date:____________________________. DELIVERABLES: - ------------ ACCEPTANCE CRITERIA: (If any) - ------------------- PROJECT FEES AND PAYMENT TERMS: (Including any conditions associated with - ------------------------------ limits on the maximum level of funds that may be expensed in any particular Statement of Work.) IN WITNESS WHEREOF, CSG and Customer cause this Statement of Work to be duly executed below. CSG SYSTEMS, INC. ("CSG") TCI CABLE MANAGEMENT CORPORATION ("CUSTOMER") By: _______________________ By: ___________________________ Name: _____________________ Name: _________________________ Title: ____________________ Title: ________________________ Date: _____________________ Date: _________________________ CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES SCHEDULE C CCS PRODUCTS SOFTWARE LICENSE ----------------------------- ACSR TELEPHONY, CSG Vantage, ACSR, AND COMPUTER BASED TRAINING 1. LICENSE. CSG hereby grants Customer, and Customer hereby accepts from CSG, a non-exclusive and non-transferable perpetual right to use the software products known as ACSR Telephony, CSG Vantage, ACSR, and Computer Based Training described in Section 2 below for use with the CCS Services (the "CCS Products") at the System Sites in the United States in the designated environment described in Section 3 below (the "Designated Environment"), for the fees set forth in Schedule D and subject to the terms and conditions specified below and in the - ---------- Master Agreement. 2. CCS PRODUCTS. "CCS Products" as described in the Product Schedule attached hereto as Exhibit C-1 includes (i) the machine-readable object code version of ACSR Telephony, ACSR and Computer Based Training software (collectively, the "Software"), whether embedded on disc, tape or other media; (ii) the published user manuals and documentation that CSG may make generally available for the Software (the "Documentation"), (iii) the fixes, updates, upgrades or new versions of the Software or Documentation that CSG may provide to Customer under this Schedule C (the "Enhancements") and (iv) any copy of the Software, ---------- Documentation or Enhancements. Except as provided in Section 28 of the Master Agreement, nothing in this Schedule C will entitle nor prohibit Customer from ---------- receiving the source code of the Software or Enhancements, in whole or in part. 3. DESIGNATED ENVIRONMENT. "Designated Environment" means the combination of the other computer programs and hardware equipment CSG specified for use with the CCS Products as set forth in Exhibit C-2, or otherwise approved by CSG in writing for Customer's use with the CCS Products at the system sites set forth on Exhibit C-1 (the "System Sites"). Customer may use the CCS Products only in the Designated Environment and will be solely responsible for upgrading the Designated Environment to the specifications that CSG may provide from time to time. CSG shall provide Customer with prompt notice in the case of any modifications to the Designated Environment. If Customer fails to upgrade the Designated Environment or otherwise uses the CCS Products outside the certified Designated Environment, CSG will have no obligation to continue maintaining and supporting the CCS Products and Customer will have no payment obligations associated with those services. Use outside the Designated Environment voids all performance warranties. CSG shall certify the Designated Environment prior to the commencement of CSG's obligations under this Schedule C, including its ---------- obligations to maintain and support the CCS Products. Any other use or transfer of the CCS Products will require CSG's prior approval, which may be subject to additional charges. 4. USE. Customer may use the CCS Products only in object code form on the workstations set forth on Exhibit C-1 and in the Designated Environment and at the System Sites in the United States, and only for the term set forth below, and only for Customer's own internal purposes and business operations with the CCS Services for providing accounting and billing services to its video subscribers. In addition to the Incorporated Third Party Software, if third party products are provided to Customer as part of the CCS Products, by opening the package containing the third party product or downloading it, Customer agrees to be bound by the terms of the third party's standard license. Customer will not use the CCS Products to provide any such service to or on behalf of any third parties in a service bureau capacity and will not permit any other person to use the CCS Products, whether on a time-sharing, remote job entry or other multiple user arrangement. Customer will not install the Software or Enhancements on a network or other multi-user computer system unless otherwise specified in the Exhibits to this Schedule, in which case the Designated Environment may be used to provide database or file services to other of Customer's computers across the network, up to the number of workstations specified in Exhibit C-1. Backup and recovery plans or backup and recovery for the Products shall be Customer's responsibility for any data located on Customer's local server. Any Customer documents, data and files are and shall remain Customer's property; and therefore, Customer is solely responsible for its own backup and recovery plan(s) for its data stored on Customer's local server. Customer may make only one back-up archival copy of the Software or Enhancements. CSG shall be responsible for backup and recovery of any Customer data that resides at CSG's data processing center. Customer will reproduce all confidentiality and proprietary notices on each of these copies and maintain an accurate record of the location of each of these copies. Customer will not otherwise copy, translate, modify, adapt, decompile, disassemble or reverse engineer the CCS Products, except as and to the extent expressly authorized by applicable law. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES 5. MAINTENANCE AND SUPPORT. (a) Standard Support Services. Following expiration of the Warranty Period, CSG ------------------------- will provide Customer the support and maintenance of the then-current version of each licensed CCS Product as described on Exhibit C-3 (the "Support Services"). Customer agrees to pay the fees set forth in Schedule D, which are identified in ----------- Schedule D as maintenance fees, for the Support Services for the term of this Master Agreement. Included in the Support Services is support of the then- current version of the licensed CCS Products via CSG's Product Support Center, Account Management, publication updates, and the fixes and updates that CSG may make generally available as part of its maintenance and support packages (the "Updates"). The Support Services do not include maintenance and support of the Incorporated Third Party Software, if any, or any other third party software. The maintenance and support for third party products is provided by the licensor of those products. Although CSG may assist in this maintenance and support with front-line support, CSG will have no liability with respect thereto and Customer must look solely to the licensor. (b) Additional Support. At Customer's request, CSG may agree to provide at its ------------------ then current rates additional Support Services or other support, including but not limited to, the optional support services listed on Exhibit C-3. If Customer is not utilizing the CCS Products in a certified Designated Environment or Customer has added third party applications, the Customer will be responsible for making all necessary modifications to such third party applications to ensure they function properly with the Updates. (c) Limitation. Updates or Enhancements in this Schedule C will not include ---------- ---------- any upgrade or new version of the CCS Products that CSG decides, in its sole discretion, (which does not replace functionality previously provided in the base processing or other fee) to make generally available as a separately priced item. This Schedule C will not require CSG to (i) develop and release Updates ---------- or Enhancements (ii) customize the Updates or Enhancements to satisfy Customer's particular requests or (iii) obtain Updates or Enhancements to any third party product. If an Update or Enhancement replaces the prior version of the CCS Product, Customer will destroy such prior version and all archival copies upon installing the Update or Enhancement. 6. Term. This Schedule C shall be effective from the Effective Date as defined ---------- in the Master Agreement and shall continue thereafter indefinitely unless terminated pursuant to Sections 17 of the Master Agreement. AGREED AND ACCEPTED THIS 10TH DAY OF AUGUST 1997, BY: CSG SYSTEMS, INC. ("CSG") TCI CABLE MANAGEMENT CORPORATION ("CUSTOMER") BY: /S/ JOHN P. POGGE BY: /S/ GARY K. BRACKEN ----------------------- ---------------------------- EXHIBIT C-1 PRODUCT SCHEDULE EXHIBIT C-2 DESIGNATED ENVIRONMENT EXHIBIT C-3 INSTALLATION, MAINTENANCE AND SUPPORT CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT C-1 PRODUCT SCHEDULE LICENSED SOFTWARE: - ------------------ ACSR Telephony - ACSR Telephony is offered with ACSR to provide customer management for telephone customers. With ACSR Telephony, both video and telephone services may be managed by a single customer management package. Included in ACSR Telephony are integrated ordering and manual provisioning, telephone number assignment, usage billing for a single bill of multiple products, product packaging and pricing. ACSR Telephony software also supports Customer requested development or APIs to provide interfaces for E911, directory listing updates, CARE and service number portability as well as other third party provider interfaces. CSG VANTAGE - Vantage is a database which enables Customer to evaluate product and service performance, conduct customer analysis and lifetime values, and transform raw data into real-time reports and graphs. ADVANCED CUSTOMER SERVICE REPRESENTATIVE (ACSR) - ACSR is a graphical user interface for CSG's CCS service bureau subscriber management system. ACSR significantly reduces training time and eliminates the need for CSR's to memorize transactions and codes. CSRs instead are allowed easily to access reference tools, help screens and customer data. As companies consolidate and cluster disparate systems with different codes and procedures, ACSR ensures the accounts can be serviced by the same CSR. ACSR also enables CSR's to communicate with one another through a self contained messaging system. ACSR is designed so that module based functionality such as CIT can be added as needed. COMPUTER BASED TRAINING (CBT) - Computer Based Training ("CBT") is Software which may be downloaded onto Customer's workstation to provide training and instruction on use of various CCS Products. ________________________________________________________________________________ SYSTEM SITE(S): - -------------- [TO BE COMPLETED] NUMBER OF WORKSTATIONS: - ----------------------- ACSR - 5000 CSG VANTAGE - TO BE DETERMINED ACSR TELEPHONY - 125 CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT C-2 (Page 1 of 4) DESIGNATED ENVIRONMENT FOR THE CCS PRODUCTS ------------------------------------------- Notes: THE FOLLOWING APPLIES ONLY IN REGARDS TO THE CCS PRODUCTS ACTUALLY - ------ LICENSED BY CUSTOMER UNDER SCHEDULE C AND MAY BE SUBJECT TO CHANGE AS THE ---------- SPECIFIC HARDWARE CONFIGURATION CANNOT BE COMPLETELY IDENTIFIED AND CERTIFIED UNTIL AFTER THE BUSINESS REQUIREMENTS OF CUSTOMER ARE DETERMINED DURING THE PRE- INSTALL VISIT. The SUPPORT SERVICES DO NOT INCLUDE SUPPORT OF THE CCS PRODUCTS IF USED OUTSIDE THE CERTIFIED DESIGNATED ENVIRONMENT (I.E. OTHER HARDWARE, SOFTWARE, OR OTHER MODIFICATIONS HAVE BEEN INTRODUCED BY CUSTOMER THAT ARE OUTSIDE THE CERTIFIED DESIGNATED ENVIRONMENT). IN SUCH A CASE, CSG MAY AGREE TO PROVIDE CUSTOMIZED TECHNICAL SUPPORT FOR CSG'S THEN-CURRENT FEES FOR SUCH SERVICES. Product Compatibility (Yes indicates product is available on indicated - ---------------------------------------------------------------------- workstation platform; date indicates estimated date available) - --------------------------------------------------------------
Win 3.11 Win NT Apple MAC SUN Solaris Win 95 --------- ------- ---------- ------------ ------ ACSR (1) Yes (4) Yes Yes CIT (1) (2) (4) (3) Yes Telephony No Yes No No No ACSR CBT (1) Yes No Yes Yes CIT CBT (1) Yes No Yes Yes Telephony CBT N/A Yes N/A N/A N/A AOI w/DDE (1) Yes N/A N/A Yes AOI w/TCPIP No Yes (4) Yes Yes
(1) - Supported at existing sites only until Nov 15, 1997; cannot be used after that date. (2) - Currently not available with Telephony. (3) - Beta availability on request. (4) - Available under existing contracts only. Workstations - ------------ Compaq Deskpro 2000 Pentium (133mhz minimum) IBM PC350 Pentium (133 mhz minimum) SparcStation 5/70Mhz, Solaris V2.5.1 Apple 7600 Power MAC Ultra Sparc 1, model 170, Solaris 2.5.1 Workstation Minimum Memory (RAM) - --------------------------------- 32MB Workstation Minimum Hard Drive Space - ------------------------------------ 1.2GB Workstation Minimum Video Requirements - --------------------------------------- Minimum video resolution supported 1024 x 768 x 256 colors, small font Minimum 15" SVGA monitor (17" for Apple MAC) CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES Ex. C-2 (Page 2 of 4) Workstation Software - -------------------- Microsoft Windows NT V4.0 w/ Service Pack 3 applied (note: Telephony workstations running Applications Administration require 16 bit drivers) Note: Service Pack 3 pending final CSG testing for Telephony; contact CSG for latest status Microsoft Windows 95 w/ Service Pack 1 and the Kernel32 update applied MAC OS V7.6.1 (w/ Apple MAC) Solaris V2.5.1 (see workstations above) Netmanage Chameleon Hostlink V6.0.1 (with Windows NT or 95) Open windows or Motif (with SUN Solaris) Brixton 3270 client for Solaris V2.3.0.10 (with SUN Solaris) Samba V1.9.15 p8 (with NT or 95) MAC Irma V5.11 (w/Apple MAC) Additional Workstation Software to Support Telephony - ---------------------------------------------------- (note: Telephony workstations running Product Administration require 16 bit drivers) Oracle SQL*NET V2.1.4.1.4 for NT runtime (with Windows NT) Oracle SQL Forms V4.5.6.5.5 for NT runtime (with Windows NT) Forest & Trees 4.1 (with Windows NT) (For PCs running reports) Additional Workstation Software to Support CIT - ---------------------------------------------- Oracle SQL*NET V2.1.4.1.4 runtime (with NT or 95) (For PCs with Forest & Trees) Forest & Trees 4.1 (with Windows NT or 95) (For PCs running reports) Servers - ------- SUN Sparc 20 SUN Sparc 1000E Ultra Sparc 1 - model 170 only Ultra Sparc 2 Ultra Sparc 3000 (Server model, number of CPUs, memory, and disk storage are based on individual customer requirements.) Server Software - --------------- Solaris V2.5.1 Samba V1.9.15 p8 (with NT or 95) Brixton Server PU2.1 for Solaris (Version 3.0.5-1) running in 2.3.2 mode (both core and session components required) Brixton 3270 Client for Solaris (Version 2.3.0.10) (1 copy required for trouble shooting & 1 copy required for each mainframe printer if printing through TCP/IP) Hewlett Packard Unix Jet Direct interface software Additional Server Software to Support CIT - ----------------------------------------- Oracle V7.1.6 runtime Platinum EPM Agent V3.1.0 Tuxedo V6.1 Additional Server Software to Support Telephony - ----------------------------------------------- Oracle V7.3.2.1 runtime Tuxedo V 6.1.(With NT or 95) Platinum EPM agent V3.1.0 Platinum Autosys agent V3.3 release 5 Postalsoft V 5.00b CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES Ex. C-2 (Page 3 of 4) Distribution Server and Softwar - ------------------------------- SparcStation 5/170Mhz, 64M RAM, 2.1G hard drive, Solaris V2.5.1 Concentrators - ------------- BayNetworks (Synoptics) 2813-04 (managed 16-port ethernet hub) BayNetworks (Synoptics) 2803 (passive 16-port ethernet hub) BayNetworks (Synoptics) 800 (passive 8-port ethernet hub) BayNetworks (Synoptics) 2712B-04 (managed 16-port token ring hub) BayNetworks (Synoptics) 2702B-C (passive 16-port token ring hub) Network Cards/Devices - --------------------- 3Com Etherlink cards SUN Quad Ethernet card SUN Fast Ethernet 10/100M SUN Token Ring 4/16M SUN Single Ring FDDI Interface SUN Dual Ring FDDI Interface Hewlett Packard Jet Direct EX Aurora Technologies Multiport 401S+ A/Sync Series Printers - -------- Lexmark IBM 4226 (533 cps) Lexmark 4227 (533 cps) IBM 6400 series Hewlett Packard LaserJet5 Routers - ------- Cisco 2501, 2509, 2511, 2514, 4500 CSG VANTAGE: - ----------- PC HARDWARE/SOFTWARE REQUIREMENTS - --------------------------------- CSG Systems, Inc. recommended hardware/software PC configuration is as follows: Minimum PC requirements: IBM or Compaq 486DX 66MHz, 16 meg. RAM, 500 megabyte hard drive Recommended PC requirements: IBM or Compaq Pentium 90Mhz or better, 32 meg. RAM or better, one gigabyte hard drive or larger, CD-ROM.
PC OS1.: MS DOS 6.2x with Windows 3.1x, or Windows 95, or Windows NT 4.0 EDA/Client for Windows2.: 2.2a, 3.2 EDA ODBC Extender: 2.2a, 3.2 (packaged with EDA/Client) Forest & Trees User Edition: 4.1 3270 Emulation Software3.: Attachmate's Extra! Mainframe for Windows 4.1, up to 6.1 (See notes below for more version information.) 3270 Emulation Board: IBM recommended (only required if Coax connection through Controller) -or- 3270 Network Adapter: Network-specific
All software must be loaded and operated per workstation. LAN server versions and/or operations are not supported. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EX. C-2 (PAGE 4 OF 4) CONNECTIVITY REQUIREMENTS - ------------------------- * IBM 3174 Controller, or * Novell NetWare OS version 3.1 or greater on a Token Ring or Ethernet LAN. The 3270 Gateway must be an Attachmate SAA gateway or a Novell IPX/SPX to Netware for SAA gateway. If Novell version is 1.2 and you will use Attachmate's Extra! Mainframe for Windows, you must use a version prior to Extra! for Windows 4.1. Novell SAA Gateway version 2.0 or higher will require Attachmate's Extra! Mainframe for Windows 4.1 or higher. If client currently has a network that is not Novell, or a gateway that is not Novell or Attachmate, the LAN and gateway can be tested for possible operation. USING VANTAGE IN THE ACSR AND/OR ACSR TELEPHONY PRODUCT ENVIRONMENT - ------------------------------------------------------------------- The ACSR product runs on an IP LAN with a SUN Server. A Brixton gateway on the SUN Server is used to provide the Vantage Host link. When running Vantage in that environment, Brixton TN3270 applications run on the SUN Server and Extra! Mainframe for Windows is configured for a TN3270 network connection versus an SAA or SNA gateway. In this environment, the version of Extra! is dependent on the client-specific method of connectivity in relation to EDA/Client. - -------------------------------------------------------------------------------- 1. If the Vantage PC will be used in the ACSR environment, the ACSR PC Workstation Requirements should be used for both Vantage and ACSR. Vantage will only operate on a PC workstation. 2. The designated version of EDA/Client is dependent on the client-specific method of connectivity. Contact CSG for more information. 3. The designated version of Attachmate's Extra! Is dependent on the client- specific network configuration and the version of EDA/Client. Contact CSG for more information. CCS CENTERALIZED SERVER CONNECTIVITY: Service Software Brixton Server PU2.1 for Solaris (version 3.0.5-1) running in 2.3.2 mode (both core and session components required) Client software Attachmate's Extra! Mainframe for Windows 4.1 (minimum) Note: This configuration only pertains to pooling of Sys/Prins into a single server environment for 3270 gateway access to CSG's mainframe. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT C-3 (PAGE 1 OF 4) CCS PRODUCTS INSTALLATION AND SUPPORT SERVICES ( EXCLUDING VANTAGE) ------------------------------------------------------------------- (Note: for Vantage support detail - see page 3 of Exhibit C-3) -------------------------------------------------------------- TO BE COMPLETED _______________________________________________________________________________ SUPPORT SERVICES FOR THE CCS PRODUCTS (excluding Vantage) --------------------------------------------------------- (Note: for Vantage support detail - see page 3 of Exhibit C-3) -------------------------------------------------------------- PRODUCT SUPPORT CENTER The customer Product Support Center provides Customer with advice, consultation and assistance to use CCS Products and diagnose and correct problems that Customer may encounter with the then-current version of CCS Products. CSG will offer the Product Support Center remotely by telephone, fax or other electronic communication twenty-four hours a day, seven days a week. Customer will bear all telephone and other expenses that it may incur in connection with the Product Support Center. Every customer problem is assigned a tracking number and a priority. Problems are resolved according to their assigned priority. See attached list detailing "Priority Levels". Account Management CSG will provide an account manager which is shared resource which will serve as Customer's liaison to all other CSG support services and will be responsible for ensuring customer satisfaction. Through periodic status reports and occasional on-site visits when necessary, the account manager will assist Customer with their use of CCS Products and keep them abreast of new developments in CSG's products and services. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT C-3 (Page 2 of 4) UPDATES Subject to the terms set forth in this Schedule C, product Updates include ---------- software corrections, the fixes and updates that CSG may make generally available. These Updates are delivered to Customer accompanied by bulletins describing the updates and installation instructions. CSG will not provide Updates due to changes or new releases in Customer's vendor products. Custom software modifications are NOT included under the Basic Support Package as Updates but rather are covered as Technical Services under Schedule B. ---------- PUBLICATIONS The customer will receive updates to all published Documentation for CCS Products. CSG will provide such Documentation pursuant to Attachment 3 of the Master Agreement. THIRD PARTY SOFTWARE The maintenance and support for third party software is provided by the licensor of those products. Although CSG will use reasonable best efforts and assist in this maintenance and support with front-line support, CSG will have no liability with respect thereto and Customer must look solely to the licensor. The third party software for the CCS Products is set forth in Exhibit C-2. ________________________________________________________________________________ PRODUCT SUPPORT CENTER FOR THE CCS PRODUCTS - PRIORITY LEVELS - (excluding --------------------------------------------------------------------------- Vantage) -------- (Note: for Vantage support detail - see page 4 of Exhibit C-3) -------------------------------------------------------------- When contacting the PRODUCT SUPPORT CENTER, the caller should be prepared to provide detailed information regarding the problem and the impact on the operation and the end user. Each problem or question is assigned a tracking number and a priority. The priority is set to correspond with the urgency of the problem. It is very important that the customer describe the urgency of the problem when it is reported. The priority levels are described below: . CRITICAL (PRIORITY 1): Complete loss of functionality, system outage or down production system. Customers cannot access the system, cannot perform any function due to the hardware being down, are experiencing network control or communication problems, or are unable to process. The customer will receive immediate response and prioritized at the highest level. Once control has been regained, efforts are then made to determine the "root cause" of the problem. Considering the nature of the cause, the problem is adjusted to one of the other priorities and processed accordingly. While a Critical (Priority 1) problem exists, the Product Support Center commitment is to provide around-the-clock support until customers system/network/application is restored to operational status. . SERIOUS (PRIORITY 2): Partial loss of functionality, or loss of critical functionality. The Customer's production/processing system is not down but there is an impact within the system/network. The Customer will receive immediate response. If the problem persists, the control of the network may be lost and/or end-user impacts may become serious. The Customer will receive immediate response. The Product Support Center's goal is to ensure that control of the system is not jeopardized and to work with Customer to gather information in order to resolve the issue. The Product Support Center allocates resources during normal business hours until a permanent solution is found. . OPERATIONAL (PRIORITY 3): Partial loss of functionality loss of non-critical functionality, or loss of critical functionality for which a work around exists. The problem is within the customers' operations environment. The user is attempting to utilize a CSG product and is having difficulty completing the process. A user may be a CSR, subscriber, or the Customer's operation staff running the system. CSG's Product Support Center goal is to respond the next business days. . INCONVENIENCE OR ENHANCEMENT (PRIORITY 4): Inconvenience or loss of functionality for which a work-around solution exists, or enhancement request is required. The problem is an operator inconvenience, an enhancement, or the Customer have requested information. There is no serious impact to the end user of the system. The problem can be avoided by proper operator action, internal training by the customer, or a work- CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT C-3 (Page 3 of 4) around solution. There is no apparent danger of losing control of the system, network, application or data because of this type of problem. A suggestion or request for enhancement is based upon the problem, concern or business need. The Product Support Center's goal is to provide a correction through internal software control procedures. CSG's Product Support Center goal is to respond within (3) business days. . INFORMATIONAL (PRIORITY 5): This category also includes questions. The Product Support Center is committed to responding with the requested information within (5) business days. Software correction notification may be sent to the customer shortly after the correction has been made by our development engineers. At times, a work-around may be suggested if: . Its delivery is more timely . Its implementation is less complex . Its reliability is more certain However, a work around must be mutually acceptable to our Customers, and it must have the effect of reducing the concern until a permanent resolution can be determined. Should the Customer wish to check the status of a problem they may contact the Product Support Center desk representatives or their Account Manager. In either case, the customer should reference the tracking number. Customer may request to have the priority of Customer's call upgraded. Customer may check on the status of such request at any time by calling the Product Support Center or contacting Customer's account manager. The account manager is responsible for problem escalation to the appropriate level of management if Customer is not satisfied with a response. - ------------------------------------------------------------------------------- CSG VANTAGE Support Services Vantage Installation Services: - ----------------------------- The following services will be provided by CSG with respect to start-up of the Vantage product. 1. Initial load of the Vantage data base. 2. Unlimited phone support for installation of hardware and software that is certified by CSG Systems, Inc. 3. For non-certified environments, CSG Systems, Inc. will provide the necessary phone support to determine if the non-certified environment can or should be certified 4. If the environment is deemed certifiable, the costs associated with certifying the environment will be communicated to the customer. 5. On-site assistance by CSG can be provided upon customer request. VANTAGE TRAINING SERVICES: - ------------------------- 1. Basic Vantage training at a regularly scheduled Omaha training class, as space permits. 2. Basic Vantage training at a scheduled regional training class, as space permits. 3. Basic Vantage training at a customer requested time and/or location is available on request. VANTAGE SUPPORT SERVICES: - ------------------------ Customer support of Vantage is provided as part of the Support Services during CSG's customer service hours for support of questions, functionality, workflow, training, and non-catastrophic software defects. System support of Vantage is provided as part of the Support Services for problems resulting from defects in Vantage. The following services for the then-current version will be provided by CSG for all Vantage users: 1. Telephone consultation for trained users for questions and problems regarding Vantage. 2. Up to one (1) hour of telephone consultation for troubleshooting a previously certified hardware/software environment. 3. Attendance at regularly scheduled basic and advanced Vantage training classes offered in Omaha or at a scheduled regional training location, as space permits. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT C-3 (PAGE 4 OF 4) 4. Daily updates to the Vantage database. 5. Storage of thirteen (13) months of financial data. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES FEE SCHEDULE - TCI Cable Management Corporation ----------------------------------------------- INDEX 1.................... CCS(TM) WIRELINE VIDEO AND CABLEMAX 2.................... TECHNICAL SERVICES 3.................... CCS(TM) - ISP SERVICES FEES 4.................... CCS(TM) TELEPHONY SERVICES FEES 5.................... CCS(TM) DISCOUNTS 6.................... CCS PRINT AND MAIL SERVICES FEES 7.................... CSG VANTAGE(TM) 8.................... HITS DIGITAL 9.................... ACSR SOFTWARE LICENSE/MAINTENANCE/INSTALLATION 10................... CSG VANTAGEPOINT(TM) 11................... ISP DOMAIN SERVER SOFTWARE (SINGLE SITE LICENSE) 12................... USAGE HANDLING SYSTEM 13................... ISP DOMAIN API'S 14................... DATA COMMUNICATIONS SERVICES 15................... FINANCIAL SERVICES 16................... SUMMITRAK CUSTOMER MANAGEMENT SYSTEM 17................... SUMMITRAK PAY-PER-VIEW SERVICE CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES
"Confidential Treatment Requested 1. CCS WIRELINE VIDEO AND CABLEMAX PROCESSING- and the Redacted Material has been - -------------------------------------------------- separately filed with the Commission."
Basic Monthly Subscriber Charge (herein after referred to as BSC) - $(***)
MINIMUMS: (Base processing and ancillary services) Monthly Subscriber Minimum Monthly Processing Fee Minimum - ---------------------------------------- -------------------------- ------------------------------- September 1, 1997 through December 31, 1997 3,906,250 $(***) January 1, 1998 through March 31, 1998 4,864,387 $(***) April 1, 1998 through June 30, 1998 6,928,006 $(***) July 1, 1998 through September 30, 1998 7,959,906 $(***) October 1, 1998 through December 31, 1998 10,023,585 $(***) January 1, 1999 through December 31, 1999 13,000,000 $(***) January 1, 2000 through December 31, 2000 13,000,000 $(***) January 1, 2001 through December 31, 2001 13,000,000 $(***) January 1, 2002 through December 31, 2012 13,000,000 $(***) Year 2003 to Year 2012*
*The monthly processing fee minimum for the years 2003 to 2012 will commence using the year 2002 monthly processing fee minimum adjusted annually pursuant to the terms and conditions of the Master Agreement. On-Line Allowance And Overage Charges:
- --------------------------------------------------------------------------------------------------- ITEM MONTHLY ON-LINE MONTHLY PER ALLOWANCE PER SUBSCRIBER OVERAGE CHARGE - --------------------------------------------------------------------------------------------------- A. Work Orders on file 7.64 $(***) - --------------------------------------------------------------------------------------------------- B. Statements stored on-line 6.25 $(***) - --------------------------------------------------------------------------------------------------- C. Details stored on-line 45.84 $(***) - --------------------------------------------------------------------------------------------------- D. Memos stored on-line 6.0 $(***) - --------------------------------------------------------------------------------------------------- E. Inactive subscribers on file .40 $(***) - ---------------------------------------------------------------------------------------------------
CCS(TM) - ANCILLARY SERVICE FEES
ANCILLARY SERVICE FEES - ------------------------------------------------------------------------------------------------------------------------------------ ITEM ONE TIME CHARGE PER MONTHLY CHARGE PER MONTHLY CHARGE PER PER SYSTEM SYSTEM SUBSCRIBER ITEM - ------------------------------------------------------------------------------------------------------------------------------------ I. Reporting & Decision Support Services - ------------------------------------------------------------------------------------------------------------------------------------ A. Microfiche - ------------------------------------------------------------------------------------------------------------------------------------ A. Originals $(***) - ------------------------------------------------------------------------------------------------------------------------------------ B. Duplicates $(***) - ------------------------------------------------------------------------------------------------------------------------------------ B. Reporting $(***) Package-includes Basic Vantage Reporting and Selects Reporting (with Selects Reporting Usage included up to $(***) per subscriber) - ------------------------------------------------------------------------------------------------------------------------------------ C. Selects - ------------------------------------------------------------------------------------------------------------------------------------ (1). Set-up fee per select $(***) (per system) - ------------------------------------------------------------------------------------------------------------------------------------ (2). Select Records to Print $(***) - ------------------------------------------------------------------------------------------------------------------------------------ (3). Select Records to $(***) Magnetic Tape - ------------------------------------------------------------------------------------------------------------------------------------ Volume Discount $(***) Greater than 1,000,000 (per acct selected) - ------------------------------------------------------------------------------------------------------------------------------------ (4). Audit Master Tape with $(***) Carrier Sort - ------------------------------------------------------------------------------------------------------------------------------------ Volume Discount $(***) Greater than 1,000,000 (per acct selected) - ------------------------------------------------------------------------------------------------------------------------------------ (5). TAC File Audit $(***) - ------------------------------------------------------------------------------------------------------------------------------------ (6). Tape Charges $(***) - ------------------------------------------------------------------------------------------------------------------------------------ (7). Special Reports - ------------------------------------------------------------------------------------------------------------------------------------ Audit Confirmation $(***) Statements - ------------------------------------------------------------------------------------------------------------------------------------ Sales Call Cards $(***) - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES
"Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." - ------------------------------------------------------------------------------------------------------------------------------------ ANCILLARY SERVICE FEES - ------------------------------------------------------------------------------------------------------------------------------------ ITEM ONE TIME CHARGE PER MONTHLY CHARGE PER MONTHLY CHARGE PER PER SYSTEM SYSTEM SUBSCRIBER ITEM - ------------------------------------------------------------------------------------------------------------------------------------ (8). Auto dialer - ------------------------------------------------------------------------------------------------------------------------------------ a. Records read $(***) - ------------------------------------------------------------------------------------------------------------------------------------ b. Minimum charge per $(***) report - ------------------------------------------------------------------------------------------------------------------------------------ c. Maximum charge per $(***) report - ------------------------------------------------------------------------------------------------------------------------------------ (9). Labels (printed at CSG's Production Facility) - ------------------------------------------------------------------------------------------------------------------------------------ Set-up fee per select $(***) (per system) - ------------------------------------------------------------------------------------------------------------------------------------ a. Cheshire labels $(***) - ------------------------------------------------------------------------------------------------------------------------------------ Volume Discount - ------------------------------------------------------------------------------------------------------------------------------------ Greater than $(***) 100,000 (indiv. job) - ------------------------------------------------------------------------------------------------------------------------------------ Greater than $(***) 500,000 (indiv. job) - ------------------------------------------------------------------------------------------------------------------------------------ b. Cheshire Labels w/ $(***) carrier sort - ------------------------------------------------------------------------------------------------------------------------------------ Volume Discount - ------------------------------------------------------------------------------------------------------------------------------------ Greater than $(***) 100,000 (indiv. job) - ------------------------------------------------------------------------------------------------------------------------------------ Greater than $(***) 500,000 (indiv. job) - ------------------------------------------------------------------------------------------------------------------------------------ c. Applying Cheshire $(***) labels (each) - ------------------------------------------------------------------------------------------------------------------------------------ d. LAB labels $(***) - ------------------------------------------------------------------------------------------------------------------------------------ e. 4-Up Gum Labels $(***) - ------------------------------------------------------------------------------------------------------------------------------------ f. 4-Up Gum Labels w/ $(***) carrier sort - ------------------------------------------------------------------------------------------------------------------------------------ II. Other Ancillary Services - ------------------------------------------------------------------------------------------------------------------------------------ A. Equipment Inventory Incl. in BSC - ------------------------------------------------------------------------------------------------------------------------------------ B. Tape transmission Incl. in (lockbox) BSC - ------------------------------------------------------------------------------------------------------------------------------------ C. Audio response units 1. Access fee $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Transaction charge $(***) (per PPV item) - ------------------------------------------------------------------------------------------------------------------------------------ D. Automatic Number Identification (ANI) - ------------------------------------------------------------------------------------------------------------------------------------ 1. Access fee $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Transaction fee (per $(***) - ------------------------------------------------------------------------------------------------------------------------------------ E. Autopackaging (maximum Incl. in BSC $(***)) - ------------------------------------------------------------------------------------------------------------------------------------ F. Pay Per View - ------------------------------------------------------------------------------------------------------------------------------------ 1. PPV events (per event) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Build events, per $(***) supplier tape - ------------------------------------------------------------------------------------------------------------------------------------ 3. Event schedule download $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 4. Output of $(***) Authorization Profiles - ------------------------------------------------------------------------------------------------------------------------------------ G. Account number format $(***) change - ------------------------------------------------------------------------------------------------------------------------------------ H. Addition for a system, principle or agent - ------------------------------------------------------------------------------------------------------------------------------------ 1. Setup of new system $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Setup of new $(***) principal/agent - ------------------------------------------------------------------------------------------------------------------------------------ 3. Add new agents (up to $(***) 10) - ------------------------------------------------------------------------------------------------------------------------------------ I. Equipment interfaces - ------------------------------------------------------------------------------------------------------------------------------------ Charge for TAC Interface Incl. in BSC - ------------------------------------------------------------------------------------------------------------------------------------ Charge for Non-TAC $(***) Interface (exclusive of HITS Digital) - ------------------------------------------------------------------------------------------------------------------------------------ TCI Download and Refresh $(***) - ------------------------------------------------------------------------------------------------------------------------------------ DMX Monthly Fees $(***) - ------------------------------------------------------------------------------------------------------------------------------------ Volume Discount --------------- - ------------------------------------------------------------------------------------------------------------------------------------ 1 to 35 System Sites $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 36 to 70 System Sites $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 71 to 140 System Sites $(***) - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES
"Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." - ------------------------------------------------------------------------------------------------------------------------------------ ANCILLARY SERVICE FEES - ------------------------------------------------------------------------------------------------------------------------------------ ITEM ONE TIME MONTHLY MONTHLY CHARGE PER CHARGE PER CHARGE PER PER SYSTEM SYSTEM SUBSCRIBER ITEM - ------------------------------------------------------------------------------------------------------------------------------------ greater than 140 users $(***) - ------------------------------------------------------------------------------------------------------------------------------------ J. Special reports (each request) - ------------------------------------------------------------------------------------------------------------------------------------ 1. Duplicate terminal address reports $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Duplicate house address report $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Duplicate house/sub compare report $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 4. Duplicate sub/converter compare report $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 5. Duplicate phone report $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 6. Trouble call reports - ------------------------------------------------------------------------------------------------------------------------------------ a. Repeat trouble calls within 30 $(***) days(CPWM-060) - ------------------------------------------------------------------------------------------------------------------------------------ b. Trouble calls within 60 days of $(***) install (CPWM-400) - ------------------------------------------------------------------------------------------------------------------------------------ K. Tape Requests (per request) - ------------------------------------------------------------------------------------------------------------------------------------ 1. Subscriber Masterfile $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. House Masterfile $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Converter Masterfile $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 4. Work Order Masterfile $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 5. General Ledger $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 6. Financial Summary Tape $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 7. General Ledger & Financial Summary $(***) - ------------------------------------------------------------------------------------------------------------------------------------ L. User data/ report data files - special services - ------------------------------------------------------------------------------------------------------------------------------------ 1. Late user data file cards $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Late reports data file cards $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Late statement message card $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 4. Special user data file build $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 5. Special reports data file build $(***) - ------------------------------------------------------------------------------------------------------------------------------------ M. Deconversion fees - ------------------------------------------------------------------------------------------------------------------------------------ 1. Deconversion per Site $(***) - ------------------------------------------------------------------------------------------------------------------------------------ N. Statement Reruns - ------------------------------------------------------------------------------------------------------------------------------------ 1. Monetary $(***)sub plus $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Non-Monetary $(***)/sub plus $(***) - ------------------------------------------------------------------------------------------------------------------------------------ O. Special Requests - ------------------------------------------------------------------------------------------------------------------------------------ 1. Cycle Freeze - per cycle per PRIN charge $(***) - ------------------------------------------------------------------------------------------------------------------------------------ P. Converter Batch Upload Via Tape (each tape) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ Q. Mass Adjustments $(***) - ------------------------------------------------------------------------------------------------------------------------------------ R. Data Extracts Quote $(***) - ------------------------------------------------------------------------------------------------------------------------------------ S. Dialog (1st sign-on ID at no charge) - ------------------------------------------------------------------------------------------------------------------------------------ 1. Each Additional ID $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Passport $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Software/Diskette (each) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ T. Expand Bill Codes $(***) plus $(***)/sub (subscribers who exceed who exceed 24 24 billing codes) billing codes. - ------------------------------------------------------------------------------------------------------------------------------------ U. Frequent Buyer Program (data storage and processing) - ------------------------------------------------------------------------------------------------------------------------------------ Number of Subscribers Monthly Access Fee - ------------------------------------------------------------------------------------------------------------------------------------ 0 - 10,000 $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 10,001 - 50,000 $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 50,001 - 100,000 $(***) - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES
"Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." - ------------------------------------------------------------------------------------------------------------------------------------ ANCILLARY SERVICE FEES - ------------------------------------------------------------------------------------------------------------------------------------ ITEM ONE TIME MONTHLY MONTHLY CHARGE PER CHARGE PER CHARGE PER PER SYSTEM SYSTEM SUBSCRIBER ITEM - ------------------------------------------------------------------------------------------------------------------------------------ 100,001 - 200,000 $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 200,001 - 500,000 $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ Over 500,000 $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ W. System Enhancements - ------------------------------------------------------------------------------------------------------------------------------------ Programming Charge per hour $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ X. Deconversion Fees/Per Basic Subscriber $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ Y. Refund Check - ------------------------------------------------------------------------------------------------------------------------------------ 1. Refund Check Prep $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Refund Check DR Posted $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Refund Check Account File $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 4. Money Order Processing $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ Z. Computer Based Training - ------------------------------------------------------------------------------------------------------------------------------------ Students Number $ (***) (Instructor+1 Student/month) - ------------------------------------------------------------------------------------------------------------------------------------ 1. Additional Student #s (per month) $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Course Materials $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Code Table Books $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 4. Job Aids (per set) $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ AA. TCI Marketing Download Incl. in BSC - ------------------------------------------------------------------------------------------------------------------------------------ AB. CCS Host System Availability- $ (***) High System Availability Option (option to execute expires 12/01/97). (Requires a minimum of 7 million subscribers) - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested CCS(TM) VIDEO CONVERSION SERVICES and the Redacted Material has been - --------------------------------- separately filed with the Commission." (REIMBURSABLE EXPENSES ARE EXCLUDED AND BILLABLE): A. For Manual Conversions with subscriber counts of less than 20,000: - --------------------------------------------------------------------- CSG Start-Up Fee - $(***) CSG Support - $(***)/day plus Reimbursable Expenses On Data Bases Over 10K Subs, CSG will offer the following: - - Programmatic Load of House Data - $(***) - - Programmatic Load of Converter Data - $(***) B. For Programmatic Conversions: - --------------------------------
PROGRAMMATIC CONVERSION SITE SIZE - --------------------------------------------------------------------------------------------------------- 20,000 to 30,000 to 60,000 to Greater than 90,000 29,999 59,999 90,000 - --------------------------------------------------------------------------------------------------------- 1. Known Processor* - --------------------------------------------------------------------------------------------------------- Total Conversion/Implementation Fee $ (***) $ (***) $ (***) $ (***) - --------------------------------------------------------------------------------------------------------- 2. FOREIGN PROCESSOR - --------------------------------------------------------------------------------------------------------- Total Conversion/Implementation Fee $ (***) $ (***) $ (***) $ (***) - ---------------------------------------------------------------------------------------------------------
*Known Processors: BSI, EDS - System 1 (CMS), Service Electric, CableData, ISD, Toner, Parallex, Touchstone, Cablestar, Quickdata, SUMMITrak. C. Cablemax Conversions: - ------------------------ Total conversion and implementation fee- $(***) per System Site. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." 2. TECHNICAL SERVICES FEES - - ----------------------------- Fees vary depending on the project. See the respective Statement of Work. Standard Hourly Rates for Consultants are as follows: Associate $(***) per hour minimum of $(***) per day Consultant $(***) per hour minimum of $(***) per day Senior Consultant $(***) per hour minimum of $(***) per day Principal $(***) per hour minimum of $(***) per day Project Manager $(***) per hour minimum of $(***) per day Director $(***) per hour minimum of $(***) per day Vice President $(***) per hour minimum of $(***) per day 3. CCS(TM) - ISP SERVICES FEES - - --------------------------------- Basic Monthly Subscriber Charge (herein after referred to as BSC) -
Monthly Subscriber Volume Monthly Fee Per Subscriber ------------------------- -------------------------- 0 to 99,999 $(***) 100,000 to 349,999 $(***) 350,000 to 749,999 $(***) 750,000 to 999,999 $(***) 1,000,000 and greater $(***)
Monthly Per System/Principle Charge included in BSC. On-Line Allowance And Overage Charges:
Year Monthly Subscriber Minimums Monthly Fee Minimums ---- --------------------------- -------------------- 1998 10,000 $ (***) 1999 100,000 $ (***) 2000 350,000 $ (***) 2001 750,000 $ (***) 2002 1,000,000 $ (***) 2003 to 2012*
*The monthly processing fee minimum for the years 2003 to 2012 will commence using the year 2002 monthly processing fee minimum adjusted annually pursuant to the terms and conditions of the Master Agreement.
ITEM MONTHLY ON-LINE MONTHLY PER ALLOWANCE PER SUBSCRIBER OVERAGE CHARGE -------------------------------------------------------------------------------------------- A. Work Orders on file 7.64 $ (***) -------------------------------------------------------------------------------------------- B. Statements stored on-line 6.25 $ (***) -------------------------------------------------------------------------------------------- C. Details stored on-line 45.84 $ (***) -------------------------------------------------------------------------------------------- D. Memos stored on-line 6.00 $ (***) -------------------------------------------------------------------------------------------- E. Inactive subscribers on file .40 $ (***) --------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatement Requested and the Redacted Material has been separately filed with the Commission." CCS-ISP ANCILLARY SERVICE FEES
- ------------------------------------------------------------------------------------------------------------------------------------ ANCILLARY SERVICE FEES - ------------------------------------------------------------------------------------------------------------------------------------ ITEM ONE TIME MONTHLY MONTHLY CHARGE CHARGE PER CHARGE PER PER ITEM PER SYSTEM SYSTEM SUBSCRIBER - ------------------------------------------------------------------------------------------------------------------------------------ I. Reporting & Decision Support Services - ------------------------------------------------------------------------------------------------------------------------------------ A. Microfiche - ------------------------------------------------------------------------------------------------------------------------------------ A. Originals Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ B. Duplicates $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ B. Basic Vantage Reporting Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ C. Selects - ------------------------------------------------------------------------------------------------------------------------------------ (1). Set-up fee per report Included in BSC* then $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ (2). Select records to print Included in BSC* then $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ (3). Select records to magnetic tape Included in BSC* then $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ (4). Tape Charges $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ (5). Auto dialer - ------------------------------------------------------------------------------------------------------------------------------------ a. Records read Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ b. Minimum charge per report Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ c. Maximum charge per report Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ (6). Labels (printed at CSG's Production Facility) - ------------------------------------------------------------------------------------------------------------------------------------ a. Cheshire labels $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ b. LAB labels $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ II. Other Ancillary Services - ------------------------------------------------------------------------------------------------------------------------------------ A. Equipment Inventory Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ B. Autopackaging (maximum $(***)) Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ C. Account number format change $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ D. Addition for a system, principle or agent - ------------------------------------------------------------------------------------------------------------------------------------ 1. Setup of new system $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Setup of new principal/agent $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Add new agents (up to 10) $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ E. File maintenance (each request) Quote - ------------------------------------------------------------------------------------------------------------------------------------ F. Tape Requests (per request) - ------------------------------------------------------------------------------------------------------------------------------------ 1. Subscriber Masterfile $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. House Masterfile $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Converter Masterfile $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 4. Work Order Masterfile $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 5. General Ledger $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 6. Financial Summary Tape $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 7. General Ledger & Financial Summary $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ G. User data/ report data files - special services - ------------------------------------------------------------------------------------------------------------------------------------ 1. Late user data file cards $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Late reports data file cards $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Late statement message card $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 4. Special user data file build $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 5. Special reports data file build $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ H. Deconversion fees - ------------------------------------------------------------------------------------------------------------------------------------ 1. Deconversion per Site $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Online access fee Quote - ------------------------------------------------------------------------------------------------------------------------------------ I. Statement Reruns - ------------------------------------------------------------------------------------------------------------------------------------ 1. Monetary $ (***)/sub plus $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Non-Monetary $ (***)/sub plus $(***) - ------------------------------------------------------------------------------------------------------------------------------------ J. Special Requests - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission."
- ------------------------------------------------------------------------------------------------------------------------------------ ANCILLARY SERVICE FEES - ------------------------------------------------------------------------------------------------------------------------------------ ITEM ONE TIME MONTHLY MONTHLY CHARGE CHARGE PER CHARGE PER PER ITEM PER SYSTEM SYSTEM SUBSCRIBER - ------------------------------------------------------------------------------------------------------------------------------------ 1. Cycle Freeze - per cycle per PRIN charge $(***) - ------------------------------------------------------------------------------------------------------------------------------------ K. Mass Adjustments (per SAM transaction) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ L. Data Extracts Quote $(***) - ------------------------------------------------------------------------------------------------------------------------------------ M. Expand Bill Codes $(***) $(***)/sub who (subscribers who exceed 24 billing plus exceed 24 billing codes) codes. - ------------------------------------------------------------------------------------------------------------------------------------ N. System Enhancements - ------------------------------------------------------------------------------------------------------------------------------------ Programming Charge per hour $(***) - ------------------------------------------------------------------------------------------------------------------------------------
*FIRST TEN (10) SELECTS ARE INCLUDED IN THE BSC. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." 4. CCS(TM) TELEPHONY SERVICES FEES - - ------------------------------------ Basic Monthly Subscriber Charge (herein after referred to as BSC) - $ (***) INCLUDES: 1. Customer record and file maintenance 2. Processing of rated messages 3. E911 updates 4. Directory listing updates 5. Number portability updates 6. Customer Account record exchange updates (CARE) 7. Line information data base updates (LIDB) 8. TAR updates 9. ESP Statement, one physical page/Telephony Format (excludes postage, paper and envelope costs). * Software development required is per Quote. 10. Selected CCS Service Fees 11. Basic Vantage Reporting Services
MINIMUMS: Year Monthly Subscriber Minimums Monthly Processing Fee Minimums ---- --------------------------- ------------------------------- 1998 10,000 $ (***) 1999 20,000 $ (***) 2000 30,000 $ (***) 2001 40,000 $ (***) 2002 50,000 $ (***) 2003 to 2012*
*The monthly processing fee minimum for the years 2003 to 2012 will commence using the year 2002 monthly processing fee minimum adjusted annually pursuant to the terms and conditions of the Master Agreement. Monthly Per System/Principle Charge included in BSC. On-Line Allowance And Overage Charges:
-------------------------------------------------------------------------------------------- ITEM MONTHLY ON-LINE MONTHLY PER ALLOWANCE PER SUBSCRIBER OVERAGE CHARGE -------------------------------------------------------------------------------------------- A. Work Orders on file 7.64 $ (***) -------------------------------------------------------------------------------------------- B. Statements stored on-line 6.25 $ (***) -------------------------------------------------------------------------------------------- C. Details stored on-line 45.84 $ (***) -------------------------------------------------------------------------------------------- D. Memos stored on-line 6.00 $ (***) -------------------------------------------------------------------------------------------- E. Inactive subscribers on file 0.40 $ (***) --------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." CCS TELEPHONY - ANCILLARY SERVICE FEES
- ------------------------------------------------------------------------------------------------------------------------------------ ANCILLARY SERVICE FEES - ------------------------------------------------------------------------------------------------------------------------------------ ITEM ONE TIME MONTHLY MONTHLY CHARGE CHARGE PER CHARGE PER PER ITEM PER SYSTEM SYSTEM SUBSCRIBER - ------------------------------------------------------------------------------------------------------------------------------------ I. Reporting & Decision Support Services - ------------------------------------------------------------------------------------------------------------------------------------ A. Microfiche - ------------------------------------------------------------------------------------------------------------------------------------ A. Originals Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ B. Duplicates $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ B. Basic Vantage Reporting Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ C. Selects - ------------------------------------------------------------------------------------------------------------------------------------ (1). Set-up fee per report Included in BSC* then $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ (2). Select records to print Included in BSC* then $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ (3). Select records to magnetic tape Included in BSC* then $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ (4). Auto dialer - ------------------------------------------------------------------------------------------------------------------------------------ a. Records read Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ b. Minimum charge per report Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ c. Maximum charge per report Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ (5). Labels (printed at CSG's Production Facility) - ------------------------------------------------------------------------------------------------------------------------------------ a. Cheshire labels $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ b. LAB labels $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ II. Other Ancillary Services - ------------------------------------------------------------------------------------------------------------------------------------ A. Equipment Inventory Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ B. Tape transmission (lockbox) - ------------------------------------------------------------------------------------------------------------------------------------ 1. Per remittance processor Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ 2. Lockbox reversal Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ C. Autopackaging (maximum $(***)) Included in BSC - ------------------------------------------------------------------------------------------------------------------------------------ D. Account number format change $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ E. Addition for a system, principle or agent - ------------------------------------------------------------------------------------------------------------------------------------ 1. Setup of new system $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Setup of new principal/agent $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Add new agents (up to 10) $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ F. File maintenance (each request) Quote - ------------------------------------------------------------------------------------------------------------------------------------ G. Tape Requests (per request) - ------------------------------------------------------------------------------------------------------------------------------------ 1. Subscriber Masterfile $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. House Masterfile $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Converter Masterfile $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 4. Work Order Masterfile $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 5. General Ledger $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 6. Financial Summary Tape $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 7. General Ledger & Financial $ (***) Summary - ------------------------------------------------------------------------------------------------------------------------------------ H. User data/ report data files - special services - ------------------------------------------------------------------------------------------------------------------------------------ 1. Late user data file cards $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Late reports data file cards $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 3. Late statement message card $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 4. Special user data file build $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 5. Special reports data file build $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ I. Deconversion fees - ------------------------------------------------------------------------------------------------------------------------------------ 1. Deconversion per Site $ (***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Online access fee Quote - ------------------------------------------------------------------------------------------------------------------------------------ J. Statement Reruns - ------------------------------------------------------------------------------------------------------------------------------------ 1. Monetary $(***)/sub plus $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 2. Non-Monetary $(***)/sub plus $(***) - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission."
- ------------------------------------------------------------------------------------------------------------------------------------ ANCILLARY SERVICE FEES - ------------------------------------------------------------------------------------------------------------------------------------ ITEM ONE TIME CHARGE MONTHLY CHARGE PER MONTHLY CHARGE PER PER SYSTEM SYSTEM SUBSCRIBER PER ITEM - ------------------------------------------------------------------------------------------------------------------------------------ K. Special Requests - ------------------------------------------------------------------------------------------------------------------------------------ 1. Cycle Freeze - per cycle per PRIN charge $(***) - ------------------------------------------------------------------------------------------------------------------------------------ L. Converter Batch Upload Via Tape (each tape) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ M. Mass Adjustments (per SAM transaction) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ N. Data Extracts Quote $(***) - ------------------------------------------------------------------------------------------------------------------------------------ O. Expand Bill Codes $(***) $(***)/sub who (subscribers who exceed 24 plus exceed 24 billing billing codes. codes - ------------------------------------------------------------------------------------------------------------------------------------ P. System Enhancements - ------------------------------------------------------------------------------------------------------------------------------------ Programming Charge per hour $(***) - ------------------------------------------------------------------------------------------------------------------------------------ Q. Switch Polling Quote Quote - ------------------------------------------------------------------------------------------------------------------------------------ R. New or updates to rate plans Quote Quote - ------------------------------------------------------------------------------------------------------------------------------------ S. Special reports, fiche, or research Quote Quote - ------------------------------------------------------------------------------------------------------------------------------------ T. CMDS Processing Quote Quote - ------------------------------------------------------------------------------------------------------------------------------------
*FIRST TEN (10) SELECTS ARE INCLUDED IN THE BSC. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been 5. CCS(TM) DISCOUNTS- separately filed with the Commission." - --------------------- (a) Multiple CCS Services. For any account (an "account" is defined as a --------------------- subscriber assigned to one subscriber number) which receives more than one of the following CCS Services - wireline video, ISP or residential telephony, on the same account, the aggregate basic subscriber monthly charge for all of the CCS Services that are billed under such account will be calculated by taking the sum of the basic subscriber charge set forth on Schedule D for each CCS Service ---------- billed under such account and subtracting $(***) per account per month, for each CCS Service in excess of one, billed under such account. The $(***) discount is not subject to Section 4 of the Master Agreement. (b) Incremental New Subscribers. The basic subscriber charge for wireline video --------------------------- subscribers set forth in Schedule D shall be eligible for discounts as follows: ---------- The number of increments of 100,000 CCS wireline video subscribers in excess of the Minimum for CCS wireline video subscribers multiplied times the applicable Discount Factor set forth in the table below multiplied times the current basic subscriber charge for CCS wireline video subscribers.
Year Discount Factor - ----------------------------------------- --------------- Effective Date through December 31, 1998 (***)% January 1, 1999 through December 31, 1999 (***)% January 1, 1999 through December 31, 2000 (***)% January 1, 1999 through December 31, 2001 (***)% January 1, 1999 through December 31, 2002 (***)% January 1, 1999 through December 31, 2003 (***)% January 1, 1999 through December 31, 2004 (***)% January 1, 1999 through December 31, 2005 (***)% January 1, 1999 through December 31, 2006 (***)% January 1, 1999 through December 31, 2007 (***)% January 1, 1999 through December 31, 2008 (***)% January 1, 1999 through December 31, 2009 (***)% January 1, 1999 through December 31, 2010 (***)% January 1, 1999 through December 31, 2011 (***)% January 1, 1999 through December 31, 2012 (***)%
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." 6. CCS PRINT AND MAIL SERVICES FEES- - ------------------------------------
- -------------------------------------------------------------------------------------------------------------- ITEM/DESCRIPTION PRICE - -------------------------------------------------------------------------------------------------------------- I. ESP PROCESSING FEES - -------------------------------------------------------------------------------------------------------------- A. First Physical Page, Duplexed (Front & Back), Black & White Print Only - -------------------------------------------------------------------------------------------------------------- 1. Generic Format $(***) per statement per month - -------------------------------------------------------------------------------------------------------------- 2. Data Warehouse Format $(***) per statement per month - -------------------------------------------------------------------------------------------------------------- 3. CCS ACSR/Telephony Format Quote - -------------------------------------------------------------------------------------------------------------- 4. Custom Format Quote - -------------------------------------------------------------------------------------------------------------- B. Additional Physical Pages*, Duplexed (Front & Back), Black & White Print Only - -------------------------------------------------------------------------------------------------------------- 1. Statement $(***) per physical page per month - -------------------------------------------------------------------------------------------------------------- 2. Ad Page/Coupon Page** $(***) per physical page per month - -------------------------------------------------------------------------------------------------------------- C. Start Up Fees - -------------------------------------------------------------------------------------------------------------- Initial Cable System Location*** $(***) - -------------------------------------------------------------------------------------------------------------- Additional Cable System Locations**** $(***) - -------------------------------------------------------------------------------------------------------------- D. CD-ROM Archival (only available for ESP statements) $(***) per Data Frame plus postage - -------------------------------------------------------------------------------------------------------------- 1. Duplicate CD-ROM (price each) $(***) - -------------------------------------------------------------------------------------------------------------- E. ESP Development and Programming $(***) per hour/minimum per day - -------------------------------------------------------------------------------------------------------------- F. Special Request Build Fee $(***) per build, per System Site - -------------------------------------------------------------------------------------------------------------- G. Customized Statement Paper Quote - -------------------------------------------------------------------------------------------------------------- H. ESP Deconversion Fee $(***) per hour - --------------------------------------------------------------------------------------------------------------
*NOTE: An additional physical page means text items, such as billing details or system-generated statement messages that overflow onto an additional physical page with no more graphics than those graphics tied to messages via the statement message module and no programmer intervention. The page may include static company information, such as, policies and procedures, payment locations, franchise authorities, etc. Only graphics from the ESP graphics library may be used on the additional physical page. Set-up and changes to this page are billed at the ESP Development and Programming Fee. ** An ad page/coupon page means targeted messages, coupons or advertisements using text, graphics and coupon borders generated on an additional physical page. No reverses or dark photos may be used, only gray scale graphics. This page may be duplexed, but only text may be printed on the back side. The conditional logic for this page can be by zip code or franchise. Set-up and changes to this page are billed at the ESP Development and Programming Fee. *** Initial Cable System Location start-up includes: 16 hours of format programming and standard ESP conversion efforts (data testing through ESP format with confirmation of data standards and verification and approval by customer). Additional format programming and conversion efforts billed at ESP Development and Programming rates. **** Additional Cable System Location start-up includes: Standard ESP conversion efforts (data testing through ESP format with confirmation of data standards and verification and approval by customer). Pricing assumes no changes in format. Additional format programming and conversion efforts billed at ESP Development and Programming rates.
- -------------------------------------------------------------------------------------------------------------- II. PRINT AND MAIL ANCILLARY SERVICE FEES - -------------------------------------------------------------------------------------------------------------- A. Past Due Notices (excludes postage) - -------------------------------------------------------------------------------------------------------------- 1. Generic, per notice $(***) - -------------------------------------------------------------------------------------------------------------- 2. Generic, with bold lettering, per notice $(***) - -------------------------------------------------------------------------------------------------------------- 3. Custom, per notice Quote - -------------------------------------------------------------------------------------------------------------- B. Computer Letters (excludes postage) - -------------------------------------------------------------------------------------------------------------- 1. Generic, per letter $(***) - -------------------------------------------------------------------------------------------------------------- 2. Custom, per letter Quote - -------------------------------------------------------------------------------------------------------------- C. Delinquency Labels - -------------------------------------------------------------------------------------------------------------- 1. Spooled to site $(***) per label - -------------------------------------------------------------------------------------------------------------- 2. Printed 4-up labels $(***) per label - -------------------------------------------------------------------------------------------------------------- 3. Printed Cheshire labels $(***) per label - -------------------------------------------------------------------------------------------------------------- 4. Printed LAB labels $(***) per label - -------------------------------------------------------------------------------------------------------------- 5. Reports ($(***) minimum charge) $(***) per report, per site - -------------------------------------------------------------------------------------------------------------- D. Development and Programming $(***) per hour/minimum per day - --------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission."
- ----------------------------------------------------------------------------------------------------------------- ITEM/DESCRIPTION PRICE - ----------------------------------------------------------------------------------------------------------------- E. Special Request Build Fee $ (***) per build, per System Site - ----------------------------------------------------------------------------------------------------------------- F. Paper, Envelope, Supply Purchasing Quote - ----------------------------------------------------------------------------------------------------------------- G. Inserts - ----------------------------------------------------------------------------------------------------------------- 1. Printing Services - ----------------------------------------------------------------------------------------------------------------- a. Marketing/ad inserts Quote - ----------------------------------------------------------------------------------------------------------------- b. Other communication Quote - ----------------------------------------------------------------------------------------------------------------- 2. Processing (maximum of 5 inserts per statement) - ----------------------------------------------------------------------------------------------------------------- a. Unfolded Program Guides $ (***) per insert - ----------------------------------------------------------------------------------------------------------------- b. Folded Program Guide $ (***) per insert - ----------------------------------------------------------------------------------------------------------------- c. Other Materials $ (***) per insert - ----------------------------------------------------------------------------------------------------------------- Volume Discount for other materials $ (***) per insert insertion - (applies if all Cable Systems receive same insert in the same month.) - ------------------------------------------------------------------------------------------------------------------ d. Folding By Machine $ (***) per item - ------------------------------------------------------------------------------------------------------------------ e. Folding by Hand $ (***) per item - ------------------------------------------------------------------------------------------------------------------ 3. Set-up charge - ------------------------------------------------------------------------------------------------------------------ a. Cycle size per site less than 5,000 statements $ (***) per cycle - ------------------------------------------------------------------------------------------------------------------ b. Cycle size per site greater than 10,000 statements No Charge - ------------------------------------------------------------------------------------------------------------------ 4. Late insert notification $ (***) per version per site - ------------------------------------------------------------------------------------------------------------------ 5. Late arrival of inserts $ (***) per version per site - ------------------------------------------------------------------------------------------------------------------ 6. Holds or notification of insufficient inserts $ (***) - ------------------------------------------------------------------------------------------------------------------ 7. Returns to customer (handling fee) $ (***) (Shipping costs passed to customer) - ------------------------------------------------------------------------------------------------------------------ NOTE: SET UP FEE $(***) per cycle per System Site for each System Site that prints less than 550 statements in a cycle. The set up fee will not be charged to newly converted System Sites until the System Site cycle spreads or five (5) months after the conversion date, whichever occurs first. - -----------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested 7. CSG VANTAGE(TM) - and the Redacted Material has been - -------------------- separately filed with the Commission." One Time Start-up Fee (per System Site): - ---------------------------------------
SYSTEM SITE SUBSCRIBER COUNT START UP FEE ---------------------------- ------------ 0 to 49,999 $(***) 50,000 to 99,999 $(***) 100,000 and greater $(***)
Basic Vantage Reporting (per System Site): - ------------------------------------------- Monthly Subscriber Fee: $(***) per Basic Subscriber Includes 0.5 CPU Minutes per 1,000 Basic Subscribers, monthly maintenance, daily updates and file loads, initial file load, eight user ID's, installation and training services in Omaha, and Query Library (per query). Training: - --------- * Conversion 1. Basic Vantage training at a regularly scheduled Omaha training class, as space permits. This will be allocated at one (1) class for up to two (2) people for the first $(***) (or portion of) of the "Monthly Subscriber Fee" for Vantage. For each additional $(***) (or portion of) of the "Monthly Subscriber Fee", one (1) additional person may attend the training class. 2. Basic Vantage training at a scheduled regional training class, as space permits. This will be allocated at one (1) class for up to two (2) people for the first $(***) (or portion of) of the "Monthly Subscriber Fee" for Vantage. For each additional $(***) (or portion of) of the "Monthly Subscriber Fee", one (1) additional person may attend the training class. 3. Basic Vantage training at a customer requested time and/or location is available on at the rate of $(***)/day plus Reimbursable Expenses for up to 8 students. Ancillary Fees: - ----------------- * Additional File Loads: $ (***) per subscriber * Additional User IDs: $ (***) each * File Structure Changes $ (***) per hour * Application development $ (***) per hour * Downline Load Software $ (***) per site * Additional CPU usage $ (***) per CPU minute Static Database: - ---------------- * One Time Set-up Fee: $(***) * Monthly Load Fee: $(***)/data base * Monthly Disk Storage: $(***)/megabyte (minimum of $(***) per month) Monetary Transactions (Customer may store between one and six months of data): - ------------------------------------------------------------------------------ * One Time Set-up Fee: $(***) * Monthly Processing Fee: $(***) per sub, $(***) minimum * Monthly Disk Storage: $(***)/megabyte (minimum of $(***) per month) Additional Work Order History: - ------------------------------ * One Time Set-up Fee: $(***) * Monthly Processing Fee: $(***) for each month beyond two years for each database * Monthly Disk Storage: $(***)/megabyte (minimum of $(***) per month) Scheduling Calendar: - -------------------- * One Time Set-up Fee: $(***) * Monthly Processing Fee: $(***) for each monthly schedule stored * Monthly Disk Storage: $(***)/megabyte (minimum of $(***) per month) Cluster Coding: Annual subscription pricing available on request - -------------- Third Party Software: - --------------------- Is not incorporated and a separate purchase order shall be executed for third party software at CSG's Standard Price List. Output Charges: Per agreement - -------------- NOTE: CSG will store up to 13 months of Customer's financial data and up to 24 - ---- months of Customer's work order data in the CSG Vantage database for so long as Customer pays the Fees and Charges for Vantage. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been 8. HITS DIGITAL - separately filed with the Commission." - ----------------- A. PERPETUAL SOFTWARE LICENSES IN ADDITION TO THE AGREEMENT FOR LICENSES FOR 300 - -------------------------------------------------------------------------------- SYSTEM SITES EXECUTED BY THE PARTIES, DATED JUNE 30, 1997. - ---------------------------------------------------------- PERPETUAL SOFTWARE LICENSES: $(***) per System Site * Includes HITS Digital Access (1.0 specifications) * Includes CSG's standard one-time implementation for each System Location with work performed by CSG personnel in Omaha. MONTHLY SUPPORT SERVICES: System Site Size Monthly Fee per System Site ----------------- ---------------------------- 0 - 9,999 subscribers $ (***) 10,000 - 24,999 subscribers $ (***) 25,000 and greater subscribers $ (***) B. HITS IMPLEMENTATION/TRAINING: - -------------------------------- * $(***) per day per person plus Reimbursable Expenses. C. HITS INTERFACE DEVELOPMENT: - ------------------------------ * Development through 2.0 Specifications - $(***) per hour per person plus Reimbursable Expenses. * Development beyond 2.0 Specifications - $(***) per hour per person plus Reimbursable Expenses. Fees vary depending on the project. The terms and conditions for each project will be set forth in the respective Statement of Work. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." 9. ACSR SOFTWARE LICENSE/MAINTENANCE/INSTALLATION/THIRD PARTY SOFTWARE- - ------------------------------------------------------------------------ A. CSG LICENSE FEES (PRICES EXCLUDE THIRD PARTY SOFTWARE, HARDWARE, - ------------------------------------------------------------------- IMPLEMENTATION, INSTALLATION AND CUSTOMIZATION): - ------------------------------------------------ ACSR Perpetual Licenses for 5,000 workstations: $ (***) (Additional ACSR perpetual Licenses- $(***) per workstation) ACSR Telephony Perpetual Licenses for 125 workstations: $ (***) CSG ANNUAL SOFTWARE MAINTENANCE FEES: - ------------------------------------- ACSR Perpetual Software License Maintenance Fees for 5,000 workstations: $ (***) (Additional ACSR Perpetual Software License Maintenance Fees- 20% of License Fees) ACSR Telephony Perpetual Software License Maintenance Fees for 125 workstations: $ (***) PAYMENT TERMS: - -------------- * Due at Contract Execution: $ (***) * Due at September 30, 1997: $ (***) * Due 60 days after Contract Execution: $ (***) * Due December 15, 1997 $ (***) * Due March 15, 1998 $ (***) * Due June 15, 1998 $ (***) * Due July 15, 1998 $ (***) NOTE: Subsequent years annual maintenance fees are due on the anniversary of CSG granting of the software license. B. INSTALLATION SERVICES (REIMBURSABLE EXPENSES ARE EXCLUDED AND BILLABLE): - ---------------------------------------------------------------------------- ACSR ONLY INSTALLATION & STARTUP FEE: $(***). - ---- INCLUDES THE SUPPORT DETAILED IN THE MASTER AGREEMENT EXHIBIT (_). ACSR TELEPHONY INSTALLATION & STARTUP FEES (IN ADDITION TO ACSR) - $(***). - -------------- INCLUDES THE ADDITIONAL SUPPORT DETAILED IN THE MASTER AGREEMENT EXHIBIT (_). CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treament Requested and the Redacted Material has been separately filed with the Commission." ACSR/CIT/ACSR Telephony-Startup And Installation- Additional Services - ----------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- DESCRIPTION PRICE PER PRICE PER PRICE PER PRICE PER PRICE PER DAY DEVICE HOUR ITEM MONTH - ----------------------------------------------------------------------------------------------------------------------------------- Site Survey (Per Location, $(***)/day $ (***) min) - ----------------------------------------------------------------------------------------------------------------------------------- Site Diagram ($(***)/day min) $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Server Configuration, Software $ (***) Installation, and Testing (At CSG) - ----------------------------------------------------------------------------------------------------------------------------------- Site Prep, Server Installation, and $ (***) pre-production Support - ----------------------------------------------------------------------------------------------------------------------------------- 4030 Installation ($(***)/day min) $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Advantis Installation - 56k IP $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Advantis Installation - Above 56k IP $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Printer Install ($(***)/day min) $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Workstation Install ($(***)/day min) - ----------------------------------------------------------------------------------------------------------------------------------- Quantity Per Site - ----------------------------------------------------------------------------------------------------------------------------------- 0 to 5 $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- 6 to 11 $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- 12 to 22 $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- 23 to 33 $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- 34 to 44 $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- 45 to 65 $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- LAN Hub Install ($(***)/day min) $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Router Install ($(***)/day min) $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Modem Install ($(***)/day min) $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Copy of CBT On CD ROM - In $ (***) Addition To License/Maint Fee - - ----------------------------------------------------------------------------------------------------------------------------------- User Guides - Paper $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- User Guides - Electronic w/right to copy $ (***) (annual) - ----------------------------------------------------------------------------------------------------------------------------------- User Guide Right to Copy - Paper (Annual) $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Annual Fee for User Guide Updates - Paper $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Custom Technical Support-Hourly $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Custom Technical Support - Monthly $ (***) Contract (includes 50 hours support) - ----------------------------------------------------------------------------------------------------------------------------------- 1 Instructor Day User Training - Up to 8 $ (***) Students - ----------------------------------------------------------------------------------------------------------------------------------- Hourly Technical Support, Consulting, $ (***) Systems Integration - ----------------------------------------------------------------------------------------------------------------------------------- AOI API License Fee (per application/per $ (***) server interfaced) - ----------------------------------------------------------------------------------------------------------------------------------- AOI API Annual Maintenance Fee (per $ (***) application/per server interfaced - ----------------------------------------------------------------------------------------------------------------------------------- AML (ACSR Message Link) w/ Data $ (***) Warehouse - Perpetual License Fee - ----------------------------------------------------------------------------------------------------------------------------------- AML (ACSR Message Link) w/ Data $ (***) Warehouse - Annual Maintenance Fee - ----------------------------------------------------------------------------------------------------------------------------------- Forest & Trees License Fee (for CIT) $ (***) - ----------------------------------------------------------------------------------------------------------------------------------- Forest & Trees Annual Maintenance Fee $ (***) (for CIT) - -----------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." C. ACSR/ CIT/ ACSR TELEPHONY- (THIRD PARTY SOFTWARE): - ------------------------------------------------------ NOTES: 1) All third party fees are subject to change per third party vendor agreements and are provided at CSG's Standard Price List 2) Other third party software may be required for Telephony depending on customer's interface requirements for E911, CARE, etc. 3) ACSR Telephony requires CSG's ACSR and ESP.
* THIRD PARTY LICENSE AND MAINTENANCE FEES License (1 time) Maint (annual) Netmanage or Chameleon Host Link 1 to 9 workstations $ (***)/per workstation $ (***) 10 to 25 workstations $ (***)/per workstation $ (***) 26 to 99 workstations $ (***)/per workstation $ (***) 100 to 499 workstations $ (***)/per workstation $ (***) 500 to 999 workstations $ (***)/per workstation $ (***) Brixton PU2.1 SNA Core Software $ (***)/per server $ (***) Brixton session for SNA server $ (***)/per 2 copies $ (***) (2 required per workstation sold in blocks of 20 only) Brixton 3270 solaris client (1 required per server only) $ (***)/per copy $ (***) BEA Tuxedo (required with CIT or Telephony) $ (***)/per workstation $ (***) Platinum EPM Agent $ (***)/per server $ (***) (required with CIT or Telephony) Platinum Forest & Trees* (1 required with CIT) $ (***)/per copy $ (***) *1 recommended with Telephony Platinum Autosys Agent (required with Telephony) $ (***)/per server $ (***) Postalsoft (required with Telephony) $ (***)/per workstation $ (***) ($(***) min) ($(***) min) * THIRD PARTY SUBSCRIPTION FEES (ANNUAL) Postalsoft (required with Telephony) US Addresses Canadian Addresses 1 to 25 workstations $ (***) $ (***) 26 to 50 workstations $ (***) $ (***) 51 to 250 workstations $ (***) $ (***) 251 to 500 workstations $ (***) $ (***) 501+workstations $ (***) $ (***)
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." 10. CSG VANTAGEPOINT(TM) - - -------------------------- A. VANTAGEPOINT(TM) (VERSION 1.0) FOR VIDEO SERVICES: - ----------------------------------------------------- LICENSE FEE FOR ONE (1) PERPETUAL LICENSE (SINGLE SITE, 12 USERS, UNLIMITED RECORDS): $ (***) . Payment Terms For License Fees: Due at contract execution $ (***) Due at December 15, 1997 $ (***) Due at July 15, 1998 $ (***) Annual Software Maintenance Fee - Twenty percent (20%) of License Fee. . Payment Terms For First Year Software Maintenance Fee: Due at contract execution $ (***) B. VANTAGEPOINT(TM) (VERSION 1.0) FOR TELEPHONY SERVICES: - --------------------------------------------------------- LICENSE FEE FOR ONE (1) PERPETUAL LICENSE (SINGLE SITE, 12 USERS, LIMITED TO 500,000 RECORDS): $ (***) Annual Software Maintenance Fee - Twenty percent (20%) of License Fee. $ (***) . Payment Terms (Initial License Fee & First Year Maintenance): Due 60 days after Contract Execution $ (***) Due December 15, 1997 $ (***) Due March 15, 1998 $ (***) Due June 15, 1998 $ (***) LICENSE FEE FOR ADDITIONAL RECORDS IN EXCESS OF 500,000: 500,001 to 1,000,000 $ (***) 1,000,0001 and greater $ (***) Annual Software Maintenance Fee for additional License Fees- Twenty percent (20%) of License Fee. . Payment Terms (License Fee & First Year Maintenance): Due upon CSG granting of License for additional records. C. NOTE: Subsequent years annual maintenance fees are due on the anniversary - -------- of CSG granting of the software license. D. MODULES INCLUDED PER PERPETUAL LICENSE: - ------------------------------------------ Data Model/Conversion Engine Marketing Analysis System (includes 8 market MAS cubes and 76 standard reports) Campaign Management System Executive Information System ESP Message Link Predictive Modeling System E. EXCLUSIONS: - -------------- . CSG agrees to pay for all required Third Party Software and other third party software associated with CSG VantagePoint. . Customization to be subcontracted with Technical Services separately through a Statement of Work. . Hardware and Equipment, CSG's Standard Price List. . Training, CSG's Standard Price List. . Installation, CSG's Standard Price List. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES 11. ISP DOMAIN SERVER SOFTWARE "Confidential Treatment Requested - ------------------------------ and the Redacted Material has been (SINGLE SITE LICENSE) - separately filed with the Commission." - ------------------------------ PERPETUAL LICENSE FEE: . $(***) per server (with up to 1,000,000 subscribers) due at delivery ANNUAL SOFTWARE MAINTENANCE FEE: . First year maintenance- $(***) due at delivery . Subsequent years maintenance- 20% of license fee 12. USAGE HANDLING SYSTEM - - --------------------------- Perpetual License Fee: . $(***) per server (with up to 1,000,000 subscriber services) due at delivery ANNUAL SOFTWARE MAINTENANCE FEE: . First year maintenance- $(***) due at delivery . Subsequent years maintenance- 20% of license fee 13. ISP DOMAIN API'S - - ----------------------- API Development $(***) (plus development fees for scheduling and inventory functionality) API PERPETUAL LICENSE FEE: . $(***) (License Fee is waived) ANNUAL SOFTWARE MAINTENANCE FEE: . First year maintenance- $(***) due at delivery . Subsequent years maintenance- $(***) CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." 14. DATA COMMUNICATION SERVICES- - --------------------------------- CSG agrees to provide Customer through December 31, 1997, for each System Site that used CSG Services prior to August 1, 1997 the following communication services. * For all System sites with equal to or greater than 12,000 subscribers, CSG will provide, at no cost to Customer, the necessary hardware, software, communication line and communication equipment to provide communication services to such System Sites. * For System Sites with equal to or greater than 12,000 subscribers but less than 50,000 subscribers, the communication line provided will be a 9600 baud circuit. * For System Sites with equal to or greater than 50,000 subscribers, but less than 75,000 subscribers, the communication line provided will be a 14,400 baud circuit. * For System Sites with 75,000 and more subscribers, the communication line provided will be a 19,300 baud circuit. Customer will be responsible for all communication charges for System Sites with less than 12,000 subscribers and for any "Satellite office." For all System Sites that initiated services after July 31, 1997, Customer will be responsible for all communication services charges. Effective January 1, 1998, Customer will be responsible for all communication services charges, regardless of the date that CSG services were initiated. DATA COMMUNCATION SERVICES - (WITHOUT DBAN)
- ----------------------------------------------------------------------------------------------------------------------------------- NUMBER OF MAXIMUM PRINTERS CIRCUIT SPEED/Without DBAN INSTALLATION MONTHLY DEVICES* SUPPORTED** (M-P = MULTIPLE LOCATIONS PER CIRCUIT) CHARGE CHARGE**** (P-P = DEDICATED CIRCUIT PER LOCATION) - ----------------------------------------------------------------------------------------------------------------------------------- 1 - 4*** 1-480 CPS M-P 4.8 KBPS / SNA $(***) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 10 - 35 1-475 LPM P-P 9.6 KBPS / SNA $(***) $(***) 1-480 CPS - ------------------------------------------------------------------------------------------------------------------------------------ 3546 - 75 1-600 LPM P-P 19.2 KBPS / SNA $(***) $(***) 1-475 LPM - ------------------------------------------------------------------------------------------------------------------------------------ 76 - 160 2-600 LPM P-P 56 KBPS / SNA $(***) $(***) 2-475 LPM - ------------------------------------------------------------------------------------------------------------------------------------ NOTE: * DEVICES equals terminals, printers, addressable, ARU, and ANI connections. Requires 3174-91R controller or SNA gateway. Printers just being used for screen print are counted as devices but are not included here. ** Requires IBM 3174 controller or SNA gateway. *** Printers just being used for screen print are counted as devices but are not included here. **** Includes all modems and maintenance fees for installations and centralized help desk in the Continental U.S. For point-to-point circuits running at 9.6 KBPS; 14.4 KBPSand 19.2 KBPS,; and 56KBPS dial-back-up capability price $(***) per month, one time installation $(***). Each site must supply two business lines to connect to the dial-back-up modem. In addition, customer will pay any usage charges incurred. This capability backs up only the circuit, does not support modems or node. 56 KBPS/SNA circuit is required for each server running to ACSR software. If Customer requests to add DBAN to an existing circuit, the additional fee is a one time charge of $(***) for 9.6 and 19.2KBPS circuits plus $(***) per month. Customers are responsible for having two (2) Full Business Lines (FBL) installed to support their DBAN on the 9.6 and 19.2 line speeds. The Customer is responsible for any installation fees and monthly recurring fees. For a 56KBPS circuit Customer the additional fee is a one time charge of $(***) plus $(***) per month. When DBAN is activated, Customer will incur long distance expenses while operating on the back up lines. Locations outside the Continental U.S. can be supported by dedicated circuits, and will be subject to the following - ------------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." - -------------------------------------------------------------------------------- monthly surcharges: submissions of special bid from CSG's Network Provider. Alaska- $(***) (Circuit) ; N/A (Dial-Back-Up) Hawaii- $(***) (Circuit); $(***) (Dial-Back-Up) Puerto Rico- $(***) (Circuit) ; $(***) (Dial-Back-Up) - -------------------------------------------------------------------------------- Customer will incur CSG's out-of-pocket order processing and telco expenses for any order canceled. CSG will not place orders more than 120 days before the conversion date. The above fees apply only with respect to System Sites set forth on Exhibit A-1 as of the Effective Date; however, with respect to System Sites added to Exhibit A-1 after the Effective Date, such fees are subject to change at any time. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." DATA COMMUNCATION SERVICES - (WITH DBAN)
- ----------------------------------------------------------------------------------------------------------------------------------- NUMBER OF MAXIMUM PRINTERS CIRCUIT SPEED/With DBAN INSTALLATION MONTHLY DEVICES* SUPPORTED** (P-P = DEDICATED CIRCUIT PER LOCATION) CHARGE CHARGE**** - ----------------------------------------------------------------------------------------------------------------------------------- 1 - 35 1-475 LPM P-P 9.6 KBPS / SNA $(***) $(***) 1-480 CPS - ----------------------------------------------------------------------------------------------------------------------------------- 35 - 75 1-600 LPM P-P 19.2 KBPS / SNA $(***) $(***) 1-475 LPM - ----------------------------------------------------------------------------------------------------------------------------------- 76 - 160 2-600 LPM P-P 56 KBPS Fan Out / SNA $(***) $(***) 2-475 LPM - -----------------------------------------------------------------------------------------------------------------------------------
NOTE: * DEVICES equals terminals, printers, addressable, ARU, and ANI connections. ** Requires IBM 3174 controller or SNA gateway. *** Printers just being used for screen print are counted as devices but are not included here. **** Includes all modems and maintenance fees for installations and centralized help desk in the Continental U.S. For point-to-point circuits running at 9.6 KBPS; 19.2 KBPS; and 56KBPS. Customers are responsible for having two (2) Full Business Lines (FBL) installed to support their DBAN on the 9.6 and 19.2 line speeds. The Customer is responsible for any installation fees and monthly recurring fees. When DBAN is activated, Customer will incur long distance expenses while operating on the back up lines. Locations outside the Continental U.S. can be supported by dedicated circuits, and will be subject to submissions of special bid from CSG's Network Provider. - -------------------------------------------------------------------------------- Customer will incur CSG's out-of-pocket order processing and telco expenses for any order canceled. CSG will not place orders more than 120 days before the conversion date. The above fees apply only with respect to System Sites set forth on Exhibit A-1 as of the Effective Date; however, with respect to System Sites added to Exhibit A-1 after the Effective Date, such fees are subject to change at any time. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." TCP/IP CONNECTIONS DATA COMMUNICATIONS PRICING HOST SERVER REQUIRED AT CUSTOMER LOCATION
- ----------------------------------------------------------------------------------------------------------------------------------- CIRCUIT SPEED INSTALLATION MONTHLY* (P-P = DEDICATED CIRCUIT PER LOCATION) CHARGE CHARGE - ----------------------------------------------------------------------------------------------------------------------------------- PRIMARY/CONNECTION - ------------------------------------------------------------------------------------------------------------------------------------ IP CIRCUITS 56 KBPS $(***) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 128 KBPS $(***) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 256 KBPS $(***) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 512 KBPS $(***) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 1,544 MBPS $(***) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ SECOND LEASED LINE IS AVAILABLE EQUAL TO THE PRIMARY LINE CIRCUIT SPEED INSTALLATION MONTHLY* (P-P = DEDICATED CIRCUIT PER LOCATION) CHARGE CHARGE - ------------------------------------------------------------------------------------------------------------------------------------ Secondary Connection - ------------------------------------------------------------------------------------------------------------------------------------ 56 KBPS $(***) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 128 KBPS $(***) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 256 KBPS $(***) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 512 KBPS $(***) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ 1,544 MBPS $(***) $(***) - ------------------------------------------------------------------------------------------------------------------------------------ NOTE: Token ring or SDLC adapter card can be installed in any of the above configurations. Token Ring Card is $(***) per month. SDLC Adapter Card/SNA Support is $(***) per month. * All IP connections require a back up connection as reviewed with CSG's Engineer.Includes all modems and maintenance fees for installations and centralized help desk in the Continental U.S. For point-to-point circuits running at 9.6 KBPS; 14.4 KBPS; and 19.2 KBPS, dial- back-up capability price $(***) per month, one time installation $(***). Each site must supply two business lines to connect to the dial-back-up modem. In addition, customer will pay any usage charges incurred. This capability backs up only the circuit, does not support modems or node. 56 KBPS circuit is required to support CSG's data warehouse product. Locations outside the Continental U.S. can be supported by dedicated circuits, and will be subject to submissions of special bid from CSG's Network Provider. - ------------------------------------------------------------------------------------------------------------------------------------
Customer will incur CSG's out-of-pocket order processing and telco expenses for any order canceled. CSG will not place orders more than 120 days before the conversion date. The above fees apply only with respect to System Sites set forth on Exhibit A-1 as of the Effective Date; however, with respect to System Sites added to Exhibit A-1 after the Effective Date, such fees are subject to change at any time. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." NETWORK SERVICES - TIMELINES AND PRICING
- ------------------------------------------------------------------------------------------------------------------------------- # OF WORK DAYS TYPE OF SERVICE (Mon. - Fri. excluding holidays) PRICING - ------------------------------------------------------------------------------------------------------------------------------- SNA Circuit installations 35 work days from entry into CSG's order process system. per Customer contract Entry into the system can take 2 - 5 days after the physical site information (complete address, technical contact and phone number) is verified. 40 work days from entry into CSG's order process system Multi-Protocol (MPN) Circuit after design review of your network configuration which can installations take 7 - 10 days. - ------------------------------------------------------------------------------------------------------------------------------- Circuit expedites (SNA circuits only 25 work days (no guarantee on meeting requested delivery $(***) Processing fee, - -- multi-protocol circuits can not date) plus installation and be expedited) monthly line fees. - ------------------------------------------------------------------------------------------------------------------------------- Change circuit speed (upgrades from 4.8 to 9.6, 9.6 bridged to 9.6 point to point, and from 19.2 to 56k are not included because a new 35 work days $(***) processing circuit is required) fee/plus installation 9.6 point to point to 14.4 or cost and monthly line 19.2 (only requires a modem fees change) - ------------------------------------------------------------------------------------------------------------------------------- Disconnect circuit (Can not be 30 work days $(***) expedited) - ------------------------------------------------------------------------------------------------------------------------------- On-Prem move 20 work days $(***) plus telco charges - ------------------------------------------------------------------------------------------------------------------------------- Off-Prem move Disruptive 25 work days $(***) plus telco charges Non-disruptive (New Start Up) 35 work days plus 2 -5 days for verification of address, technical contact and phone number. - ------------------------------------------------------------------------------------------------------------------------------- Dial Back up to an Alternate Node 35 work days $(***) plus cost of new (DBAN) telco line* - ------------------------------------------------------------------------------------------------------------------------------- Switched 56 Backup (56kbps only) 35 work days $(***) plus cost of new telco line * - ------------------------------------------------------------------------------------------------------------------------------- Passport/ TCP/IP Dial 10 work days $(***) plus a one time $(***) diskette charge** - ------------------------------------------------------------------------------------------------------------------------------- NOTE: Expedites for the following services will incur an additional processing fee $(***) (expedite processing fee) - ------------------------------------------------------------------------------------------------------------------------------- Access Changes (Region Change, Group 5 work days $(***) per controller ID Change, Sys/Prin Add/Delete) - ------------------------------------------------------------------------------------------------------------------------------- Add Terminal Controller Unit (Add PU) 15 work days $(***) - ------------------------------------------------------------------------------------------------------------------------------- Change Terminal Controller Unit 15 work days $(***) - ------------------------------------------------------------------------------------------------------------------------------- Delete Terminal Controller Unit 15 work days $(***) (Delete PU) - -------------------------------------------------------------------------------------------------------------------------------
CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission."
- ------------------------------------------------------------------------------------------------------------------------------- # OF WORK DAYS TYPE OF SERVICE (Mon. - Fri. excluding holidays) PRICING - ------------------------------------------------------------------------------------------------------------------------------- Reconfigure Terminal 10 work days $(***) Controller/Brixton (various order types/changes requires a reconfiguring of the controller/addressable device) - ------------------------------------------------------------------------------------------------------------------------------- Add R# (Remote Job Entry) 30 work days $(***) (first time setup) Add R# - Change to existing setup 30 work days $(***) (change from existing setup) - ------------------------------------------------------------------------------------------------------------------------------- Add Ports for terminals, printers, 15 work days $(***) per port, $(***) PC's and additional sessions max/controller - ------------------------------------------------------------------------------------------------------------------------------- Change ports 15 work days $(***) per port - ------------------------------------------------------------------------------------------------------------------------------- Delete ports 15 work days $(***) per port - ------------------------------------------------------------------------------------------------------------------------------- Re-installation of an addressable 10 work days (assumes all programming and connectivity $(***) per hour device (assumes device was remained unchanged) (1 hour minimum) previously disconnected by Customer) - ------------------------------------------------------------------------------------------------------------------------------- Add Ports for addressable devices 20 work days per contract exhibit - ------------------------------------------------------------------------------------------------------------------------------- Change ports for addressable devices 20 work days per contract exhibit - ------------------------------------------------------------------------------------------------------------------------------- Add PU for addressable devices 20 work days per contract exhibit - -------------------------------------------------------------------------------------------------------------------------------
* client will incur reoccurring monthly charges plus usage rate ** client will incur hourly usage rate CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." EQUIPMENT INSTALLATION OUTSIDE NORMAL WORK HOURS - ------------------------------------------------- * Technicians are available for over-the-phone equipment installation during the hours of 5:00 AM and 9:00 PM CST Monday through Friday at no additional charge to the Customer. If a Customer prefers to have a device installed outside the established work hours, on a weekend, or a holiday --- the Customer will be billed at a rate of $(***) per hour (1 hour minimum) for technical assistance TECHNICAL AND ENGINEERING SERVICES/SUPPORT - CSG charges for consulting - -------------------------------------------- services, non-standard installation services and technical assistance on Customer owned/leased equipment or Customer local/wide area networks) * Technical onsite visit is $(***) per day (8 hour day) plus travel and related expenses * Consulting Services via phone is $(***) per hour (1 hour minimum) DIRECT CONNECT INTO THE CSG MILLENIUM CENTER - -------------------------------------------- (For Customer Frame Relay Configurations) INSTALLATION FEE: $(***) MONTHLY RECURRING: $(***) CSG DIRECT CONNECT (CUSTOMER FRAME RELAY): - ------------------------------------------ If a Customer chooses to do a direct connect into the CSG Denver facility, there are charges associated with this connection. CSG has equipment in place to isolate our Customers from one another and to provide a firewall to the mainframe services CSG offers. CSG Customers are responsible for there own circuit(s) into the facility as well as any equipment associated with that circuit, including the DSU(s) and router(s). CSG would then provide a "subnet" into our Cisco router equipment. Mainframe services are provided through our router equipment. The costs associated with this connectivity includes a one-time connect fee, and a monthly fee thereafter. All Frame Relay connections must be reviewed with a CSG Engineer. CSG'S DIRECT CONNECT SERVICES INCLUDE: 1. Cisco 7000 and Cisco 7206 Routers * CSG's access to the mainframe services * Redundant power supplies * Configured for "Hot Standby" to provide redundancy and reliability * Covered by Cisco on a 7/24 maintenance agreement * Includes base unit * Includes the cards necessary to supply the ports for our Customers 2. Managed Hubs * Necessary to provide a "subnet" for each Customer on a private dedicated segment of the routers 3. Cabinets * Provide the necessary rack space to "cleanly" mount all equipment 4. Facility Floor Space * A temperature controlled, UPS'd facility for all Customer equipment 5. Mainframe TIC Connection * CSG pays a cost associated with our connection to the mainframe 6. Remote Monitoring * Tools to monitor the Cisco routers, Token Ring subnets, and Ethernet subnets * Tools to page an on-call engineer when a threshold has been exceeded * Tools to do packet level analysis * Tools to perform utilization/trending analysis 7. Network Engineer * To support CSG's direct connect equipment * Does NOT provide coverage for the Customer's equipment Customer will incur CSG's out-of-pocket order processing and telco expenses for any order canceled. CSG will not place orders more than 120 days before the conversion date. The above fees apply only with respect to System Sites set forth on Exhibit A-1 as of the Effective Date; however, with respect to System Sites added to Exhibit A-1 after the Effective Date, such fees are subject to change at any time. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES CCS EQUIPMENT PRICING: - ---------------------- Provided at CSG's then current rates. Note: Customer is responsible for obtaining and installation of all computer hardware, software, peripherals and necessary communications facilities, including, but not limited to printers, servers, power supply, workstations, printers, concentrators, communications equipment and routers (the "Required Equipment") which are necessary in order for the Customer to utilize the Services and Products as defined in the Master Agreement. Customer shall be responsible for the Required Equipment, including, but not limited to the costs of procuring, installing, bar coding hardware/software, operating and maintaining such Required Equipment unless otherwise noted in the Customer's Master Agreement. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." 15. FINANCIAL SERVICES' FEES - - ------------------------------ A. CREDIT CARD PROCESSING: - --------------------------- 1. Real-time authorization and daily settlement of "one-off" credit card transactions (a) Start up fee $(***)one time charge per system (b) Maintenance fee $(***) monthly charge per system (c) Accepted transaction fee $(***) per item 2. Recurring Credit Card Transactions (a) Accepted Transaction Fee * 0-1,000 transactions $(***) per item * 1,001 -2,000 transactions $(***) per item * 2,001 - 3,000 transactions $(***) per item * 3,001 - 4,000 transactions $(***) per item * 4,001 - 5,000 transactions $(***) per item * 5,001 and up transactions $(***) per item B. CASH REGISTER RECEIPTS: - --------------------------- Each CSG Customer System Site will be charged a monthly fixed fee of $(***) for processing front counter receipts for payment and equipment. Each CSG Customer System Site will be charged a one-time start-up fee of $(***) "Other Fees": Cash Register Receipts processing requires specific approved and certified equipment and forms. Additional pricing for equipment and forms is available upon request. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." 16. SUMMITRAK CUSTOMER MANAGEMENT SYSTEM - - ------------------------------------------ Monthly processing fee per subscriber* - $(***) (Price does not include postage costs) Customer is responsible for any and all hardware, software and communication lines required with the use of the Summitrak Customer Management System. *Pricing is subject to change on or after January 1, 1998 based upon mutually agreed terms. 17. SUMMITRAK PAY-PER-VIEW SERVICE - - ------------------------------------ Monthly processing fee per transaction* - $(***) Monthly minimum processing fee - $(***) Customer is responsible for any and all hardware, software and communication lines required with the use of the Impulse Pay-Per-View Service System. *Pricing is subject to change on or after January 1, 1998 based upon mutually agreed terms. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES WIRE TRANSFER INSTRUCTIONS: - --------------------------- Norwest Bank of Nebraska, NA 20th Street and Farnam Street Omaha, Nebraska USA 68102 ABA 104000058 Account Number 1155026349 AGREED AND ACCEPTED THIS 10TH DAY OF AUGUST, 1997, BY: CSG SYSTEMS, INC. ("CSG") TCI CABLE MANAGEMENT CORPORATION("CUSTOMER") BY: /S/ JOHN P. POGGE BY: /S/ GARY K. BRACKEN -------------------------- ---------------------------------------- Note: Any other fees and charges for any CSG Product or Service provided or licensed to Customer and not listed above shall be set forth in the subsequently executed Schedule for such Product or Service. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES SCHEDULE E CSG VANTAGEPOINT SOFTWARE LICENSE 1. LICENSE. CSG hereby grants Customer, and Customer hereby accepts from CSG, a non-exclusive, non-transferable perpetual to use CSG VantagePoint data warehouse software product described in Section 3 below ("VantagePoint") together with the Incorporated Third Party Software (collectively, the "System") at the System Sites in the United States and in the designated environment described in Section 4 below (the "Designated Environment"), for the fees set forth in Schedule D and subject to the terms and conditions specified below and ---------- in the Master Agreement. 2. COMMUNICATIONS SERVICES AND FEES. CSG or Customer shall provide, at Customer's expense, a data communications line from the CSG data processing center to Customer's data processing Center in TBD. Customer shall pay all fees --- and charges in connection with the installation and use of and peripheral equipment related to the data communications line in accordance with the fees described in Schedule D attached hereto. ---------- 3. VANTAGEPOINT. "VantagePoint" means (i) the machine-readable object code version of the computer programs described in the Product Schedule attached hereto as Exhibit E-1, whether embedded on disc, tape or other media and such portions of the source code to the CSG written programs or applications that CSG may make available to VantagePoint customers from time to time (the "Software"), (ii) the published user manuals and documentation that CSG makes generally available for the Software (the "Documentation"), (iii) the fixes, updates, upgrades or new versions of the Software or Documentation that CSG may provide to Customer under this Schedule E (the "Enhancements") and (iv) any ---------- customization or addition to the Software, Documentation or Enhancements that CSG may provide pursuant to Schedule B executed concurrently with this Schedule ---------- -------- E (the "Customization"). Nothing in this Schedule E will entitle Customer to - - ---------- receive the source code of the Incorporated Third Party Software, in whole or in part. 4. DESIGNATED ENVIRONMENT. "Designated Environment" means the combination of the other computer programs and hardware equipment CSG specifies for use with the System as set forth in Exhibit E-1, or otherwise approved by CSG in writing for Customer's use with the System at the system sites set forth on Exhibit E-1 (the "System Sites"). Customer may use the System only in the Designated Environment and will be solely responsible for upgrading the Designated Environment to the specifications that CSG may provide from time to time. CSG shall provide Customer with prompt notice in the case of any modifications to the Designated Environment. If Customer fails to upgrade the Designated Environment, CSG will have no obligation to continue maintaining and supporting the System and Customer shall have no obligation to pay for such Services. Use outside the Designated Environment voids all performance warranties. CSG shall certify the Designated Environment prior to the commencement of CSG's obligations under this Schedule E. Unless CSG has certified the Designated ---------- Environment, CSG shall have no obligation to perform under this Schedule E, ---------- including no obligation to maintain and support the VantagePoint. Any other Use of the System will require CSG's prior approval, and may be subject to additional charges. 5. USE. Customer may use the System only in the Designated Environment and a single, designated site in the United States for the term set forth in Section 7, below, and only in and for providing internal decision support, including use as a financial and marketing data tool. Customer will not use the System to provide any such service to or on behalf of any third parties in a service bureau capacity and will not permit any other person other than an Affiliate to use the System, whether on a time-sharing, remote job entry or other multiple user arrangement. Customer will not install the Software, Enhancements, Customization or Incorporated Third Party Software on a network or other multi- user computer system unless otherwise specified in Exhibit E-1, in which case the Designated Environment may be used to provide database or file services to other of Customer's computers across the network, up to the number of workstations specified in Exhibit E-1. Except as otherwise mandated by applicable law, Customer may make only one back-up archival copy of the Software, Enhancements, Customization or Incorporated Third Party Software. Customer will reproduce all confidentiality and proprietary notices on each of these copies and maintain an accurate record of the location of each of these copies. Customer will not otherwise copy, translate, modify, adapt, decompile, disassemble or reverse engineer the System, except as and to the extent expressly authorized by applicable law. Customer may change the designated site upon advance written notice to CSG. 6. MAINTENANCE AND SUPPORT. (a) Maintenance. Following expiration of the Warranty Period, CSG will provide ----------- Customer with phone support, adequately staffed, from Monday through Friday 8 a.m. to 6 p.m. (Mountain Time) to advice, consult and assist with the CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES use of the then-current version of VantagePoint and diagnose and correct routine problems that Customer may encounter (the "Hot-Line Support"), and also publication updates and the fixes and updates that CSG and its licensors may make generally available (the "Updates") for the fees set forth in Schedule D, ---------- which are identified in Schedule D as maintenance fees, and for the term of this Master Agreement. Hot-Line Support and Updates do not include support of the Incorporated Third Party Software or any other third party software except to the extent set forth in Schedule G. ----------- (b) Customization. Customer acknowledges that the Updates may not operate with ------------- the Customization. At Customer's request, CSG may provide Customer with customization services to modify the Updates to operate with the Customization. CSG and Customer will establish the terms, conditions and charges under which CSG provides any such customization services in a Statement Of Work incorporated into Schedule B. In no event will any such customization services affect ---------- Customer's acceptance of the System pursuant to this Schedule E. ---------- (c) Limitation. The Updates or Enhancements will not include any upgrade or ---------- new version of VantagePoint that CSG and its licensors decide, in their sole discretion, to make generally available as a separately priced item. This Section will not be interpreted to require CSG to (i) develop and release Updates or Enhancements or (ii) customize the Updates or Enhancements to satisfy Customers' particular requests. If an Update or Enhancement replaces the prior version of the System, Customer will promptly install the Update or Enhancement and destroy such prior version upon installing the Update or Enhancement. CSG will have no obligation to maintain and support VantagePoint if Customer has modified VantagePoint by altering the source code that CSG may have provided to Customer pursuant to this Agreement. At Customer's request, CSG will provide maintenance and support of VantagePoint containing such Customer modifications at CSG's standard hourly rates and charges. 7. FEES. With respect to the VantagePoint license granted hereunder, Customer agrees to pay the fees set forth in Schedule D. ----------- 8. Term. The term of this Schedule E shall commence on the effective date of this Schedule and continue thereafter indefinitely. AGREED AND ACCEPTED THIS 10TH DAY OF AUGUST, 1997, BY: CSG SYSTEMS, INC. ("CSG") TCI CABLE MANAGEMENT CORPORATION ("CUSTOMER") BY: /S/ JOHN P. POGGE BY: /S/ GARY K. BRACKEN ---------------------------- ----------------------------------------- EXHIBIT E-1 PRODUCT SCHEDULE CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT E-1 (PAGE 1 OF 3) PRODUCT SCHEDULE ---------------- CSG VANTAGEPOINT SOFTWARE (MODULE DEFINITIONS): TBD --------------------------------- 1. VANTAGEPOINT MODEL The VantagePoint Model is a telecommunications business model in pictorial representation of the significant business items, the business relationships between them and the attributes which describe each of the business items. The model has been architected to store data from multiple sources, these sources include the CCS billing system, Phoenix, 3rd party billing systems, operational data and metagraphic data. The VantagePoint logical model has then been converted to a physical implementation for a relational database environment and is optimally tuned for the Oracle RDBMS. 2. VANTAGEPOINT CONVERSION ENGINE The Conversion Engine provides the functionality necessary to move data from an existing database into VantagePoint. Initially, all selected data from the client's existing database will be loaded into the VantagePoint. Subsequently, an incremental update will load data into VantagePoint on a nightly basis. 3. VANTAGEPOINT MARKETING ANALYSIS SYSTEM The Marketing Analysis System (MAS) is a tool which provides users the capability to view data with complex relationships among several dimensions. It also sorts, forecasts, tracks trends and performs other complex analyses. Finally, it lets users move from one query to another and get results quickly and easily. A Multidimensional Database (MDD) is an alternative way of organizing summary data for business intelligence. Data is organized in dimensions and measures by time providing a better way to represent a business view of data. This process provides marketers with the ability to perform profiling, view market segments and with answers to marketing types of "what- if" scenarios. 4. VANTAGEPOINT CAMPAIGN MANAGEMENT SYSTEM The VantagePoint Campaign Management System (CMS) is a custom designed marketing strategy tool which provides a platform for marketers to create, manage and track marketing Campaigns and Campaign Cells. The Campaign Management System allows the creation of marketing segments based on demographic and performance data in the VantagePoint data warehouse and allows customers and prospects to be assigned to many marketing segments. Additionally, the system provides facilities for tracking budget and actual expenses, as well as revenues. 5. VANTAGEPOINT ENHANCED STATEMENT PRESENTATION MESSAGELINK The VantagePoint Enhanced Statement Presentation (ESP) MessageLink is a unique set of software utilities which allow the user to add messages to statements, notices, reports, and other hard copy output without requiring any software development. While ESP is an existing mainframe application, ESP Integration has been developed for use in conjunction with the VantagePoint Campaign Management System application. 6. VANTAGEPOINT ADDRESS MERGE (ADDRESS STANDARDIZATION) The VantagePoint Address Merge routine validates that the address data within the VantagePoint data warehouse conform to United States Postal Service codes. Invalid addresses are identified within the system and are selected out of the data warehouse for clean up. 7. VANTAGEPOINT EXECUTIVE INFORMATION SYSTEM (EIS) The EIS presents high-level key performance indicators to executive and senior management. ABS will conduct interviews of the customer to obtain critical success factors and their associated key performance indicators (e.g., revenue, churn, network quality, etc.). Typically there are about seven key performance indicators but no more than nine with clear and concise definitions provided by the customer. The user interface is very intuitive and is based on displaying the data using geographic map displays that show performance in pre-defined areas and regions. The interface supports "drill down" capabilities within regions and can display a range of qualitative data that can be quickly accessed at any level of the geographic hierarchy. The EIS is not intended to provide access to detail data nor does it provide ad hoc query capabilities. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT E-1 (Page 2 of 3) 8. VANTAGEPOINT PREDICTIVE MODELING* The emerging telecommunications marketplace will be characterized by rapid introductions of new promotions and marketing campaigns and entry into new geographic areas and markets. The data warehouse contains information necessary to evaluate campaigns and to identify the best targets for new campaigns. The Market Analysis System provides a foundation for qualitative analysis of the effectiveness of campaigns and products. The predictive modeling system provides for qualitative analyses. The predictive modeling system integrates a neural network modeling tool with the data warehouse to create formal statistical models. The predictive modeling tool can be used to create response models (e.g., identify individuals most likely to respond to a promotion) or performance models (e.g., lifetime value). The predictive modeling system creates scoring algorithms that can be applied to the entire data warehouse. The predictive model creates a set of "lift" reports that are useful for determining the effectiveness of campaigns and promotions. * THIS MODULE IS SUBJECT TO COMPLETION. INCORPORATED THIRD PARTY SOFTWARE (TO BE DELIVERED WITH VANTAGEPOINT): AVS Express from Advanced Visual Systems and Group 1 Address Merge. OTHER THIRD PARTY SOFTWARE (TO BE DELIVERED WITH VANTAGEPOINT): Cognos Powerplay and Impromptu. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT E-1 (Page 3 of 3) CUSTOMIZATION: - ------------------------------------------------------------------------------ Customization means the Technical Services' Deliverables as defined under Schedule B of the Master Agreement including but not limited to any and all - ---------- interface programs and data conversion software developed by CSG on behalf of Customer. SYSTEM SITES AND NUMBER OF WORKSTATIONS: - ------------------------------------------------------------------------------ Customer Site(s) where VantagePoint software will be located: TBD Number of Workstations: Three (3) workstation seats for each of the User Application Modules which include: Marketing Analysis, Campaign Management, Customer Loyalty, EIS and Predictive Modeling. Note: If each of the five modules are loaded on different workstations/seats, then Customer would have a total of fifteen (15) workstations/seats with a VantagePoint software module loaded onto each one. DESIGNATED ENVIRONMENT: - ------------------------------------------------------------------------------ Customer is responsible for providing the necessary third party hardware, software and network. The hardware requirements listed below are to be used as rough guidelines for Customer's planning purposes. These estimates are subject to revision as Advanced Business Solutions develops additional requirements and initiates work for performance tuning. Advanced Business Solutions will work with Customer to identify the necessary computing environment for VantagePoint. The disk estimates for the database server do not assume disk mirroring or any other fault tolerant disk configuration. Hardware: Client configuration: MS-DOS 6.2 with Windows for Workgroups 3.11 (32 bit extension) Pentium 133 32MB RAM, 2 GB HD, SQLNet TCP/IP connection to Oracle server MDD Server MS-DOS 6.2 with Windows NT 3.51 Pentium 133 64MB RAM, 2GB HD, SQLNet TCP/IP connection to Oracle server Database Server (Oracle) SUN Sparc 2000X, Solaris V2.5, 10 CPU, 2GB RAM, 120GB DASD, SQLNet TCP/IP Network T1 circuit between Customer data center and CSG data center Software: Oracle RDMBS Oracle 7.3.2.2 Microsoft Visual Basic NOTE: The above is subject to change. The specific hardware configuration - ---- cannot be completely identified and certified until after the business requirements of Customer are determined during the pre-install visit. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES SCHEDULE F PRINT AND MAIL SERVICES 1. SERVICES. Subject to the terms and conditions of the Master Agreement and for the fees set forth in Schedule D, CSG will provide to Customer, and Customer ---------- will purchase from CSG, Customer's requirements for the Print and Mail Services defined in Section 2 below set forth in this Schedule F for the System Sites set ---------- forth in Exhibit F-1. 2. POSTAGE. CSG agrees to purchase the postage required to mail statements to Customer's subscribers ("Subscriber Statements"), notification letters generated by CSG, past due notices and other materials mailed by CSG on behalf of Customer (the "Print and Mail Services"). As part of the Print and Mail Services, CSG agrees to provide multiple billing frequencies, including monthly billing, quarterly billing and annual billing. Customer shall reimburse CSG for all postage expenses incurred in the performance of the Print and Mail Services based on the then current first class postal rate for each item of first class mail processed by CSG on behalf of Customer less an amount equal to the then current presort credit rate for each item of first class mail which qualifies for the discount rate. This qualification rate will be based on the monthly rate of all of CSG's mailings which are produced at the same CSG facility that qualify for the presort credit rate. 3. COMMUNICATIONS SERVICES. Communications services shall be provided pursuant to Section 2 of Schedule A. 4. ENHANCED STATEMENT PRESENTATION SERVICES. For the fees set forth in Schedule D, CSG shall develop a customized billing statement (the "ESP - ------------ Statement" ) for Customer's subscribers utilizing CSG's enhanced statement presentation services. Customer will create a template that may be utilized by each System Site, but the template may be modified for any System Site for the fees set forth in Schedule D. Customer agrees that CSG's enhanced statement ---------- presentation services shall be Customer's sole and exclusive method of mailing Subscriber Statements. The ESP Statements may include CSG's or Customer's intellectual property. "Customer's Intellectual Property" means the trademarks, service marks, other indicia of origin, copyrighted material and art work owned or licensed by Customer that CSG may use in connection with designing, producing and mailing ESP Statements and performing its other obligations pursuant to this Schedule F. "CSG Intellectual Property" means trademarks, service marks, other - ---------- indicia of origin, copyrighted material and art work owned or licensed by CSG and maintained in CSG's public library that may be used in connection with designing, producing and mailing ESP Statements. (a) Development and Production of ESP Statements. CSG will perform the design, -------------------------------------------- development and programming services related to design and use of the ESP Statements (the "Work") and create the work product deliverables (the "Work Product") set forth in a separately executed and mutually agreed upon ESP Work Order (the "Work Order") by the completion date set forth on the Work Order. The ESP Statement will contain the Customer and CSG Intellectual Property set forth on the Work Order. Customer shall pay CSG the development fee for the Work and the Work Product set forth on the Work Order upon acceptance of the ESP Statements in accordance with the Work Order. Except with respect to Customer's Intellectual Property, Customer agrees that the Work and Work Product shall be the sole and exclusive property of CSG. Customer shall have no proprietary interest in the Work Product or in CSG's billing and management information software and technology and agrees that the Work Product is not a work specially ordered and commissioned for use as a contribution to a collective work and is not a work made for hire pursuant to United States copyright law. After CSG has completed the Work and the Work Product, CSG will produce ESP Statements for Customer as contemplated under this Schedule. (b) Supplies. CSG will suggest and Customer will select the type and quality -------- of the paper stock, carrier envelopes and remittance envelopes for the ESP Statements (the "Supplies"). CSG shall purchase Customer's requirements of Supplies necessary for production and mailing of the ESP Statements. CSG shall charge Customer the rates set forth in Schedule D for purchase of Supplies. ---------- (c) Right to Use Customer's Intellectual Property. Customer provides to CSG a --------------------------------------------- non-exclusive right to use all of Customer's Intellectual Property necessary to design, produce and mail, directly or indirectly, the ESP Statements. Customer represents and warrants that it owns or has the right to use all of Customer's Intellectual Property and has full power and authority to grant CSG the rights set forth herein and that CSG's use of Customer's Intellectual Property on the ESP Statements will not constitute a misuse or infringement of the Customer's Intellectual Property or an infringement of CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES the rights of any third party. Customer will use best efforts to maintain its rights to use and license Customer's Intellectual Property and will immediately advise CSG of the loss of Customer's right to use any Customer's Intellectual Property and will advise CSG of all copyright and other notices that must be used in connection with Customer's Intellectual Property and of any restrictions on use of Customer's Intellectual Property relevant to CSG's activities hereunder. Said rights shall terminate with no further action of Customer upon termination or expiration of this Master Agreement or Schedule F, and upon ---------- Customer's written request, CSG shall promptly return or destroy all Customer Intellectual Property. (d) Indemnification Relating to ESP Statements. Subject to Section 14 of the ------------------------------------------ Master Agreement, Customer shall indemnify, defend and hold CSG harmless from any claims, demands, liabilities, losses, damages, judgments or settlements, including all reasonable costs and expenses related thereto (including attorneys' fees), directly or indirectly resulting from Customer's breach of any representation or warranty under this Section 4, and the Work Product, except for those arising out of CSG Intellectual Property. 5. ANCILLARY SERVICES. At Customer's request, CSG shall provide the ancillary services described in Schedule D attached hereto (the "Ancillary Services") at ---------- the rates described in Schedule D. ----------- 6. PER CYCLE MINIMUM. As of the Commencement Date as defined in Section 9 below, for each month that this Agreement is in effect, each System Site will maintain per each billing cycle a minimum of three thousand (3000) subscribers on the CCS Services; provided, however, that such minimum obligation shall not apply to (i) System Sites under 12,000 subscribers and (ii) for a period of twelve (12) months after the conversion date to the CCS Services, System Sites converting to the CCS Services pursuant to the Master Agreement 7. DEPOSIT. At least seven (7) days prior to the Commencement Date of the Print and Mail Services set forth in Section 8 below, Customer shall pay CSG a security deposit (the "Deposit") for the payment of the expenses described in Section 2 of this Schedule F (the "Disbursements"). The Deposit will equal the ---------- estimated amount of Disbursements for one (1) month as determined by CSG based upon the project volume of applicable services to be performed monthly by CSG. If Customer incurs Disbursements greater than the Deposit for any month, Customer shall, within forty five (45) days of receipt of a request from CSG to increase the Deposit, pay CSG the additional amount to be added to the Deposit. If Customer fails to pay the additional amount requested within such 45 day period, CSG may hold Customer's statements until the additional amount is received. Upon written request from Customer, CSG will return to Customer a portion of the Deposit if the Disbursements incurred by Customer on a monthly basis are less than the Deposit for three (3) consecutive months; such portion shall be equal to the amount by which the Deposit exceeds the Disbursements. In addition to the foregoing, CSG shall have the right to apply the Deposit to the payment of any invoice from CSG which remains unpaid, and is not reasonably disputed, during the term of this Agreement, and Customer agrees to replenish any such Deposit amount as set forth above. Any portion of the Deposit that remains after the payment of all amounts due to CSG following the termination or expiration of this Master Agreement will be returned to Customer. Customer shall not be entitled to receive interest on the Deposit while it is maintained by CSG. 8. TERM. The first day of the calendar month in which the Print and Mail Services commence shall be referred to as the "Commencement Date." The Print and Mail Services shall continue until December 31, 2012. AGREED AND ACCEPTED THIS 10TH DAY OF AUGUST, 1997, BY: CSG SYSTEMS, INC. ("CSG") TCI CABLE MANAGEMENT CORPORATION ("CUSTOMER") By: /S/ JOHN P. POGGE BY: /S/ GARY K. BRACKEN ------------------ -------------------- Exhibit G-1........SYSTEM SITES CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES SCHEDULE G INCORPORATED THIRD PARTY SOFTWARE AND LICENSES AND THIRD PARTY RIGHTS ADDITIONAL TERMS AND CONDITIONS A. INCORPORATED THIRD PARTY SOFTWARE --------------------------------- The following terms and conditions supplement, and where in conflict, supersede the terms and conditions contained in the Master Agreement, but solely with respect to the identified item of Incorporated Third Party Software. 1. WARRANTY. a. Limited Warranty. CSG warrants that the Incorporated Third Party Software ---------------- will conform with the applicable specifications contained in the documentation accompanying the Incorporated Third Party Software at the time of delivery, and perform substantially as described therein, for the period specified below: B.E.A. 90 days from installation at Customer's site. ORACLE (RUNTIME LICENSE) One year from the date on which the Oracle software is delivered by Oracle to CSG, or if no delivery is necessary, the effective date set forth on the order form for the Oracle software. AVS No warranty. Provided "AS-IS". GROUP 1 perpetual warranty b. Remedies. In case of breach of warranty or any other duty related to the -------- quality of the Incorporated Third Party Software as set forth in Section 1(a), CSG or its representative will correct or replace any defective item of Incorporated Third Party Software or, if not practicable, CSG will accept the return of the defective item of Incorporated Third Party Software and refund to Customer (i) the amount actually paid to CSG for the defective item of Incorporated Third Party Software, less amortization based on a five (5) year straight line amortization schedule (provided, however, that the amount to be paid by CSG under this subsection (i) will be less than 50% of said amount actually paid). Customer acknowledges that this Paragraph sets forth Customer's exclusive remedy, and CSG's exclusive liability, for any breach of warranty or other duty related to the quality of the Incorporated Third Party Software. c. Disclaimer. THE ABOVE LIMITED WARRANTIES ARE IN LIEU OF ALL OTHER ---------- WARRANTIES OR CONDITIONS, WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR WRITTEN STATEMENTS BY CSG, ITS LICENSORS, AGENTS OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY, SATISFACTION, FITNESS FOR PARTICULAR PURPOSE, TITLE) WHICH ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED. 2. INFRINGEMENT. a. Indemnity. If an action is brought against Customer claiming that the --------- Incorporated Third Party Software infringes a patent or copyright within the United States, CSG's obligations and Customer's rights relating thereto shall be those set forth in Section 12 of the Master Agreement. B. THIRD PARTY RIGHTS ------------------ Customer shall be entitled to the benefits of Section 12 of the Master Agreement, subject, however, to the following limitation: CSG may provide Customer with Products, Incorporated Third Party Software and Services subject to patent or copyright licenses that third parties, including Ronald A. Katz Technology Licensing, L.P., have granted to CSG (the "Third Party Licenses"). Customer acknowledges that Customer receives no express or implied license under the Third Party Licenses other than the right to use the Products, Incorporated Third Party Software and Services, as provided by CSG, as permitted CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES by the Master Agreement, as amended from time-to-time. Any modification of or addition to the Products, Incorporated Third Party Software or Services or combination with other software, hardware or services not made or provided by CSG is not licensed under the Third Party Rights, expressly or impliedly, and may subject Customer and any third party supplier or service provider to an infringement claim. Neither Customer nor any third party will have any express or implied rights under the Third Party Licenses with respect to (i) any software, hardware or services not provided by CSG or (ii) any product or service provided by Customer other than through the use of the Products, Incorporated Third Party Software or Services as provided by CSG. C. CUSTOMER THIRD PARTY RIGHTS. CSG acknowledges that Customer has obtained --------------------------- certain rights under that certain license agreement, by and between Customer and Ronald A. Katz Technology Licensing, L.P. entered into as of October 15, 1996 (the "Customer License"). Customer agrees not to cause an unexcused default for nonpayment under Customer License. AGREED AND ACCEPTED THIS 10TH DAY OF AUGUST, 1997, BY: CSG SYSTEMS, INC. ("CSG") TCI CABLE MANAGEMENT CORPORATION ("Customer") By: /S/ JOHN P. POGGE BY: /S/ GARY K. BRACKEN __________________________ _____________________________ CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES "Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission." SCHEDULE Q ISP DOMAIN SOFTWARE LICENSE --------------------------- 1. LICENSE. CSG hereby grants Customer, and Customer hereby accepts from CSG, a non-exclusive, non-transferable and perpetual right to use the software product known as ISP Domain, which is middleware software utilized between the CCS Services and Customer's application, for use only with the Usage Handling System and the CCS Services for the number of subscribers set forth in Exhibit Q-1 in the designated environment described in Section 3 below (the "Designated Environment"), for the fees set forth in Schedule D and subject to the terms and ---------- conditions specified below and in the Master Agreement. "ISP Domain" includes (i) the ISP Domain server resident on CSG's central server and (ii) and the machine-readable object code version of the following APIs that will be utilized with ISP Domain - Account Replication, Usage, Adjustment, Account Notification, Statements, Scheduling (the "APIs"). Customer will not permit any person other than Customer's employees or authorized consultants to access ISP Domain. Customer will not download or otherwise copy or decompile, disassemble or otherwise reverse engineer the ISP Domain or any software accessed through ISP Domain. Nothing in this Schedule Q will entitle Customer to receive the source ---------- code of the ISP Domain or Enhancements, in whole or in part. 2. COMMUNICATION LINES. Customer shall be responsible for the installation and use of data communications lines from Customer's applications to ISP Domain and all associated fees and charges. 3. DESIGNATED ENVIRONMENT. "Designated Environment" means the combination of the other computer programs and hardware equipment CSG specified for use with the APIs as set forth in Exhibit Q-1, or otherwise approved by CSG in writing for Customer's use with the APIs. Customer may use the APIs only in the Designated Environment and will be solely responsible for upgrading the Designated Environment to the specifications that CSG may provide from time to time. CSG shall provide Customer with prompt notice in the case of any modifications to the Designated Environment. If Customer fails to update the Designated Environment within six (6) months of receipt of notice from CSG or otherwise uses the APIs outside the certified Designated Environment, CSG will have no obligation to continue maintaining and supporting the ISP Domain. CSG shall certify the Designated Environment prior to the commencement of CSG's obligations under this Schedule Q, including its obligations to maintain and ---------- support the ISP Domain. Any other use or transfer of the ISP Domain will require CSG's prior approval, which may be subject to additional charges. 4. SUPPORT. For the fees set forth in Schedule D, CSG will provide Customer ---------- the support and maintenance for the then-current version of ISP Domain as set forth in Exhibit Q-2 (the "Support Services"). Customer agrees to pay the fees set forth in Schedule D, which are identified in Schedule D as maintenance fees, ----------- for the Support Services for the term of this Master Agreement. Included in the Support Services is support of the then-current version of ISP Domain via the Product Support Center, publication updates, and the fixes and updates that CSG may make generally available as part of its maintenance and support packages (the "Updates"). The Updates will not include any upgrade or new version of ISP Domain that CSG decides, in its sole discretion, to make generally available as a separately priced item. In such a case, Customer may decide, at its sole option, whether to install an Update. This Section will not be interpreted to require CSG to (i) develop and release Updates or (ii) customize the Updates to satisfy Customers' particular requests. 5. INTERIM SERVICES. If CSG does not provide ISP Domain to Customer by December 15, 1997, CSG will provide, until such time as ISP Domain is provided to Customer, (i) at no charge to Customer, the CCS Services user interface, or if mutually agreed between the parties, the ACSR user interface, and (iii) one half of the out of pocket labor costs necessary for Customer to peform dual entry; CSG's portion of such labor costs shall not exceed (*************) dollars ($(***)) per month. 5. TERM. This Schedule Q shall be effective from the Effective Date as defined ---------- in the Master Agreement and will remain in effect thereafter indefinitely, unless terminated pursuant to Sections 17 of the Master Agreement. AGREED AND ACCEPTED THIS 10TH DAY OF AUGUST, 1997, BY: CSG SYSTEMS, INC. ("CSG") TCI CABLE MANAGEMENT CORPORATION ("CUSTOMER") BY: /S/ JOHN P. POGGE BY: /S/ GARY K. BRACKEN ______________________ _______________________________ CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT Q-1 DESIGNATED ENVIRONMENT EXHIBIT Q-2 INSTALLATION, MAINTENANCE AND SUPPORT CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT Q-1 DESIGNATED ENVIRONMENT FOR ISP DOMAIN ------------------------------------- THE SUPPORT SERVICES DO NOT INCLUDE SUPPORT OF THE ISP DOMAIN IF THE APIS ARE USED OUTSIDE THE CERTIFIED DESIGNATED ENVIRONMENT (I.E. OTHER HARDWARE, SOFTWARE, OR OTHER MODIFICATIONS HAVE BEEN INTRODUCED BY CUSTOMER THAT ARE OUTSIDE THE CERTIFIED DESIGNATED ENVIRONMENT). IN SUCH A CASE, CSG MAY AGREE TO PROVIDE CUSTOMIZED TECHNICAL SUPPORT FOR CSG'S THEN-CURRENT FEES FOR SUCH SERVICES. APIS - ---- NT Server Microsoft Transaction Server Software - ------------------------------------------------------------------------------- NUMBER OF SUBSCRIBERS: Up to one million subscribers. For each increment of one million subscribers in excess of the one million subscribers currently licensed, Customer may license ISP Domain for the license fee set forth in Schedule D (subject to Section 4 of the Master Agreement). - ---------- CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT Q-2 (PAGE 1 OF 3) SUPPORT SERVICES FOR ISP DOMAIN ------------------------------- PRODUCT SUPPORT CENTER The customer Product Support Center provides Customer with advice, consultation and assistance to use ISP Domain and diagnose and correct problems that Customer may encounter with the then-current version of ISP Domain. CSG will offer the Product Support Center remotely by telephone, fax or other electronic communication twenty-four hours a day, seven days a week. Customer will bear all telephone and other expenses that it may incur in connection with the Product Support Center. Every customer problem is assigned a tracking number and a priority. Problems are resolved according to their assigned priority. See attached list detailing "Priority Levels". ACCOUNT MANAGEMENT CSG will provide an account manager which is shared resource which will serve as Customer's liaison to all other CSG support services and will be responsible for ensuring customer satisfaction. Through periodic status reports and occasional on-site visits when necessary, the account manager will assist Customer with their use of ISP Domain and keep them abreast of new developments in CSG's products and services. UPDATES Subject to the terms set forth in this Schedule Q, product Updates include ---------- software corrections, the fixes and updates that CSG may make generally available. These Updates will be installed by CSG and bulletins and/or technical documentation describing the Updates will be provided to Customer. CSG will not provide Updates due to changes or new releases in Customer's vendor products. Custom software modifications are NOT included under the Basic Support Package as Updates but rather are covered as Technical Services under Schedule -------- B. - - PUBLICATIONS The customer will receive updates to all published documentation for ISP Domain. CSG will provide Customer with documentation electronically, if available. THIRD PARTY SOFTWARE The maintenance and support for third party software is provided by the licensor of those products. Although CSG may assist in this maintenance and support with front-line support, CSG will have no liability with respect thereto and Customer must look solely to the licensor. ________________________________________________________________________________ CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT Q-2 (Page 2 of 3) PRODUCT SUPPORT CENTER FOR ISP DOMAIN - PRIORITY LEVELS -------------------------------------------------------- When contacting the PRODUCT SUPPORT CENTER, the caller should be prepared to provide detailed information regarding the problem and the impact on the operation and the end user. Each problem or question is assigned a tracking number and a priority. The priority is set to correspond with the urgency of the problem. It is very important that the customer describe the urgency of the problem when it is reported. The priority levels are described below: * CRITICAL (PRIORITY 1): Complete loss of functionality, system outage or down production system. Customers cannot access the system, cannot perform any function due to the hardware being down, are experiencing network control or communication problems, or are unable to process. The customer will receive immediate response and prioritized at the highest level. Once control has been regained, efforts are then made to determine the "root cause" of the problem. Considering the nature of the cause, the problem is adjusted to one of the other priorities and processed accordingly. While a Critical (Priority 1) problem exists, the Product Support Center commitment is to provide around-the-clock support until customers system/network/application is restored to operational status. * SERIOUS (PRIORITY 2): Partial loss of functionality, or loss of critical functionality. The Customer's production/processing system is not down but there is an impact within the system/network. The Customer will receive immediate response. If the problem persists, the control of the network may be lost and/or end-user impacts may become serious. The Customer will receive immediate response. The Product Support Center's goal is to ensure that control of the system is not jeopardized and to work with Customer to gather information in order to resolve the issue. The Product Support Center allocates resources during normal business hours until a permanent solution is found. * OPERATIONAL (PRIORITY 3): Partial loss of functionality loss of non-critical functionality, or loss of critical functionality for which a work around exists. The problem is within the customers' operations environment. The user is attempting to utilize a CSG product and is having difficulty completing the process. A user may be a CSR, subscriber, or the Customer's operation staff running the system. CSG's Product Support Center goal is to respond the next business day. * INCONVENIENCE OR ENHANCEMENT (PRIORITY 4): Inconvenience or loss of functionality for which a work-around solution exists, or enhancement request is required. The problem is an operator inconvenience, an enhancement, or the Customer have requested information. There is no serious impact to the end user of the system. The problem can be avoided by proper operator action, internal training by the customer, or a work-around solution. There is no apparent danger of losing control of the system, network, application or data because of this type of problem. A suggestion or request for enhancement is based upon the problem, concern or business need. The Product Support Center's goal is to provide a correction through internal software control procedures. CSG's Product Support Center goal is to respond within (3) business days. * INFORMATIONAL (PRIORITY 5): This category also includes questions. The Product Support Center is committed to responding with the requested information within (5) business days. Software correction notification may be sent to the customer shortly after the correction has been made by our development engineers. At times, a work-around may be suggested if: * Its delivery is more timely * Its implementation is less complex * Its reliability is more certain CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT Q-2 (PAGE 3 OF 3) However, a work around must be mutually acceptable to our Customers, and it must have the effect of reducing the concern until a permanent resolution can be determined. Should the Customer wish to check the status of a problem they may contact the Product Support Center desk representatives or their Account Manager. In either case, the customer should reference the tracking number. Customer may request to have the priority of Customer's call upgraded. Customer may check on the status of such request at any time by calling the Product Support Center or contacting Customer's account manager. The account manager is responsible for problem escalation to the appropriate level of management if Customer is not satisfied with a response. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES SCHEDULE R THE USAGE HANDLING SYSTEM ------------------------- 1. LICENSE. CSG hereby grants, and Customer hereby accepts from CSG a non- exclusive and non-transferable, perpetual license to use the Usage Handling System ( the "Usage Handling System"), for the fees set forth in Schedule D and ---------- subject to the terms and conditions specified below and in the Master Agreement. Customer may use the Usage Handling System, which is resident on CSG's central server, for the number of subscriber services set forth in Exhibit R-1, only for use with the ISP Domain and ACSR Telephony Products and the CCS Services to provide rating and billing services for Customer's Internet and telephony subscribers. Customer will not make any other use of the Usage Handling System and will not use the Usage Handling System to create additional application programs or other software. Customer will not permit any person other than Customer's employees and authorized consultants to access the Usage Handling System. Customer will not download or otherwise copy or decompile, disassemble or otherwise reverse engineer the Usage Handling System or any software accessed through the Usage Handling System. 2. COMMUNICATION LINES. Customer shall be responsible for the installation and use of data communications lines used with the Usage Handling System and all associated fees and charges. 3. SUPPORT. CSG will provide Customer the support and maintenance for the then-current version of the Usage Handling System as described on Exhibit R-2 (the "Support Services"). Customer agrees to pay the fees set forth in Schedule -------- D, which are identified in Schedule D as maintenance fees, for the Support - - Services for the term of this Master Agreement. Included in the Support Services is support of the then-current version of the Usage Handling System via the Product Support Center, publication updates, and the fixes and updates that CSG may make generally available as part of its maintenance and support packages (the "Updates"). The Updates will not include any upgrade or new version of the Usage Handling System that CSG decides, in its sole discretion, to make generally available as a separately priced item. This Section will not be interpreted to require CSG to (i) develop and release Updates or (ii) customize the Updates to satisfy Customers' particular requests. 4. TERM. This Schedule R license will become effective as of the Effective ---------- Date of the Master Agreement will remain in effect thereafter indefinitely, subject to the provisions of Section 17 of the Master Agreement. AGREED AND ACCEPTED THIS 10TH DAY OF AUGUST, 1997, BY: CSG SYSTEMS, INC. ("CSG") TCI CABLE MANAGEMENT CORPORATION ("Customer") BY: /S/ JOHN P. POGGE BY: /S/ GARY K. BRACKEN _______________________ ________________________________ EXHIBIT R-1 PRODUCT SCHEDULE; EXHIBIT R-2 SUPPORT SERVICES CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT R-1 PRODUCT SCHEDULE ---------------- SOFTWARE:____________________________________________________________________ THE USAGE HANDLING SYSTEM - ------------------------- BASE FUNCTIONALITY * Identify providers of service with usage types that have cases and calendars at system startup. * Provide an environment for rating rules to be entered into the system. * Customer lookup capability to access customer information from the database to obtain relevant information required to rate the events. * Provide the ability to collect CDR, connection and transaction events for the purposes of performing rating. * Perform rating logic against events based upon the plan defined for that event. * Place the rated event in a database. Aggregate multiple events to apply rates based upon accumulated usage and/or usage of multiple services. * Provide ability to report incidents to the system in the case of abnormal termination. * Allow multiple rating engines to run at once with different rule bases. * Prepare rated events for delivery to billing system. NUMBER OF SUBSCRIBERS SERVICES: Up to 1 million subscriber services (A subscriber service is either the CCS Services for Internet or telephony). For each increment of one million subscriber services in excess of the one million subscriber services currently licensed, Customer may license the Usage Handling System for the license fee set forth in Schedule D (subject to Section 4 of the ---------- Master Agreement). CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT R-2 (PAGE 1 OF 3) SUPPORT SERVICES FOR THE USAGE HANDLING SYSTEM ---------------------------------------------- PRODUCT SUPPORT CENTER The customer Product Support Center provides Customer with advice, consultation and assistance to use the Usage Handling System and diagnose and correct problems that Customer may encounter with the then-current version of the Usage Handling System. CSG will offer the Product Support Center remotely by telephone, fax or other electronic communication twenty-four hours a day, seven days a week. Customer will bear all telephone and other expenses that it may incur in connection with the Product Support Center. Every customer problem is assigned a tracking number and a priority. Problems are resolved according to their assigned priority. See attached list detailing "Priority Levels". ACCOUNT MANAGEMENT CSG will provide an account manager which is shared resource which will serve as Customer's liaison to all other CSG support services and will be responsible for ensuring customer satisfaction. Through periodic status reports and occasional on-site visits when necessary, the account manager will assist Customer with their use of the Usage Handling System and keep them abreast of new developments in CSG's products and services. UPDATES Subject to the terms set forth in this Schedule Q, product Updates include ---------- software corrections, the fixes and updates that CSG may make generally available. These Updates are delivered to Customer accompanied by bulletins describing the updates and installation instructions. CSG will not provide Updates due to changes or new releases in Customer's vendor products. Custom software modifications are NOT included under the Basic Support Package as Updates but rather are covered as Technical Services under Schedule B. ---------- PUBLICATIONS The customer will receive updates to all published documentation for the Usage Handling System. THIRD PARTY SOFTWARE The maintenance and support for third party software is provided by the licensor of those products. Although CSG may assist in this maintenance and support with front-line support, CSG will have no liability with respect thereto and Customer must look solely to the licensor. ________________________________________________________________________________ CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT R-2 (Page 2 of 3) PRODUCT SUPPORT CENTER FOR THE USAGE HANDLING SYSTEM - PRIORITY LEVELS ----------------------------------------------------------------------- When contacting the PRODUCT SUPPORT CENTER, the caller should be prepared to provide detailed information regarding the problem and the impact on the operation and the end user. Each problem or question is assigned a tracking number and a priority. The priority is set to correspond with the urgency of the problem. It is very important that the customer describe the urgency of the problem when it is reported. The priority levels are described below: * CRITICAL (PRIORITY 1): Complete loss of functionality, system outage or down production system. Customers cannot access the system, cannot perform any function due to the hardware being down, are experiencing network control or communication problems, or are unable to process. The customer will receive immediate response and prioritized at the highest level. Once control has been regained, efforts are then made to determine the "root cause" of the problem. Considering the nature of the cause, the problem is adjusted to one of the other priorities and processed accordingly. While a Critical (Priority 1) problem exists, the Product Support Center commitment is to provide around-the-clock support until customers system/network/application is restored to operational status. * SERIOUS (PRIORITY 2): Partial loss of functionality, or loss of critical functionality. The Customer's production/processing system is not down but there is an impact within the system/network. The Customer will receive immediate response. If the problem persists, the control of the network may be lost and/or end-user impacts may become serious. The Customer will receive immediate response. The Product Support Center's goal is to ensure that control of the system is not jeopardized and to work with Customer to gather information in order to resolve the issue. The Product Support Center allocates resources during normal business hours until a permanent solution is found. * OPERATIONAL (PRIORITY 3): Partial loss of functionality loss of non-critical functionality, or loss of critical functionality for which a work around exists. The problem is within the customers' operations environment. The user is attempting to utilize a CSG product and is having difficulty completing the process. A user may be a CSR, subscriber, or the Customer's operation staff running the system. CSG's Product Support Center goal is to respond the next business day. * INCONVENIENCE OR ENHANCEMENT (PRIORITY 4): Inconvenience or loss of functionality for which a work-around solution exists, or enhancement request is required. The problem is an operator inconvenience, an enhancement, or the Customer have requested information. There is no serious impact to the end user of the system. The problem can be avoided by proper operator action, internal training by the customer, or a work-around solution. There is no apparent danger of losing control of the system, network, application or data because of this type of problem. A suggestion or request for enhancement is based upon the problem, concern or business need. The Product Support Center's goal is to provide a correction through internal software control procedures. CSG's Product Support Center goal is to respond within (3) business days. * INFORMATIONAL (PRIORITY 5): This category also includes questions. The Product Support Center is committed to responding with the requested information within (5) business days. Software correction notification may be sent to the customer shortly after the correction has been made by our development engineers. At times, a work-around may be suggested if: * Its delivery is more timely * Its implementation is less complex * Its reliability is more certain CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EXHIBIT R-2 (PAGE 3 OF 3) However, a work around must be mutually acceptable to our Customers, and it must have the effect of reducing the concern until a permanent resolution can be determined. Should the Customer wish to check the status of a problem they may contact the Product Support Center desk representatives or their Account Manager. In either case, the customer should reference the tracking number. Customer may request to have the priority of Customer's call upgraded. Customer may check on the status of such request at any time by calling the Product Support Center or contacting Customer's account manager. The account manager is responsible for problem escalation to the appropriate level of management if Customer is not satisfied with a response. CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES FOR THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE THEIR RESPECTIVE COMPANIES EX-2.20 3 ASSET PURCHASE AGREEMENT EXHIBIT 2.20 ASSET PURCHASE AGREEMENT This Asset Purchase Agreement ("Agreement") is made effective as of August 10, 1997 between CSG Systems International, Inc., a Delaware corporation ("CSG"), with its principal place of business located 7887 E. Belleview Avenue, Suite 1000, Englewood, Colorado, and TCI SUMMITRAK of Texas, Inc., a Colorado corporation, and TCI SUMMITrak, L.L.C., a Delaware limited liability company and TCI Technology Ventures, Inc., a Delaware Corporation. (collectively, "TCI"), with their principal place of business located at 5619 DTC Parkway, Englewood, Colorado 80111. RECITALS WHEREAS, TCI owns certain software and related assets associated with the operations currently known as SUMMITrak; WHEREAS, TCI desires to sell, transfer, convey and deliver all of its right, title and interest in and to such software and assets to CSG; WHEREAS, CSG is in the business of developing and marketing software, and providing billing and customer care services to the telecommunications industry; WHEREAS, CSG desires to purchase such software and other assets, as more specifically described below, from TCI; Now, therefore, in consideration of the mutual promises herein set forth and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, TCI and CSG agree as follows: 1. DEFINITIONS. As used in this Agreement, the following terms shall have the meanings set forth below: (a) "AFFILIATE" shall mean TCI Communications, Inc. ("TCIC") and any person or entity controlling, controlled by, or under common control with TCIC. For purposes of this Agreement, a person or entity owning at least 20% of the equity interest in an entity shall be deemed to control that entity. (b) "ASSUMED LIABILITIES" shall mean the liabilities assumed by CSG under Section 3(f). (c) "CONTRACTS" shall mean those agreements, contracts, licenses and orders, whether written or oral that are described in Schedule 2D, and Section s 5(e) and 5(f) of the Disclosure Schedule. 1 (d) "CSG SYSTEM" shall mean any customer service and billing system owned or operated by CSG or any person or entity controlling, controlled by, or under common control with CSG. (e) "OPERATIONAL DATA" shall mean any and all license agreements and maintenance agreements or portions thereof relating to the Software and all saleable Software inventory, including all reproducible copies of each of the foregoing and magnetic tapes and machine readable codes or other media reasonably necessary to generate the foregoing. Operational Data shall also include all rights of TCI under all Contracts (as defined in Section 5(e) below), including without limitation, originals or copies of the Contracts set forth on Schedule 2D and originals or copies of all relevant portions of TCI's books, records and accounts, correspondence, production records, technical, manufacturing and procedural manuals, studies, reports, business plans, or summaries relating primarily to the Software. (f) "DOCUMENTATION" means all user manuals and technical information relating primarily to the Software, including codes (object and source), program notes, drawings, reproducible copies of each of the foregoing, magnetic tapes, machine readable codes or other media primarily developed for the Software, or reasonably necessary to generate the foregoing. The term shall also mean all of the software programs and related software development tools and utilities that have been used by TCI in the creation of the Software, and for which it has a license to use. (g) "EXCLUDED ASSETS" shall mean those assets listed on Schedule 2F, all of which will be retained by TCI and not purchased by CSG. (h) "PURCHASED ASSETS" shall mean the assets sold pursuant to this Agreement, as more specifically described in Section 2 below. (i) "SOFTWARE" means the software product and the Documentation currently known as SUMMITrak, which is described in Schedule 2A, including without limitation all trademarks (and goodwill appurtenant thereto) and copyrights (including copyright in the structure, sequence and organization of the Software, all screen layouts, command sequences and user interfaces), copyright and trademark registrations, copyright and trademark applications and patent and patent application rights, on such Software, and all of TCI's right, title and interest in and to all intangible property described in Schedule 2A, including without limitation all inventions, discoveries, trade secrets, confidential information, processes, formulas, know-how and rights and interests in all licenses and other agreements to which TCI is a party (as licensor or licensee) or by which it is bound relating to any of the foregoing kinds of property or rights. The term Software shall include all present and predecessor versions of the Software (regardless of whether actually marketed), as well as all work in progress on the Software and related source and object codes and all rights to manufacture, use, sell and license the same. 2 (j) "SUBSCRIBER" shall mean any current or future customer of TCI or any of the Affiliates that subscribes to any of its video (regardless of the medium of delivery, whether via cable, microwave, or otherwise), NVOD, VOD, Internet and/or high speed data services, any combination thereof, or any future comparable, service(s) that supplants in whole or in part any or all of the aforementioned services. 2. PURCHASE OF ASSETS. On the Closing Date upon and subject to the terms and conditions set forth herein, TCI shall sell, assign, transfer and convey exclusively to CSG all of the following rights, assets and properties, (the "Purchased Assets"), free and clear of any and all Liens, (as herein defined): (a) The Software, together with related Documentation, Operational Data, TCI's copyrights, trademarks, (and goodwill appurtenant thereto) patents, patent applications, and any other intellectual property rights in and to the Software as described in Schedule 2A, including trade secrets, know-how, or confidential information embodied within such Software; (b) The furniture, fixtures and equipment, and other tangible and intangible assets, as specifically described in Schedule 2B; (c) The leases and leasehold interests specifically described in Schedule 2C; (d) The contracts and contract rights specifically described in Schedule 2D; and (e) The other assets specifically described in Schedule 2F. TCI agrees that from and after the Closing, TCI shall have no further right to the name SUMMITrak or to use, or to market or otherwise transfer any portion of the Purchased Assets or to maintain the Software for itself or any third party except such rights as set forth in the License Agreement referred to in Section 6(e) hereof or as may be specifically granted to it under any other license from CSG. Notwithstanding the foregoing or any other provision hereof to the contrary, (i) the Purchased Assets shall not include the Excluded Assets, as specifically described in Schedule 2F and (ii) the parties acknowledge and agree that it is their intention that the Purchased Assets are all those assets that are currently used by TCI and its Affiliates to process Subscribers using SUMMITrak and to develop and maintain the Purchased Assets except for: (i) the Excluded Assets; and (ii) certain of those assets which are used for both (a) the processing, development and/or maintenance of the Purchased Assets; and (b) the business of TCI and its Affiliates (excluding SUMMITrak operations) ("Shared Assets"), provided, however, with respect to the Shared Assets, the parties agree that they shall use their best efforts as soon as reasonably practicable after the execution of this Agreement to define the Shared Assets and reach an equitable distribution or other 3 accommodations with respect thereto to enable CSG to continue the SUMMITrak operations and TCI and its affiliates to continue their operations. The Excluded Assets schedule may not be added to after execution of this Agreement. 3. PURCHASE PRICE. (a) CSG agrees to pay to TCI Technology Ventures, Inc. or its designee a purchase price for the Purchased Assets as follows: (i) At the Closing, CSG shall pay to TCI Technology Ventures, Inc. or its designee by wire transfer or immediately available funds, one- hundred-six-million Dollars ($106,000,000); and (ii) CSG shall pay TCI Technology Ventures, Inc. or its designee up to a maximum of an additional fourteen-million Dollars ($14,000,000), as fees payable with respect to Subscribers that convert to a CSG System from a non-CSG System other than the Software ("Converted Subscriber") on or before December 31, 1998 ("Conversion Fee"). The Conversion Fee shall be equal to $0.15 per month, per Converted Subscriber for each of the first 24 months after a Converted Subscriber converts to a CSG System. Payments due under this Section 3(a)(ii) shall begin to accrue on the first of the month subsequent to the month in which any particular Converted Subscriber converts to a CSG System, and shall be payable quarterly, within 60 days after the conclusion of each applicable CSG fiscal quarter. In the event that TCI has met all of its obligations under any mutually agreed to conversion plan for any particular system site, and is ready, willing and able to convert any particular group of Subscribers, and such Subscribers are not converted solely as a result of CSG's inability to effect such a conversion, then CSG agrees that it shall nonetheless credit TCI with an amount of the Conversion Fee that would have been due TCI, had CSG converted such Subscribers in accordance with the agreed upon schedule. (iii) CSG shall pay TCI Technology Ventures, Inc., or its designee an additional twelve million dollars ($12,000,000) fifteen (15) days after the end of the first month in which CSG processes on its CCS Services 13 million or more of TCI and its Affiliates' (as those terms are defined in the Master SMS Agreement) video subscribers in accordance with Section 30 and Schedule D of the Restated and Amended CSG Master Subscriber Management System Agreement ("Master SMS Agreement"). Tthe manner in which the 13 million video subscribers are calculated shall be determined by the Master SMS Agreement. (iv) CSG shall issue to TCI Technology Ventures, Inc., or its designee warrants to purchase CSG common stock pursuant to the following conditions: - Royalty Warrants: At the Closing CSG shall grant to TCI Technology Ventures, Inc., or its designee warrants to purchase up to 1,000,000 shares of CSG common stock at $24 per share on or after the time that CSG processes 13 million 4 video subscribers of Customer and its Affiliates(as those terms are defined in the Master SMS Agreement). - Contingent Warrants: For every 100,000 Customer and its Affiliates (as those terms are defined in the SMS Agreement) video subscribers processed by CSG in excess of the 13 million minimum subscribers required pursuant to the Master SMS Agreement ("Excess Subscribers"), CSG shall grant to TCI Technology Ventures, Inc., or its designee warrants to purchase up to 40,000 shares of CSG common stock at $24 per share, but only if these Excess Subscribers are not presently being processed on a CSG System or are presently being processed but the entity serving such Excess Subscribers has given notice of termination to CSG. In addition, for every 100,000 Excess Subscribers, CSG shall grant to TCI Technology Ventures, Inc., or its designee warrants to purchase up to 20,000 shares of CSG common stock at $24 per share, but only if these Excess Subscribers are presently being processed on a CSG System and the entity serving such Excess Subscribers has not given notice of termination to CSG and which entity is induced to agree to renew with CSG. All warrants, regardless of when issued, shall expire five (5) years from the date of Closing. The total number of warrants that shall be issued, regardless of whether royalty warrants or contingent warrants, shall not exceed 1.5 million, and each new and renewing system must agree to be bound by the same terms and conditions of the Master SMS Agreement. The parties agree that the warrant terms shall be negotiated in good faith as soon as reasonably practicable after execution of this Agreement, and shall contain reasonable and customary terms, including without limitation, mutually agreed upon demand registration rights, piggyback rights, and the right to benefit from any stock splits or reverse splits or other anti dilution rights to the same extent as CSG common stockholders receive. (b) The parties agree that, should CSG commence substantive discussions for the divestiture of all or substantially all of the Purchased Assets taken as a whole to a third party that is not directly or indirectly 100% owned by CSG, at any time before the third anniversary of the Closing, then CSG shall be required to remit to TCI a portion of the proceeds of the Purchased Assets sold based upon the period of time after the closing to the commencement of substantive discussions ("Commencement Date") according to the following schedule: Months following the Closing to Commencement Date Proceeds to TCI ----------------------------------------------------- 0 through 12 months 80% more than 12 through 24 months 60% more than 24 months through 36 months 40% 5 CSG shall not be required to make such payment until such time as CSG has not less than 13 million TCI and its Affiliates (as defined in the Master SMS Agreement) video subscribers being processed on the CCS Services pursuant to Section 30 and Schedule D of the Master SMS Agreement provided, however CSG shall pay the funds into a mutually acceptable escrow account for the benefit of TCI. Further, no payments to TCI under this Section shall be payable to TCI should all or substantially all of the stock of CSG be sold to a third party. That portion of the proceeds that shall be remitted to TCI hereunder shall be a reasonably allocated pro-rata portion of the entire consideration received for that portion of the Purchased Assets divested to a third party, and shall only be payable upon receipt by CSG of the consideration. Should there be a subsequent adjustment made to the total consideration received and/or retained by CSG for the Purchased Assets, then the parties agree that there shall be a corresponding subsequent adjustment to the amount earned by TCI. (c) TCI may terminate any TCI agreement with a third party, and should there be damages, penalties or a termination fee payable with respect to such third party contract termination in an amount not in excess of $2,000,000, then the purchase price payable under Section 3 (a)(i) shall be reduced by an amount equal to the damages, penalties, or a termination fee payable as a consequence, and CSG shall then pay an equal amount not in excess of $2,000,000 to the appropriate third party. CSG is not assuming any liability for any third party contracts applicable under this Section, and TCI shall remain solely responsible for any liabilities arising therefrom. (d) As additional consideration for entering into this Agreement, the parties hereto shall, before the Closing Date, use their best efforts to prepare and execute a mutually acceptable royalty agreement, pursuant to which CSG shall pay to TCI a royalty equal to five percent (5%) of the net cash received by CSG for nonexclusive licenses of the Software to third party end users, provided, however, if the parties are unable to reach a mutually acceptable royalty agreement prior to Closing, then the terms of this Section 3(d) shall govern CSG's obligation to pay such royalties. Such royalty agreement shall contain customary terms and conditions, and will terminate seven (7) years after the Closing Date. Without limiting the foregoing, no royalty shall be payable for reasonable maintenance, consulting, and/or training fees received by CSG for such services associated with the Software. If CSG licenses the Software to Enron, the above royalty on the net cash received from Enron shall be increased to 10%. (e) All license fees, technical support and maintenance fees, receivables and other revenues relating to the Software, for goods sold, Software licensed or services rendered prior to Closing shall be for the account of TCI and all such revenue for goods sold, Software licenses or services rendered on or after Closing shall be for the account of CSG. Promptly following Closing, the parties hereto shall jointly prepare a schedule identifying each technical support, maintenance agreement, end user agreement or other license for the Software and the fees and revenues received at or prior to Closing 6 thereunder for software or services to be provided subsequent to Closing. The aggregate annual fees and revenues received pursuant to each such agreement for services to be provided subsequent to Closing shall be allocated to CSG based on a fraction equal to the number of days of service to be provided by CSG subsequent to Closing as the numerator and 365 as the denominator. Such amount shall be deducted from any remaining purchase price payable to TCI. The amounts set forth on Schedule 3(c) shall be added to, or subtracted from, any remaining purchase price payable to TCI as provided in such Schedule. CSG shall have no obligation to collect any receivables for TCI. CSG agrees to remit to TCI any funds received by CSG to the extent such funds represent payment of TCI receivables. (f) Upon and subject to the terms and conditions set forth herein, CSG agrees to assume, pay, perform and discharge when due, all liabilities and obligations of TCI set forth on Schedule 3(f) that relate to the use or ownership or operation of the Purchased Assets after the Closing Date but only to the extent that such liabilities and obligations arise after the Closing Date and relate to or result from the use or ownership or operation of the Purchased Assets by CSG (collectively, the "ASSUMED LIABILITIES"). Other than the Assumed Liabilities, CSG is not assuming and shall not be or become obligated or liable for any liability, indebtedness or obligation of TCI of any nature whatsoever, except as set forth herein. (g) After the Closing Date, TCI and CSG will act reasonably and in good faith to permit each other reasonable access to their respective books and records so that each may confirm or verify solely (i) the allocation of the fees and revenues provided in subsection (c) above; (ii) the allocation of responsibility for the Assumed Liabilities referred to in subsection (d) above; and (iii) the calculation of the payments referred to in subsection (a) (ii) and (b) above. 4. CLOSING. The Closing of the purchase of assets contemplated hereby (the "Closing") shall take place at the offices of TCI on the fifth business day after all conditions to Closing have been satisfied or waived, or at such time, place and date as the parties hereto may agree in writing (the "Closing Date"). At Closing, the following documents, agreements and consents will be delivered: (a) TCI shall deliver to CSG a duly executed bill of sale and such other instruments of transfer as CSG and its counsel may reasonably request to convey to CSG all of TCI's right, title and interest in and to all of the Purchased Assets. At any time and from time to time following Closing, at CSG's request and without further consideration, TCI agrees to promptly execute and deliver such further instruments of sale, transfer, conveyance, assignment and confirmation, as CSG may reasonably request to more effectively transfer, convey and assign to CSG, and to confirm CSG's title to, all of the Purchased Assets and to effectuate and consummate the terms of this Agreement, including but not limited to any assignment of trademarks, patents or copyrights needed 7 to effectuate and record the transfer of ownership of the Purchased Assets with the appropriate government agency. (b) TCI shall provide CSG with certified copies of applicable certificates of incorporation and bylaws and duly adopted board and, if applicable, shareholder resolutions, authorizing and approving the execution and delivery of this Agreement and consummation of the transactions contemplated herein and the performance by TCI of all acts required herein, accompanied by an appropriate certificate of incumbency for the officers executing and delivering the certificate. (c) TCI shall provide CSG with consents required under contracts or leases, to consummate the transactions contemplated hereby. (d) TCI shall provide CSG with the agreements of each person who holds a Lien (as defined herein) on the Purchased Assets pursuant to which each such person releases and discharges the Lien which agreement shall be in form and substance reasonably satisfactory to CSG and its counsel. (e) TCI and CSG shall provide each other with such other documents or instruments as required pursuant to the provisions of this Agreement or as may reasonably be requested by the parties. (f) TCI and CSG will execute and deliver an Assignment and Assumption Agreement in the form attached hereto as Exhibit A pursuant to which TCI shall assign all rights under and pursuant to the Contracts to CSG and CSG will assume obligations that arise on and after the Closing Date with respect to those Contracts identified on Schedule 3(f). 5. TCI'S REPRESENTATIONS AND WARRANTIES. Subject to the matters set forth in the Disclosure Schedule delivered by TCI to CSG, TCI hereby represents and warrants to CSG as follows: (a) Each of the TCI entities is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary. (b) Each of the TCI entities has all requisite corporate or company power and authority to enter into this Agreement and to consummate the transactions contemplated herein. The execution and delivery of this Agreement, and the consummation of the transactions contemplated herein have been duly authorized by all necessary corporate or company action on the part of each TCI entity and this Agreement 8 constitutes the valid and binding obligation of each TCI entity enforceable in accordance with its terms. (c) Except as set forth in Section 5(c) of the Disclosure Schedule, the execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) of (i) the provisions of any law, rule or regulation applicable to TCI, (ii) the provisions of the Certificate of Incorporation, Bylaws, Certificate of Formation, or Limited Liability Company Agreement of each of the TCI entities; (iii) any judgment, decree, order or award of any court, governmental body or arbitrator issued against or naming TCI or, to the knowledge of TCI, applicable to TCI; or (iv) conflict with or result in the breach or termination of any term or provision of, or constitute a default under, or cause any acceleration under, or cause the creation of any lien, charge or encumbrance upon the properties or assets of TCI pursuant to, any indenture, mortgage, deed of trust or other instrument or agreement to which TCI is a party or by which TCI or any of its properties is or may be bound. Section 5(c) of the Disclosure Schedule sets forth a true, correct and complete list of all consents and approvals of governmental authorities or third parties that are required in connection with the consummation by TCI of the transactions contemplated by this Agreement, all of which have been obtained, except as noted on such schedule. (d) The delivery to CSG of the instruments of transfer of ownership contemplated by this Agreement will vest good title to the Purchased Assets in CSG, free and clear of any and all liens, mortgages, pledges, security interests, restrictions, prior assignments, encumbrances and claims of any kind or nature whatsoever ("Liens") except such Liens identified on Section 5(d) of the Disclosure Schedule which Liens shall be released and discharged at or prior to Closing, except as noted on the schedule. The Software which is presently under development, is being developed by TCI in a diligent, commercial and workmanlike manner. (e) Section 5(e) of the Disclosure Schedule hereto contains a true, complete and correct list and description of the contracts, licenses, orders and agreements, whether written or oral, the benefits under which are to be transferred to CSG at the Closing, as Purchased Assets, to which is attached a true, correct and complete copy of each such Contract. Except for such Contracts and other agreements attached to such schedule, TCI is not a party to any agreements or, licenses, either written or oral, relating to the right to use the Purchased Assets, except as disclosed in Section 5(e), the Disclosure Schedule. Each such Contract is a valid and binding agreement of TCI, enforceable against and by TCI in accordance with its terms, and TCI does not have any knowledge that any Contract is not a valid and binding agreement of the other parties thereto except as disclosed in Section 5(e) of the Disclosure Schedule. TCI has fulfilled all material obligations required pursuant to the Contracts to have been performed by TCI on its part prior to the date hereof, and TCI has no reason to believe that it would not be able to fulfill, when due, all of the obligations under the Contracts which remain to be performed after the date hereof assuming this transaction was not consummated and TCI 9 is not in breach of or in default under any Contract which would give the other party thereto the right to terminate such Contract, and no event has occurred which with the passage of time or giving of notice or both would constitute such a default, result in a loss of rights or result in the creation of any lien, charge or encumbrance, thereunder or pursuant thereto except as disclosed in Section 5(e) of the Disclosure Schedule. To the best knowledge of TCI, there is no existing breach or default by any other party to any Contract, and no event has occurred which with the passage of time or giving of notice or both would constitute a default by such other party, result in a loss of rights or result in the creation of any lien, charge or encumbrance thereunder or pursuant thereto except as disclosed in Section 5(e) of the Disclosure Schedule. TCI is not restricted by any Contract from carrying on its business relating to the Software anywhere in the world, the continuation, validity and effectiveness of each Contract will not be affected by the assignment of each Contract to CSG and all such Contracts are assignable to CSG without any consent, except as disclosed in Section 5(e) of the Disclosure Schedule. Following assignment CSG will have the rights formerly held by TCI under such Contracts. There are no agreements or contracts that require the payment of a royalty or other fee for CSG's use, modification, licensing, distribution, processing services or otherwise carrying on business activities relating to the Software and documentation except as set forth in Section 5(e) of the Disclosure Schedule. After the Closing, TCI and its Affiliates will not use or have any interest in the Customer Data, Documentation or Software except as disclosed in Section 5(e) of the Disclosure Schedule. (f) Section 5(f) of the Disclosure Schedule sets forth, without material exception, a true, correct and complete list and, where appropriate, a description of, all licenses and maintenance agreements, or similar arrangements to which TCI is a party as licensee, with respect to the Purchased Assets, and the licensors have no right to terminate such licenses due to the consummation of the transactions contemplated by this Agreement and such agreements are in full force and effect and, to the knowledge of TCI, constitute the enforceable obligation of the parties thereto, except as disclosed on such schedule. (g) TCI is the sole exclusive owner of all right, title and interest in and to the Software and, except as described in Section 5(g) of the Disclosure Schedule, the Purchased Assets free and clear of all Liens or other adverse claims other than product licenses granted in the ordinary course of business. TCI now has the exclusive right and authority to use, and to assign to CSG the exclusive right and authority to use after the Closing, the Purchased Assets in connection with the conduct of its business in the manner presently conducted and for CSG to use the Purchased Assets as contemplated by CSG, and to the best knowledge of TCI after due inquiry, such use or continuing use does not and will not conflict with, infringe upon or otherwise violate any rights of any other person, corporation or entity, including but not limited to any trademark or copyright rights of any other person. TCI has not received notice of, and has no knowledge of any basis for, any pleading or threatened claim, interference action or other judicial or adversarial proceeding against TCI to the effect that any of the operations, activities, products, services or publications of TCI or any of its customers or distributors in 10 connection with the Purchased Assets infringes or will infringe any patent, trademark, trade name, copyright, trade secret or other property right of a third party, or that it is illegally or otherwise wrongfully using the trade secrets, formulae or property rights of others and there is no suit, action or proceeding pending, or to the best knowledge of TCI, threatened against or affecting the Purchased Assets, or their use and there is no judgment, decree, injunction, rule or order with respect thereto. TCI has not been advised of any outstanding or threatened disputes or other disagreements with respect to any licenses or similar agreements or arrangements described in the Disclosure Schedule with respect to infringement by a third party of any of the Purchased Assets. The Purchased Assets owned or licensed by TCI or under which TCI is licensed are sufficient to conduct business relating to the Software as presently conducted, except as otherwise disclosed to CSG in Section 5(g) of the Disclosure Schedule. TCI has taken commercially reasonable steps to protect its right, title and interest in and to and the continued use of, the Purchased Assets, and to the best knowledge of TCI, no officer, director, shareholder or present or former employee of TCI, nor any relative or affiliate thereof, owns or has a financial interest in, directly or indirectly, in whole or in part, any of the Purchased Assets; and TCI has no knowledge that any third party is infringing, or will threaten to infringe, upon or otherwise violate any of the rights in the Purchased Assets. TCI is not a party to any distribution, sales or marketing agreements, oral or written, with any third party regarding the Purchased Assets which entitles any persons (i) to act as a distributor or sales or marketing agent on behalf of CSG for the Purchased Assets or (ii) to a fee from CSG with respect to any license, sales or maintenance agreement entered into by CSG subsequent to the date of this Agreement. (h) TCI has complied in all material respects with all laws and regulations which are applicable to it, its ownership of the Purchased Assets and the conduct of its business in regard to the Purchased Assets, including without limitation all laws and regulations applicable to the licensing, sale or delivery of the Software outside the United Sates and has performed and complied with all contracts, commitments and obligations by which it is bound and which affect the Purchased Assets, except where the failure to so comply would not have a material adverse effect on the use, operation or licensing of the Software, taken as a whole. Each and every person that was an independent contractor of TCI at the time the person contributed to the creation of the Purchased Assets, has signed a binding and enforceable agreement with TCI conveying to TCI all of such person's right, title and interest in and to any such creation, except as set forth in Section 5(h) of the Disclosure Schedule. (i) Except as set forth on Section 5(i) of the Disclosure Schedule: (i) no copies of the Software have been licensed to any third party and there are no outstanding maintenance agreements with any third party, (ii) there are no third parties that have the right to distribute, remarket, resell, use or otherwise sublicense the Software or any portion thereof anywhere 11 in the world and (iii)there are no lists of prospective customers of the Software or for services to be performed using the Software and no marketing materials for the Software that have been prepared. (j) [DELIBERATELY OMITTED] (k) Except as set forth on Section 5(k) of the Disclosure Schedule, TCI is not a party to any agreement, written or oral, requiting it to provide access to the source code for the Software to any person and no third party has any right to such source code and the execution and delivery of this Agreement will not cause any third party to have any right, or access, to such source code. There are no copies of the source code of the Software other than those being delivered to CSG under this Agreement or as set forth on Section 5(k) of the Disclosure Schedule. (l) TCI does not have in place any U.S. or foreign distribution, marketing, development, OEM, agent or other agreement whereby any third party has any right whatsoever to market, license, sell or otherwise directly or indirectly distribute the Software to end users, except as disclosed on Section 5(l) of the Disclosure Schedule. 6. ADDITIONAL COVENANTS AND AGREEMENTS. TCI and CSG make the following additional covenants and agreements: (a) TCI will provide CSG a list of all of the TCI and Affiliates employees that are primarily engaged in the SUMMITrak operations as Schedule 6 (a). CSG will offer employment to all employees listed on Schedule 6(a) and, if employed by CSG, CSG will not terminate any such employee for at least ninety (90) days, except for cause. Such employment will be offered at comparable compensation packages. CSG and TCI will on or before August 22, 1997 mutually agree upon the persons that appear on Schedule 6(a) that will continue to be employees of TCI after the closing and which will be attached as Schedule 6(a)(1) ("Excluded Employees"). TCI shall use its reasonable best efforts to encourage the employees identified on Schedule 6(a) other than the Excluded Employees to become employees of CSG in CSG's Denver, Colorado metropolitan area offices. In furtherance thereof, TCI shall cooperate with and use its reasonable best efforts to assist CSG, if requested by CSG, in hiring such persons by rendering such services as may reasonably be requested by CSG. If any such employees are hired, TCI agrees that it will not solicit or hire any such person for a period of two (2) years following Closing; provided, however, that for any such employees terminated by CSG, TCI may rehire any such person thirty (30) days following such person's termination of employment by CSG. TCI shall, at its cost and expense, enforce for its benefit, and for the benefit of CSG, each agreement between TCI and each employee listed on Schedule 6(a) and each agreement with any current or former TCI employee who does not become an employee of CSG at Closing relating to the Purchased Assets. There are no contracts, agreements or understandings between TCI and any of the 12 Schedule 6(a) employees (excluding the Excluded Employees) whereby such employees would be entitled to any severance or benefits other than that to which they are entitled under applicable statutes such as COBRA, except as set forth in Section 6(a) of the Disclosure Schedule. (b) For a period of one-hundred-eighty (180) days after the Closing TCI shall use commercially reasonable efforts to assist CSG in the transition of the business which utilizes the Purchased Assets. On a commercially reasonable basis, TCI agrees to provide CSG, as and when requested by CSG, prompt, timely and appropriate technical assistance from appropriately qualified existing TCI personnel that were involved in the SUMMITrak operations, if there are any such TCI personnel, within a reasonable period of time after request from CSG, including without limitation, as specified by CSG, telephone conversations and meetings with CSG personnel; provided, however, that TCI retains the right to terminate any of its employees for any reason at any time and it shall not be obligated to make any employee who resides outside of the Denver, Colorado area available for meetings with CSG representatives or make any employee who resides in the Denver, Colorado area available for meetings outside of the Denver, Colorado area. (c) For a period of thirty (30) days following Closing, TCI agrees to diligently and in good faith refer all inquiries regarding the availability, performance, use, licensing or servicing of the Software to CSG and shall direct all such inquires to Jack Pogge at 7887 E. Belleview Avenue, Englewood, Colorado 80111, telephone number 303-796-2850. (d) CSG and TCI understand and agree that the Disclosure Schedule referred to in Section 5 may be amended to reflect additional information compiled by TCI on or before August 22, 1997. TCI agrees to deliver to CSG all Disclosure Schedule materials as soon as reasonably practicable after execution of this Agreement, in portions, as collected; provided, however, that TCI shall have until August 22, 1997 to deliver to CSG the final, binding Disclosure Schedule. TCI further agrees to use its best efforts to timely provide to CSG access to persons, documents, the Purchased Assets and information as CSG reasonably requests for purposes of completing its legal and technical due diligence. (e) TCI shall provide to CSG the use of the Dallas Data Center for purposes of carrying out the business currently conducted by TCI related to the Purchased Assets for a period of not less than 120 days for rent equal to $4,000 monthly (inclusive of all ancillary services) and at CSG's option, TCI may continue to lease to CSG such use of the Dallas Data Center for a period of not less than one (1) year and at the same rent. CSG agrees that it shall, as soon as reasonably practicable after the Closing, make arrangements to relocate the equipment and Software portion of the Purchased Assets located in the Dallas Data Center. 13 (f) With respect to the real property located at Orchard III, the parties agree that they shall use their best efforts to negotiate and enter into an agreement, as soon as reasonably practicable after execution of this Agreement, to sublease to CSG a portion of the square footage leased at Orchard III that is necessary to process, develop and maintain the Purchased Assets, including CSG's use of local telephone, security, janitorial and ancillary services. The term of the sublease shall be mutually agreed upon. The cost of the sublease shall approximate TCI's actual cost. (g) The parties hereto agree to use their best efforts to satisfy all conditions to Closing, including making any necessary filings with governmental agencies, and taking other steps to consummate the transactions contemplated hereby. 7. CONFIDENTIAL INFORMATION AND NON-COMPETITION. (a) TCI shall hold in confidence, and use its best efforts to have all of its officers, directors and personnel hold in confidence, all knowledge and information of a secret or confidential nature that is embodied in or a part of to the Purchased Assets and shall not disclose, publish or make use of the same without the consent of CSG, except for (i) Confidential Information which at the time of disclosure is in the public domain; (ii) Confidential Information which after generation or disclosure is published or otherwise becomes part of the public domain through no fault of the receiving party (but only after and to the extent that it is published or otherwise becomes part of the public domain); (iii) Confidential Information which was received after the time of generation or disclosure hereunder, from a third party who did not acquire it, directly or indirectly, from the other party under an obligation of confidentiality or otherwise acquired from the receiving party; and (iv) Confidential Information which is required to be disclosed by law or legal process. For purposes of this Agreement, the term "Confidential Information," includes without limitation, (i) any and all information that is uniquely related to the Software or the Documentation that TCI has held in confidence prior to the date of this Agreement, and (ii) the financial and other terms of this Agreement and related transactions. Confidential Information also includes unique programming techniques, security techniques, control techniques and analysis techniques incorporated in the Software. "Confidential Information" shall not include confidential information not sold as a part of the Purchased Assets. TCI shall use its commercially reasonable best efforts to protect all Confidential Information that remains in its possession or control and shall use its best efforts to enforce this obligation against breach by its employees and agents and third party vendors. Notwithstanding the foregoing, TCI shall have the right to use Confidential Information that was used in its businesses prior to the date of this Agreement for purposes other than the development of the Software and the processing of Subscribers using the Software and that does not diminish the value of the Purchased Assets, provided that TCI maintains the confidentiality of the Confidential Information. (b) For a period of five (5) years after the date of the Agreement, neither TCI nor any affiliate thereof (including employees) shall market, license to others or sell any product which has the same or substantially the same form or fulfills 14 substantially the same function or primary applications as the Software. TCI agrees, at its cost and expense to use its commercially reasonable best efforts to enforce for its benefit, and for the benefit of CSG, each agreement between TCI and each of the former employees and, to the extent applicable, any independent contractors, that had access to the Software, to ensure compliance with this subsection by former employees and contractors of TCI. (c) The parties hereto agree that the duration and geographic scope of the non-competition provisions set forth herein are reasonable. In the event that any court determines that the duration or the geographic scope, or both, are unreasonable and that such provision is to that extent unenforceable, the parties hereto agree that the provision shall remain in full force and effect for the greatest time period and in the greatest area that would not render it unenforceable. The parties intend that this non-competition provision shall be deemed to be a series of separate covenants, one for each and every county of each and every state of the United States of America and outside the United States of America where this provision is intended to be effective. Any such amendment to the non-competition provision therefore shall only be applicable in the jurisdiction over which the particular judicial body has authority. (d) Except as set forth in Section 7(c), each of TCI's employees, agents and representatives who have been directly involved with the development of the Software, has executed a non-disclosure agreement protecting the confidentiality of the Software and each such person is identified on Section 7(e) to which is attached a true, correct and complete copy of each such agreement. 8. CSG'S REPRESENTATIONS AND WARRANTIES. CSG makes the following representations and warranties: (a) CSG is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary. (b) CSG has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated herein. The execution and delivery of this Agreement, and the consummation of the transactions contemplated herein have been duly authorized by all necessary corporate action on the part of CSG and this Agreement constitutes the valid and binding obligation of CSG enforceable in accordance with its terms. 15 (c) The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) (i) the provisions of any law, rule or regulation applicable to CSG; (ii) the provisions of the Certificate of Incorporation or Bylaws of CSG; (iii) any judgment, decree, order or award of any court, governmental body or arbitrator applicable to CSG; or (iv) conflict with or result in the breach or termination of any term or provision of, or constitute a default under, or cause any acceleration under, or cause the creation of any lien, charge or encumbrance upon the properties or assets of CSG pursuant to, any indenture, mortgage, deed of trust or other instrument or agreement to which CSG is a party or by which CSG or any of its properties is or may be bound. The representations and warranties of TCI contained in this Agreement constitute the sole and exclusive representations and warranties of TCI to CSG in connection with this Agreement and the purchase of the Purchased Assets, and CSG acknowledges that all other representations and warranties are specifically disclaimed and may not be relied upon as a basis for a claim against TCI.] (d) CSG has on hand, or has arranged financing for the entire amount of, the initial cash consideration referred to in Section 3(a)(i) above, and will have such cash available to it to deliver to TCI in accordance with Section 3(a)(i). 9. INDEMNIFICATION. (a) TCI agrees to indemnify and hold CSG harmless as follows: (i) For the period of four (4) years after the Closing, TCI will defend any claims or proceeding brought against CSG to the extent based on assertions that the Software infringes on any patent, trademark, copyright, trade secret or any other intellectual property, contractual or other rights of any third party, and shall indemnify and hold harmless CSG against all costs, damages and expenses incurred by CSG which result from any such claim. Such defense and payments are subject to the conditions that: (i) TCI will be notified promptly in writing by CSG of any such claim, (ii) TCI will have control of the defense and all negotiations for any settlement or compromise; (iii) TCI will not be responsible for any claims based on CSG's modification or enhancement to the Software, (iv) CSG will reasonably assist TCI at TCI's expense in the defense of any such claim; and (v) should the Software become (or in TCI's reasonable opinion be likely to become) the subject of any such claim, CSG will permit TCI, at TCI's expense, to either procure for CSG and its customers the right to continue using the Software, or replace or modify the Software so that it becomes non-infringing while providing functionally equivalent performance. CSG may choose to participate in the defense of any claim at its own expense. If TCI falls to defend CSG hereunder, then CSG shall be permitted to select its own counsel and shall be entitled to reimbursement from TCI of all reasonable costs and expenses associated with such defense, including any costs of settlement or compromise. 16 (ii) TCI's liability to indemnify and hold CSG harmless under this Section shall be limited to ten million dollars ($10,000,000) in the aggregate, exclusive of TCI's attorney's fees. 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties shall expire at Closing, except for those representations and warranties of TCI for which indemnification is provided in Section 9 (a)(i). 11. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (with confirmation), mailed by registered or certified mail (return receipt) or sent by a worldwide overnight courier company that provides written confirmation of receipt to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): If to CSG: CSG Systems, Inc. 7887 E. Belleview Avenue Suite 1000 Englewood, CO 80111 Attn: Jack P. Pogge with a copy to: CSG Systems, Inc. 7887 E. Belleview Avenue Suite 1000 Englewood, CO 80111 Attn: Joseph T. Ruble, Esq. If to TCI: Tele-Communications, Inc. 5619 DTC Parkway Englewood, CO 80111 Attn: Larry Romrell with a copy to: Tele-Communications, Inc. 5619 DTC Parkway Englewood, CO 80111 Attn: Lee W. Zieroth, Esq. 12. BROKERS AND FINDERS. Each of TCI and CSG represents that no agent, broker, investment banker, financial advisor or other firm or person is or will be entitled to any broker's or finder's fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement and each party agrees to indemnify the other party and hold the other party harmless from and against any and all claims, liabilities or obligations with respect to any other fees, commissions or expenses 17 asserted by any person on the basis of any act or statement alleged to have been made by such first party. 13. EXPENSES. Each of the parties hereto agree to pay its own costs and expenses incurred in connection with this Agreement or any transactions contemplated by this Agreement. The foregoing shall not be construed as limiting any rights which any party may have as the result of a breach of the terms, conditions or provisions contained in this Agreement or any misrepresentation or omission to disclose any fact necessary in order to make any statements made not misleading or a breach of a specific indemnification provision hereof. 14. RELATIONSHIP OF PARTIES. The parties to this Agreement agree that they are not agents, partners or joint ventures. 15. CONDITIONS PRECEDENT TO CLOSING. (a) CSG's obligations hereunder shall be subject to the condition that there shall have been no breach or breaches by TCI of any of its representations, warranties or covenants which, singularly or together, result in a material adverse effect on the value of the Purchased Assets, taken as a whole. (b) TCI's obligations hereunder shall be subject to the condition that there shall have been no breach or breaches by CSG of any of its representations, warranties or covenants which, singularly or together, result in a material adverse effect on the value of the consideration to be received by TCI hereunder, taken as a whole. (c) The obligations of the parties to this Agreement are also conditioned upon the expiration of applicable waiting periods under the Hart- Scott-Rodino Antitrust Improvements Act of 1976. (d) The obligations of the parties are conditioned upon the simultaneous closing of that certain Restated and Amended CSG Master Subscriber Management System Agreement by and between CSG and TCI Cable Management Corporation. 16. TERMINATION. (a) CSG may terminate this Agreement without any liability of any nature to TCI, if (i) the conditions to Closing specified in Section 15 have not been fulfilled on or before October 25, 1997, provided that CSG has fulfilled all of its obligations hereunder, or (ii) CSG gives TCI notice on or before September 2, 1997, that CSG in its sole and absolute discretion, as the result of its legal or technical due diligence has decided to terminate this Agreement, except that in this instance only CSG shall pay to TCI Technology Ventures, Inc. or its designee the amount of five million dollars 18 ($5,000,000) by wire transfer of immediately available funds within five business days of such notice. (b) TCI may terminate this Agreement without any liability of any nature to CSG, if the conditions to Closing specified in Section 15 have not been fulfilled on or before October 25, 1997, provided that TCI has fulfilled all of its obligations hereunder. 17. FURTHER ASSURANCES. Subject to the terms and conditions herein provided, each of the parties hereto shall use reasonable efforts to take, or cause to be taken, such action, to execute and deliver, or cause to be executed and delivered, such additional documents and instruments and to do, or cause to be done, all things necessary, proper or advisable under the provisions of this Agreement and under applicable law to consummate and make effective the transactions contemplated hereby. 18. GUARANTEE. TCI Technology Ventures, Inc. unconditionally guarantees the performance of all of the obligations of the TCI entities hereunder without CSG's having to pursue any claim or remedy against the other TCI entities and regardless of the apportionment of liability among the TCI entities. 19. PUBLICITY. Any general notices, releases, statements or communications to the general public or the press relating to this Agreement and the transactions contemplated hereby shall be made only at such times and in such manner as may be mutually agreed upon by the parties hereto provided, however, that the parties hereto shall be entitled to issue such press releases and to make such public statements as are, in the opinion of their respective legal counsel, required by applicable law, in which case the other party shall be advised thereof and the parties shall use their reasonable efforts to cause a mutually agreeable release or announcement to be issued. 19 IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their duly authorized representatives on the date first above written. CSG SYSTEMS INTERNATIONAL, INC.: By: /s/ Neal C. Hansen ------------------- Neal C. Hansen Chief Excutive Officer TCI SUMMITRAK of Texas, Inc. By: /s/ Gary K. Bracken ------------------- Gary K. Bracken Vice President TCI Technology Ventures, Inc. By: /s/ Larry E. Romwell -------------------- Larry E. Romwell President TCI SUMMITrak, L.L.C. By: TCI Ventures Group, L.L.C By: Larry E. Romwell ---------------- Larry E. Romwell Vice President 20 EX-2.21 4 CONTINGENT AGREEMENT EXHIBIT 2.21 CONTINGENT WARRANT THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. NEITHER THIS WARRANT NOR ANY SECURITIES ISSUED HEREUNDER MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE WARRANT OR SUCH SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. No. W-C Warrant to Purchase up to 500,000 Shares of Common Stock (subject to adjustment) WARRANT TO PURCHASE COMMON STOCK of CSG SYSTEMS INTERNATIONAL, INC. VOID AFTER SEPTEMBER 19, 2002 This certifies that, for value received, TCI Technology Ventures, Inc., a Delaware corporation ("TCI"), or its registered assigns ("Holder") is entitled, subject to the terms and conditions set forth below, to purchase from CSG Systems International, Inc. (the "Company"), a Delaware corporation, the principal office of which is located at 7887 E. Belleview Avenue, Suite 1000, Englewood, Colorado, such number of shares of the Common Stock of the Company, $.01 par value per share (the "Common Stock") determined in accordance with Section 1 below which shall in no event exceed 500,000, upon surrender hereof (subject to the last sentence of Section 4(b) below), at the principal office of the Company referred to above, with the Notice of Exercise attached hereto duly executed, and simultaneous payment therefor in lawful money of the United States or otherwise as hereinafter provided, at the Exercise Price as set forth in Section 3 below. The number, character and Exercise Price of such shares of Common Stock are subject to adjustment as provided below. The term "Warrant" as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein and the term "Warrant Issue Date" shall mean the date hereof. This Warrant is issued pursuant to the terms of an Asset Purchase Agreement dated as of August 10, 1997 between the Company, TCI SUMMITRAK of Texas, Inc., a Colorado corporation, TCI SUMMITrak, L.L.C., a Delaware limited liability company, and TCI. 1. Number of Shares Underlying Warrant. Notwithstanding any provision in this Warrant to the contrary, this Warrant shall not be exercisable unless and until such time as the Company or its subsidiaries process at least 13 million wireline video subscribers of TCI Cable Management Corporation (the "Customer"), a Colorado corporation which is affiliated with TCI -2- and its "Affiliates," as such term is defined in the Restated and Amended CSG Master Subscriber Management System Agreement dated as of August 10, 1997 between CSG Systems, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company ("CSG"), and the Customer (the "Master Agreement") and thereafter through the term hereof only to the extent provided in either (a) or (b) below. (a) For each 100,000 wireline video subscribers which are being processed by CSG under the Master Agreement prior to September 19, 2002 in excess of the minimum 13 million provided for above ("Excess Subscribers") and subject to the terms and conditions of this Warrant, this Warrant shall be exercisable for up to 40,000 shares of Common Stock provided that such Excess Subscribers either (i) are not processed by CSG as of the date hereof or (ii) are processed by CSG but the wireline video provider has given notice of termination of CSG's services and such termination would not violate the terms of the Master Agreement. (b) For each 100,000 Excess Subscribers which are being processed by CSG prior to September 19, 2002 and subject to the terms and conditions of this Warrant, this Warrant shall be exercisable for up to 20,000 shares of Common Stock provided that such Excess Subscribers are presently being processed by CSG but the wireline video provider has not given notice of termination of CSG's services and has been induced to agree to renew with the Company. This Warrant shall only be exercisable to the extent there are full increments of 100,000 Excess Subscribers under either (a) or (b) above. There shall be no proration for increments of less than 100,000 Excess Subscribers. Excess Subscribers shall be credited under either (a) or (b) above, but not under both (a) and (b). The determination of whether a wireline video subscriber is an Excess Subscriber or one of the wireline video subscribers comprising the minimum 13 million, shall be based on the time (determined monthly) at which CSG commences processing or continues processing subscribers under the terms of (a) or (b), with the earlier in time comprising the minimum until the minimum is exceeded. If the minimum is exceeded during any calendar month at the start of which there were fewer than 13 million wireline video subscribers as provided in this Section 1 and during which CSG commences processing or continues processing both subscribers which would be credited under (a) and subscribers which would be credited under (b) if they were Excess Subscribers, then the Excess Subscribers credited during such month shall be allocated between (a) and (b) proportionally based on the number of subscribers added during the month which would have been credited under (a) or (b), respectively, but for satisfaction of the minimum. All Excess Subscribers must be processed by the Company or its subsidiaries on the same terms and conditions of the Master Agreement in order for any exercise condition to be satisfied. No wireline video subscriber which was included in the minimum 13 million provided for above shall thereafter be credited under (a) or (b) above. 2. Term of Warrant. Subject to the terms and conditions set forth herein, this Warrant shall expire at 5 p.m. Denver time, on September 19, 2002. 3. Exercise Price. The Exercise Price at which this Warrant may be exercised shall be $24.00 per share of Common Stock, as adjusted from time to time pursuant to Section 13 hereof. -3- 4. Exercise of Warrant. (a) The purchase rights represented by this Warrant are exercisable by the Holder in whole or in part, but not for less than 20,000 shares at a time (or such lesser number of shares which may then constitute the maximum number purchasable; such number being subject to adjustment as provided in Section 13 below), at any time, or from time to time, during the term hereof as described in Section 2 above, by the surrender of this Warrant (subject to the last sentence of Section 4(b) below) and the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder, at the office of the Company, upon payment in cash to the Company, or by wire transfer to an account designated by the Company, of the purchase price of the shares to be purchased. (b) This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date. As promptly as practicable on or after such date and in any event within ten (10) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised (i) in part or (ii) for the full number of shares purchasable pursuant to Section 1 on the date of exercise but before termination of this Warrant, the Company at its expense will execute and deliver a new Warrant of like tenor. 5. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction. 6. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor. 7. No Stockholder Rights. The Holder shall not be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, -4- or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised as provided herein. 8. Compliance with Securities Laws. The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Common Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment and not with a view to the distribution or resale of this Warrant or the shares of Common Stock to be issued upon exercise hereof. The Holder will not offer, sell or otherwise dispose of the shares of Common Stock to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws. The Holder of this Warrant, by acceptance hereof, further acknowledges that the Holder is an accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act. The Holder further acknowledges that the Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Holder has had access to all reports filed under the Exchange Act by the Company. Upon exercise of this Warrant, the Holder shall, if requested by the Company, affirm in writing, in a form reasonably satisfactory to the Company, the acknowledgements and agreements set forth in this Section 8. 9. Transfer. (a) Restrictions on Transfer. The Holder shall not sell, transfer, pledge, hypothecate or otherwise dispose of this Warrant to or in favor of any person or entity without the prior written consent of the Company; provided, however, that the Holder may assign this Warrant to an entity that controls, is controlled by, or is under common control with the Holder subject to the requirements set forth below in this Section 9. This Warrant and the shares issuable upon the exercise hereof have not been registered under the Securities Act, or under any state securities laws, and unless so registered, may not be transferred, sold, pledged, hypothecated or otherwise disposed of unless an exemption from such registration is available. In the event the Holder desires to transfer this Warrant or any of the shares issued upon exercise hereof, the Holder must give the Company prior written notice of such proposed transfer including the name and address of the proposed transferee. Such transfer may be made only (i) upon receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that the proposed transfer will not violate the provisions of the Securities Act or applicable state securities laws, or the rules and regulations promulgated thereunder; or (ii) if this Warrant or the shares to be sold or transferred have been registered under the Securities Act and there is in effect a current prospectus meeting the requirements of Subsection 10(a) of the Securities Act, which is being or will be delivered to the purchaser or transferee at or prior to the time of delivery of this Warrant or the certificates evidencing the shares to be sold or transferred. Any assignment, transfer, pledge, hypothecation, or other disposition of this Warrant or any of the shares issued upon exercise hereof attempted contrary to the provisions of this Warrant shall be null and void and without effect. (b) Conditions to Transfer. Prior to any such proposed transfer, and as a condition thereto, if such transfer is not made pursuant to an effective registration statement under the Securities Act, the Holder will, if requested by the Company, deliver to the Company (i) written -5- confirmation from the proposed transferee that this Warrant or the shares to be transferred, as applicable, are being acquired solely for the proposed transferee's own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale, (ii) an agreement by any transferee of shares issued upon exercise hereof to the impression of the restrictive investment legend set forth in Section 9(c) below on the certificate or certificates representing the shares acquired by such transferee and (iii) an agreement by such transferee that the Company may place a "stop transfer order" with its transfer agent or registrar, if any. (c) Legend and Stop Transfer Orders. Unless the shares issuable upon exercise hereof have been registered under the Securities Act, or the Company shall have received an opinion of counsel reasonably satisfactory to the Company to the effect that it is not required, upon exercise of the Warrant and the issuance of any of the shares of Common Stock covered by this Warrant, the Company shall instruct its transfer agent, if any, to enter stop transfer orders with respect to such shares, and all certificates representing such shares shall bear on the face thereof substantially the following legend: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL TO THE HOLDER HEREOF IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, IS EXEMPT FROM REGISTRATION UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS." 10. Registration Rights. TCI has been granted certain registration rights with respect to the stock underlying this Warrant as more fully described in the Registration Rights Agreement of even date herewith between TCI and the Company. 11. Amendments. (a) This Warrant may be amended only by the written consent of the Company and the Holder. (b) No waivers of, or exceptions to, any term, condition or provision of this Warrant in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. Any waiver of a provision of this Warrant must be in writing and signed by a duly authorized representative of the party waiving such provision. -6- 12. Adjustments. The Exercise Price and the number of shares purchasable hereunder are subject to adjustment from time to time as follows: (a) Split, Subdivision or Combination of Shares. If the Company at any time while this Warrant, or any portion thereof, remains outstanding and unexpired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be decreased in the case of a split or subdivision or increased in the case of a combination in proportion to such increase or decrease of outstanding shares and the maximum number of shares of Common Stock purchasable upon exercise of this Warrant shall also increase or decrease in proportion to any increase or decrease in the number of outstanding shares. (b) Adjustments for Dividends in Stock or Other Securities or Property. If while this Warrant, or any portion thereof, remains outstanding and unexpired the holders of the securities as to which purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property (other than cash) of the Company by way of dividend, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon exercise of this Warrant, and without payment of any additional consideration therefor, the amount of such other or additional stock or other securities or property (other than cash) of the Company that such holder would hold on the date of such exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period, giving effect to all adjustments called for during such period by the provisions of this Section 12. (c) Reclassification. If the Company, at any time while this Warrant, or any portion thereof, remains outstanding and unexpired by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 12. (d) Merger, Sale of Assets, etc. If at any time while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) a reorganization (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), (ii) a merger or consolidation of the Company with or into another corporation in which the Company is not the surviving entity, or a reverse triangular merger in which the Company is the surviving entity but the shares of the Company's capital stock outstanding immediately prior to the merger are converted by virtue of the merger into other property, whether in the form of securities, cash, or otherwise, or (iii) a sale or transfer of the Company's properties and assets as, or substantially as, an entirety to any -7- other person, then, as a part of such reorganization, merger, consolidation, sale or transfer, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such reorganization, merger, consolidation, sale or transfer that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 12. The foregoing provisions of this Section 12(d) shall similarly apply to successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation that are at the time receivable upon the exercise of this Warrant. If the per-share consideration payable to the holder hereof for shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such consideration shall be determined in good faith by the Company's Board of Directors. In all events, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant. (e) Reservation of Stock Issuable Upon Exercise. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the exercise of this Warrant such number of shares of Common Stock as shall from time to time be sufficient to effect the exercise of this Warrant; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the purchase by the Holder of the maximum number of shares of Common Stock purchasable upon exercise of this Warrant, in addition to such other remedies as shall be available to the Holder of this Warrant, the Company will use its best efforts to take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. 13. Notices. (a) Within 30 days of any change in the number of shares of Common Stock the Holder is entitled to purchase under this Warrant pursuant to Section 1 above, the Company shall issue a certificate, signed by its Chief Financial Officer setting forth the event requiring the change, the amount of shares the Holder is entitled to purchase under this Warrant after giving effect to such change, and the method by which such change was calculated, and shall cause a copy of such certificate to be given to the Holder of this Warrant. (b) Whenever the Exercise Price or number of shares purchasable hereunder shall be adjusted pursuant to Section 12 hereof, the Company shall issue a certificate signed by its Chief Financial Officer setting forth the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Exercise Price and -8- number of shares purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be given to the Holder of this Warrant. 14. Assignment. Subject to the restrictions on transfer described in Section 9, the rights and obligations of the Company and Holder of this Warrant shall be binding upon and benefit the successors and permitted assigns of the parties. TCI may assign its rights hereunder (i) to a direct or indirect wholly owned subsidiary, (ii) to an entity that owns, directly or indirectly, the entire equity interest of TCI, or (iii) to an entity the entire equity interest of which is owned, directly or indirectly, by an entity that owns, directly or indirectly, the entire equity interest of TCI. 15. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of Delaware, excluding that body of law relating to conflict of laws. 16. Delivery of Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if mailed by registered or certified mail, postage prepaid, at the respective addresses of the parties as set forth herein. Any party hereto may by notice so given change its address for future notice hereunder. Notice shall conclusively be determined to have been given when personally delivered or when deposited in the mail or telegraphed in the manner set forth above and shall be deemed to have been received when delivered. 17. Headings; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Warrant. Except where otherwise indicated, all references herein to sections refer to sections hereof. -9- IN WITNESS WHEREOF, CSG Systems International, Inc. has caused this Warrant to be executed by an officer thereunto duly authorized this 19th day of September, 1997. CSG SYSTEMS INTERNATIONAL, INC. By: /s/ John P. Pogge -------------------------------- Name: John P. Pogge ------------------------- Title: Executive Vice President ------------------------ AGREED TO AND ACCEPTED AS OF THE DATE HEREOF: Name of Initial Holder: TCI Technology Ventures, Inc. By: /s/ Larry E. Romrell ------------------------------------- Name: Larry E. Romrell ------------------------------ Title: President ----------------------------- Address of Initial Holder: 5619 DTC Parkway Englewood, Colorado 80111-3000 EX-2.22 5 ROYALTY AGREEMENT EXHIBIT 2.22 ROYALTY WARRANT THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. NEITHER THIS WARRANT NOR ANY SECURITIES ISSUED HEREUNDER MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE WARRANT OR SUCH SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. No. W-R Warrant to Purchase 1,000,000 Shares of Common Stock (subject to adjustment) WARRANT TO PURCHASE COMMON STOCK of CSG SYSTEMS INTERNATIONAL, INC. VOID AFTER SEPTEMBER 19, 2002 This certifies that, for value received, TCI Technology Ventures, Inc., a Delaware corporation ("TCI"), or its registered assigns ("Holder") is entitled, subject to the terms and conditions set forth below, to purchase from CSG Systems International, Inc. (the "Company"), a Delaware corporation, the principal office of which is located at 7887 E. Belleview Avenue, Suite 1000, Englewood, Colorado, One Million (1,000,000) shares of the Common Stock of the Company, $.01 par value per share (the "Common Stock"), as constituted on the date hereof (the "Warrant Issue Date"), upon surrender hereof (subject to the last sentence of Section 3(c) below), at the principal office of the Company referred to above, with the Notice of Exercise attached hereto duly executed, and simultaneous payment therefor in lawful money of the United States or otherwise as hereinafter provided, at the Exercise Price as set forth in Section 2 below. The number, character and Exercise Price of such shares of Common Stock are subject to adjustment as provided below. The term "Warrant" as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein. This Warrant is issued pursuant to the terms of an Asset Purchase Agreement dated as of August 10, 1997 between the Company, TCI SUMMITRAK of Texas, Inc., a Colorado corporation, TCI SUMMITrak, L.L.C., a Delaware limited liability company, and TCI. 1. Term of Warrant. Subject to the terms and conditions set forth herein, this Warrant shall expire at 5 p.m., Denver time, on September 19, 2002. 2. Exercise Price. The Exercise Price at which this Warrant may be exercised shall be $24.00 per share of Common Stock, as adjusted from time to time pursuant to Section 12 hereof. -2- 3. Exercise of Warrant. (a) Subject to the conditions upon exercise provided in Section 3(b) below, the purchase rights represented by this Warrant are exercisable by the Holder in whole or in part, at any time, and from time to time, in increments of not less that 100,000 shares at a time, during the term hereof as described in Section 1 above, by the surrender of this Warrant (subject to the last sentence of Section 3(c) below) and the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder, at the office of the Company, upon payment in cash to the Company, or by wire transfer to an account designated by the Company, of the purchase price of the shares to be purchased. (b) Exercise Condition. Notwithstanding any provision in this Warrant to the contrary, this Warrant shall not be exercisable unless and until such time as the Company or its subsidiaries process at least 13 million wireline video subscribers of TCI Cable Management Corporation, a Colorado corporation (the "Customer") which is affiliated with TCI, and its "Affiliates" (as such term is defined in the Restated and Amended CSG Master Subscriber Management System Agreement dated as of August 10, 1997 between CSG Systems, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company, and Customer) (the "Master Agreement"). All such 13 million wireline video subscribers must be processed by the Company or its subsidiaries on the same terms and conditions of the Master Agreement in order for the exercise condition to be satisfied. (c) This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date. As promptly as practicable on or after such date and in any event within ten (10) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the number of shares for which this Warrant may then be exercised. 4. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction. 5. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount. -3- 6. No Stockholder Rights. The Holder shall not be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised as provided herein. 7. Compliance with Securities Laws. The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Common Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment and not with a view to the distribution or resale of this Warrant or the shares of Common Stock to be issued upon exercise hereof. The Holder will not offer, sell or otherwise dispose of the shares of Common Stock to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws. The Holder of this Warrant, by acceptance hereof, further acknowledges that the Holder is an accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act. The Holder further acknowledges that the Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Holder has had access to all reports filed under the Exchange Act by the Company. Upon exercise of this Warrant, the Holder shall, if requested by the Company, affirm in writing, in a form reasonably satisfactory to the Company, the acknowledgements and agreements set forth in this Section 7. 8. Transfer. (a) Restrictions on Transfer. The Holder shall not sell, transfer, pledge, hypothecate or otherwise dispose of this Warrant to or in favor of any person or entity without the prior written consent of the Company; provided, however, that the Holder may assign this Warrant to an entity that controls, is controlled by, or is under common control with the Holder subject to the requirements set forth in this Section 8. This Warrant and the shares issuable upon the exercise hereof have not been registered under the Securities Act, or under any state securities laws, and unless so registered, may not be transferred, sold, pledged, hypothecated or otherwise disposed of unless an exemption from such registration is available. In the event the Holder desires to transfer this Warrant or any of the shares issued upon exercise hereof, the Holder must give the Company prior written notice of such proposed transfer including the name and address of the proposed transferee. Such transfer may be made only (i) upon receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that the proposed transfer will not violate the provisions of the Securities Act or applicable state securities laws, or the rules and regulations promulgated thereunder; or (ii) if this Warrant or the shares to be sold or transferred have been registered under the Securities Act and there is in effect a current prospectus meeting the requirements of Subsection 10(a) of the Securities Act, which is being or will be delivered to the purchaser or transferee at or prior to the time of delivery of this Warrant or the certificates -4- evidencing the shares to be sold or transferred. Any assignment, transfer, pledge, hypothecation, or other disposition of this Warrant or any of the shares issued upon exercise hereof attempted contrary to the provisions of this Warrant shall be null and void and without effect. (b) Conditions to Transfer. Prior to any such proposed transfer, and as a condition thereto, if such transfer is not made pursuant to an effective registration statement under the Securities Act, the Holder will, if requested by the Company, deliver to the Company (i) written confirmation from the proposed transferee that this Warrant or the shares to be transferred, as applicable, are being acquired solely for the proposed transferee's own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale, (ii) an agreement by any transferee of shares issued upon exercise hereof to the impression of the restrictive investment legend set forth in Section 8(c) below on the certificate or certificates representing the shares acquired by such transferee and (iii) an agreement by such transferee that the Company may place a "stop transfer order" with its transfer agent or registrar, if any. (c) Legend and Stop Transfer Orders. Unless the shares issuable upon exercise hereof have been registered under the Securities Act, or the Company shall have received an opinion of counsel reasonably satisfactory to the Company to the effect that it is not required, upon exercise of the Warrant and the issuance of any of the shares of Common Stock covered by this Warrant, the Company shall instruct its transfer agent, if any, to enter stop transfer orders with respect to such shares, and all certificates representing such shares shall bear on the face thereof substantially the following legend: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL TO THE HOLDER HEREOF IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, IS EXEMPT FROM REGISTRATION UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS." 9. Registration Rights. TCI has been granted certain registration rights with respect to the stock underlying this Warrant as more fully described in the Registration Rights Agreement of even date herewith between TCI and the Company. 10. Amendments. (a) This Warrant may be amended only by the written consent of the Company and the Holder. -5- (b) No waivers of, or exceptions to, any term, condition or provision of this Warrant in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. Any waiver of a provision of this Warrant must be in writing and signed by a duly authorized representative of the party waiving such provision. 11. Adjustments. The Exercise Price and the number of shares purchasable hereunder are subject to adjustment from time to time as follows: (a) Split, Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and unexpired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be decreased in the case of a split or subdivision or increased in the case of a combination in proportion to such increase or decrease of outstanding shares and the maximum number of shares of Common Stock purchasable upon exercise of this Warrant shall also increase or decrease in proportion to any increase or decrease in the number of outstanding shares. (b) Adjustments for Dividends in Stock or Other Securities or Property. If while this Warrant remains outstanding and unexpired the holders of the securities as to which purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property (other than cash) of the Company by way of dividend, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon exercise of this Warrant, and without payment of any additional consideration therefor, the amount of such other or additional stock or other securities or property (other than cash) of the Company that such holder would hold on the date of such exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period, giving effect to all adjustments called for during such period by the provisions of this Section 11. (c) Reclassification. If the Company, at any time while this Warrant remains outstanding and unexpired by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 11. (d) Merger, Sale of Assets, etc. If at any time while this Warrant is outstanding and unexpired there shall be (i) a reorganization (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), (ii) a merger or consolidation of the Company with or into another corporation in which the Company is not the surviving entity, or -6- a reverse triangular merger in which the Company is the surviving entity but the shares of the Company's capital stock outstanding immediately prior to the merger are converted by virtue of the merger into other property, whether in the form of securities, cash, or otherwise, or (iii) a sale or transfer of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, sale or transfer, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such reorganization, merger, consolidation, sale or transfer that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 11. The foregoing provisions of this Section 11.4 shall similarly apply to successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation that are at the time receivable upon the exercise of this Warrant. If the per-share consideration payable to the holder hereof for shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such consideration shall be determined in good faith by the Company's Board of Directors. In all events, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant. (e) Reservation of Stock Issuable Upon Exercise. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the exercise of this Warrant such number of shares of Common Stock as shall from time to time be sufficient to effect the exercise of this Warrant; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the purchase by the Holder of the maximum number of shares of Common Stock purchasable upon exercise of this Warrant, in addition to such other remedies as shall be available to the Holder of this Warrant, the Company will use its best efforts to take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. 12. Notices of Adjustments. Whenever the Exercise Price or number of shares purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the Company shall issue a certificate signed by its Chief Financial Officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Exercise Price and number of shares purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be given to the Holder of this Warrant. 13. Assignment. Subject to the restrictions on transfer described in Section 8, the rights and obligations of the Company and Holder of this Warrant shall be binding upon and benefit the successors and permitted assigns of the parties. TCI may assign its rights hereunder (i) to a direct -7- or indirect wholly owned subsidiary, (ii) to an entity that owns, directly or indirectly, the entire equity interest of TCI, or (iii) to an entity the entire equity interest of which is owned, directly or indirectly, by an entity that owns, directly or indirectly, the entire equity interest of TCI. 14. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of Delaware, excluding that body of law relating to conflict of laws. 15. Delivery of Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if mailed by registered or certified mail, postage prepaid, at the respective addresses of the parties as set forth herein. Any party hereto may by notice so given change its address for future notice hereunder. Notice shall conclusively be determined to have been given when personally delivered or when deposited in the mail or telegraphed in the manner set forth above and shall be deemed to have been received when delivered. 16. Headings; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Warrant. Except where otherwise indicated, all references herein to sections refer to sections hereof. IN WITNESS WHEREOF, CSG Systems International, Inc. has caused this Warrant to be executed by an officer thereunto duly authorized this 19th day of September, 1997. CSG SYSTEMS INTERNATIONAL, INC. By: /s/ John P. Pogge -------------------------------- Name: John P. Pogge ------------------------- Title: Executive Vice President ------------------------ AGREED TO AND ACCEPTED AS OF THE DATE HEREOF: Name of Initial Holder: TCI Technology Ventures, Inc. By: /s/ Larry E. Romrell --------------------------- Name: Larry E. Romrell -------------------- Title: President ------------------- Address of Initial Holder: 5619 DTC Parkway Englewood, Colorado 80111-3000 EX-2.23 6 REGISTRATION AGREEMENT EXHIBIT 2.23 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT ("Agreement") made as of the 19th day of September, 1997 by and between CSG Systems International, Inc., a Delaware corporation (the "Company") and TCI Technology Ventures, Inc., a Delaware corporation ("TCI"). WITNESSETH WHEREAS, the Company, TCI SUMMITRAK of Texas, Inc., a Colorado corporation, TCI SUMMITrak, L.L.C., a Delaware limited liability company, and TCI have entered into an Asset Purchase Agreement dated as of August 10, 1997 (the "Asset Purchase Agreement"); WHEREAS, on the date hereof, pursuant to the terms of the Asset Purchase Agreement, the Company issued to TCI certain warrants (the "Warrants") to purchase in the aggregate up to 1,500,000 shares of the Company's Common Stock subject to certain conditions and adjustment under the terms of the Warrants; and WHEREAS, in connection with its issuance of the Warrants under the Asset Purchase Agreement, the Company has agreed to grant to TCI certain registration rights with respect to the shares issuable upon exercise of the Warrants as set forth in this Agreement; NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. CERTAIN DEFINITIONS. As used in this Agreement the following initially ------------------- capitalized terms shall have the following meanings: a. Person: A corporation, an association, a partnership, an organization, ------ a business, an individual, a governmental or political subdivision thereof or a governmental agency. b. Registrable Securities: The shares of Common Stock of the Company (as ---------------------- presently constituted) or other equity securities of the Company issued upon exercise of the Warrants, and any stock or other securities issued or distributed with respect to such shares of Common Stock or other equity securities, or into which such shares of Common Stock or other equity securities of the Company shall have hereafter been changed, converted or exchanged, held by TCI; provided, however, that any such securities shall cease to be -------- ------- Registrable Securities with respect to a proposed offer or sale thereof (i) when a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with the plan of distribution set forth in such registration -1- statement, (ii) to the extent that such securities are distributed pursuant to Rule 144 or another exemption from registration under the Securities Act, or (iii) they shall have ceased to be outstanding. c. Registration Expenses: As defined in Section 2.7 of this --------------------- Agreement. d. Rule 144: Rule 144 promulgated under the Securities Act, or any -------- successor rule to similar effect. e. SEC: The United States Securities and Exchange Commission. --- f. Securities Act: The Securities Act of 1933, as amended, or any -------------- successor statute. g. Termination Date: The date which is the earliest of (i) the sixth ---------------- anniversary of the date hereof, (ii) the first anniversary of the date all shares of Common Stock or other securities purchasable under the terms of the Warrants have been issued, (iii) the fifth anniversary of the date hereof if no Warrant has been exercised and (iv) the date TCI no longer holds any Registrable Securities. 2. REGISTRATION UNDER SECURITIES ACT. --------------------------------- 2.1 INCIDENTAL REGISTRATION. ----------------------- a. Right to Include the Registrable Securities. If the Company, at ------------------------------------------- any time before the Termination Date, proposes to register securities under the Securities Act by registration on Forms S-1, S-2 or S-3 or any successor or similar form(s) (except registrations on such Forms S-4 or S-8 and any successor or similar forms) whether for sale for its own account or pursuant to another demand for registration granted any other party, it will give prompt written notice (specifying the securities intended to be disposed of and the intended method of disposition thereof) each such time to TCI of its intention to do so and of TCI's rights under this Section 2.1. Upon the written request of TCI, made within 15 business days after the receipt of any such notice (10 business days if the Company gives telephonic notice to TCI with written confirmation to follow promptly thereafter) (which request shall specify the Registrable Securities to be disposed of by TCI), the Company will include in its proposed registration the Registrable Securities specified in any such request, subject to the priorities set forth in Section 2.1(b) below. If the Company thereafter determines for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to TCI if TCI has requested to participate in such registration pursuant to this Section 2.1 and, thereupon, (i) in the case of a determination not to register, shall be relieved of the obligation to register such Registrable Securities in connection with such registration (but not from any obligation of the Company to pay the Registration Expenses in connection therewith), and (ii) in the case of a determination to delay -2- registration, shall be permitted to delay registering any Registrable Securities, for the same period as the delay in registration of such other securities. b. Priority in Incidental Registration Rights in connection with ------------------------------------------------------------- Registrations for Company Account. If the registration referred to in Section - --------------------------------- 2.1(a) is to be an underwritten registration and the managing underwriter(s) advise the Company (or the other shareholders participating therein) in writing that in their good faith opinion such offering would be adversely affected by the inclusion therein of the total number of Registrable Securities requested to be included therein by TCI under this Agreement, the Company shall include in such registration: (1) first, all securities the Company proposes to sell for its own account ("Company Securities"), (2) second, up to the full number of securities proposed to be registered for the account of the shareholders (other than TCI) who are entitled to priority under registration rights granted by the Company to such shareholders, and (3) third, the securities requested to be registered by TCI and other shareholders entitled to participate in the registration, drawn from them pro rata based on the number each has requested to be included in such registration. The Company agrees not to grant after the date hereof any incidental registration rights to which clause (2) of this Section 2.1(b) would be applicable provided that nothing herein shall affect the priority of previously granted registration rights or of demand registration rights granted after the date hereof. c. Limitations; Exceptions. The Company shall not be required to ----------------------- effect any registration of Registrable Securities under this Section 2.1 incidental to the registration of any of its securities in connection with mergers, acquisitions, exchange offers, subscription offers, dividend reinvestment plans or stock option or other employee benefit plans. 2.2 DEMAND REGISTRATION. ------------------- a. Request. Subject to the provisions of this Section 2.2, at any ------- time after the date hereof and prior to the Termination Date, upon the written request of TCI that the Company effect the registration under the Securities Act of all or part of TCI's Registrable Securities, specifying the number of Registrable Securities to be registered and the intended method of disposition thereof, the Company will use its reasonable efforts to effect the registration under the Securities Act of the Registrable Securities which the Company has been requested to register by TCI to the extent requisite to permit the intended disposition of the Registrable Securities to be so registered. The request may include Registrable Securities to be acquired by TCI under the Warrants, provided that the request is accompanied by a commitment to exercise the Warrants for the number of Registrable Securities to be sold in the registration, which exercise shall occur at least three business days prior to the disposition of the Registered Securities. b. Registration of Other Securities. Whenever the Company shall -------------------------------- effect a registration pursuant to this Section 2.2, securities other than Registrable Securities may be included among the securities covered by such registration without restriction, except as provided herein. -3- c. Registration Statement Form. Registrations under this Section --------------------------- 2.2 shall be on such appropriate registration form of the SEC (i) as shall be selected by the Company and (ii) as shall permit the disposition of such Registrable Securities in accordance with the intended method or methods of disposition specified in the request for registration. d. Effective Registration Statement. A registration requested -------------------------------- pursuant to this Section 2.2 shall not be deemed to have been effected and will not be considered one of the demand registrations which may be requested by TCI (i) unless a registration statement with respect to the number of Registrable Securities specified in the request has become effective, or (ii) if, after it has become effective, it does not remain effective and available to TCI for resale for a period of at least 90 days (unless the Registrable Securities registered thereunder have been sold or disposed of prior to the expiration of such 90 day period) or such registration is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court for any reason and has not thereafter become effective. Notwithstanding the foregoing, (i) if a registration requested pursuant to this Section 2.2 does not become or remain effective at the request of TCI, then it will be considered one of the demand registrations which may be requested by TCI, and (ii) TCI may withdraw its request for registration if the Company does not register all the Registrable Securities specified in TCI's request, in which case the request will not be considered one of TCI's demands. e. Number and Size of Demand Registrations; Other Limitations. ---------------------------------------------------------- Notwithstanding anything in this Section 2.2 to the contrary, the Company shall not be required to effect more than a total of three (3) demand registrations at the request of TCI, pursuant to Section 2.2. of this Agreement. The Company shall not be required to effect a demand registration under this Section 2.2 after the Termination Date. Further, the Company shall not be required to effect a demand registration under this Section 2.2 unless the total number of Registrable Securities requested to be registered in the demand registration by TCI exceeds 500,000 shares of Common Stock of the Company. f. Incidental Company Registration. If TCI makes a request for a ------------------------------- registration pursuant to Section 2.2(a), the Company may determine to include securities for sale for the Company's own account or the account of other shareholders of the Company by giving written notice thereof to TCI. If the registration referred to in Section 2.2(a) is to be an underwritten registration and the managing underwriter(s) advise the Company (or the other shareholders participating therein) in writing that in their good faith opinion such offering would be adversely affected by the inclusion therein of the total number of Registrable Securities requested to be included therein by TCI, the Company shall include in such registration: (1) first, up to the full number of securities proposed to be registered for the account of shareholders (other than TCI) who are entitled to priority under registration rights granted by the Company to such shareholders provided that the Company agrees not to grant after the date hereof any registration rights to which clause (1) of this Section 2.2(f) would be applicable provided that nothing herein shall affect the priority of previously granted registration rights, (2) second, the securities requested to be registered by TCI, (3) third, all securities the Company proposes to sell for its own account, and (4) fourth, -4- securities requested to be registered by any other shareholders entitled to participate in the registration, drawn from them pro rata based on the number each has requested to be included in such registration. 2.3 REGISTRATION PROCEDURES. Whenever TCI has requested that any Registrable ----------------------- Securities be registered pursuant to this Agreement, the Company will use its reasonable efforts to effect the registration of such Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company will: a. prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its reasonable efforts to cause such registration statement to become effective; b. prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus(es) used in connection therewith, which prospectus(es) are to be filed pursuant to Rule 424 under the Securities Act, as may be necessary to keep such registration statement effective for a period of 90 days and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement or supplement to such prospectus; c. furnish to TCI and the underwriters, if any, without charge, such number of copies of such registration statement, each amendment and supplement thereto, the prospectus(es) included in such registration statement (including each preliminary prospectus), and such other documents as TCI or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities (the Company consents to the use of such prospectus or any amendment or supplement thereto by TCI and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such prospectus or any amendment or supplement thereto); and furnish to TCI and each managing underwriter, without charge, at least one conformed copy of the registration statement or statements and any post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference); d. use its reasonable efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as TCI reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to (i) keep such registration or qualification effective during the 90 day period such registration statement is required to be kept effective hereunder and (ii) enable TCI to consummate the disposition in such jurisdictions of the Registrable Securities owned by TCI (provided that the Company will not be required to (1) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (2) subject itself to taxation in any such jurisdiction or (3) consent to general service of process in any such jurisdiction); -5- e. notify TCI and the managing underwriters, if any, promptly, and (if requested by any such Person) confirm such advice in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to a registration statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC for amendments or supplements to a registration statement or related prospectus or for additional information, (iii) of the happening of any event as a result of which a registration statement or the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of TCI, the Company will prepare a supplement or amendment to such registration statement or prospectus so that such registration statement or prospectus will not contain any untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, and (v) of the Company's reasonable determination that a post-effective amendment to a registration statement would be appropriate; f. cause all such Registrable Shares to be listed on each securities exchange and inter-dealer quotation system on which similar securities issued by the Company are then listed and pay all fees and expenses in connection therewith; g. provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement; h. take all such other actions as TCI or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities, including, without limitation, (i) preparing and arranging for the timely delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends unless required by applicable law and (ii) enabling such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two business days prior to any sale of Registrable Securities to the underwriters; i. advise TCI promptly after it shall receive notice or obtain knowledge thereof, of (i) the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for such purposes and will promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued, or (ii) the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purposes and will promptly use its best efforts to prevent such suspension or have such suspension lifted if it should be effected; j. if requested by the managing underwriters or TCI, immediately incorporate in a prospectus supplement or post-effective amendment such information as the managing -6- underwriters and TCI agree should be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being sold to such underwriters, the purchase price being paid therefor by such underwriters and with respect to any other terms of the underwritten (or best efforts underwritten) offering of the Registrable Securities to be sold in such offering; make all required filings of such prospectus supplement or post- effective amendment as soon as notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and supplement or make amendments to any registration statement if reasonably requested by TCI or any underwriter of such Registrable Securities; k. use its reasonable efforts to cause the Registrable Securities covered by the applicable registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities; and l. otherwise use its reasonable efforts to comply with all applicable rules and regulations of the SEC and make generally available to its security holders earnings statements satisfying the provisions of Section 11(a) of the Securities Act, no later than 90 days after the end of any 12-month period (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm or best efforts underwriting offering and (ii) beginning with the first day of the Company's first fiscal quarter next succeeding each sale of Registrable Securities after the effective date of a registration statement, which statements shall cover said 12-month periods. TCI shall furnish to the Company in writing such information relating to TCI as the Company may reasonably request in connection with the preparation of such registration statement and TCI agrees to notify the Company as promptly as practicable of any inaccuracy or change in information it has previously furnished to the Company or of the happening of any event, in either case as a result of which any prospectus relating to such registration contains an untrue statement of a material fact regarding TCI or the distribution of such Registrable Securities or omits to state any material fact regarding TCI or the distribution of such Registrable Securities required to be stated therein or necessary to make the statement therein not misleading in light of the circumstances then existing, and to promptly furnish to the Company any additional information required to correct and update any previously furnished information or required such that such prospectus shall not contain, with respect to TCI or the distribution of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. TCI agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.3(e) (ii), (iii), (iv) or (v) or Section 2.3(i) hereof, TCI will forthwith discontinue disposition of such Registrable Securities covered by such registration statement or prospectus until TCI's receipt of the copies of the supplemented or amended prospectus relating to such registration statement or prospectus, or until it is advised in writing by the Company that the use of the applicable prospectus may be resumed, and has received copies of any additional or supplemental -7- filings which are incorporated by reference in such prospectus, and, if so directed by the Company, TCI will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in TCI's possession, of the prospectus covering the Registrable Securities current at the time of receipt of such notice. In addition, TCI shall enter into and perform its obligations pursuant to any underwriting agreement to be entered into with respect to a registration that includes Registrable Securities. 2.4 UNDERWRITTEN OFFERINGS. ---------------------- a. General. If any registration under Section 2.2 is underwritten, the ------- selection of the managing underwriter or underwriters shall be mutually agreed upon by the Company and TCI. If any registration under Section 2.1 is underwritten, the Company shall select the underwriters. b. Incidental Underwritten Offerings. If the Company at any time --------------------------------- proposes to register any of its securities under the Securities Act as contemplated by Section 2.1 and the Company determines that such securities are to be distributed by or through one or more underwriters, the Company will, if requested by TCI as provided in Section 2.1 and subject to the provisions of Section 2.1(b), use its reasonable efforts to arrange for such underwriters to include all the Registrable Securities to be offered and sold by TCI among the securities to be distributed by underwriters. The right of TCI to participate in any registration pursuant to Section 2.1 shall be conditioned upon TCI being a party to the underwriting agreement between the Company and such underwriters selected pursuant to Section 2.4(a), and TCI executing powers of attorney and custodial agreements in customary form for selling stockholders. c. Demand Registration. In the event of a request for registration by ------------------- TCI under Section 2.2(a), the Company and/or TCI may elect to use its reasonable efforts to arrange for one or more underwriters to distribute such Registrable Securities provided that the underwriters would be selected under Section 2.4(a). The right of TCI to participate in any registration pursuant to Section 2.2(a) shall be conditioned upon TCI being a party to any underwriting agreement between the Company and any underwriters, and TCI executing powers of attorney and custodial agreements in customary form for selling stockholders. 2.5 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER --------------------------------------------------------------- REGISTRATION COVENANTS. The obligations of the Company to cause the Registrable - ---------------------- Securities to be registered under the Securities Act are subject to each of the following limitations, conditions and qualifications: a. The Company shall not be obligated to file or keep effective any registration statement pursuant to Section 2.2 hereof at any time if the Company would be required to include financial statements audited as of any date other than the end of its fiscal year. -8- b. The Company, by act of its Board of Directors, shall be entitled to postpone for a reasonable period of time (but not exceeding 120 days) the filing or effectiveness of any registration statement otherwise required to be prepared and filed by it pursuant to Section 2.2 ("Delaying Event") if the Board of Directors of the Company determines, in its reasonable judgment, that (i) the Company is in possession of material information that has not been disclosed to the public and the Board of Directors of the Company reasonably deems it to be advisable not to disclose such information at such time in a registration statement, (ii) such registration and offering would interfere with any financing, acquisition, corporate reorganization or other material transaction involving the Company and its subsidiaries, taken as a whole, or (iii) such registration and offering would otherwise be detrimental to the Company and its subsidiaries, taken as a whole, or the Company's shareholders, and, in any such case, the Company promptly gives TCI written notice of such determination, containing a general statement of the reasons for such postponement and an approximation of the anticipated delay. If the Company shall so postpone the filing of a registration statement for more than 30 days, then the demand for a registration pursuant to Section 2.2 shall be deemed not to have been requested and TCI shall be entitled to request pursuant to the terms of Section 2.2 upon the earlier of (i) 120 days after notice by the Company of the Delaying Event or (ii) notice by the Company of the end of the Delaying Event. 2.6 INDEMNIFICATION. --------------- a. Indemnification by the Company. With respect to any registration of ------------------------------ any Registrable Securities under the Securities Act pursuant to this Agreement, the Company will, and hereby does, indemnify and hold harmless, to the fullest extent permitted by law, TCI against any and all judgments, fines, penalties, charges, costs, amounts paid in settlement, losses, claims, damages, liabilities, expenses, or attorney fees, joint or several, incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto ("Indemnified Damages"), to which TCI may become subject under the Securities Act or any other statute or common law, insofar as any such Indemnified Damages arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the registration statement relating to the sale of such securities or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under blue sky or other securities laws of jurisdictions in which the Registrable Securities are offered ("Blue Sky Filing"), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, if used prior to the effective date of such registration statement (unless such statement is corrected in the final prospectus and the Company has previously furnished copies thereof to TCI and the underwriters), or contained in the final prospectus (as amended or supplemented if the Company shall have filed with the SEC any amendment thereof or supplement thereto) if used within the period during which the Company is required to keep the registration statement to which such prospectus relates current, or the omission -9- or alleged omission to state therein (if so used) a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the indemnification agreement contained herein shall not apply to such Indemnified Damages arising out of, or based upon, any such untrue statement or alleged untrue statement, or any such omission or alleged omission, if such statement or omission was made in reliance upon and in conformity with information furnished to the Company by TCI. b. Indemnification by TCI. With respect to any registration of any ---------------------- Registrable Securities under the Securities Act pursuant to this Agreement, TCI will, and hereby does, indemnify and hold harmless (in the same manner and to the same extent as set forth in subdivision (a) of this Section 2.6, mutatis ------- mutandis) the Company, its officers and directors and each officer of the - -------- Company and each other Person, if any, who controls the Company within the meaning of the Securities Act with respect to any untrue statement or alleged untrue statement in, or omission or alleged omission from, such registration statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, or any Blue Sky Filing, if such statement or omission was made in reliance upon and in conformity with information furnished to the Company by TCI. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer of such securities by TCI. c. Notices of Claims, etc. Promptly after receipt by an indemnified ----------------------- party of notice of the commencement of any action or proceeding involving a claim referred to in the preceding subdivisions of this Section 2.6, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action, provided that the failure of any indemnified party to give notice -------- as provided herein shall not relieve the indemnifying party of its obligations under the preceding subdivisions of this Section 2.6, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, the indemnifying party shall be entitled to participate in and, unless a conflict of interest between such indemnified and indemnifying parties exists in respect of such claim as would make representation of the parties by a single counsel violative of applicable attorney ethical rules, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation. The indemnified party shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the indemnified party which relates to such action or claim. The indemnifying party shall keep the indemnified party apprised as to the status of the defense or any settlement negotiations with respect thereto. If the indemnifying party elects to defend any such action or claim, then the indemnified party shall be entitled to participate in such defense with counsel of its choice at its sole cost and expense. If the indemnifying party does not assume such defense, the indemnified party shall keep the -10- indemnifying party apprised at all times as to the status of the defense; provided, however, that the failure to keep the indemnifying party so informed shall not affect the obligations of the indemnifying party hereunder. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its written consent. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the indemnified party with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. d. Contribution. If the indemnification provided hereby is unavailable, ------------ then the indemnifying party shall contribute to the amount paid or payable by the indemnified party, in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the indemnifiable event. 2.7 REGISTRATION EXPENSES. In a registration of Registrable Securities under --------------------- Sections 2.1 and in the first two registrations of Registrable Securities which may be requested by TCI under Section 2.2, the Company will pay all Registration Expenses (as defined below), other than (i) counsel's fees and expenses for TCI and (ii) the fees and expenses of any other Person retained by TCI which shall be borne by TCI. In the third registration of Registrable Securities which may be requested by TCI under Section 2.2, TCI will pay all Registration Expenses, provided that if the offering includes shares sold for the account of the Company or other shareholders, TCI shall bear only its pro rata share of the Registration Expenses other than the fees and expenses described in clauses (i) and (ii) of the first sentence of this Section 2.7 which it shall bear in their entirety. Registration Expenses include all expenses incident to the Company's performance of or compliance with this Agreement, including without limitation all registration and filing fees, including fees with respect to filings required to be made with the National Association of Securities Dealers, Inc., fees and expenses of compliance with securities or blue sky laws, including, without limitation, reasonable fees and disbursements of counsel for the underwriters relating to compliance with blue sky laws, all word processing, duplicating and printing expenses, messenger, telephone and delivery expenses, and fees and disbursements of counsel of the Company and of all independent certified public accountants of the Company (including the expenses of any special audit and "cold comfort" letters required by or incident to such performance), underwriters fees and disbursements (excluding discounts, commissions, stock transfer taxes, SEC or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals relating to the distribution of the Registrable Securities), and fees and expenses of other Persons retained by the Company upon the reasonable determination of the Company that the retention of such other Persons is reasonably necessary for the successful completion of the registered offering (all such expenses being herein called "Registration Expenses"). Except as included in the immediately preceding sentence, the Company in any registration will pay its internal expenses (consisting of all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and -11- expenses incurred in connection with the listing of the securities to be registered on any securities exchange, rating agency fees and the fees and expenses of any Person, including special experts, retained by the Company. TCI shall pay all underwriting discounts, selling commissions, stock transfer taxes, SEC or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals relating to the distribution of the Registrable Securities. 3. RULE 144. The Company shall take all reasonable actions and file all such -------- information, documents and reports as shall be required to enable TCI to sell its Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. 4. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and -------------------------- inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. TCI may not assign its rights hereunder or otherwise provide to any third party the benefits granted to TCI hereunder without the prior written consent of the Company, which consent may be granted or withheld at the Company's sole discretion. TCI may assign its rights hereunder to an entity that controls, is controlled by, or is under common control with, TCI in connection with an assignment of the Warrants pursuant to the terms thereof. 5. STANDOFF AGREEMENT. TCI agrees that if, in connection with an ------------------ underwritten public offering of the Company's securities, the underwriters managing the offering so request, TCI will not sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Registrable Securities (other than those included in the registration) without the prior written consent of such underwriters, for such period of time (not to exceed one hundred eighty (180) days) from the effective date of such registration as may be requested by such underwriters. 6. MISCELLANEOUS. ------------- a. Severability. If any term or provision of this Agreement is held by a ------------ court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms and provisions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable commercial efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term or provision. b. Further Assurances. Subject to the specific terms of this Agreement, ------------------ each of the parties hereto shall make, execute, acknowledge and deliver such other instruments and -12- documents, and take all such other actions, as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby. c. Waivers, Etc. No failure or delay on the part of either party hereto ------------ (or the intended third party beneficiaries referred to herein) in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. No modification or waiver of any provision of this Agreement nor consent to any departure therefrom shall in any event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. d. Entire Agreement. This Agreement contains the entire understanding of ---------------- the parties with respect to the subject matter hereof. The section headings contained in this Agreement are solely for the purpose of reference, and shall not in any way affect the meaning or interpretation of this Agreement. e. Counterparts. For the convenience of the parties, this Agreement may ------------ be executed in any number of counterparts, each of which shall be deemed to be an original but all of which together shall be one and the same instrument. f. Notices. All notices, consents, requests, instructions, approvals and ------- other communications provided for herein shall be validly given, made or served, if in writing and delivered personally, sent by facsimile (with confirmation), mailed by registered or certified mail (return receipt) or sent by a worldwide overnight courier company that provides written confirmation of receipt to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (ii) if to the Company, to: CSG Systems International, Inc. 7887 E. Belleview Avenue Suite 1000 Englewood, Colorado 80111 Attention: Jack P. Pogge Facsimile No.: 303-796-2881 with a copy to: CSG Systems International, Inc. 7887 E. Belleview Avenue Suite 1000 Englewood, Colorado 80111 -13- Attention: Joseph T. Ruble, Esq. Facsimile No.: 303-796-2881 (ii) if to TCI: Tele-Communications, Inc. 5619 DTC Parkway Englewood, Colorado 80111 Attention: Larry Romrell with a copy to: Tele-Communications, Inc. 5619 DTC Parkway Englewood, Colorado 80111 Attention: Lee W. Zieroth, Esq. Any notices or other communications shall be deemed delivered and received on the date actually received. g. Governing Law. This Agreement shall be governed by and ------------- construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such state without giving effect to the principles of conflicts of laws. h. Amendments. This Agreement may be amended only by a written ---------- agreement signed by the Company and TCI. i. Gender, etc. As used in this Agreement, the masculine gender ------------ shall include the feminine and neuter and the singular number shall include the plural and vice versa. -14- IN WITNESS WHEREOF, the Company and TCI have caused this Agreement to be duly executed as of the date first above written. CSG SYSTEMS INTERNATIONAL, INC. By: /s/ John P. Pogge ------------------------------------- Name: John P. Pogge ------------------------ Title: Executive Vice President ------------------------ TCI TECHNOLOGY VENTURES, INC. By: /s/ Larry E. Romrell ------------------------------------- Name: Larry E. Romrell ------------------------ Title: President ------------------------ -15- EX-2.24 7 LOAN AGREEMENT EXHIBIT 2.24 ================================================================================ LOAN AGREEMENT among CSG SYSTEMS, INC. and CSG SYSTEMS INTERNATIONAL, INC., as co-borrowers, THE LENDERS NAMED HEREIN and BANQUE PARIBAS, as Agent September 18, 1997 ================================================================================ TABLE OF CONTENTS PAGE ARTICLE I DEFINITIONS...................... 2 Section 1.1 Defined Terms....................................... 2 Section 1.2 Other Interpretive Provisions....................... 27 (a) Accounting Terms.................................... 27 (b) Other Terms......................................... 27 (c) Performance; Time................................... 27 (d) Laws................................................ 27 (e) Rounding............................................ 28 (f) Schedules and Exhibits.............................. 28 ARTICLE II THE CREDITS...................... 28 Section 2.1 Amounts and Terms of Commitments.................... 28 2.1.1 Term Facility....................................... 28 (a) General Provisions Relating to Term Loans..... 28 (b) Permitted Uses of Term Loan Proceeds.......... 28 2.1.2 Revolving Credit Facility........................... 29 (a) Limitation on Each Lender's Obligation........ 29 (b) Funding of Revolving Loans to the Agent....... 29 (c) Disbursement of Revolving Loans to the Borrowers.................................... 30 (d) Over Advances................................. 30 (e) General Provisions Relating to Revolving Loans........................................ 30 (f) Permitted Uses of Revolving Loan Proceeds..... 30 Section 2.2 Notes............................................... 30 (a) Term Loan Notes..................................... 30 (b) Revolving Loan Notes................................ 30 (c) Notations in the Lenders' Books and Records......... 31 Section 2.3 Repayment of Principal Amount of Loans.............. 31 (a) Repayment of the Term Loans......................... 31 (b) Repayment of Revolving Loans........................ 31 Section 2.4 Payment of Interest on the Loans.................... 31 (a) The Term Loans...................................... 31 (b) Revolving Loans..................................... 32 (c) Interest Payment Dates.............................. 32 (d) Interest Upon Events of Default..................... 32 (e) Limitations on Interest Rates....................... 32 Section 2.5 Procedure for the Borrowing of Revolving Loans...... 32 Section 2.6 Conversion and Continuation Elections............... 33 i TABLE OF CONTENTS (continued) Page Section 2.7 Optional Prepayments.................................. 35 Section 2.8 Mandatory Prepayments................................. 35 (a) Excess Cash Flow Prepayments.......................... 35 (b) Dispositions.......................................... 35 (c) Replacement or Refinancing Funded Debt................ 36 (d) Equity Issuance....................................... 36 (e) Early Termination of Customer Services Agreements..... 36 (f) General............................................... 37 Section 2.9 Commitment Fee for Providing Revolving Commitments.... 37 Section 2.10 Calculation of Interest............................... 38 Section 2.11 Payments.............................................. 38 Section 2.12 Payment on Non-Business Days.......................... 38 Section 2.13 Application of Payments............................... 38 Section 2.14 Distribution of Payments.............................. 39 Section 2.15 The Agent's Right to Assume Funds Available for Loans................................................ 39 Section 2.16 The Agent's Right to Assume Payments Will be Made by the Borrowers .................................... 39 ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY.............. 40 Section 3.1 Taxes................................................. 40 Section 3.2 Illegality............................................ 43 Section 3.3 Increased Costs....................................... 44 Section 3.4 Inability to Determine Rates.......................... 44 Section 3.5 Prepayment of LIBOR Loans............................. 44 Section 3.6 Capital Requirements.................................. 45 Section 3.7 Certificates of Lenders............................... 46 Section 3.8 Substitution of Lenders............................... 46 Section 3.9 Survival.............................................. 46 ARTICLE IV CONDITIONS PRECEDENT TO THE CLOSING AND THE MAKING OF LOANS...... 46 Section 4.1 Conditions Precedent to the Closing................... 46 (a) Corporate Documents................................... 46 (i) CSG.............................................. 46 (ii) Holdings......................................... 47 (b) Loan Documents........................................ 47 ii TABLE OF CONTENTS (continued) Page (i) This Agreement............. ........................ 47 (ii) Notes............................................... 48 (iii) Designation of Responsible Persons.................. 48 (iv) Collateral Documents................................ 48 (v) Holdings Collateral Documents....................... 49 (vi) Environmental Indemnity............................. 49 (vii) Collateral Information Certificate.................. 49 (c) [Intentionally deleted..................................... 50 (d) Opinion of the Borrowers' Counsel.......................... 50 (e) SUMMITrak Acquisition Documents............................ 50 (f) TCI Services Agreement..................................... 50 (g) Government Consents........................................ 50 (h) Third Party Consents....................................... 50 (i) Consummation of the SUMMITrak Acquisition.................. 50 (j) Landlords' Estoppels....................................... 50 (k) Title Policies............................................. 51 (l) UCC Searches............................................... 51 (m) Intellectual Property Review............................... 51 (n) Environmental Review....................................... 51 (o) Insurance.................................................. 51 (p) No Litigation.............................................. 51 (q) Pro Forma Balance Sheet and Projections.................... 52 (r) Accounts Report............................................ 52 (s) No Material Adverse Change................................. 52 (t) The Borrowers' Bring-Down Certificate...................... 52 (u) Paribas Side Letter........................................ 52 (v) Funds Transfer Memorandum.................................. 52 (w) Fees, Costs and Disbursements.............................. 52 (x) Other Documents............................................ 53 Section 4.2 The Making of Revolving Loans.............................. 53 ARTICLE V THE BORROWERS' REPRESENTATIONS AND WARRANTIES............ 53 Section 5.1 Organization, Power and Authority of the Borrower.......... 53 Section 5.2 Organization, Power and Authority of the Borrowers' Subsidiaries.............................................. 53 Section 5.3 Loan Documents and Notes Authorized; Binding Obligations... 54 Section 5.4 No Conflict................................................ 54 iii TABLE OF CONTENTS (continued) Page Section 5.5 Capital Structure................................... 54 Section 5.6 Financial Condition................................. 55 Section 5.7 No Material Adverse Change.......................... 55 Section 5.8 Ownership of Properties............................. 55 Section 5.9 Executive Offices; Trade Names...................... 55 Section 5.10 Litigation.......................................... 55 Section 5.11 Material Documents; Third Party Consents............ 56 Section 5.12 No Government Consents Needed....................... 56 Section 5.13 Persons Signing Authorized.......................... 56 Section 5.14 Solvency............................................ 56 Section 5.15 Employment and Labor Agreements..................... 56 Section 5.16 ERISA............................................... 56 Section 5.17 Labor Matters....................................... 57 Section 5.18 Margin Regulations.................................. 57 Section 5.19 Taxes............................................... 57 Section 5.20 Schedule of Deposit Accounts........................ 57 Section 5.21 Intellectual Property Rights........................ 58 Section 5.22 Other Regulations................................... 58 Section 5.23 Nature of Representations and Warranties............ 58 Section 5.24 Brokers' Fees....................................... 58 Section 5.25 Representations and Warranties Contained in the SUMMITrak Purchase Agreement....................... 59 ARTICLE VI INSURANCE............................. 59 Section 6.1 Insurance by the Borrowers.......................... 59 Section 6.2 General Insurance Requirements...................... 59 (a) Workers' Compensation Insurance..................... 59 (b) Commercial General Liability........................ 59 (c) Automobile Liability Insurance...................... 59 (d) Excess Insurance.................................... 59 (e) Amount of Insurance................................. 60 (f) Property Damage Insurance........................... 60 (g) Extra Expense/Business Interruption Insurance....... 60 (h) ERISA Insurance..................................... 60 Section 6.3 Endorsements........................................ 60 Section 6.4 Conditions.......................................... 60 Section 6.5 Evidence of Insurance............................... 61 iv TABLE OF CONTENTS (continued) Page Section 6.6 No Duty of the Lenders to Verify...................... 61 ARTICLE VII AFFIRMATIVE COVENANTS OF THE BORROWERS........... 61 Section 7.1 Records and Reports................................... 62 (a) Quarterly Borrower-Prepared Financial Statements...... 62 (b) Annual Audited Financial Statements................... 62 (c) Accountants' Statement................................ 63 (d) Compliance Certificate................................ 63 (e) Borrowing Base Certificate............................ 63 (f) Financial Forecasts................................... 63 (g) SEC Filings........................................... 63 (h) Other Reports......................................... 63 (i) Notices............................................... 64 (j) Termination Events/Prohibited Transaction............. 64 (k) ERISA................................................. 64 (l) Pension Plans......................................... 64 (m) Tax Returns........................................... 64 (n) Other Information..................................... 65 Section 7.2 Maintenance of Rights and Properties.................. 65 (a) Maintenance of Existence and Rights................... 65 (b) Maintenance of Properties............................. 65 Section 7.3 Taxes and Other Liabilities........................... 65 Section 7.4 Inspection of Books and Records....................... 65 Section 7.5 Inspection and Audit of Collateral.................... 66 Section 7.6 Compliance With Laws.................................. 66 Section 7.7 Agreements............................................ 66 Section 7.8 Supplemental Disclosure............................... 66 Section 7.9 Interest Rate Protection.............................. 66 Section 7.10 Copyright Registration and Recordation................ 67 (a) Unregistered Copyrights............................... 67 (b) Newly Developed Intellectual Property................. 67 Section 7.11 Further Assurances.................................... 67 ARTICLE VIII NEGATIVE COVENANTS OF THE BORROWERS.................. 68 Section 8.1 Limitation on Liens................................... 68 v TABLE OF CONTENTS (continued) Page Section 8.2 Consolidations and Mergers............................. 69 Section 8.3 Loans and Investments.................................. 70 Section 8.4 Limitation on Indebtedness............................. 71 Section 8.5 Transactions with Affiliates........................... 72 Section 8.6 Use of Proceeds........................................ 72 Section 8.7 Lease Obligations...................................... 72 Section 8.8 Capital Expenditures................................... 72 Section 8.9 Restricted Payments.................................... 73 Section 8.10 Modification of Certain Agreements..................... 73 Section 8.11 Maintenance of Business................................ 73 Section 8.12 ERISA.................................................. 74 Section 8.13 No Use of any Lender's Name............................ 74 Section 8.14 Accounting Changes..................................... 74 ARTICLE IX FINANCIAL COVENANTS OF HOLDINGS..................... 74 Section 9.1 Maximum Leverage Ratio................................. 75 Section 9.2 Minimum Fixed Charge Coverage Ratio.................... 75 Section 9.3 Minimum Interest Coverage Ratio........................ 75 ARTICLE X EVENTS OF DEFAULT AND REMEDIES...................... 76 Section 10.1 Events of Default...................................... 76 (a) Installments of Principal.............................. 76 (b) Other Payments......................................... 76 (c) Cross Defaults......................................... 76 (d) Representations and Warranties......................... 76 (e) Specific Defaults...................................... 76 (f) Other Defaults......................................... 76 (g) Insolvency; Voluntary Proceedings...................... 77 (h) Involuntary Proceedings................................ 77 (i) Material Adverse Change................................ 77 (j) Monetary Judgments..................................... 77 (k) Non-Monetary Judgments................................. 77 (l) Collateral............................................. 78 (m) Rate Contracts......................................... 78 (n) Governmental Action.................................... 78 vi TABLE OF CONTENTS (continued) Page (o) Change of Control....................................... 78 (p) Failure to Be Publicly Reporting Company................ 78 Section 10.2 Waiver of Default....................................... 78 Section 10.3 Remedies................................................ 79 Section 10.4 Set-Off................................................. 79 (a) Rights of Set-Off....................................... 79 (b) Required Lenders' Consent to Set-Off Required........... 79 Section 10.5 Sharing of Payments..................................... 80 Section 10.6 Rights and Remedies Cumulative.......................... 80 ARTICLE XI THE AGENT................................ 80 Section 11.1 Appointment and Authorization........................... 80 Section 11.2 Delegation of Duties.................................... 80 Section 11.3 Liability of Agent...................................... 81 Section 11.4 Reliance by the Agent................................... 81 Section 11.5 Notice of Default....................................... 82 Section 11.6 Credit Decision......................................... 82 Section 11.7 Indemnification......................................... 83 Section 11.8 Agent in Individual Capacity............................ 83 Section 11.9 Successor Agent......................................... 84 Section 11.10 Collateral Matters...................................... 84 ARTICLE XII MISCELLANEOUS.............................. 85 Section 12.1 Amendments and Waivers.................................. 85 Section 12.2 Notices................................................. 86 Section 12.3 No Waiver by the Agent or the Lenders................... 86 Section 12.4 Entire Agreement; Construction.......................... 86 Section 12.5 Indemnification......................................... 87 Section 12.6 Costs and Expenses...................................... 87 Section 12.7 Reliance by the Lenders................................. 88 Section 12.8 Marshalling; Payments Set Aside......................... 88 Section 12.9 No Set-Offs by the Borrowers............................ 88 Section 12.10 Successors and Assigns.................................. 88 Section 12.11 Assignments, Participations, Etc........................ 89 Section 12.12 Headings................................................ 91 vii TABLE OF CONTENTS (continued) Page Section 12.13 Severability.......................................... 91 Section 12.14 Notification of Addresses, Lending Offices, Etc....... 91 Section 12.15 No Third Parties Benefitted........................... 91 Section 12.16 Relationship of Parties............................... 91 Section 12.17 Time.................................................. 92 Section 12.18 Counterparts.......................................... 92 Section 12.19 Equitable Relief...................................... 92 Section 12.20 Governing Law......................................... 92 Section 12.21 Obligations of Each Borrower.......................... 92 Section 12.22 Suretyship Waivers.................................... 93 Section 12.23 Refund Check Processing Account....................... 95 Section 12.24 Notice of Claims; Claims Bar.......................... 96 Section 12.25 Waiver of Punitive Damages............................ 96 Section 12.26 Waiver of Jury Trial.................................. 96 viii INDEX OF SCHEDULES Schedule 1.1 - Term Loan Commitments Schedule 1.2 - Revolving Commitments Schedule 2 - Disclosure Schedule INDEX OF EXHIBITS Exhibit A.1 - Form of Term Loan Note Exhibit A.2 - Form of Revolving Note Exhibit B - Form of Notice of Borrowing Exhibit C - Form of Notice of Conversion/Continuation Exhibit D - Form of Compliance Certificate Exhibit E - Form of Borrowing Base Certificate Exhibit F - Form of Assignment and Acceptance Exhibit G.1 - Designation of Responsible Persons (CSG) Exhibit G.2 - Designation of Responsible Persons (Holdings) Exhibit H - Non-Bank Lender Tax Certificate ix LOAN AGREEMENT THIS LOAN AGREEMENT is entered into as of September 18, 1997, by and among CSG SYSTEMS, INC., a Delaware corporation ("CSG"), and CSG SYSTEMS INTERNATIONAL, INC., a Delaware corporation ("Holdings"), as co-borrowers on a joint and several basis (each individually being from time to time referred to herein as a "Borrower" and collectively as the "Borrowers"), the LENDERS (as defined below) and BANQUE PARIBAS, not in its individual capacity but solely in its capacity as the Agent (as defined below). RECITALS A. Holdings has entered into the SUMMITrak Purchase Agreement with the TCI Selling Entities pursuant to which the TCI Selling Entities have agreed to sell to Holdings and Holdings has agreed to purchase from the TCI Selling Entities certain software, intellectual property and related assets described in the SUMMITrak Purchase Agreement (the "SUMMITrak Assets"). Holdings has assigned and transferred to CSG all of Holdings' rights and interests in, to, and under the SUMMITrak Purchase Agreement, including the right to acquire and receive the SUMMITrak Assets upon the closing of the SUMMITrak Acquisition. B. Concurrent with Holdings' entering into the SUMMITrak Purchase Agreement, CSG entered into the TCI Services Agreement with TCI Cable Management, pursuant to which CSG will provide subscriber management, billing, statement mailing, support and other services to TCI Cable Management. The TCI Services Agreement will become effective upon the closing of the SUMMITrak Acquisition. C. The Borrowers have requested the Lenders and the Agent to enter into this Agreement pursuant to which the Lenders severally agree (in accordance with their respective Commitments) to advance to the Borrowers: (i) at Closing, Term Loans in an amount equal to the Lenders' Aggregate Term Loan Commitment and Revolving Loans in an amount equal to a portion of the Maximum Availability under the Revolving Credit Facility for the purpose of funding (1) the payment of a portion of the purchase price for the SUMMITrak Assets payable by CSG upon the closing of the SUMMITrak Acquisition, (2) the payment of transaction costs related to the SUMMITrak Acquisition and this Agreement, (3) the payment of costs related to product development and (4) the repayment of all amounts owing under the Original Agreement; and (ii) thereafter from time to time, Revolving Loans subject to the Maximum Availability under the Revolving Credit Facility for the purpose of funding the payment of (A) Contingent Earn-Out Payments, (B) ongoing costs related to product development and (C) working capital and other general corporate needs of the Borrowers. D. The Lenders have agreed to make and maintain the credit described in this Agreement only on the terms, subject to the conditions and in reliance on the representations and warranties set forth below. 1 AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants set forth below, and intending to be legally bound, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.1 DEFINED TERMS. As used in this Agreement, the following terms shall have the following meanings: "Accounts" means all accounts receivable now owned or hereafter received or acquired by or belonging or owing to the Borrowers arising out of goods sold or services rendered by the Borrowers in the Ordinary Course of Business. "Acquisition" means any transaction, or any series of related transactions, by which either of the Borrowers or any of their respective Subsidiaries directly or indirectly (a) acquire any ongoing business or all or substantially all of the assets of any firm, partnership, limited liability company, joint venture or corporation, or any division thereof, whether through the purchase of assets, a merger or otherwise, or (b) acquire (in one transaction or as the most recent transaction in a series of transactions) control of at least a majority of the Stock of a corporation having ordinary voting power for the election of directors, or (c) acquire control of fifty percent (50.0%) or more of the ownership interest in any partnership, limited liability company or joint venture. "Adjusted LIBOR" means, for each Interest Period in respect of LIBOR Loans comprising part of the same Borrowing, an interest rate per annum (rounded upward to the nearest 1/16th of one percent (0.0625%)) determined pursuant to the following formula: LIBOR Adjusted LIBOR = ---------------------------------- 1.00 Eurodollar Reserve Percentage The Adjusted LIBOR shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage. "Affected Lender" has the meaning set forth in SECTION 3.8. "Affiliate" means, with respect to any Person, each other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person (excluding any trustee under, or any committee with responsibility for administering, any Pension Plan or Employee Benefit Plan). A Person shall be deemed to be "controlled by" any other Person if such other Person possesses, directly or indirectly, power (a) to vote twenty percent (20.0%) 2 or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors, managing general partners or managing members or (b) to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. "Agent" means Banque Paribas solely when acting in its capacity as the Agent under any of the Loan Documents and any successor Agent. "Agent-Related Persons" means Banque Paribas and any successor Agent appointed pursuant to SECTION 11.9, together with their respective Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates. "Agent's Payment Office" means the address for payments set forth on the signature page hereto in relation to the Agent or such other address as the Agent may from time to time specify in accordance with SECTION 12.2. "Aggregate Commitments" means the combined Commitments of the Lenders in the aggregate principal amount of One Hundred Ninety Million Dollars ($190,000,000). "Aggregate Revolving Commitment" means the combined Revolving Commitments of the Lenders in the aggregate stated principal amount of Forty Million Dollars ($40,000,000). "Aggregate Term Loan Commitment" means the combined Term Loan Commitments of the Lenders in the aggregate original principal amount of One Hundred Fifty Million Dollars ($150,000,000). "Agreement" means this Loan Agreement dated as of September 18, 1997, including all amendments, modifications and supplements hereto and all appendices, exhibits and schedules to any of the foregoing, and shall refer to the Agreement as the same may be in effect from time to time. "Applicable Margin" means with respect to any Base Rate Loan or any LIBOR Loan, as applicable, the following margins based on the Leverage Ratio maintained by Holdings and its 3 Subsidiaries as determined as of the end of the most recent Fiscal Quarter for which the Borrowers have furnished a Compliance Certificate to the Agent pursuant to SUBSUBSECTION 7.1(d): =========================================================================== Applicable Margin for Applicable Margin for Leverage Ratio LIBOR Loans Base Rate Loans =========================================================================== Greater than 3.50 1.75% 0.50% --------------------------------------------------------------------------- Greater than 2.50 but less 1.00% 0.00% than or equal to 3.50 --------------------------------------------------------------------------- Greater than 1.50 but less 0.75% 0.00% than or equal to 2.50 --------------------------------------------------------------------------- Less than or equal to 1.50 0.50% 0.00% =========================================================================== The Applicable Margin applying to any Loan outstanding after the last day of the Fiscal Quarter ending September 1997 shall be subject to increase or decrease, as provided above, based on the current Leverage Ratio as calculated as of the last day of the immediately preceding Fiscal Quarter, with any change in the Applicable Margin being effective (a) as of the first day of the next succeeding Fiscal Quarter provided that the Compliance Certificate with respect to the immediately preceding Fiscal Quarter is delivered to the Agent on or prior to the fifteenth (15th) Business Day following the last day of the immediately preceding Fiscal Quarter and (b) as of the second Business Day after the date on which the Agent receives the Compliance Certificate with respect to the immediately preceding Fiscal Quarter if the Agent receives such Compliance Certificate after the fifteenth (15th) Business Day following the last day of the immediately preceding Fiscal Quarter (provided that if any Loan is prepaid or repaid after the end of any Fiscal Quarter but prior to the delivery of the Compliance Certificate for such Fiscal Quarter, such Loan shall, for such period, continue to have the same Applicable Margin as applied during the prior Fiscal Quarter; provided further that from the Closing until the last day of the Fiscal Quarter ending September 30, 1997, the Applicable Margin for Base Rate Loans shall be deemed to be 0.50% and provided, further, that if at any time an Event of Default has occurred and is continuing, the Applicable Margin for LIBOR Loans shall be deemed to be 1.75% and the Applicable Margin for Base Rate Loans shall be deemed to be 0.50%). The initial Applicable Margin applying to any Borrowing occurring after the end of any Fiscal Quarter but prior to the delivery of the Compliance Certificate for such Fiscal Quarter shall be based on the Leverage Ratio calculated as at the last day of the most recent Fiscal Quarter for which the Borrowers have delivered a Compliance Certificate. "Assignee" has the meaning set forth in SUBSECTION 12.11(a). "Assignment and Acceptance" has the meaning specified in SUBSECTION 12.11(a). 4 "Attorney Costs" means and includes all fees and disbursements of any law firm or other external counsel, the allocated cost of internal legal services and all disbursements of internal counsel. "Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978, as codified under Title 11 of the United States Code, and the Bankruptcy Rules promulgated thereunder. "Base Rate" means for any day, the higher of (a) the per annum floating rate established by Banque Paribas as its "prime rate" for domestic (United States) commercial loans in effect on such day, and (b) one-half percent (0.50%) in excess of the Federal Funds Rate in effect on such day. Banque Paribas' prime rate is a rate set by Banque Paribas based upon various factors, including Banque Paribas' costs and desired return, general economic conditions and other factors, and is neither directly tied to an external rate of interest or index nor necessarily the lowest or best rate of interest actually charged by Banque Paribas at any given time to any customer or particular class of customers for any particular credit extension. Banque Paribas may make commercial or other loans at rates of interest at, above or below its prime rate. "Base Rate Loan" means a Loan that bears interest based on the Base Rate. "Base Rate Revolving Loan" has the meaning set forth in SUBSECTION 2.1.2(e). "Base Rate Term Loan" has the meaning set forth in SUBSECTION 2.1.1(a). "Borrowing" means a borrowing under this Agreement consisting of Loans made to the Borrowers on the same day by the Lenders pursuant to ARTICLE II. "Borrowing Base" means an amount equal to the value of eighty percent (80.0%) of the Borrowers' Eligible Accounts. "Borrowing Base Certificate" means a certificate signed by each of the Borrowers' chief financial officer or Controller/Principal Accounting Officer, substantially in the form set forth in EXHIBIT E, completed with appropriate insertions and attachments for the purpose of having such certificate disclose the matters certified therein and the method of computation thereof. "Business" means the business of providing subscriber or customer management services, billing and statement mailing services, management reporting, live- voice operator tele-marketing services, Cableperks and billing statement inserts, refund check processing, pay-per-view itemization, insert printing, decision support services, VIP services and other similar services for businesses in various industries and developing and licensing related software to multiple cable system operators, direct broadcast satellite television operators, cable programming providers, video dial tone providers, telephony and telephone system operators, on-line service providers, utility providers, insurance companies, financial services providers and businesses in other industries. 5 "Business Day" means any day other than a Saturday, Sunday or other day on which banking institutions in the States of California, Colorado, Nebraska, Illinois or New York are authorized or required by law or other governmental action to close, except that if any determination of a "Business Day" shall relate to a LIBOR Loan, the term "Business Day" shall mean a day on which dealings are carried on in the London interbank market. "Bytel" means Bytel Limited, a corporation organized under the laws of England, and a wholly-owned subsidiary of Holdings. "Capital Expenditures" means all payments which are required to be capitalized under GAAP for (a) fixed assets or improvements, replacements, substitutions or additions thereto that have a useful life of more than one (1) year and (b) software development costs and costs to improve intangible assets. "Capital Lease" means, as to any Person, any lease of any Property by such Person as lessee that is classified and accounted for as a "capital lease" on the balance sheet of such Person prepared in accordance with GAAP. "Capital Lease Obligation" means, with respect to any Capital Lease, the amount of the obligation of the lessee thereunder that, in accordance with GAAP, would appear as a liability on a balance sheet of such Person in respect of such Capital Lease or otherwise be disclosed in a note to such balance sheet. "Cash Equivalents" means: (a) securities issued or unconditionally guaranteed or insured by the United States government or any agency or any state thereof and backed by the full faith and credit of the United States or such state having maturities of not more than six (6) months from the date of acquisition; (b) certificates of deposit, time deposits, Eurodollar time deposits, repurchase agreements, reverse repurchase agreements, or bankers' acceptances, having in each case a tenor of not more than six months, issued by any Lender, or by any nationally or state chartered commercial bank or any branch or agency of a foreign bank licensed to conduct business in the United States having combined capital and surplus of not less than $100,000,000 and whose short-term securities are rated at least A-1 by Standard & Poor's Corporation and P-1 by Moody's Investors Service, Inc.; and (c) commercial paper of an issuer rated at least A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors Service Inc. and having a tenor of not more than six (6) months. "Chandler Road Property" means all of CSG's right, title and interest in and to the real property located at 14301 Chandler Road, Omaha, Nebraska, leased by CSG from Nebco, Inc., 6 including all improvements located on such property and all easements and other rights appurtenant to such property. "Change of Control" means the occurrence after the date of this Agreement of: (i) any Person, or two or more Persons acting in concert, acquiring beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of either of the Borrowers (or other securities convertible into such securities) representing greater than fifty percent (50.0%) of the combined voting power of all securities of such Borrower entitled to vote in the election of directors; (ii) any Person, or two or more Persons acting in concert, acquiring by contract or otherwise, or entering into a contract or arrangement which, upon consummation, will result in its or their acquisition of, or control over, securities of either of the Borrowers (or other securities convertible into such securities) representing greater than fifty percent (50.0)% of the combined voting power of all securities of such Borrower entitled to vote in the election of directors; or (iii) during any twelve (12) consecutive calendar months, individuals who were directors of either of the Borrowers on the first day of such period shall cease to constitute a majority of the board of directors of such Borrower unless their successors are elected by a majority of the members of the board of directors of such Borrower who were members of such board of directors as of the first day of such period or whose election as a member of such board of directors was previously so approved. "Charges" means all federal, state, county, city, municipal, local, foreign or other governmental taxes, levies, assessments, charges or claims, in each case then due and payable, upon or relating to (a) the Collateral, (b) the Loans, (c) either of the Borrowers' employees, payroll, income or gross receipts, (d) either of the Borrowers' ownership or use of any of its Properties or assets or (e) any other aspect of the Borrowers' respective businesses. "Code" means the Internal Revenue Code of 1986, as amended, the Treasury Regulations adopted thereunder and the Treasury Regulations proposed thereunder (to the extent the Agent, at its sole discretion, reasonably determines that such proposed regulations set forth the regulations that apply in the circumstances). "Collateral" means all Property and interests in Property, and all proceeds thereof, now owned or hereafter acquired by either of the Borrowers or their respective Subsidiaries in or upon which a Lien now or hereafter exists in favor of the Lenders or the Agent, whether under this Agreement or under any other document executed by any such Persons and delivered to the Agent or the Lenders. "Collateral Assignment of Rights (SUMMITrak Purchase Agreement)" means the Collateral Assignment of Rights Under Asset Purchase Agreement dated as of September 18, 1997, executed by each of CSG and Holdings in favor of the Agent, and acknowledged by each of TCI SUMMITrak, TCI SUMMITRAK Texas and TCI Ventures, pursuant to which Holdings assigns to the Agent a security interest in all of its rights under the SUMMITrak Purchase Agreement. 7 "Collateral Assignment of Rights (TCI Services Agreement)" means the Collateral Assignment of Rights Under Restated and Amended CSG Master Subscriber Management System Agreement dated as of September 18, 1997, executed by CSG in favor of the Agent, and acknowledged by TCI Cable Management, pursuant to which CSG assigns to the Agent a security interest in all of CSG's rights under the TCI Services Agreement. "Collateral Information Certificate" means the Collateral Information Certificate dated the date of this Agreement, duly executed by each of the Borrowers and addressed to the Agent, and all final schedules, exhibits and attachments thereto, and all copies of agreements and other information required to be delivered to the Agent pursuant thereto. "Collateral Documents" means, collectively, (a) the Leasehold Deeds of Trust, the Security Agreement, the separate Grants of IP Security Interests, the Financing Statements and all other agreements, assignments, documents and instruments from time to time executed and delivered by CSG granting, assigning, transferring or otherwise evidencing or relating to any Lien granted, assigned or transferred to the Agent or any Lender pursuant to or in connection with the transactions contemplated by this Agreement, and (b) any amendments, supplements, modifications, renewals, restatements, replacements, consolidations, substitutions and extensions of any of the foregoing. "Commitment Percentage" means, as to any Lender, the percentage equivalent of such Lender's Term Loan Commitment or Revolving Commitment divided by the Aggregate Term Loan Commitment or Aggregate Revolving Commitment, as applicable. "Commitment Fee Percentage" has the meaning set forth in SECTION 2.9. "Commitments" means, for each Lender, its Term Loan Commitment and its Revolving Commitment, if any. "Compliance Certificate" means a certificate signed by each of the Borrowers' chief financial officer or Controller/Principal Accounting Officer, substantially in the form set forth in EXHIBIT D, with such changes therein as the Agent from time to time may reasonably request for the purpose of having such certificate disclose the matters certified therein and the method of computation thereof. "Contingent Earn-Out Payments" means any payment made or required to be made by either of the Borrowers to any of the TCI Selling Entities pursuant to Sections 3(a)(ii) and 3(a)(iii) of the SUMMITrak Purchase Agreement. "Contingent Obligation" means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend, letter of credit or other obligation of another, including any such obligation directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business), co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable, including any such obligation for which that 8 Person is in effect liable through any agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such primary obligations or any property constituting direct or indirect security therefor, or (b) to advance or provide funds (i) for the payment or discharge of any such primary obligation (whether in the form of loans, advances, capital stock purchases, capital contributions or otherwise), or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, or (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (d) otherwise to assure or hold harmless the holder of any such primary obligation against loss in respect thereof, or (e) to make payment for any products, materials or supplies or for any transportation, services or lease regardless of the non-delivery or non-furnishing thereof, in any such case if the purpose or intent of such agreement is to provide assurance that such obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guaranty or other support arrangement. "Continuation Date" means any date on which the Borrowers elect to continue a LIBOR Loan into another Interest Period. "Conversion Date" means any date on which the Borrowers elect to convert a Base Rate Loan to a LIBOR Loan or a LIBOR Loan to a Base Rate Loan. "Copyrights" means all copyrights, whether registered or unregistered, held pursuant to the laws of the United States of any state thereof or of any other country, including all registrations, applications and recordings in respect thereof in the federal Copyright Office or with any other Governmental Authority. "CSG" has the meaning set forth in the PREAMBLE. "CSG Employee Stock Purchase Plan" means the CSG Employee Stock Purchase Plan adopted by the Board of Directors of Holdings on February 14, 1995. "Customer Services Agreement" means any agreement entered into by CSG with any Person, pursuant to which CSG renders services or sells, leases or licenses its products or property, in either case related to the Business. "Customer Services Agreement Termination" means the exercise by any Customer Services Client of any right contained in such Customer Services Client's Customer Services Agreement to terminate such Customer Services Agreement prior to its stated expiration date. 9 "Customer Services Agreement Termination Proceeds" means all proceeds obtained by either of the Borrowers, including early termination fees, any minimum payments, liquidated damages or other amounts (net of deconversion costs) upon or with respect to the occurrence of a Customer Services Agreement Termination. "Customer Services Client" means any Person who has entered into a Customer Services Agreement. "Default" means any event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default. "Designated Deposit Account" means deposit account number 1155026349 maintained by CSG with Norwest Bank Nebraska, N.A. or such other deposit account maintained at the same or a different depository institution as both of the Borrowers from time to time shall designate by written notice to the Agent, which designation shall be subject to the Agent's prior written approval. "Designation of Responsible Persons (CSG)" means a Designation of Responsible Persons, executed by the chief financial officer of CSG, substantially in the form of EXHIBIT G.1, identifying the officers of CSG having authority to request, convert or continue Loans hereunder. "Designation of Responsible Persons (Holdings)" means a Designation of Responsible Persons, executed by the chief financial officer of Holdings, substantially in the form of EXHIBIT G.2, identifying the officers of Holdings having authority to request, convert or continue Loans hereunder. "Disclosure Schedule" means SCHEDULE 2. "Disposition" means the sale, lease, conveyance or other disposition by either of the Borrowers of any of their respective Property or other assets in a single transaction or related series of transactions, other than sales of inventory in the Ordinary Course of Business. "Dollars", "dollars" and "$" each means lawful money of the United States of America. "Domestic Lending Office" means, with respect to each Lender, the office of that Lender designated as such in the signature pages hereto or such other office of the Lender as it from time to time may specify to the Borrowers and the Agent. "Due Inquiry" means any and all inquiry, investigation and analysis which a prudent Person would undertake and complete with diligence with the intent of coming to an understanding appropriate to the importance of the subject to which the inquiry relates. "EBITDA" means, as calculated on a consolidated basis for Holdings and its Subsidiaries for any period as of any date of determination, the sum of (a) Net Income, plus (b) all amounts 10 treated as expenses for depreciation and the periodic or accelerated non-cash amortization of intangibles of any kind to the extent included in the determination of Net Income, plus (c) all accrued taxes on or measured by income to the extent included in the determination of Net Income, plus (d) Net Interest Expense to the extent included in the determination of Net Income, plus (e) acquired research and development efforts which are expensed immediately following the acquisition to the extent included in the determination of Net Income, plus (f) all charges to Net Income classified as extraordinary items or discontinued operations, and the cumulative effect of change in accounting principles, each in accordance with GAAP, to the extent included in the determination of Net Income, plus (g) non-cash amortization and other expense related to Stock-based compensation minus (h) all additions to Net Income classified as extraordinary items, or discontinued operations, and the cumulative effect of change in accounting principles, each in accordance with GAAP, to the extent included in the determination of Net Income. "Eligible Accounts" means, at any time, the aggregate of the Borrowers' Accounts, excluding, however: (a) all Accounts in respect of which full payment has not been received within ninety (90) days of the invoice date; (b) all Accounts as to which the goods, merchandise or other personal property or the rendering of services has not been fully and completely delivered or performed; (c) all Accounts against which the account debtor or any other Person obligated to make payment thereon asserts any defense, offset, counterclaim or other right to avoid or reduce the liability represented by such Accounts; (d) all Accounts as to which the account debtor or other Person obligated to make payment thereon is insolvent, subject to bankruptcy or receivership proceedings or has made an assignment for the benefit of creditors or whose credit standing is unacceptable to the Agent and the Agent has so notified the Borrowers; (e) all Accounts in which an Affiliate of either of the Borrowers is the account debtor; (f) Accounts for any account debtor to the extent that Accounts for such account debtor exceed thirty percent (30.0%) of the aggregate of the Borrowers' total Accounts; (g) all Accounts of any Governmental Authority or foreign account debtor unless the Agent, on behalf of the Lenders, has received a Lien in and to such Accounts which is perfected; (h) all Accounts of an account debtor in the event that payment in full has not been received within 120 days of the invoice date for twenty-five percent (25.0%) or more of the Accounts of such account debtor; 11 (i) any Account for which any portion of the payment thereof is due more than sixty (60) days after the invoice date; and (j) any Account which the Agent in its reasonable discretion shall deem not to qualify as an Eligible Account. "Eligible Assignee" means (a) a commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of at least $100,000,000; (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the "OECD"), or a political subdivision of any such country, and having a combined capital and surplus of at least $100,000,000; provided, however, that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD or the Cayman Islands; (c) the central bank of any country which is a member of the OECD; (d) a finance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and having a combined capital and surplus of $100,000,000; (e) an insurance company organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of $100,000,000; (f) any Lender party to this Agreement; (g) any Lender Affiliate; and (h) any other Person approved by the Agent and the Borrowers, such approval not to be unreasonably withheld; provided, however, that an Affiliate of the Borrowers shall not qualify as an Eligible Assignee. "Employee Benefit Plan" means any Pension Plan and any employee welfare benefit plan, as defined in Section 3(1) of ERISA, that is maintained for the employees of any Person or any ERISA Affiliate of such Person. "Environmental Indemnity" means the Environmental Indemnity dated as of September 18, 1997, executed and delivered by each of the Borrowers in favor of and to each of the Lenders and the Agent. "ERISA" means the Employee Retirement Income Security Act of 1974. "ERISA Affiliate" means, as applied to any Person, any trade or business (whether or not incorporated) which is a member of a group of which that Person is a member and which is under common control within the meaning of the regulations promulgated under Section 414 of the Code. "Eurodollar Reserve Percentage" means the reserve percentage (expressed as a decimal, rounded upward to the nearest 1/100th of one percent (0.01%)) in effect on the date LIBOR for such Interest Period is determined (whether or not applicable to any Lender) under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities") having a term comparable to such Interest Period. 12 "Event of Default" means any of the events or circumstances set forth in SECTION 10.1. "Event of Loss" means, with respect to any Property having a net book value in excess of $2,000,000, any of the following: (a) any material loss, destruction or damage of such Property or (b) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such Property, or confiscation of such Property or the requisition of the use of such Property. "Excess Cash Flow" means, as calculated for the Fiscal Quarter ending December 31, 1997 and annually thereafter as of the last day of each Fiscal Year, an amount equal to (a) Operating Cash Flow minus (b) Total Debt Service. "Excess Cash Flow Percentage" means, with respect to the Mandatory Prepayment of Excess Cash Flow required to be made with respect to any Fiscal Year as set forth in SUBSECTION 2.8(a), fifty percent (50.0%), unless the Leverage Ratio as measured as of the last day of such Fiscal Year based on the audited financial statements for such Fiscal Year delivered to the Lenders pursuant to SUBSECTION 7.1(b) shall be less than 1.50:1.00, in which event and with respect to the Mandatory Prepayment of Excess Cash Flow to be made for such Fiscal Year only, the Excess Cash Flow Percentage shall mean zero percent (0.00%). "FDC" means First Data Corporation, a Delaware corporation. "FDC Services Agreement" means the Amended and Restated Service Agreement dated as of December 31, 1996, between FDT and CSG, and all final schedules, exhibits and attachments thereto, as amended, modified, supplemented or restated from time to time. "FDT" means First Data Technologies, Inc., a Delaware corporation and a wholly-owned Subsidiary of FDC. "Federal Funds Rate" means, for any period, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Federal Reserve Board (including any such successor, "H.15(519)") for such day opposite the caption "Federal Funds (Effective)." If on any relevant day such rate is not yet published in H.15(519), the rate for such day will be the rate set forth in the daily statistical release designated as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any successor publication, published by the Federal Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m. Quotation") for such day under the caption "Federal Funds Effective Rate." If on any relevant day the appropriate rate for such previous day is not yet published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be the arithmetic mean of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m., New York Time, on that day by each of three leading brokers of Federal funds transactions in New York City selected by the Agent. "Federal Reserve Board" means the Board of Governors of the Federal Reserve System or any successor thereto. 13 "Financing Statements" means the UCC-1 financing statements, duly executed by CSG, as debtor, naming the Agent as secured party and duly filed with the filing offices of the Governmental Authorities required by the Agent. "Fiscal Quarter" means each fiscal quarter of Holdings ending on each March 31, June 30, September 30 and December 31, unless quarters ending on different dates are consented to in writing in advance by the Agent. "Fiscal Year" means each fiscal year of Holdings ending on each December 31, unless a fiscal year ending on a different date is consented to in writing in advance by the Agent. "Fixed Charge Coverage Ratio" means, as calculated quarterly as of the last day of each Fiscal Quarter on a rolling four (4) quarter basis, the ratio of (a) an amount equal to (i) Operating Cash Flow plus (ii) the SUMMITrak/Phoenix Capex Adjustment plus (iii) the SUMMITrak/Phoenix Expense Adjustment to (b) Fixed Charges; provided, however, that the Fixed Charge Coverage Ratio for (A) the Fiscal Quarter ended December 31, 1997 shall be calculated solely in respect of such Fiscal Quarter; (B) the Fiscal Quarter ended March 31, 1998 shall be calculated solely in respect of the two Fiscal Quarters ended December 31, 1997 and March 31, 1998; and (C) the Fiscal Quarter ended June 30, 1998 shall be calculated solely in respect of the three Fiscal Quarters ended December 31, 1997, March 31, 1998 and June 30, 1998. "Fixed Charges" means, as calculated for Holdings and its Subsidiaries for any period as of any date of determination, the sum of (a) Net Interest Expense, plus (b) all taxes on or measured by income actually paid, plus (c) scheduled amortization of Funded Debt, determined on an historical basis (regardless of whether such amounts were actually paid), plus (d) dividends paid by Holdings pursuant to SECTION 8.9. "Form 1001" has the meaning set forth in SUBSECTION 3.1(g). "Form 4224" has the meaning set forth in SUBSECTION 3.1(g). "Funded Debt" means, for Holdings and its Subsidiaries as of any date of determination, the total amount of all interest bearing obligations (including all issued and undrawn letters of credit), which obligations shall include the principal amount outstanding under all Loans advanced by the Lenders hereunder, but shall specifically exclude Capital Lease Obligations. "Funding Date" means with respect to any proposed Borrowing hereunder, the date funds are advanced to the Borrowers for any Loan. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment 14 of the accounting profession, which are applicable to the circumstances as of the date of determination. "Governmental Authority" means (a) any federal, state, county, municipal or foreign government, or political subdivision thereof, (b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality or public body, (c) any court or administrative tribunal or (d) with respect to any Person, any arbitration tribunal or other non-governmental authority to whose jurisdiction that Person has consented. "Grants of IP Security Interests" means each of the (a) Grant of Security Interest (Patents and Patent Applications), dated September 18, 1997, executed by CSG and duly filed with the federal Patent and Trademark Office, (b) Grant of Security Interest (Trademarks, Service Marks and Trade Names), dated September 18, 1997, executed by CSG and duly filed with the federal Patent and Trademark Office and (c) Grant of Security Interest (Copyrights), dated September 18, 1997, executed by CSG and duly filed with the federal Copyright Office, in each case with respect to the Liens granted to the Agent in the Security Agreement. "Gross Interest Expense" means, as calculated on a consolidated basis for Holdings and its Subsidiaries for any period as at any date of determination, cash interest expense for such period (including all commissions, discounts, fees and other charges under letters of credit and similar instruments and under any Rate Contract) classified and accounted for in accordance with GAAP. "Holdings" has the meaning set forth in the PREAMBLE. "Holdings Collateral Documents" means, collectively, the Holdings Security Agreement, the Holdings Pledge Agreement, the Holdings Financing Statements and each other agreement, assignment, document or instrument executed and delivered by Holdings granting, assigning or transferring or otherwise evidencing or relating to a Lien to or in favor of the Agent or any Lender. "Holdings Financing Statements" means the UCC-1 financing statements duly executed by Holdings, as debtor, naming the Agent as secured party and duly filed with the filing offices of the Governmental Authorities required by the Agent. "Holdings Pledge Agreement" means the Stock Pledge Agreement dated as of September 18, 1997, executed by Holdings in favor of the Agent. "Holdings Security Agreement" means the Security Agreement dated as of September 18, 1997, by and between Holdings and the Agent. "Indebtedness" means, as to any Person, (a) all indebtedness of such Person for borrowed money, including all amounts outstanding under this Agreement and any of the other Loan Documents, (b) all Capital Leases of such Person, (c) to the extent of the outstanding Indebtedness thereunder, all obligations of such Person that are evidenced by a promissory note 15 or other instrument representing an extension of credit to such Person, whether or not for borrowed money, (d) all obligations of such Person for the deferred purchase price of Property or services (other than trade or other accounts payable in the ordinary course of business in accordance with customary industry terms and other than the Contingent Earn-Out Payments), (e) all obligations of such Person of the nature described in clauses (a), (b), (c) or (d), above, and not otherwise included therein that are secured by a Lien on assets of such Person, whether or not that Person has assumed such obligation or whether or not such obligation is non-recourse to the credit of such Person, but only to the extent of the fair market value of the assets so subject to the Lien, (f) all obligations of such Person arising under acceptance facilities or under facilities for the discount of accounts receivable of such Person, (g) all obligations of such Person to reimburse the issuer of any letter of credit issued for the account of such Person upon which a draw has been made, (h) all obligations of such Person to a counterparty under any Rate Contract and (i) all Contingent Obligations of such Person. "Indemnified Matters" has the meaning set forth in SECTION 12.5. "Indemnitees" has the meaning set forth in SECTION 12.5. "Insolvency Proceeding" means (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors, in each of case (a) and (b) undertaken under federal, state or foreign law, including the Bankruptcy Code. "Intellectual Property" means all Copyrights, Trademarks, Patents, trade secrets, customer lists, proprietary or confidential information, inventions (whether or not patented or patentable), technical information, procedures, designs, knowledge, know-how, software, databases, data, skill, expertise, recipes, experience, processes, models, drawings, materials and records. "IntelliTEK" means IntelliTEK Computer Corporation, a Delaware corporation and a wholly-owned Subsidiary of CSG. "Interest Coverage Ratio" means, as calculated quarterly as of the last day of each Fiscal Quarter on a rolling four (4) Fiscal Quarter basis, the ratio of (a) an amount equal to (i) EBITDA plus (ii) the SUMMITrak/Phoenix Expense Adjustment to (b) Net Interest Expense; provided, however, that the Interest Coverage Ratio for (A) the Fiscal Quarter ended December 31, 1997 shall be calculated solely in respect of such Fiscal Quarter; (B) the Fiscal Quarter ended March 31, 1998 shall be calculated solely in respect of the two Fiscal Quarters ended December 31, 1997 and March 31, 1998; and (C) the Fiscal Quarter ended June 30, 1998 shall be calculated solely in respect of the three Fiscal Quarters ended December 31, 1997, March 31, 1998 and June 30, 1998. 16 "Interest Differential" means, with respect to any prepayment of a LIBOR Loan on a day other than an Interest Payment Date on which such LIBOR Loan matures, the difference between (a) the per annum interest rate payable with respect to such LIBOR Loan as of the date of the prepayment and (b) the Adjusted LIBOR on, or as near as practicable to, the date of the prepayment for a LIBOR Loan commencing on such date and ending on the last day of the applicable Interest Period. The determination of the Interest Differential by the Agent shall be conclusive in the absence of manifest error. "Interest Payment Date" means, with respect to any LIBOR Loan, the last day of each Interest Period applicable to such Loan and, with respect to Base Rate Loans, the last Business Day of each Fiscal Quarter and each date a Base Rate Loan is converted into a LIBOR Loan; provided, however, that if any Interest Period for a LIBOR Loan exceeds three (3) months, interest shall also be paid on the date which falls three (3) months after the beginning of such Interest Period. "Interest Period" means, as to any LIBOR Loan, the period commencing on the date of such LIBOR Loan and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is one (1), two (2), three (3) or six (6) months thereafter, in each case as the Borrowers may elect; provided, however, that (a) no Interest Period with respect to any LIBOR Term Loan shall end later than the Term Loan Maturity Date, (b) no Interest Period with respect to any LIBOR Revolving Loan shall end later than the Revolving Credit Maturity Date, (c) if an Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the immediately preceding Business Day, and (d) interest shall accrue from and including the first Business Day of an Interest Period to but excluding the last Business Day of such Interest Period. "Interest Rate Determination Date" means each date for calculating the LIBOR for purposes of determining the interest rate in respect of an Interest Period. The Interest Rate Determination Date shall be the second Business Day prior to the first day of the related Interest Period for such LIBOR Loan. "Investment" means, when used in connection with any Person, any investment by or of that Person, whether by means of purchase or other acquisition of securities of any other Person or by means of loan, advance, capital contribution, guaranty or other debt or equity participation or interest, or otherwise, in any other Person, including any partnership, limited liability company or joint venture interests of such Person in any other Person. The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity thereon (and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of Property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such Property. 17 "Investment Company Act" means the Investment Company Act of 1940, as amended (15 U.S.C. (S) 80a-1 et seq.). "IRS" means the Internal Revenue Service and any successor thereto. "Leasehold Deeds of Trust" means each of the (a) Leasehold Deed of Trust, Assignment of Leases and Rents and Fixture Filing dated September 18, 1997, executed by CSG, as trustor, to Transamerica Title Insurance Company, as trustee, for the beneficial interest of the Agent, and caused to be recorded in the Mortgage Records of the County of Douglas, Nebraska, covering all of CSG's right, title and interest in the North Park (Building 6) Property, and (b) Leasehold Deed of Trust, Assignment of Leases and Rents and Fixture Filing dated September 18, 1997, executed by CSG, as trustor, to Transamerica Title Insurance Company, as trustee, for the beneficial interest of the Agent, and caused to be recorded in the Mortgage Records of the County of Sarpy, Nebraska, covering all of CSG's right, title and interest in the Chandler Road Property. "Lender Affiliate" means a Person engaged primarily in the business of commercial banking and that is an Affiliate of a Lender or of a Person of which a Lender is an Affiliate. "Lenders" means the financial institutions which have executed signature pages to this Agreement and such other Assignee financial institutions as shall hereafter execute and deliver an Assignment and Acceptance with respect to all or any portion of the Commitments and the Loans advanced and maintained pursuant to the Commitments, in each case pursuant to and in accordance with SECTION 12.11. "Lending Office" means, with respect to any Lender, the office or offices of the Lender specified as its "Domestic Lending Office" opposite its name on the applicable signature page hereto, or such other office or offices of the Lender of which it may from time to time notify the Borrowers and the Agent. "Leverage Ratio" means, as calculated quarterly as of the last day of each Fiscal Quarter, the ratio of (a) Total Indebtedness as of the last day of such Fiscal Quarter to (b) an amount computed on a rolling four (4) Fiscal Quarter basis equal to (i) EBITDA plus (ii) the SUMMITrak/Phoenix Expense Adjustment. "LIBOR" means, with respect to any Loan to be made, continued as or converted into a LIBOR Loan, the London Inter-Bank Offered Rate (determined by the Agent), rounded upward to the nearest 1/16th of one percent (0.0625%), at which Dollar deposits are offered to Banque Paribas by major banks in the London interbank market at or about 11:00 a.m., London time, on the Interest Rate Determination Date with respect to such Loan in an aggregate amount approximately equal to the amount of such Loan and for a period of time comparable to the number of days in the applicable Interest Period. The determination of LIBOR by the Agent shall be conclusive in the absence of manifest error. "LIBOR Loan" means a Loan that bears interest based on Adjusted LIBOR. 18 "LIBOR Revolving Loan" has the meaning set forth in SUBSECTION 2.1.2(e). "LIBOR Term Loan" has the meaning set forth in SUBSECTION 2.1.1(a). "Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, levy, lien or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, against any Property, including any agreement to grant any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature of a security interest, and the filing of or agreement to file or deliver any financing statement (other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under the UCC or comparable law of any jurisdiction. "Loan" means an extension of credit made by a Lender pursuant to ARTICLE II and may be a Base Rate Loan or a LIBOR Loan, depending upon the context. "Loan Documents" means this Agreement, the Notes, the Collateral Documents, the Environmental Indemnity, the Holdings Collateral Documents, the Paribas Side Letter and any and all other agreements (including any Rate Contract), documents and instruments from time to time executed and delivered by or on behalf or in support of either of the Borrowers to the Agent, any Lender or their respective authorized designee evidencing or otherwise relating to the Loans as the same may from time to time be amended, modified, supplemented, extended or renewed. "Mandatory Prepayment" means any mandatory prepayment of the principal amount of Term Loans made pursuant to SECTION 2.8. "Margin Regulations" means, collectively, Regulations G, T, U and X adopted by the Federal Reserve Board (12 C.F.R. Parts 207, 220, 221 and 224, respectively). "Material Adverse Change" means any set of circumstances or events which (a) has any material adverse effect whatsoever upon the validity or enforceability of any Loan Document, (b) is material and adverse to the condition (financial or otherwise) or business operations of CSG or of the Borrowers taken as a whole, (c) materially impairs the ability of CSG or the Borrowers collectively to perform the Obligations or (d) materially impairs the ability of the Agent or any Lender to enforce any of its legal remedies pursuant to the Loan Documents. "Maximum Availability" has the meaning set forth in SECTION 2.1.2. "Multiemployer Plan" shall mean a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA, and to which any Person or any Affiliate of such Person is making, or is obligated to make, contributions or has made, or been obligated to make, contributions within the preceding five (5) years. "Net Income" means, as calculated on a consolidated basis for Holdings and its Subsidiaries for any period as at any date of determination, the net income (or loss) from 19 continuing operations, determined in accordance with GAAP, of Holdings and its Subsidiaries for such period taken as a single accounting period. "Net Interest Expense" means, as calculated on a consolidated basis for Holdings and its Subsidiaries for any period as at any date of determination, (a) Gross Interest Expense, less (b) interest income for that period and Rate Contract payments received. "Net Issuance Proceeds" means, in respect of any issuance of debt or equity, cash proceeds and non-cash proceeds received or receivable in connection therewith, net of reasonable out-of-pocket costs and expenses paid or incurred in connection therewith in favor of any Person not an Affiliate of either of the Borrowers, except as are paid or payable to any such Affiliate upon fair and reasonable terms that are duly approved by the disinterested members of such Borrower's board of directors, fully disclosed to the Agent and no less favorable to such Borrower than would obtain in a comparable arm's length transaction with a Person not an Affiliate of such Borrower, such costs and expenses to be consistent with standard investment bank practices for similar issuances; provided, however, that Net Issuance Proceeds shall not include any cash proceeds received by Holdings (a) upon the exercise, in whole or in part, from time to time, of the common stock purchase warrants issued by Holdings pursuant to Section 3(a) of the SUMMITrak Purchase Agreement, (b) upon the exercise of employee Stock options granted or from restricted Stock awards made under the 1995 Incentive Stock Plan, the 1996 Stock Incentive Plan, the Stock Option Plan for Non-Employee Directors, and any future employee or directors Stock option or stock incentive plan of Holdings, or (c) from Stock purchases made pursuant to the 1996 Employee Stock Purchase Plan of Holdings. "Net Proceeds" means proceeds in cash, checks or other cash equivalent financial instruments (including Cash Equivalents) as and when received by the Person making a Disposition, net of (a) the direct costs relating to such Disposition excluding amounts payable to either of the Borrowers or any Affiliate of such Borrower, except as are paid or payable to any such Affiliate upon fair and reasonable terms that are duly approved by the disinterested members of such Borrower's board of directors, fully disclosed to the Agent and no less favorable to such Borrower than would obtain in a comparable arm's length transaction with a Person not an Affiliate of such Borrower, (b) sale, use or other transaction taxes paid or payable as a result thereof and (c) amounts required to be applied to repay principal, interest and prepayment premiums and penalties on Indebtedness secured by a Permitted Lien on the asset which is the subject of such Disposition. "Net Proceeds" shall also include proceeds paid on account of any Event of Loss, net of (i) all money actually applied to repair or reconstruct the damaged property or property affected by the condemnation or taking, (ii) all of the costs and expenses reasonably incurred in connection with the collection of such proceeds, award or other payments and (iii) any amounts retained by or paid to parties having superior rights to such proceeds, awards or other payments. "North Park (Building 6) Property" means all of CSG's right, title and interest in and to the real property located at North Park, Second Addition, Building 6, Omaha, Nebraska, leased by CSG from NPX Partnership, a Nebraska general partnership, including all improvements located on such property and all easements and other rights appurtenant to such property. 20 "Note" means any Term Loan Note or Revolving Note, and any and all replacements, extensions, substitutions and renewals of any such promissory note. "Notice of Borrowing" means a notice given by the Borrowers to the Agent in accordance with SECTION 2.5, substantially in the form of EXHIBIT B, with appropriate insertions. "Notice of Conversion/Continuation" means a notice given by the Borrowers to the Agent in accordance with SECTION 2.6, substantially in the form of EXHIBIT C, with appropriate insertions. "Obligations" means all loans, advances, debts, liabilities and obligations for monetary amounts owing by the Borrowers, or either of them, to the Lenders or the Agent, whether due or to become due, matured or unmatured, liquidated or unliquidated, contingent or non-contingent, and all covenants and duties regarding such amounts, of any kind or nature, present or future, whether or not evidenced by any note, agreement or other instrument, arising under or in respect of any of the Loan Documents or under or in respect of any Rate Contract. This term includes all principal, interest (including interest that accrues after the commencement against either of the Borrowers of any action under the Bankruptcy Code), fees, including any and all arrangement fees, loan fees, commitment fees and agent fees and any and all other fees, expenses, costs or other sums (including Attorney Costs) chargeable to the Borrowers under any of the Loan Documents. "Operating Cash Flow" means, as calculated on a consolidated basis for Holdings and its Subsidiaries for any period as at any date of determination, (a) EBITDA, less (b) permitted Capital Expenditures actually made (as opposed to committed). "Operating Lease" means, with respect to any Person, any lease of any Property by such Person as lessee (including leases which may be terminated by the lessee at any time) that is or should be classified and accounted for as an "operating lease" on the balance sheets, or notes thereto, of such Person prepared in accordance with GAAP. "Operating Lease Obligations" means, with respect to any Operating Lease, the amount of the obligations of the lessee thereunder that, in accordance with GAAP, would appear on a balance sheet of such Person in respect of such Operating Lease or otherwise be disclosed in a note to such balance sheet. "Opinion of the Borrowers' Counsel" means the favorable written legal opinion of Abrahams, Kaslow & Cassman, special counsel to the Borrowers, addressed to the Lenders and the Agent. "Ordinary Course of Business" means, in respect of any transaction involving either of the Borrowers, the ordinary course of such Borrower's business, as conducted by such Borrower in accordance with past practice and undertaken by such Borrower in good faith and not for purposes of evading any covenant or restriction in any Loan Document. 21 "Organizational Documents" means, for any corporation, the certificate or articles of incorporation, the bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation, and all applicable resolutions of the board of directors (or any committee thereof) of such corporation. "Original Agreement" means the Amended and Restated Loan Agreement dated as of April 26, 1996, by and among CSG, certain lenders party thereto, and Banque Paribas as Agent for such lenders, as amended. "Originating Lender" has the meaning set forth in SUBSECTION 12.11(d). "Other Taxes" has the meaning specified in SUBSECTION 3.1(b). "Over Advance" has the meaning set forth in SUBSECTION 2.1.2(d). "Paribas Side Letter" means the side letter dated September 18, 1997, between the Borrowers and Banque Paribas. "Participant" has the meaning set forth in SUBSECTION 12.11(d). "Patents" means all letters patent of, or rights corresponding thereto in, the United States or any other county, all registrations and recordings thereof, and all applications for letters patent of, or rights corresponding thereto in, the United States or any other country, including registrations, recordings and applications in the federal Patent and Trademark Office or with any other Governmental Authority. "PBGC" means the Pension Benefit Guaranty Corporation and any successor thereto. "Pension Plan" means any employee pension benefit plan, as defined in Section 3(2) of ERISA, that is maintained for the employees of any Person or any ERISA Affiliate of such Person, other than a Multiemployer Plan. "Permitted Liens" has the meaning set forth in SECTION 8.1. "Permitted Title Exceptions" means, collectively, all matters listed as permitted exceptions to the Title Policies on Schedule B thereto. "Person" means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or Governmental Authority. "Property" means any interest in any kind of property or asset, whether real, personal or mixed, whether tangible or intangible. 22 "Public Utility Holding Company Act" means the Public Utility Holding Company Act of 1935, as amended (15 U.S.C. (S) 79 et seq.). "Rate Contract" means an interest rate or currency cap, swap or other agreement or arrangement entered into by a Person which agreement or arrangement hedges, caps or otherwise limits the exposure of such Person to fluctuations in interest or currency exchange rates. "Required Lenders" means at any time Lenders then holding at least fifty and one-tenth percent (50.1%) of the then aggregate unpaid principal amount of all Loans then outstanding or, if no Loans are then outstanding, Lenders then having at least fifty and one-tenth percent (50.1%) of the Aggregate Commitments. "Requirement of Law" means, as to any Person, any law (statutory or common), treaty, rule, regulation, guideline or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its Property or to which the Person or any of its Property is subject. "Responsible Person" means the Persons identified by CSG on the Designation of Responsible Persons (CSG) and the Persons identified by Holdings on the Designation of Responsible Persons (Holdings) as having authority on behalf of CSG or Holdings, as applicable, to request, convert or continue Loans hereunder. "Restricted Tax Payments" has the meaning set forth in SECTION 8.9. "Revolving Commitment" means, as to each Lender, the amount set forth on SCHEDULE 1.2 next to such Lender's name. "Revolving Credit Facility" means the Forty Million Dollar ($40,000,000) revolving credit facility described in SECTION 2.1.2 to be provided to the Borrowers by the Lenders having a Revolving Commitment according to each such Lender's Commitment Percentage. "Revolving Credit Maturity Date" means the fifth anniversary of the Closing Date. "Revolving Loan" means a Loan advanced to the Borrowers pursuant to SECTION 2.1.2 by the Lenders under their Revolving Commitments according to their respective Commitment Percentage, which Revolving Loan may be in the form of either a Base Rate Revolving Loan or a LIBOR Revolving Loan. "Revolving Note" means a promissory note dated September 18, 1997, executed by each of the Borrowers and payable to the order of each Lender in the stated principal amount of such Lender's Revolving Commitment, substantially in the form of EXHIBIT A.2. "SEC" means the Securities and Exchange Commission and any successor thereto. 23 "Security Agreement" means the Security Agreement dated as of September 18, 1997, executed by CSG and the Agent, for the benefit of the Lenders. "Solvent" means, as to any Person at any time, that (a) the fair value of the Property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(31) of the Bankruptcy Code and, in the alternative, for purposes of the California Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the Property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its Property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in a business or a transaction for which such Person's property would constitute unreasonably small capital. "Stock" means all shares, options, warrants, interests, participations or other equivalents (regardless of how designated) of or in a corporation or equivalent entity, whether voting or nonvoting, including common stock, preferred stock, or any other "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Securities Exchange Act of 1934, as amended). "Subsidiary" of a Person means any corporation, association, partnership, limited liability company, joint venture or other business entity of which more than fifty percent (50.0%) of the voting stock or other equity interests (in the case of Persons other than corporations), is owned or controlled directly or indirectly by the Person, or one or more of the Subsidiaries of the Person, or a combination thereof. "SUMMITrak Acquisition" means the Acquisition of the SUMMITrak Assets pursuant to the SUMMITrak Purchase Agreement. "SUMMITrak Acquisition Documents" means the SUMMITrak Purchase Agreement, together with all other agreements, documents and instruments executed and delivered in connection with the consummation of the SUMMITrak Acquisition, including all schedules, exhibits, attachments and supplements of any kind to any of the foregoing. "SUMMITrak Assets" has the meaning set forth in RECITAL A. "SUMMITrak/Phoenix Capex Adjustment" means an amount equal to the costs incurred by Holdings or its Subsidiaries after September 30, 1997 in connection with Holdings' or its Subsidiaries' investments in the SUMMITrak or Phoenix operations to the extent that such costs are capitalized in accordance with GAAP and to the extent that such costs, together with the SUMMITrak/Phoenix Expense Adjustment, shall not at any time exceed $15,000,000 in the aggregate. 24 "SUMMITrak/Phoenix Expense Adjustment" means an amount equal to the costs incurred by Holdings or its Subsidiaries after September 30, 1997 in connection with Holdings' or its Subsidiaries' investments in the SUMMITrak or Phoenix operations to the extent that such costs are expensed in accordance with GAAP and to the extent that such costs, together with the SUMMITrak/Phoenix Capex Adjustment, shall not at any time exceed $15,000,000 in the aggregate. "SUMMITrak Purchase Agreement" means the Asset Purchase Agreement dated as of August 10, 1997, between Holdings, on the one hand, and TCI Selling Entities, on the other hand, and all final schedules, exhibits and attachments thereto. "Taxes" has the meaning set forth in SUBSECTION 3.1(a). "TCI Cable Management" means TCI Cable Management Corporation, a Colorado corporation. "TCI Selling Entities" means TCI SUMMITRAK Texas, TCI SUMMITrak and TCI Technology Ventures, collectively. "TCI Services Agreement" means the Restated and Amended CSG Master Subscriber Management System Agreement dated as of August 10, 1997, between CSG and TCI Cable Management, and all final schedules, exhibits and attachments thereto. "TCI SUMMITrak" means TCI SUMMITrak, L.L.C., a Delaware limited liability company. "TCI SUMMITRAK Texas" means TCI SUMMITRAK of Texas, Inc., a Colorado corporation. "TCI Technology Ventures" means TCI Technology Ventures, Inc., a Delaware corporation. "Term Facility" means the One Hundred Fifty Million Dollar ($150,000,000) term facility described in SECTION 2.1.1 to be provided to the Borrowers by the Lenders having a Term Loan Commitment according to each such Lender's Commitment Percentage. "Term Loan" means a Loan advanced to the Borrowers pursuant to SECTION 2.1.1 by the Lenders under their Term Loan Commitments according to their respective Commitment Percentage, which Term Loan may be in the form of a Base Rate Term Loan or a LIBOR Term Loan. "Term Loan Commitment" means, as to each Lender, the amount set forth on SCHEDULE 1.1 next to such Lender's name. "Term Loan Maturity Date" means the fifth anniversary of the Closing Date. 25 "Term Loan Note" means a promissory note dated the Closing Date, executed by each of the Borrowers and payable to the order of each Lender in the original principal amount of such Lender's Term Loan Commitment, substantially in the form of EXHIBIT A.1. "Termination Event" means (a) a "reportable event" described in Section 4043 of ERISA and the regulations issued thereunder (other than a reportable event not subject to the provision for 30-day notice to the PBGC under such regulations), or (b) the withdrawal of either of the Borrowers or any of their ERISA Affiliates from a Pension Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination under Section 4041 of ERISA, or (d) the institution of proceedings to terminate a Pension Plan by the PBGC, or (e) any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan. "Title Company" means Commonwealth Land Title Company. "Total Debt Service" means, as calculated on a consolidated basis for Holdings and its Subsidiaries for any period as of any date of determination, the sum of (a) the net increase (or decrease) in working capital, plus (b) signing bonuses paid to any Customer Services Client in consideration of and as an inducement to such Person's entering into a Customer Services Agreement, plus (c) scheduled amortization of Funded Debt (regardless of whether such amounts were actually paid), plus (d) optional prepayments of principal on the Term Loans paid to the Lenders pursuant to SECTION 2.7, plus (e) taxes on or measured by income which were paid, plus (f) Net Interest Expense paid, plus (g) the principal component of Capital Lease Obligations paid, plus (h) Contingent Earn-Out Payments, plus (i) amounts paid by Holdings as permitted under SECTION 8.9. "Trademarks" means all trademarks, tradenames, corporate names, business names, trade styles, service marks, logos, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and any applications in connection therewith, including registrations, recordings and applications in the federal Patent and Trademark Office or with any other Governmental Authority. "Transferee" has the meaning specified in SUBSECTION 12.11(e). "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of California; provided, however, in the event that, by reason of mandatory provisions of law, any and all of the attachment, perfection or priority of the Lien of the Agent, for the benefit of the Lenders, in and to the Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of California, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provision. 26 Section 1.2 OTHER INTERPRETIVE PROVISIONS. (a) ACCOUNTING TERMS. Any accounting term used in this Agreement shall have, unless otherwise specifically provided herein, the meaning customarily given such term in accordance with GAAP, and all financial data required to be submitted by this Agreement shall be prepared and computed, unless otherwise specifically provided herein, in accordance with GAAP. That certain terms or computations are explicitly modified by the phrase "in accordance with GAAP" shall in no way be construed to limit the foregoing. In the event that GAAP changes during the term of this Agreement such that the covenants contained in ARTICLE IX would then be calculated in a different manner or with different components, (a) the parties hereto agree to amend this Agreement in such respects as are necessary to conform those covenants as criteria for evaluating the Borrowers' financial condition to substantially the same criteria as were effective prior to such change in GAAP and (b) the Borrowers shall be deemed to be in compliance with the covenants contained in the aforesaid subsections during the sixty (60) day period following any such change in GAAP if and to the extent that the Borrowers would have been in compliance therewith under GAAP as in effect immediately prior to such change. (b) OTHER TERMS. All other undefined terms contained in this Agreement shall, unless the context indicates otherwise, have the meanings provided for by the UCC to the extent the same are used or defined therein. The words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole, including the Attachments, Exhibits and Schedules attached to this Agreement, all of which are by this reference incorporated into this Agreement, and not to any particular provision of this Agreement. The term "including" is not limiting and means "including, without limitation," and "including but not limited to." The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced. The term "or" is disjunctive; the term "and" is conjunctive. The term "shall" is mandatory; the term "may" is permissive. Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, feminine and the neuter. (c) PERFORMANCE; TIME. Whenever any performance obligation hereunder (other than a payment obligation) shall be stated to be due or required to be satisfied on a day other than a Business Day, such performance shall be made or satisfied on the next succeeding Business Day. In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including"; the words "to" and "until" each mean "to but excluding", and the word "through" means "to and including." If any provision of this Agreement refers to any action taken or to be taken by any Person, or which such Person is prohibited from taking, such provision shall be interpreted to encompass any and all means, direct or indirect, of taking, or not taking, such action. (d) LAWS. References to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation. 27 (e) ROUNDING. Any financial ratios required to be maintained by Holdings pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed in this Agreement and rounding the result up or down to the nearest number (with a round-up if there is no nearest number) to the number of places by which such ratio is expressed in this Agreement. (f) SCHEDULES AND EXHIBITS. Any reference to an "Article," "Section," "Subsection," "Attachment," "Schedule" or "Exhibit" shall refer to the relevant Article, Section or Subsection of or Attachment, Schedule or Exhibit to this Agreement, unless specifically indicated to the contrary. ARTICLE II THE CREDITS Section 2.1 AMOUNTS AND TERMS OF COMMITMENTS. 2.1.1 TERM FACILITY. Upon the terms, subject to the conditions and in reliance upon the representations and warranties of the Borrowers set forth in this Agreement and in the other Loan Documents, each Lender having a Term Loan Commitment severally agrees to advance Loans of immediately available funds (each such Loan being a Term Loan) upon the satisfaction of all conditions precedent to the Closing set forth in SECTION 4.1 to the Borrowers in an aggregate principal amount equal to such Lender's Term Loan Commitment, as more fully set out in this SECTION 2.1.1. (a) GENERAL PROVISIONS RELATING TO TERM LOANS. Each Term Loan made by a Lender under the Term Facility shall, at the Borrowers' option in accordance with the terms of this Agreement, be either in the form of a Base Rate Loan or a LIBOR Loan (each such Loan being a "Base Rate Term Loan" or a "LIBOR Term Loan," as the case may be); provided that the Borrowers may not maintain LIBOR Term Loans outstanding at any one time in more than eight (8) separate Interest Periods. Notwithstanding anything to the contrary in this Agreement, until the thirty-first day after the Closing Date the Borrowers may only borrow and maintain Base Rate Term Loans. The Borrowers shall repay the principal amount of the Term Loans in the amounts and in the manner set forth in SUBSECTION 2.3(a) and pay interest accrued on the Term Loans at the rates and in the manner set forth in SECTION 2.4. The Borrowers may, at their option, prepay all or any portion of the Term Loans as set forth in SECTION 2.7. In addition, the Term Loans shall be subject to Mandatory Prepayments in accordance with SECTION 2.8. (b) PERMITTED USES OF TERM LOAN PROCEEDS. The Borrowers shall use the Term Loan proceeds only for the purpose of financing (i) the payment of a portion of the purchase price for the SUMMITrak Assets payable by CSG upon the closing of the SUMMITrak Acquisition, (ii) the payment of transaction costs related to the SUMMITrak Acquisition and this Agreement, (iii) the repayment of obligations owed by CSG under the Original Agreement, 28 including unpaid principal, accrued but unpaid interest, unpaid fees and other amounts owed in respect of the Original Agreement, (iv) the payment of costs related to product development and (v) working capital and other general corporate needs of the Borrowers. Once repaid, amounts under the Term Facility may not be re-borrowed. 2.1.2 REVOLVING CREDIT FACILITY. Upon the terms, subject to the conditions and in reliance upon the representations and warranties of the Borrowers set forth in this Agreement and in the other Loan Documents, each Lender having a Revolving Commitment severally agrees to make Loans of immediately available funds to the Borrowers (each such Loan being a Revolving Loan), on a revolving basis, from the Closing until the Business Day immediately preceding the Revolving Credit Maturity Date, in an aggregate principal amount not to exceed at any one time the lesser of (a) such Lender's Revolving Commitment or (b) an amount equal to such Lender's Commitment Percentage of the Borrowing Base (obtained by multiplying (1) the Borrowing Base by (2) such Lender's Commitment Percentage), as more fully set forth in this SECTION 2.1.2 (the lesser of (a) the Aggregate Revolving Commitment or (b) the Borrowing Base being the "Maximum Availability"). For the purpose of determining the amount of the Borrowing Base available at any one time, the amount available shall be the total amount of the Borrowing Base as set forth in the Borrowing Base Certificate delivered to the Agent pursuant to SUBSECTION 7.1(e). (a) LIMITATION ON EACH LENDER'S OBLIGATION. With respect to any Borrowing of Revolving Loans requested by the Borrowers pursuant to a complying Notice of Borrowing delivered to the Agent pursuant to SECTION 2.5, each Lender's obligation to advance funds in the form of Revolving Loans to the Borrowers shall be limited to an amount equal to the Lender's Commitment Percentage of such Borrowing (obtained by multiplying the Borrowing amount by the Lender's Commitment Percentage). (b) FUNDING OF REVOLVING LOANS TO THE AGENT. Following the Agent's receipt of a complying Notice of Borrowing and the Agent's determination that the conditions precedent to a requested Borrowing set forth in ARTICLE IV have been duly satisfied, the Agent shall promptly notify each Lender having a Revolving Commitment of (i) the amount of the requested Borrowing and such Lender's Commitment Percentage thereof and (ii) the requested Funding Date, which (1) if a LIBOR Loan is requested shall be no earlier than the second Business Day following the date on which the Agent so notifies such Lender and, (2) if a Base Rate Loan is requested shall be no earlier than the following Business Day. Not later than 11:00 a.m., San Francisco time, on the requested Funding Date, each Lender having a Revolving Commitment shall have advanced its Revolving Loan to the Agent at the Agent's Payment Office in immediately available funds. The Agent's determination that the conditions precedent to any Borrowing have been duly satisfied shall be conclusive and binding on all Lenders for purposes of determining when the Lenders shall be obligated to advance funds to the Agent; provided, however, that (A) no Lender shall have any liability to the Borrowers for the failure of such Lender to advance funds for any Loan unless and until each condition precedent to the applicable Borrowing has been duly satisfied or has been waived in writing by Required Lenders, and (B) the Borrowers shall have no right to enforce any obligation of a Lender to fund any Loan unless 29 and until each condition precedent to the applicable Borrowing has been duly satisfied or has been waived in writing by Required Lenders. (c) DISBURSEMENT OF REVOLVING LOANS TO THE BORROWERS. On the requested Funding Date, the Agent shall disburse in immediately available funds to the Borrowers' Designated Deposit Account an amount equal to the Revolving Loans advanced to the Agent's Payment Office with respect to such Borrowing. (d) OVER ADVANCES. If at any time and for any reason the aggregate principal amount of the Revolving Loans then outstanding shall exceed the Maximum Availability (the amount of such excess, if any, being an "Over Advance"), the Borrowers shall immediately repay the full amount of such Over Advance, together with all interest accrued thereon. (e) GENERAL PROVISIONS RELATING TO REVOLVING LOANS. Each Revolving Loan made by a Lender hereunder shall, at the Borrowers' option in accordance with the terms of this Agreement, be either in the form of a Base Rate Loan or a LIBOR Loan (each such Loan being a "Base Rate Revolving Loan" or a "LIBOR Revolving Loan," as the case may be). Notwithstanding anything to the contrary in this Agreement, until the thirty-first (31st) day after the Closing Date, the Borrowers may only borrow and maintain Base Rate Revolving Loans. The Borrowers shall repay the principal amount of the Revolving Loans in the amounts and in the manner set forth in SUBSECTION 2.3(b) and pay interest accrued on the Revolving Loans at the rates and in the manner set forth in SECTION 2.4. Amounts borrowed by the Borrowers under the Revolving Commitments may be repaid and, prior to the Revolving Credit Maturity Date and subject to the applicable terms and conditions precedent to Borrowings hereunder, reborrowed. (f) PERMITTED USES OF REVOLVING LOAN PROCEEDS. The Borrowers shall use the Revolving Loan proceeds only for the purposes of financing (i) the payment of a portion of the purchase price for the SUMMITrak Assets payable by CSG upon the closing of the SUMMITrak Acquisition, (ii) the payment from time to time of Contingent Earn-Out Payments, (iii) the repayment of obligations owed by CSG under the Original Agreement, including unpaid principal, accrued but unpaid interest, unpaid fees and other amounts owed in respect of the Original Agreement, (iv) ongoing costs in related to product development and (iv) working capital and other general corporate needs of the Borrowers. Section 2.2 NOTES. (a) TERM LOAN NOTES. The Term Loans made by each Lender shall be evidenced by Term Loan Notes executed by each of the Borrowers and made payable to the order of such Lender in the stated principal amount equal to its Term Loan Commitment. (b) REVOLVING LOAN NOTES. The Revolving Loans made by each Lender shall be evidenced by Revolving Loan Notes executed by each of the Borrowers and made payable to the order of such Lender in the stated principal amount equal to its Revolving Commitment. 30 (c) NOTATIONS IN THE LENDERS' BOOKS AND RECORDS. Each Lender shall make notations in its books and records regarding the date, amount and maturity of each Loan made by it and the amount of each repayment or prepayment of principal and payment of interest made by the Borrowers with respect to such Loan. Each Lender is irrevocably authorized by each of the Borrowers to endorse its Notes, and each Lender's record shall be conclusive absent manifest error; provided, however, that the failure of a Lender to make, or an error in making, such a notation with respect to any Loan shall not limit or otherwise affect the Obligations of each of the Borrowers hereunder or under any such Note to such Lender. Section 2.3 REPAYMENT OF PRINCIPAL AMOUNT OF LOANS. (a) REPAYMENT OF THE TERM LOANS. Subject to the terms of this Agreement relating to optioal prepayments and Mandatory Prepayments of Term Loans and the acceleration of maturities, the Borrowers shall, on a joint and several basis, repay the principal amount of the Term Loans over a period of nineteen (19) consecutive quarterly payment dates, in the amounts set forth below for the indicated periods, commencing December 31, 1997 and continuing thereafter on each March 31, June 30, September 30 and December 31 with the final principal repayment, together with all accrued and unpaid interest and other amounts chargeable to the Borrowers under or with respect to the Term Loan Facility being due and payable on the Term Loan Maturity Date, as follows: Principal Amount Quarterly Payment Dates of Each Installment ----------------------- ------------------- 1 - 2 $ 0 3 - 6 $ 2,500,000 7 - 10 $ 6,250,000 11 - 14 $ 8,750,000 15 - 18 $10,000,000 19 $20,000,000 Term Loan Maturity Date $20,000,000 (b) REPAYMENT OF REVOLVING LOANS. Subject to the terms of this Agreement relating to optional earlier repayments of Revolving Loans and the acceleration of maturities, the Borrowers shall, on a joint and several basis, repay the Lenders the entire outstanding principal amount of the Revolving Loans on the Revolving Credit Maturity Date. SECTION 2.4 PAYMENT OF INTEREST ON THE LOANS. (a) THE TERM LOANS. Subject to SUBSECTION 2.4(d), each Term Loan shall bear interest on the outstanding principal amount thereof from the date when made, continued or converted until paid in full at a rate per annum equal to the Base Rate or the Adjusted LIBOR, as the case may be, plus the Applicable Margin. 31 (b) REVOLVING LOANS. Subject to SUBSECTION 2.4(d), each Revolving Loan shall bear interest on the outstanding principal amount thereof from the date when made, continued or converted until paid in full at a rate per annum equal to the Base Rate or the Adjusted LIBOR, as the case may be, plus the Applicable Margin. (c) INTEREST PAYMENT DATES. Interest on each Loan shall be paid in arrears on each Interest Payment Date. Interest shall also be paid on the date of any prepayment of any Loans pursuant to this Agreement for the portion of the Loans so prepaid and upon payment (including prepayment) in full thereof. (d) INTEREST UPON EVENTS OF DEFAULT. Upon the occurrence of an Event of Default and so long as such Event of Default shall continue, including after acceleration (whether before or after entry of judgment), the Borrowers shall, at the option of Required Lenders, pay interest on the principal amount of each Loan then outstanding at a rate per annum which is determined by adding two percent (2.00%) to the Applicable Margin applicable to such Loan; provided, however, that if any continuing Event of Default is an Event of Default under either SUBSECTIONS 10.1(a) or (b) (relating to payment defaults), the Borrowers shall instead pay interest on the principal amount of each Loan then outstanding at a rate per annum which is determined by adding three percent (3.00%) to the Applicable Margin applicable to such Loan. Such rates of interest applicable following the occurrence and during the existence of an Event of Default are alternative, not cumulative, rates of interest. (e) LIMITATIONS ON INTEREST RATES. Notwithstanding any provision in this Agreement, the Notes or any of the other Loan Documents, the total liability for payments in the nature of interest shall not exceed the applicable limits imposed by any applicable federal or state interest rate laws. If any payments in the nature of interest, additional interest and other charges made hereunder or under any of the Loan Documents are held to be in excess of the applicable limits imposed by any applicable federal or state law, then the amount held to be in excess shall be considered payment of principal under the Notes, and the indebtedness evidenced thereby shall be reduced by such amount in the inverse order of maturity so that the total liability for payments in the nature of interest, additional interest and other charges shall not exceed the applicable limits imposed by any applicable federal or state interest rate laws. SECTION 2.5 PROCEDURE FOR THE BORROWING OF REVOLVING LOANS. (a) Each Borrowing of Revolving Loans shall be made upon the Borrowers' irrevocable written notice delivered to the Agent in the form of a Notice of Borrowing, executed by a Responsible Person of each Borrower, with appropriate insertions (which Notice of Borrowing must be received by the Agent prior to 10:00 a.m., San Francisco time, (i) three (3) Business Days prior to the requested Funding Date, in the case of LIBOR Revolving Loans, and (ii) one (1) Business Day prior to the requested Funding Date, in the case of Base Rate Revolving Loans), specifying: (A) the amount of the Borrowing, which shall be in integral multiples of Five Hundred Thousand Dollars ($500,000) and, if LIBOR Revolving Loans 32 are requested, in an aggregate minimum principal amount of One Million Dollars ($1,000,000) or any integral multiple of $500,000 in excess thereof; (B) the requested Funding Date, which shall be a Business Day; (C) whether the Borrowing is to be comprised of LIBOR Revolving Loans or Base Rate Revolving Loans; and (D) the duration of the Interest Period applicable to any such LIBOR Revolving Loans included in such notice. If the Notice of Borrowing shall fail to specify the duration of the Interest Period for any Borrowing comprised of LIBOR Revolving Loans, such Interest Period shall be one (1) month. (b) Upon receipt of the Notice of Borrowing, the Agent will promptly notify each Lender having a Revolving Commitment of the amount of such Lender's Commitment Percentage of the requested Borrowing. (c) Each Lender having a Revolving Commitment will make the amount of its Commitment Percentage of the Borrowing available to the Agent for the account of the Borrowers at the Agent's Payment Office by 11:00 a.m., San Francisco time, on the Funding Date requested by the Borrowers in funds immediately available to the Agent. The proceeds of all such Loans will then be made available to the Borrowers on the Funding Date by the Agent by wire transfer at the Designated Deposit Account. No Borrowing of Revolving Loans shall be deemed made to the Borrowers, and no interest shall accrue on any such Borrowing, until the related funds have been deposited in the Designated Deposit Account. (d) Unless the Lenders having a Revolving Commitment shall otherwise consent, during the existence of a Default or Event of Default, the Borrowers may not elect to have a Revolving Loan made as a LIBOR Loan. SECTION 2.6 CONVERSION AND CONTINUATION ELECTIONS . (a) The Borrowers may upon irrevocable written notice to the Agent: (i) elect to convert on any Business Day, any Base Rate Term Loans (or any part thereof in an amount equal to Three Million Dollars ($3,000,000) or any integral multiple of $500,000 in excess thereof) into LIBOR Term Loans; or (ii) elect to convert on any Interest Payment Date any LIBOR Term Loans maturing on such Interest Payment Date (or any part thereof in an amount that is in an integral multiple of $500,000) into Base Rate Term Loans; or (iii) elect to continue on any Interest Payment Date any LIBOR Term Loans maturing on such Interest Payment Date (or any part thereof in an amount equal to Three Million Dollars ($3,000,000) or any integral multiple of $500,000 in excess thereof); or 33 (iv) elect to convert on any Business Day, any Base Rate Revolving Loans (or any part thereof in an amount equal to One Million Dollars ($1,000,000) or any integral multiple of $500,000 in excess thereof) into LIBOR Revolving Loans; or (v) elect to convert on any Interest Payment Date any LIBOR Revolving Loans maturing on such Interest Payment Date (or any part thereof in an amount that is in an integral multiple of $500,000) into Base Rate Revolving Loans; or (vi) elect to continue on any Interest Payment Date any LIBOR Revolving Loans maturing on such Interest Payment Date (or any part thereof in an amount equal to One Million Dollars ($1,000,000) or any integral multiple of $500,000 in excess thereof); provided, that if the aggregate amount of LIBOR Term Loans or LIBOR Revolving Loans shall have been reduced, by payment, prepayment, or conversion of part thereof, to less than $3,000,000 or $1,000,000, respectively, then such LIBOR Loans shall automatically convert into Base Rate Loans, and on and after such date the right of the Borrowers to continue such Loans as, and convert such Loans into, LIBOR Loans shall terminate. (b) The Borrowers shall deliver a Notice of Conversion/Continuation in accordance with SECTION 12.2 to the Agent prior to 10:00 a.m., San Francisco time, at least (i) three Business Days in advance of the Conversion Date or Continuation Date, if any Loans are to be converted into or continued as LIBOR Loans; and (ii) one Business Day in advance of the Conversion Date, if any Loans are to be converted into Base Rate Loans; specifying: (A) the proposed Conversion Date or Continuation Date; (B) the aggregate amount of Loans to be converted or continued; (C) the nature of the proposed conversion or continuation; and (D) the duration of the requested Interest Period. (c) If upon the expiration of any Interest Period applicable to any LIBOR Loans, the Borrowers have failed to select a new Interest Period to be applicable to such LIBOR Loans, the Borrowers shall be deemed to have elected to continue such LIBOR Loans as LIBOR Loans having an Interest Period equal to one (1) month. (d) Upon receipt of a Notice of Conversion/Continuation, the Agent will promptly notify each Lender thereof, or, if no timely notice is provided by the Borrowers, the Agent will promptly notify each Lender of the details of any automatic conversion. All conversions and continuations shall be made according to each Lender's applicable Commitment Percentage of the outstanding principal amounts of the Loans with respect to which the notice was given. 34 (e) Unless the Required Lenders shall otherwise consent, and notwithstanding anything to the contrary in this Agreement, during the existence of a Default or Event of Default, the Borrowers may not elect to have a Loan converted into or continued as a LIBOR Loan. SECTION 2.7 OPTIONAL PREPAYMENTS. Subject to SECTION 3.5, the Borrowers may, at any time or from time to time, upon at least five (5) Business Days' notice to the Agent, ratably prepay Term Loans, in whole or in part, in amounts of $500,000 or any multiple of $100,000 in excess thereof. Such notice of prepayment shall specify the date and amount of such prepayment and whether such prepayment is of Base Rate Loans or LIBOR Loans or any combination thereof. Such notice shall be irrevocable, and the Agent shall promptly notify each Lender thereof and of such Lender's Commitment Percentage of such prepayment. If such notice is given by the Borrowers, then the Borrowers shall make such prepayment; and the payment amount specified in such notice shall be due and payable on the specified prepayment date, together with accrued interest to such date on the principal amount prepaid and any amounts required pursuant to SECTION 3.5. The principal amount of each optional prepayment shall be applied pro rata to the scheduled installments for repayment of the Term Loans. SECTION 2.8 MANDATORY PREPAYMENTS. (a) EXCESS CASH FLOW PREPAYMENTS. Notwithstanding anything to the contrary set forth in this Agreement, in addition to the Mandatory Prepayments of principal set forth in SUBSECTIONS 2.8(b), (c), (d) and (e), commencing with and for the Fiscal Year ending December 31, 1998 and for each Fiscal Year thereafter, the Borrowers shall annually prepay principal amounts outstanding under the Term Loans in an amount calculated for each such Fiscal Year equal to the product of the Excess Cash Flow Percentage multiplied by the Excess Cash Flow for such Fiscal Year, as determined based upon the audited consolidated year-end financial statements for such Fiscal Year delivered to the Agent pursuant to SUBSECTION 7.1(b). Each Mandatory Prepayment of Excess Cash Flow under this SUBSECTION 2.8(a) shall be payable within fifteen (15) calendar days after the delivery to the Agent of the audited year-end consolidated financial statements of Holdings for such Fiscal Year pursuant to SUBSECTION 7.1(b) and in no event later than the one hundred fifth (105th) calendar day following the end of such Fiscal Year. (By way of example, assuming a December 31 Fiscal Year-end, the audited year-end financial statements would be due no later than March 31 of the following year and the Mandatory Prepayment of Excess Cash Flow for such Fiscal Year would be due no later than April 15 of such following year.) (b) DISPOSITIONS. Notwithstanding anything to the contrary set forth in this Agreement, in addition to the Mandatory Prepayments of principal set forth in SUBSECTIONS 2.8(a), (c), (d) and (e), the Borrowers shall prepay principal amounts outstanding under the Term Loans in an amount equal to one hundred percent (100.0%) of the Net Proceeds obtained by either of the Borrowers from (i) any Disposition of assets or other property having an aggregate book value net of depreciation in excess of Two Million Dollars ($2,000,000) or (ii) any Event of Loss. Notwithstanding anything to the contrary set forth in this Agreement, if any Disposition (regardless of the net book value of the assets or property involved in such 35 Disposition) causes the total value of all Dispositions made, closed or completed over the term of this Agreement commencing with the Closing Date to equal or exceed Twenty-Five Million Dollars ($25,000,000), then the Borrowers shall prepay principal amounts outstanding under the Term Loans in an amount equal to one hundred percent (100.0%) of the Net Proceeds obtained by either of the Borrowers from such Disposition and from any and all Dispositions which occur thereafter. For the calculation of each such Mandatory Prepayment required under this SUBSECTION 2.8(b), there shall be excluded from the amounts otherwise required to be prepaid an amount equal to the Net Proceeds from any Disposition or Event of Loss to the extent that either of the Borrowers uses such Net Proceeds during the next succeeding six (6) months to (i) acquire replacement Property of similar, in the Required Lenders' reasonable discretion, kind and type, or (ii) acquire any fixed assets consistent with, and to be used in, the Business as currently conducted. The Mandatory Prepayment, if any, required under this SUBSECTION 2.8(b) with respect to any Disposition or any Event of Loss shall be due and payable on the last day of the Fiscal Quarter during which occurs the six-month anniversary of the closing of such Disposition or the occurrence of such Event of Loss. (c) REPLACEMENT OR REFINANCING FUNDED DEBT. Notwithstanding anything to the contrary set forth in this Agreement, in addition to the Mandatory Prepayments of principal set forth in SUBSECTIONS 2.8(a), (b), (d) and (e), the Borrowers shall prepay principal amounts outstanding under the Term Loans in an amount equal to one hundred percent (100.0%) of the Net Proceeds obtained from any new Funded Debt obtained by either of the Borrowers for the purpose of replacing or refinancing all or any portion of the Obligations, which amounts shall be prepaid under this SUBSECTION 2.8(c) on the same day as receipt thereof by such Borrower. (d) EQUITY ISSUANCE. If either of the Borrowers shall issue, raise or receive any new equity or contribution to capital (other than (i) new equity in or a contribution to the capital of CSG received from Holdings and (ii) cash proceeds referred to in the proviso to the definition of "Net Issuance Proceeds" in SECTION 1.1), such Borrower shall promptly notify the Agent of the estimated Net Issuance Proceeds of such equity issuance or contribution. Notwithstanding anything to the contrary set forth in this Agreement, in addition to the Mandatory Prepayments of principal set forth in SUBSECTIONS 2.8(a), (b), (c) and (e), the Borrowers promptly shall prepay principal amounts outstanding under the Term Loans in an amount equal to fifty percent (50.0%) of the Net Issuance Proceeds of such equity issuance or contribution received in cash or Cash Equivalents by such Borrower; provided, however, that if at the time of such Borrower's receipt of such Net Issuance Proceeds (a) the Compliance Certificate most recently delivered to the Agent pursuant to SUBSECTION 7.1(d) indicates that the Leverage Ratio as calculated as of the last day of the immediately preceding Fiscal Quarter is less than 1.50:1.00 and (b) there has not occurred and is not continuing as of the end of the immediately preceding Fiscal Quarter or at such time any Default or Event of Default, then the portion of this sentence preceding the proviso shall not apply. (e) EARLY TERMINATION OF CUSTOMER SERVICES AGREEMENTS. Notwithstanding anything to the contrary set forth in this Agreement, in addition to the Mandatory Prepayments of principal set forth in SUBSECTIONS 2.8(a), (b), (c), and (d), the Borrowers shall prepay 36 principal amounts outstanding under the Term Loans in an amount equal to one hundred percent (100.0%) of Customer Services Agreement Termination Proceeds in connection with any Customer Services Agreement Termination in which such Customer Services Agreement Termination Proceeds equal or exceed Two Million Dollars ($2,000,000). Notwithstanding anything to the contrary set forth in this Agreement, if any Customer Services Agreement Termination (regardless of the amount of Customer Services Agreement Termination Proceeds received by the Borrower in connection with such Customer Services Agreement Termination) causes the total value of all Customer Services Agreement Termination Proceeds received by either of the Borrowers over the term of this Agreement to equal or exceed Ten Million Dollars ($10,000,000), then the Borrowers shall prepay principal amounts outstanding under the Term Loans in an amount equal to one hundred percent (100.0%) of the Customer Services Agreement Termination Proceeds in connection with such Customer Services Agreement Termination and from any and all Customer Services Agreement Terminations which occur thereafter. Any Mandatory Prepayments under this SUBSECTION 2.8(c) shall be made within fifteen (15) Business Days after such Borrower's receipt of such Customer Services Agreement Termination Proceeds. (f) GENERAL. The principal amount with respect to each Mandatory Prepayment shall be applied pro rata to the scheduled installments for repayment of the Term Loans. Any prepayments pursuant to this SECTION 2.8 shall be applied first to any Base Rate Loans then outstanding and then to LIBOR Loans with the shortest Interest Periods remaining. SECTION 2.9 COMMITMENT FEE FOR PROVIDING REVOLVING COMMITMENTS. In consideration of the Lenders' agreement to commit to make the Loans available to the Borrowers as contemplated by this Agreement, the Borrowers agree to pay to the Agent, on behalf of and for the ratable benefit of the Lenders according to their respective Commitment Percentage of the Aggregate Revolving Commitments, a commitment fee in an amount equal to the Commitment Fee Percentage multiplied by the average daily difference between the Aggregate Revolving Commitment and the sum of the aggregate outstanding principal amount of Revolving Loans, due and payable quarterly in arrears on the last day of each Fiscal Quarter, with the final such payment due and payable on the Revolving Loan Maturity Date. The "Commitment Fee Percentage" means the applicable percentage set forth below based on the Leverage Ratio maintained by Holdings as determined as of the end of the most recent Fiscal Quarter for which the Borrowers have furnished a Compliance Certificate to the Agent pursuant to SUBSECTION 7.1(d): LEVERAGE RATIO COMMITMENT FEE PERCENTAGE -------------- ------------------------- Equal or greater than 2.50 0.375% Less than 2.50 0.250% The Commitment Fee Percentage shall be subject to increase or decrease, as provided above, based on the current Leverage Ratio as calculated as of the last day of the immediately preceding Fiscal Quarter, with any change in the Commitment Fee Percentage being effective upon delivery of the Compliance Certificate with respect to such Fiscal Quarter; provided, however, 37 that in no event shall the Borrowers be entitled to a decrease in the Commitment Fee Percentage if a Default or an Event of Default has occurred and is continuing. SECTION 2.10 CALCULATION OF INTEREST. Interest on the Loans shall be computed on the basis of a 365-day year for all Base Rate Loans and a 360-day year for all LIBOR Loans and the actual number of days elapsed in the period during which such interest accrues. In computing interest on any Loan, the date of the making of such Loan shall be included and the date of payment shall be excluded; provided, however, that if any Loan is repaid on the same day on which it is made, then such day shall be included in computing interest on such Loan. Each change in the interest rate of the Base Rate Loans based on changes in the Base Rate and each change in the interest rate of LIBOR Loans based on changes in the Eurodollar Reserve Percentage shall be effective on the effective date of such change and to the extent of such change. The Agent shall give the Borrowers prompt notice of any such change in the Base Rate or Eurodollar Reserve Percentage; provided, however, that any failure by the Agent to provide the Borrowers with notice hereunder shall not affect the Lenders' right to make changes in the interest rate of the Base Rate Loans based on changes in the Base Rate or changes in the interest rate of LIBOR Loans based on changes in the Eurodollar Reserve Percentage. SECTION 2.11 PAYMENTS. All repayments or prepayments of principal and all payments of interest, fees, costs, expenses and other sums chargeable to the Borrowers under this Agreement, the Notes or any of the other Loan Documents shall be in lawful money of the United States of America in immediately available funds and delivered to the Agent, on behalf and for the benefit of the Lenders, not later than 10:00 a.m., San Francisco time, on the date due at the Agent's Payment Office. Payments received after such time shall be deemed to have been received on the next succeeding Business Day. SECTION 2.12 PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be made under this Agreement, the Notes or any of the other Loan Documents shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of the payment of interest thereon. SECTION 2.13 APPLICATION OF PAYMENTS. Except as otherwise expressly provided in this Agreement or in any other Loan Document, all payments shall be applied in the following order: (a) then due and payable fees, costs and expenses; (b) then due and payable interest payments and Mandatory Prepayments; and (c) then due and payable principal payments and optional prepayments. Notwithstanding the generality of the preceding sentence, all payments received by the Agent as a result of a foreclosure or other realization on or of the Collateral shall be allocated and applied ratably to the Term Loans and the Revolving Loans in accordance with the principal Loan amounts then outstanding. In addition, each Lender is authorized to, and at its sole option may, for the benefit of the Lenders and the Agent, make advances on behalf of the Borrowers for payment of any and all fees, expenses, charges, costs, principal and interest incurred hereunder or under the other Loan Documents. To the extent permitted by law, all amounts advanced by any Lender hereunder or under other provisions of the Loan Documents shall accrue interest thereon at the Base Rate. 38 SECTION 2.14 DISTRIBUTION OF PAYMENTS. The Agent shall immediately distribute to each Lender, at such address as each Lender shall designate, its respective interest in all repayments and prepayments of principal and all payments of interest, loan fees, commitment fees and other fees, expenses and costs received by the Agent on the same day and in the same type of funds as payment was received. In the event the Agent does not distribute such payments on the same day received, such payment shall accrue interest at the Federal Funds Rate, which shall be payable by the Agent. The Agent shall indemnify and hold the Borrowers harmless from any claim for overnight interest by any Lender under this SECTION 2.14. SECTION 2.15 THE AGENT'S RIGHT TO ASSUME FUNDS AVAILABLE FOR LOANS. Unless the Agent shall have been notified by any Lender no later than the Business Day prior to the respective Funding Date of any Loan that such Lender does not intend to make available to the Agent immediately available funds equal to such Lender's Commitment Percentage of the total principal amount of such Loan, the Agent may assume that such Lender has advanced funds in the amount of such Loan to the Agent on the applicable Funding Date, and the Agent may, in reliance upon such assumption, make available to the Borrowers corresponding funds. The Agent agrees to give prompt notice to the Borrowers in the event it advances funds on behalf of a Lender under this SECTION 2.15; provided, that failure to give such notice shall in no way limit, restrict or otherwise affect the Borrowers' obligations or the Agent's or any Lender's rights or remedies under this Agreement and the other Loan Documents. If the Agent has made funds available to the Borrowers based on such assumption and such Loan is not in fact made available to the Agent by such Lender, then the Agent shall be entitled to recover the corresponding amount of such Loan on demand from such Lender. If such Lender does not promptly pay such corresponding amount upon the Agent's demand, then the Agent shall notify the Borrowers and the Borrowers shall repay such Loan to the Agent. The Agent also shall be entitled to recover from such Lender interest on such Loan in respect of each day from the date such Loan was made by the Agent to the Borrowers to the date such corresponding amount is recovered by the Agent at the Federal Funds Rate, and the Agent shall indemnify and hold harmless the Borrowers from any claim for such interest. SECTION 2.16 THE AGENT'S RIGHT TO ASSUME PAYMENTS WILL BE MADE BY THE BORROWERS. Unless the Agent shall have been notified by the Borrowers prior to the date on which any payment to be made by the Borrowers hereunder is due that the Borrowers do not intend to remit such payment, the Agent may, in its discretion, assume that the Borrowers have remitted such payment when so due, and the Agent may, in its discretion and in reliance upon such assumption, make available to each Lender on such payment date an amount equal to such Lender's Commitment Percentage of such assumed payment. If the Borrowers have not in fact remitted such payment to the Agent, each Lender shall forthwith on demand repay to the Agent the amount of such assumed payment made available to such Lender, together with interest thereon in respect of each date from and including the date such amount was made available by the Agent to such Lender to the date such amount is repaid to the Agent at the Federal Funds Rate. 39 ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY SECTION 3.1 TAXES. (a) Subject to SUBSECTION 3.1(h), any and all payments by the Borrowers to the Lenders or the Agent under this Agreement shall be made free and clear of, and without deduction or withholding for, any and all present or future taxes, fees, duties, levies, imposts, deductions, charges or withholdings whatsoever imposed by any Governmental Authority, excluding, in the case of each Lender and the Agent, such taxes as are imposed on or measured by the net income of any Lender or the Agent by any jurisdiction under the laws of which such Lender or the Agent, as the case may be, is organized or maintains a Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). (b) In addition, the Borrowers shall pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Loan Documents (hereinafter referred to as "Other Taxes"). (c) Subject to SUBSECTIONS 3.1(a) and 3.1(h), if any Taxes or Other Taxes are directly asserted or imposed against any Lender or the Agent, each of the Borrowers (without duplication) shall indemnify and hold harmless such Lender and the Agent for the full amount of the Taxes or Other Taxes (including any Taxes or Other Taxes asserted or imposed by any jurisdiction on amounts payable under this SECTION 3.1) paid by the Lender or the Agent and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted or imposed. Payment under this indemnification shall be made within thirty (30) days from the date the Lender or the Agent makes written demand therefor (provided that the Borrowers shall have the right to contest in good faith any such Taxes or Other Taxes through appropriate proceedings so long as the amount of such Taxes or Other Taxes so contested plus interest for such period of contest, as reasonably estimated by the Lender or the Agent, shall be deposited into an escrow account on terms reasonably satisfactory to the Lender or the Agent pending final determination of the contest). The Lender in its discretion also may, but shall not be obligated to, pay such Taxes or Other Taxes and the Borrowers will promptly pay such additional amounts (including any penalties, interest or expenses, except for, in the event the Lender fails to deliver notice of such assertion of Taxes or Other Taxes to the Borrowers within ninety (90) days after it has received notice of such assertion or imposition of Taxes or Other Taxes, any such penalties, interest or expenses which would not have arisen but for the failure of the Lender to so notify the Borrowers of such assertion or imposition of Taxes or Other Taxes) as is necessary in order that the net amount received by the Lender after the payment of such Taxes or Other Taxes (including any Taxes on such additional amount) shall equal the amount the Lender would have received had not such Taxes or Other Taxes been asserted or imposed. 40 (d) If either of the Borrowers shall be required by law to deduct or withhold any Taxes or Other Taxes from or in respect of any sum payable hereunder to any Lender or the Agent, then, subject to SUBSECTION 3.1(h): (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this SECTION 3.1) such Lender or the Agent, as the case may be, receives an amount equal to the sum it would have received had no such deduction or withholding been made; (ii) the Borrowers shall make such deduction or withholding; and (iii) the Borrowers shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (e) Within thirty (30) days after the date of any payment by the Borrowers of Taxes or Other Taxes, the Borrowers shall furnish to the Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to the Agent. (f) If either of the Borrowers fails to pay any Taxes or Other Taxes when due to the appropriate taxing authority or fails to furnish to the Agent the required receipts or other required documentary evidence, then each of the Borrowers (without duplication) shall indemnify the Lender for any incremental Taxes or Other Taxes, interest or penalties that may become payable by the Lender as a result of any such failure. (g) Each of the Agent and any Lender which is a foreign Person (i.e., a Person other than a United States Person for United States Federal income tax purposes) agrees that: (i) in the case of any Lender which is a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (A) it shall, no later than the Closing Date (or, in the case of a Lender which becomes a party hereto pursuant to SECTION 12.11 after the Closing Date, the date upon which the Lender becomes a party hereto) deliver to the Borrowers through the Agent two (2) accurate and complete signed originals of IRS Form 4224 or any successor thereto ("Form 4224") or two (2) accurate and complete signed originals of IRS Form 1001 or any successor thereto ("Form 1001"), as appropriate, in each case indicating that the Lender is on the date of delivery thereof entitled to receive payments of principal, interest and fees under this Agreement free from withholding of United States Federal income tax; (B) if at any time the Agent or such Lender makes any changes necessitating a new Form 4224 or Form 1001, then it shall within thirty (30) days after such change becomes effective deliver to the Borrowers through the Agent in replacement 41 for, or in addition to, the forms previously delivered by it hereunder two (2) accurate and complete signed originals of Form 4224 or two (2) accurate and complete signed originals of Form 1001, as appropriate, in each case indicating that the Lender is on the date of delivery thereof entitled to receive payments of principal, interest and fees under this Agreement free from withholding of United States Federal income tax; (ii) in the case of any Lender other than a Lender described in clause (i) above, (A) it shall, no later than the Closing Date (or, in the case of a Lender which becomes a party hereto pursuant to SECTION 12.11 after the Closing Date, the date upon which the Lender becomes a party hereto) deliver to the Borrowers through the Agent two (2) accurate and complete signed originals of a certificate substantially in the form of EXHIBIT H hereto (any such certificate, a "Non-Bank Lender Tax Certificate") and two (2) accurate and complete signed originals of IRS Form W-8 or any successor thereto ("Form W-8") certifying to such Lender's legal entitlement (assuming compliance by each of the Borrowers with the terms of this Agreement) to an exemption whereby the Lender is on the date of delivery thereof entitled to receive payments of principal, interest and fees under this Agreement free from withholding of United States Federal income tax; (B) if at any time the Agent or such Lender makes any changes necessitating a new Form W-8, then it shall within thirty (30) days after such change becomes effective deliver to the Borrowers through the Agent in replacement for, or in addition to, the forms previously delivered by it hereunder two (2) accurate and complete signed originals of Form W-8 certifying to such Lender's legal entitlement (assuming compliance by each of the Borrowers with the terms of this Agreement) to an exemption whereby the Lender is on the date of delivery thereof entitled to receive payments of principal, interest and fees under this Agreement free from withholding of United States Federal income tax; (iii) it shall, before or within thirty (30) days after the occurrence of any event (including the passing of time but excluding any event mentioned in (i) or (ii), above) requiring a change in or renewal of the most recent Form 4224, Form 1001 or Form W-8 previously delivered by such Lender, deliver to the Borrowers through the Agent two (2) accurate and complete original signed copies of Form 4224, Form 1001 or Form W-8 in replacement for the forms previously delivered by the Lender; and (iv) it shall, promptly upon the Lender's or the Agent's reasonable request to that effect, deliver to the Lender or the Agent (as the case may be) such other forms or similar documentation as may be required from time to time by any applicable law, treaty, rule or regulation in order to establish such Lender's tax status for withholding purposes. 42 (h) The Borrowers will not be required to pay any additional amounts in respect of United States Federal income tax pursuant to SUBSECTION 3.1(D) to the Agent or any Lender for the account of any Lending Office of such Lender: (i) if the obligation to pay such additional amounts would not have arisen but for a failure by such Lender to comply with its obligations under SUBSECTION 3.1(g) in respect of such Lending Office; (ii) if such Lender shall have delivered to the Borrowers a Form 4224, Form 1001 or Form W-8 in respect of such Lending Office pursuant to SUBSECTION 3.1(G), and such Lender shall not at any time be entitled to exemption from deduction or withholding of United States Federal income tax in respect of payments by the Borrowers hereunder for the account of such Lending Office for any reason other than a change in United States law or regulations or in the official interpretation of such law or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such form. (i) If, at any time, the Borrowers request any Lender to deliver any forms or other documentation in addition to those required pursuant to SUBSECTION 3.1(g)(iv), then the Borrowers shall, on demand of such Lender through the Agent, reimburse such Lender for any costs and expenses (including reasonable attorney fees) reasonably incurred by such Lender in the preparation or delivery of such forms or other documentation. (j) If the Borrowers are required to pay additional amounts to any Lender or the Agent pursuant to SUBSECTION 3.1(d), then such Lender shall use its reasonable best efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office so as to eliminate any such additional payment by the Lender which may thereafter accrue if such change in the judgment of such Lender is not otherwise disadvantageous to such Lender. SECTION 3.2 ILLEGALITY. (a) If any Lender shall determine that the introduction of any Requirement of Law, or any change in any Requirement of Law or in the interpretation or administration thereof, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Lender or its Lending Office to make LIBOR Loans, then, on notice thereof by the Lender to the Borrowers through the Agent, the obligation of that Lender to make LIBOR Loans shall be suspended until the Lender shall have notified the Agent and the Borrowers that the circumstances giving rise to such determination no longer exist. (b) If a Lender shall determine that it is unlawful to maintain any LIBOR Loan, the Borrowers shall prepay in full all LIBOR Loans of that Lender then outstanding, together with interest accrued thereon, either on the last day of the Interest Period thereof if the Lender may lawfully continue to maintain such LIBOR Loans to such day, or immediately, if 43 the Lender may not lawfully continue to maintain such LIBOR Loans, together with any amounts required to be paid in connection therewith pursuant to SECTION 3.5. (c) If the Lender is required to prepay any LIBOR Loan immediately as provided in SUBSECTION 3.2(b), then concurrently with such prepayment, the Borrowers shall borrow from the affected Lender, in the amount of such repayment, a Base Rate Loan. (d) Before giving any notice to the Agent pursuant to this SECTION 3.2, the affected Lender shall designate a different Lending Office with respect to its LIBOR Loans if such designation will avoid the need for giving such notice or making such demand and will not, in the judgment of the Lender, be illegal or otherwise disadvantageous to the Lender. SECTION 3.3 INCREASED COSTS. If any Lender shall determine that, due to either (a) the introduction of or any change (other than any change by way of imposition of or increase in reserve requirements included in the calculation of the LIBOR) in or in the interpretation of any Requirement of Law or (b) the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining any LIBOR Loans, then the Borrowers shall be liable for, and shall from time to time, upon demand therefor by such Lender, pay to such Lender such additional amounts as are sufficient to compensate such Lender for such increased costs. Notwithstanding anything to the contrary contained in this SECTION 3.3, the Borrowers shall not be obligated to compensate any Lender for any such increased costs to the extent such increased costs were incurred during or are otherwise attributable to any period of time more than 180 days prior to the date on which such Lender delivered its written certificate to the Borrowers pursuant to SECTION 3.7 for compensation for such costs. SECTION 3.4 INABILITY TO DETERMINE RATES. If the Agent shall have determined that for any reason adequate and reasonable means do not exist for ascertaining the LIBOR for any requested Interest Period with respect to a proposed LIBOR Loan or that the LIBOR applicable for any requested Interest Period with respect to a proposed LIBOR Loan does not adequately and fairly reflect the cost to the Lenders of funding such Loan, then the Agent will forthwith give notice of such determination to the Borrowers and each Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Loans, as the case may be, hereunder shall be suspended until the Agent, upon the instruction of the Required Lenders, revokes such notice in writing. Upon receipt of such notice, the Borrowers may revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted by it. If the Borrowers do not revoke such notice, then the Lenders shall make, convert or continue the Loans, as proposed by the Borrower, in the amount specified in the applicable notice submitted by the Borrowers, but such Loans shall be made, converted or continued as Base Rate Loans instead of LIBOR Loans, as the case may be. SECTION 3.5 PREPAYMENT OF LIBOR LOANS. In the event that the Borrowers prepay or are required to prepay any LIBOR Loan by acceleration or otherwise or fail to draw down or convert to a LIBOR Loan after giving notice thereof, the Borrowers agree to reimburse each 44 Lender for its expenses and funding losses due to such prepayment or failure to draw. The Borrowers and the Lenders hereby agree that such expenses and funding losses shall consist of the sum of the discounted monthly differences for each month during the applicable or requested Interest Period, calculated as follows for each such month: (a) principal amount of such LIBOR Loan times (number of days between the date of prepayment and the last day in the applicable Interest Period divided by 360), times the applicable Interest Differential; plus (b) all actual out-of-pocket expenses (other than those taken into account in the calculation of the Interest Differential) incurred by the Lenders and the Agent (excluding allocations of any expense internal to the Lenders and the Agent) and reasonably attributable to such payment or prepayment; provided that no prepayment fee shall be payable (and no credit or rebate shall be required) if the product of the foregoing formula is not a positive number. SECTION 3.6 CAPITAL REQUIREMENTS. If any Lender shall determine that any change after the date of this Agreement in any law, rule, regulation or guideline adopted pursuant to or arising out of the July 1988 report of the Basle Committee on Banking Regulations and Supervisory Practices entitled "International Convergence of Capital Measurement and Capital Standards," or the adoption after the date of this Agreement of any other Requirement of Law regarding capital adequacy, or any change after the date of this Agreement in any of the foregoing or in the enforcement or interpretation or administration of any of the foregoing by any Governmental Authority charged with the enforcement or interpretation or administration thereof, or compliance by any Lender (or any Lending Office of the Lender) or the Lender's holding company with any request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, has the effect of reducing the rate of return on the Lender's capital or on the capital of the Lender's holding company, if any, as a consequence of the maintaining of any of its Commitments or the making or maintaining any Loan under this Agreement to a level below that which the Lender or the Lender's holding company could have achieved but for such adoption, change or compliance (taking into consideration the Lender's policies and the policies of the Lender's holding company with respect to capital adequacy) by an amount deemed by the Lender to be material, then, upon written demand by the Lender, the Borrowers shall pay to the Lender from time to time such additional amount or amounts as will compensate the Lender or the Lender's holding company for any such reduction suffered. Without affecting its rights under this SECTION 3.6 or any other provision of this Agreement, the Lender agrees that if there is any increase in any cost to or reduction in any amount receivable by the Lender with respect to which the Borrowers would be obligated to compensate the Lender pursuant to this SECTION 3.6, the Lender shall use reasonable efforts to select an alternative Lending Office which would not result in any such increase in any cost to or reduction in any amount receivable by the Lender; provided, however, that the Lender shall not be obligated to select an alternative Lending Office if the Lender determines that (a) as a result of such selection the Lender would be in violation of any Requirement of Law, or would incur additional costs or expenses, or (b) such selection would be inadvisable for regulatory reasons. Notwithstanding anything to the contrary contained in this SECTION 3.6, the Borrowers shall not be obligated to indemnify or compensate any Lender for 45 any reduction in Bank's rate of return on its capital as a consequence of such Lender's obligations hereunder to the extent the same arose or were incurred during or are otherwise attributable to any period of time more than 180 days prior to the date on which such Lender delivered its written certificate to the Borrowers pursuant to SECTION 3.7 for indemnification or compensation for such reduction. SECTION 3.7 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or compensation pursuant to this ARTICLE III shall deliver to the Borrowers (with a copy to the Agent) a certificate setting forth in reasonable detail the amount payable and the basis therefor to the Lender hereunder. Such certificate shall be conclusive and binding on the Borrowers in the absence of manifest error. SECTION 3.8 SUBSTITUTION OF LENDERS. Upon the receipt by the Borrowers from any Lender (an "Affected Lender") of a claim for compensation pursuant to SECTIONS 3.1, 3.3, 3.5 or 3.6, the Borrowers may: (a) request the Affected Lender to use its best efforts to obtain a replacement bank or financial institution satisfactory to the Borrowers to acquire and assume all or part of such Affected Lender's Loans and Commitments (a "Replacement Lender"), (b) request one more of the other Lenders to acquire and assume all or part of such Affected Lender's Loans and Commitments or (c) designate a Replacement Lender. Any such designation of a Replacement Lender under clause (a) or (c) shall be subject to the prior written consent of the Agent (which consent shall not be unreasonably withheld or delayed). SECTION 3.9 SURVIVAL. The agreements and obligations of the Borrowers in this ARTICLE III shall survive the payment of all other Obligations. ARTICLE IV CONDITIONS PRECEDENT TO THE CLOSING AND THE MAKING OF LOANS SECTION 4.1 CONDITIONS PRECEDENT TO THE CLOSING. The Closing shall occur upon the prior satisfaction of each of the conditions precedent set forth in this SECTION 4.1, as determined by the Lenders and the Agent (all Loan Documents and other documents to be delivered to the Agent or any Lender pursuant to this SECTION 4.1 shall be subject to prior approval as to form and substance (including as to results) by the Lenders and the Agent). (a) CORPORATE DOCUMENTS. The Agent shall have received originals of each of the following: (i) CSG. A certificate executed by the secretary of CSG, dated the Closing Date, certifying (1) that CSG has the authority to execute, deliver and perform its obligations under each of the Loan Documents to which CSG is a party, (2) that attached behind EXHIBIT A to such certificate is a true, correct and complete copy of the certificate of incorporation of CSG certified by the Secretary of State of the State of Delaware as of a date not more than ten (10) Business Days prior to the Closing Date, (3) that attached behind EXHIBIT B to such certificate is a true, correct and complete copy of the bylaws and each other 46 Organizational Document of CSG then in full force and effect, (4) that attached behind EXHIBIT C to such certificate is a certificate of the Secretary of State of each of the States of Delaware, Colorado, Nebraska and each other state where the failure of CSG to so qualify could, with reasonable likelihood, cause or result in a Material Adverse Change, dated as of a date not more than ten (10) Business Days prior to the Closing Date, stating that CSG is a corporation in good standing in such states, (5) the name(s) of the officer(s) of CSG authorized to execute Loan Documents on behalf of CSG, together with a sample of the true signatures of such officer(s), (6) that attached behind EXHIBIT D to such certificate is a true, correct and complete copy of the resolutions adopted by the board of directors of CSG then in full force and effect authorizing the execution, delivery and performance by CSG of each of the Loan Documents required by this Agreement to which CSG is a party, (7) that attached behind EXHIBIT E to such certificate is a true, correct and complete statement of the authorized and issued stock of CSG, by class, number and record and, if different, beneficial owner (including voting rights, as determined on both an undiluted and fully diluted basis), and (8) that the Lenders may conclusively rely on such certificate unless and until CSG shall have delivered to the Agent a further certificate canceling or amending such prior certificate. (ii) HOLDINGS. A certificate executed by the secretary of Holdings, solely in his capacity as such, dated the Closing Date, certifying (1) that Holdings has the authority to execute, deliver and perform its obligations under each of the Loan Documents to which Holdings is a party, (2) that attached behind EXHIBIT A to such certificate is a true, correct and complete copy of the certificate of incorporation of Holdings certified by the Secretary of State of the State of Delaware as of a date not more than ten (10) Business Days prior to the Closing Date, (3) that attached behind EXHIBIT B to such certificate is a true, correct and complete copy of the bylaws and each other Organizational Document of Holdings then in full force and effect, (4) that attached behind EXHIBIT C to such certificate is a certificate of the Secretary of State of the States of Delaware, Colorado and Nebraska and each other state in which the failure by Holdings to so qualify could, with reasonable likelihood, cause or result in a Material Adverse Change, dated as of a date not more than ten (10) Business Days prior to the Closing Date, stating that Holdings is a corporation in good standing in such state, (5) the name(s) of the officer(s) of Holdings authorized to execute Loan Documents on behalf of Holdings, together with a sample of the true signatures of such officer(s), (6) that attached behind EXHIBIT D to such certificate is a true, correct and complete copy of the resolutions adopted by the board of directors of Holdings then in full force and effect authorizing the execution, delivery and performance by Holdings of each of the Loan Documents required by this Agreement to which Holdings is a party, and (7) that the Lenders may conclusively rely on such certificate unless and until Holdings shall have delivered to the Agent a further certificate canceling or amending such prior certificate. (b) LOAN DOCUMENTS. The Agent shall have received originals of each of the following Loan Documents: (i) THIS AGREEMENT. This Agreement, duly executed by each of the Borrowers, each of the Lenders and the Agent, together with all completed SCHEDULES to this Agreement. 47 (ii) NOTES. (A) Separate Term Loan Notes, duly executed by each of the Borrowers to each of the Lenders having a Term Loan Commitment in the original principal amount of such Lender's Term Loan Commitment; and (A) Separate Revolving Notes, duly executed by each of the Borrowers to each of the Lenders having a Revolving Commitment in the stated principal amount of such Lender's Revolving Commitment. (iii) DESIGNATION OF RESPONSIBLE PERSONS. The Designation of Responsible Persons (CSG) and Designation of Responsible Persons (Holdings), each dated the Closing Date and duly executed by the president or chief financial officer of CSG and Holdings, respectively. (iv) COLLATERAL DOCUMENTS. The Agent shall have received originals of each of the following Collateral Documents: (A) LEASEHOLD DEEDS OF TRUST. The separate Leasehold Deeds of Trust, each duly executed by CSG, as trustor, and duly notarized, together with legal descriptions of the Chandler Road Property and the North Park (Building 6) Property attached respectively thereto as Exhibit A, which Leasehold Deeds of Trust shall concurrently with the Closing be caused by the Title Company to be recorded in the Official Records of the County Recorder's Office of the Counties of Douglas, Nebraska and Sarpy, Nebraska, as applicable, with written or verbal confirmation of such recordation to the Agent by the Title Company to follow immediately thereafter. (B) SECURITY AGREEMENT. The Security Agreement, duly executed by CSG and the Agent, together with all completed schedules to the Security Agreement. (C) GRANTS OF IP SECURITY INTERESTS. The (1) Grant of Security Interest (Patents), duly executed by CSG with a completed cover sheet for filing with the federal Patent and Trademark Office, (2) Grant of Security Interest (Trademarks), duly executed by CSG with a completed cover sheet for filing with the federal Patent and Trademark Office, and (3) Grant of Security Interest (Copyrights), duly executed by CSG with a completed cover sheet for filing with the federal Copyright Office, each together with all completed schedules to such grant. (D) COLLATERAL ASSIGNMENT OF RIGHTS. The Collateral Assignment of Rights (TCI Services Agreement), duly executed by CSG in favor of the Lenders and the Agent, and acknowledged by TCI Cable Management; and the Collateral Assignment of Rights (SUMMITrak Purchase Agreement), duly executed by each of Holdings and CSG in favor of the Lenders and the Agent, and acknowledged by each of TCI SUMMITrak, TCI SUMMITRAK Texas and TCI Technology Ventures. 48 (E) FINANCING STATEMENTS. The Financing Statements, duly executed by CSG, as debtor, including a description of the personal property Collateral granted or pledged by CSG to the Agent as security for the Obligations, which Financing Statements shall concurrently with the Closing be caused to be filed with the filing office of such Governmental Authorities of such states as the Agent may reasonably require. (F) COLLATERAL CONTROL AGREEMENTS. Separate written collateral control agreements (1) executed by the Agent, CSG and each depository institution at which CSG maintains a deposit account, and (2) executed by the Agent, CSG and each securities intermediary at which CSG maintains a brokerage or similar account which holds financial assets (as defined in Section 8102(a)(9) of the UCC) owned beneficially by CSG, each satisfactory to the Agent. (v) HOLDINGS COLLATERAL DOCUMENTS. The Agent shall have received originals of each of the following Holdings Collateral Documents: (A) HOLDINGS SECURITY AGREEMENT. The Holdings Security Agreement, duly executed by Holdings and acknowledged by the Agent, together with all completed schedules to the Holdings Security Agreement. (B) HOLDINGS PLEDGE AGREEMENT. The Holdings Pledge Agreement, duly executed by Holdings, and acknowledged by the Agent, together with the original certificates evidencing all of the issued and outstanding Stock of CSG, Bytel and any and all other Subsidiaries of Holdings, and undated stock powers executed in blank for each certificate. (C) HOLDINGS FINANCING STATEMENTS. The Holdings Financing Statements, duly executed by Holdings, as debtor, including a description of the personal property Collateral granted or pledged by Holdings to the Agent as security for the Obligations, which Holdings Financing Statements shall concurrently with the Closing be caused to be filed with the filing office of such Governmental Authorities of such states as the Agent may reasonably require. (D) COLLATERAL CONTROL AGREEMENTS. Separate written collateral control agreements (1) executed by the Agent, Holdings and each depository institution at which Holdings maintains a deposit account, and (2) executed by the Agent, Holdings and each securities intermediary at which Holdings maintains a brokerage or similar account which holds financial assets owned beneficially by Holdings, each satisfactory to the Agent. (vi) ENVIRONMENTAL INDEMNITY. The Environmental Indemnity, duly executed by each of the Borrowers, and acknowledged by the Agent, together with all completed schedules to the Environmental Indemnity. (vii) COLLATERAL INFORMATION CERTIFICATE. The Collateral Information Certificate, fully completed, duly executed by each of the Borrowers. 49 (c) [INTENTIONALLY DELETED.] (d) OPINION OF THE BORROWERS' COUNSEL. The Agent shall have received an originally executed Opinion of the Borrowers' Counsel. (e) SUMMITRAK ACQUISITION DOCUMENTS. The Agent shall have received copies certified by each of the Borrowers to be true, accurate and complete of all duly and fully executed SUMMITrak Acquisition Documents, including (i) the SUMMITrak Purchase Agreement, complete with all final schedules, exhibits, attachments and all amendments thereto, which shall have reviewed and approved by the Agent, (ii) all bills of sale, assignments, including assignments of Intellectual Property assigned pursuant to the SUMMITrak Purchase Agreement, assignment and assumptions and other transfer documents evidencing or relating to the conveyance of title and interests in the SUMMITrak Assets and (iii) all other documents relating to or affecting the SUMMITrak Acquisition, including all bring-downs and all amendments and modifications to any of the foregoing. (f) TCI SERVICES AGREEMENT. The Agent shall have received a copy certified by each of the Borrowers to be true, accurate and complete of the TCI Services Agreement, duly executed by CSG and TCI Cable Management, complete with all final schedules, exhibits and attachments thereto, which shall have been reviewed and approved by the Agent. (g) GOVERNMENT CONSENTS. The Agent shall have received written confirmation that all consents, approvals, orders and authorizations, and all registrations, declarations and filings with, and expirations of waiting periods (including the Hart-Scott-Rodino pre-merger notice waiting period) imposed by any Governmental Authority necessary for the consummation of the SUMMITrak Acquisition contemplated by the SUMMITrak Acquisition Documents have been obtained. (h) THIRD PARTY CONSENTS. The Agent shall have received written confirmation that all consents, approvals and authorizations from third Persons which are either (i) required under any material agreement, contract or other document necessary for the consummation of the SUMMITrak Acquisition contemplated by the SUMMITrak Acquisition Documents or (ii) specified as being required in ITEM 5.11 of the DISCLOSURE SCHEDULE have been obtained. (i) CONSUMMATION OF THE SUMMITRAK ACQUISITION. All conditions precedent to the closing set forth in the SUMMITrak Purchase Agreement, including all actions to have been taken prior to the Closing set forth in Sections 4 and 15 of the SUMMITrak Purchase Agreement (other than payment of the purchase price), shall have been duly satisfied, and there shall not have been any modification of a material term or waiver of a material condition precedent without the prior consent of the Agent. (j) LANDLORDS' ESTOPPELS. The Agent shall have received a Landlord's Consent, Non-Disturbance and Estoppel Agreement, duly executed by each of the landlords of the Chandler Road Property and the North Park (Building 6) Property, acknowledged by the 50 Agent and duly notarized, each of which Landlord's Consent, Non-Disturbance and Estoppel Agreements shall concurrently with the Closing be caused by the Title Company to have been recorded in the official records of Douglas County, Nebraska and Sarpy County, Nebraska, as applicable, with written or verbal confirmation of such recordation to the Agent by the Title Company to follow immediately thereafter. (k) TITLE POLICIES. The Agent shall have had commitments issued to it by the Title Company with respect to the issuance to the Agent, for the benefit of the Lenders, upon the due recordation of the Leasehold Deeds of Trust in the Official Records of each of Douglas County, Nebraska and Sarpy County, Nebraska, of separate ALTA lenders' policies of leasehold title insurance (the "Title Policies") insuring the first priority of the Lien granted in favor of the Title Company, as trustee, for the benefit of the Agent, in CSG's leasehold interest in and to the Chandler Road Property and the North Park (Building 6) Property, respectively, with such endorsements as the Agent shall reasonably require and subject only to the Permitted Title Exceptions. (l) UCC SEARCHES. The Agent shall have received certified copies, dated as of a recent date, of form UCC-3 requests for copies or information listing all effective financing statements which name CSG or Holdings as debtor and which are filed with the appropriate filing offices of such Governmental Authorities as the Agent shall request be searched, and accompanied by written evidence (including UCC termination statements, if applicable) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been, or in connection with the Closing will be, terminated or released. (m) INTELLECTUAL PROPERTY REVIEW. The Agent shall have completed its due diligence review with respect to the nature and extent of the Intellectual Property of the Borrowers (including all Intellectual Property to be acquired in the SUMMITrak Acquisition), including a determination of the registered or unregistered status of such Intellectual Property with the federal Copyright Office or the federal Patent and Trademark Office, as applicable, and shall have received such assessments or other information relating to the Borrowers' Intellectual Property as the Lenders reasonably may require. (n) ENVIRONMENTAL REVIEW. The Agent shall have completed its due diligence review with respect to the Chandler Road Property and the North Park (Building 6) Property, including receipt by the Agent of an environmental questionnaire in a form presented by the Agent and completed and certified by each of the Borrowers and such other site assessments and other documents or information relating to environmental matters as the Agent may reasonably require. (o) INSURANCE. The Agent shall have received the certificates, binders and other instruments or documents evidencing the insurance coverages and limits maintained by the Borrowers in each case in compliance with the insurance requirements set forth in ARTICLE VI. (p) NO LITIGATION. There shall not have been instituted or threatened any litigation or proceeding in or before any Governmental Authority to which either of the 51 Borrowers or any of its Subsidiaries is, or is threatened with becoming, a party and which, in the Lenders' reasonable discretion, after consultation with counsel, is determined to pose a risk of resulting in a Material Adverse Change. (q) PRO FORMA BALANCE SHEET AND PROJECTIONS. The Agent shall have received a pro forma balance sheet of Holdings and its Subsidiaries (giving effect to the SUMMITrak Acquisition) and a balance sheet, statements of operations and cash flow for five (5) years of projected operations, each for Holdings and its Subsidiaries, together with a certificate of the chief financial officer of Holdings, dated as of the Closing Date. (r) ACCOUNTS REPORT. The Agent shall have received a Borrowing Base Certificate with respect to the end of the immediately preceding month. (s) NO MATERIAL ADVERSE CHANGE. There shall have occurred no Material Adverse Change since June 30, 1997. (t) THE BORROWERS' BRING-DOWN CERTIFICATE. The Agent shall have received a certificate dated the Closing Date, executed by the chief executive officer or the chief financial officer of each of the Borrowers, on behalf of the Borrowers, certifying that: (i) no Default or Event of Default has occurred and is continuing; and (ii) the representations and warranties of each of the Borrowers contained in ARTICLE V of this Agreement are true, accurate and complete as of the Closing Date (except to the extent such representations and warranties are made as of an earlier date, in which case they shall be true, accurate and complete in all material respects as of such earlier date). (u) PARIBAS SIDE LETTER. Banque Paribas, as Agent in respect of the Term Loan Facility and the Revolving Credit Facility, shall have received the Paribas Side Letter, duly executed by each of the Borrowers, and accepted by Banque Paribas, together with payment of such sums as are set forth in the Paribas Side Letter to be paid at Closing (the payment of which shall be deemed to be a concurrent condition). (v) FUNDS TRANSFER MEMORANDUM. The Agent shall have received a funds transfer memorandum dated the Closing Date, executed by each of the Borrowers and the Agent, setting forth the sources and uses of funds to be funded and disbursed as of the Closing Date in connection with the Closing. (w) FEES, COSTS AND DISBURSEMENTS. The Agent shall have received an amount equal to the aggregate of the Agent's good faith estimate of all Attorney Costs and other disbursements incurred by the Agent in connection with the Closing of the transactions contemplated hereunder, including the negotiation and preparation of this Agreement and each of the other Loan Documents (the payment of which shall be deemed to be a concurrent condition), which payment shall be subject to post-Closing adjustment following receipt by the Agent of all final invoices. 52 (x) OTHER DOCUMENTS. The Agent or the Lenders shall have received such other documents and information from the Borrowers as the Lenders may reasonably request. SECTION 4.2 THE MAKING OF REVOLVING LOANS. The obligation of the Lenders having Revolving Commitments to advance any Borrowing of Revolving Loans is subject to the satisfaction of the following further conditions precedent: (a) The Agent shall have received a Notice of Borrowing, with appropriate insertions, executed by a Responsible Person. (b) No event shall have occurred and be continuing or would result from the making of any Revolving Loan on such Funding Date which constitutes a Default or an Event of Default under this Agreement. (c) The Agent shall have received such other instruments and documents as it may have reasonably requested from the Borrowers in connection with the requested Borrowing. ARTICLE V THE BORROWERS' REPRESENTATIONS AND WARRANTIES Each of the Borrowers hereby jointly and severally warrants and represents to the Agent and each Lender as follows, and agrees that each of said warranties and representations shall be deemed to continue so long as any of the Commitments shall be available hereunder or any Loan or other payment Obligation shall remain unpaid or unsatisfied, and shall apply anew to the making of each Loan. SECTION 5.1 ORGANIZATION, POWER AND AUTHORITY OF THE BORROWER. Each of the Borrowers is a corporation duly organized and validly existing under the laws of the State of Delaware, is duly qualified to do business and is in good standing in each jurisdiction where the nature of its business requires such qualification and where the failure to so qualify could, with reasonable likelihood, cause or result in a Material Adverse Change, including each state listed with respect to each Borrower in ITEM 5.1 to the DISCLOSURE SCHEDULE, and has full power and authority and holds all material requisite governmental licenses, permits and other approvals to enter into and perform its obligations under this Agreement, the Notes, each of the Collateral Documents or Holdings Collateral Documents, as applicable, each of the other Loan Documents to which it is a party, the Paribas Side Letter, each of the SUMMITrak Acquisition Documents to which it is a party and, in the case of CSG, the TCI Services Agreement and to own and hold under lease its Property and to conduct its business substantially as currently conducted by it and such business as contemplated to be conducted by it upon and following the transactions contemplated by the Loan Documents. SECTION 5.2 ORGANIZATION, POWER AND AUTHORITY OF THE BORROWERS' SUBSIDIARIES. Each of the Borrowers' Subsidiaries is a corporation duly organized and validly existing under 53 the laws of the jurisdiction of its incorporation, is duly qualified to do business and is in good standing in each jurisdiction where the failure to so qualify could, with reasonable likelihood, cause or result in a Material Adverse Change, including each state listed with respect to each Subsidiary in ITEM 5.2 to the DISCLOSURE SCHEDULE, and has full power and authority and holds all requisite governmental licenses, permits and other approvals to enter into and perform its obligations under each of the SUMMITrak Acquisition Documents to which it is a party (if any) and to own and hold under lease its Properties and to conduct its business substantially as currently conducted by it and such business as contemplated to be conducted by it upon and following the transactions contemplated by the Loan Documents. SECTION 5.3 LOAN DOCUMENTS AND NOTES AUTHORIZED; BINDING OBLIGATIONS. The execution, delivery and performance of this Agreement, each of the Collateral Documents or the Holdings Collateral Documents to which it is a party, the Environmental Indemnity and each of the other Loan Documents to which it is a party and the execution, delivery and payment of the Notes have been duly authorized by all necessary and proper action on the part of each of the Borrowers. The Loan Documents to which either of the Borrowers is a party constitute legally valid and binding obligations of such Borrower enforceable against such Borrower in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally. SECTION 5.4 NO CONFLICT. The execution, delivery and performance of this Agreement, the Collateral Documents, the Holdings Collateral Documents, the Environmental Indemnity and each of the other Loan Documents to which either of the Borrowers is a party, and the execution, delivery and payment of the Notes, in each case to which either of the Borrowers is a party, will not contravene any provision of either of the Borrowers' Organizational Documents and will not (a) to the best of the Borrowers' knowledge, after Due Inquiry, contravene, conflict with or violate any Requirement of Law, (b) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority and (c) violate or result in the breach of, or constitute a default under any loan or credit agreement, indenture or other document (which documents are, in the aggregate, material) to which either of the Borrowers is a party or by which either of the Borrowers or their respective Property and assets may be bound or affected. Neither of the Borrowers is in violation or breach of or default under any Requirement of Law, order, writ, judgment, injunction, decree, determination or award or any contract, agreement, lease, license, indenture or other instrument to which it is a party, the non-compliance with, the violation or breach of or the default under could, with reasonable likelihood, cause or result in a Material Adverse Change. SECTION 5.5 CAPITAL STRUCTURE. ITEM 5.5 of the DISCLOSURE SCHEDULE sets forth each of the stockholders of each of the Borrowers (other than Holdings) and each of their respective Subsidiaries, together with the jurisdiction of formation or organization, the capital accounts and ownership interests (including voting partnership interests or authorized and issued capital stock, as applicable, of each such Person), by class and number and including the percentage of each class legally owned or to be owned by such Person as of the Closing Date. Except as set forth in ITEM 5.5 of the DISCLOSURE SCHEDULE, there are no options, warrants, rights to purchase or 54 similar rights covering the stock interests in either of the Borrowers or any of their respective Subsidiaries. SECTION 5.6 FINANCIAL CONDITION. All balance sheets, all statements of operations, of stockholders' equity and of changes in cash flow, and other financial data (other than projections) which have been furnished to the Agent for the purposes of or in connection with this Agreement or the other Loan Documents have been prepared in accordance with GAAP consistently applied throughout the periods involved and present fairly the financial condition of the entities involved as of the dates thereof and the results of their operations for the periods covered thereby. All balance sheets, all statements of operations, of stockholders' equity and of changes in cash flow, and other financial data (other than projections) which shall hereafter be furnished to the Agent for the purposes of or in connection with this Agreement or any of the other Loan Documents will be prepared in accordance with GAAP consistently applied throughout the periods involved and will present fairly the financial condition of the entities involved as of the dates thereof and the result of their operations for the periods covered thereby. All projections which have been or shall be furnished to the Agent for purposes of or in connection with this Agreement or any of the other Loan Documents have been, and shall represent, the Borrowers' respective management's best estimates of future performance, based upon historical financial information and reasonable assumptions of management. SECTION 5.7 NO MATERIAL ADVERSE CHANGE. Since June 30, 1997, there has been no Material Adverse Change except as disclosed in ITEM 5.7 of the DISCLOSURE SCHEDULE. SECTION 5.8 OWNERSHIP OF PROPERTIES. Each of the Borrowers owns good and marketable title to all of the Collateral, free and clear of all Liens, charges or claims, except the Permitted Liens. SECTION 5.9 EXECUTIVE OFFICES; TRADE NAMES. The current location of each of the Borrowers' chief executive office and principal place of business is set forth in ITEM 5.9 of the DISCLOSURE SCHEDULE. For the five years preceding the Closing Date, neither of the Borrowers has used, and does not presently use, a trade name other than as listed in ITEM 5.9 of the DISCLOSURE SCHEDULE. SECTION 5.10 LITIGATION. Except as disclosed in ITEM 5.10 of the DISCLOSURE SCHEDULE, there are no claims, actions, suits, proceedings or other litigation pending or, to the best of the Borrowers' knowledge, threatened against either of the Borrowers or any of the Borrowers' respective Property at law or in equity before any Governmental Authority or, to the best of the Borrowers' knowledge, any investigation by any Governmental Authority of the Borrowers' respective affairs or Properties which could, if adversely determined, with reasonable likelihood cause or result in a Material Adverse Change. Other than any liability incident to the litigation or proceedings disclosed in ITEM 5.10 of the DISCLOSURE SCHEDULE, neither of the Borrowers has any contingent liabilities which are material and which are not provided for or disclosed in the most recent financial statements delivered to the Agent. 55 SECTION 5.11 MATERIAL DOCUMENTS; THIRD PARTY CONSENTS. ITEM 5.11 of the DISCLOSURE SCHEDULE lists each of the material agreements (including the TCI Services Agreement, the FDC Services Agreement and each of the other Customer Services Agreements), contracts, leases (including each of the leases and all amendments thereto in respect of the Chandler Road Property and the North Park (Building 6) Property), licenses (including licenses or sublicenses of Intellectual Property, including Intellectual Property acquired in connection with the SUMMITrak Acquisition) and other documents of the Borrowers. Except as further set forth in ITEM 5.11 of the DISCLOSURE SCHEDULE, no consents, approvals or authorizations from third Persons which are either (i) required under any material agreement, contract or other document necessary for the consummation of the SUMMITrak Acquisition contemplated by the SUMMITrak Acquisition Documents or (ii) specified as being required in ITEM 5.11 of the DISCLOSURE SCHEDULE is required to be obtained, except as has already been obtained. SECTION 5.12 NO GOVERNMENT CONSENTS NEEDED. Except for the filing of not- yet-due tax returns and reports or as have already been made or obtained, or, in the case of CLAUSE (b) below, will be made concurrent with the Closing, as expressly contemplated by this Agreement, no certificate, authorization, permit consent, approval, order, license, exemption from, or filing or registration or qualification with, any Governmental Authority is or will be required to authorize, or is otherwise required in connection with: (a) the execution and delivery by the Borrowers of, and the payment and performance by the Borrowers of their respective obligations under, the SUMMITrak Acquisition Documents or the Loan Documents; and (b) the creation and perfection of the Liens described in and granted by CSG and Holdings pursuant to the Loan Documents. SECTION 5.13 PERSONS SIGNING AUTHORIZED. The Persons signing the Loan Documents on behalf of each of the Borrowers are fully authorized to execute the Loan Documents and have been designated as Responsible Persons in writing to the Agent. SECTION 5.14 SOLVENCY. Each of the Borrowers is Solvent. SECTION 5.15 EMPLOYMENT AND LABOR AGREEMENTS. Except as set forth in ITEM 5.15 to the DISCLOSURE SCHEDULE, there are no employment agreements covering management of either of the Borrowers and there are no collective bargaining agreements or other labor agreements covering any employees of either of the Borrowers. A true and complete copy of each such agreement has been furnished to the Agent. SECTION 5.16 ERISA. All Employee Benefit Plans of each of the Borrowers are listed in ITEM 5.16 of the DISCLOSURE SCHEDULE. All Pension Plans of each of the Borrowers, including terminated Pension Plans, that are intended to be qualified under Section 401(a) of the Code have been determined by the IRS to be qualified. All Pension Plans existing as of the date hereof continue to be so qualified. No "reportable event" (as defined in Section 4043 of ERISA) has occurred and is continuing with respect to any Pension Plan for which the thirty-day notice 56 requirement may not be waived other than those of which the appropriate Governmental Authority has been notified. All Employee Benefit Plans of each of the Borrowers have been operated in all material respects in accordance with their terms and applicable law, including ERISA, and no "prohibited transaction" (as defined in ERISA and the Code) that would result in any material liability to either of the Borrowers has occurred with respect to any such Employee Benefit Plan. SECTION 5.17 LABOR MATTERS. There are no strikes or other labor disputes against either of the Borrowers or any of its Subsidiaries, or, to the best of such Borrower's knowledge, threatened against such Borrower, or any of its Subsidiaries, which could, with reasonable likelihood, cause or result in a Material Adverse Change. Hours worked by, and payment made to, employees of each of the Borrowers or its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable law dealing with such matters which could, with reasonable likelihood, cause or result in a Material Adverse Change. SECTION 5.18 MARGIN REGULATIONS. Neither of the Borrowers owns any "margin security" as that term is defined in the Margin Regulations, and the proceeds of the Loans will be used only for the purposes contemplated in this Agreement. None of the Loans will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Loans to be considered a "purpose credit" within the meaning of the Margin Regulations. SECTION 5.19 TAXES. All material federal, state, and local tax returns, reports and statements required to be filed by either of the Borrowers have been filed with the appropriate Governmental Authorities and all Charges and other impositions shown thereon to be due and payable by either of the Borrowers have been paid prior to the date on which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof, or any such fine, penalty, interest, late charge or loss has been paid, or such Borrower is contesting its liability therefor in good faith and has fully reserved all such amounts in the financial statements delivered to the Agent pursuant to SECTION 7.1. Proper and accurate amounts have been withheld by each of the Borrowers from its employees for all periods in full and complete compliance with the tax, social security and unemployment withholding provisions of applicable federal, state, local and foreign law, and such withholdings have been timely paid to the respective Governmental Authorities. Neither of the Borrowers has executed or filed with the IRS or any other Governmental Authority any agreement or other document extending, or having the effect of extending, the period for assessment or collection of any Charges. SECTION 5.20 SCHEDULE OF DEPOSIT ACCOUNTS. ITEM 5.20 of the DISCLOSURE SCHEDULE lists (i) all banks and other depository institutions at which each of the Borrowers maintains deposit and other accounts, including the name and address of each depository institution and the Person in whose name the account is held, and a description and number of the account, and (ii) all securities intermediaries with which each of the Borrowers maintains a brokerage or similar account which holds financial assets (as defined in Section 8102 of the UCC) owned beneficially by either of the Borrowers, including the name and address of each securities 57 intermediary and the Person in whose name the account is held, and a description and number of the account. SECTION 5.21 INTELLECTUAL PROPERTY RIGHTS. Each of the Borrowers possesses and owns all necessary Intellectual Property rights and all licenses or sublicenses of Intellectual Property which are material to the conduct of its business after giving effect to the SUMMITrak Acquisition, each of which is listed, together with applicable federal, state or foreign application and registration numbers, in ITEM 5.21 of the DISCLOSURE SCHEDULE. Each of the Borrowers conducts its business without infringement or, to the best of the Borrowers' knowledge, after Due Inquiry, claim of infringement of any Intellectual Property right of others, except where such infringement or claim of infringement could not, with reasonable likelihood, cause or result in a Material Adverse Change. Except as set forth in ITEM 5.21 of the DISCLOSURE SCHEDULE, there is no infringement or, to the best of the Borrowers' knowledge, after Due Inquiry, claim of infringement by others of any Intellectual Property owned, licensed or sublicensed by either of the Borrowers. SECTION 5.22 OTHER REGULATIONS . Neither of the Borrowers is: (a) a "public utility company" or a "holding company," or an "affiliate" or a "subsidiary company" of a "holding company," or an "affiliate" of such a "subsidiary company," as such terms are defined in the Public Utility Holding Company Act or (b) an "investment company," or an "affiliated person" of, or a "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the Investment Company Act. SECTION 5.23 NATURE OF REPRESENTATIONS AND WARRANTIES. Each of the Borrowers certifies to the Agent and each Lender that all representations and warranties made in this Agreement and all other Loan Documents are true and correct in all material respects and do not contain any untrue statement of a material fact or omit any material fact necessary to make any such representation or warranty not misleading. All such representations and warranties shall continue and survive so long as any of the payment Obligations have not been satisfied or shall remain outstanding. Each request by the Borrowers for a Borrowing and each continuation of a LIBOR Loan into another LIBOR Loan and each conversion of a LIBOR Loan into a Base Rate Loan or a Base Rate Loan into a LIBOR Loan shall constitute an affirmation that all such representations and warranties remain true and correct in all material respects and shall not contain any untrue statement of a material fact or omit any material fact necessary to make any such representation or warranty not misleading as of the date thereof. Each representation and warranty made in this Agreement, in any other Loan Documents, and in any other document delivered to the Agent or any Lender by the Borrowers shall be deemed to have been relied upon by the Agent and the Lenders notwithstanding any investigation, inspection or inquiry theretofore or thereafter made by or on behalf of the Agent or any Lender, or any funding of Loans by the Lenders. SECTION 5.24 BROKERS' FEES. Except as specifically disclosed in ITEM 5.24 of the DISCLOSURE SCHEDULE, neither of the Borrowers nor any of their Affiliates have any obligation to any Person in respect of any finder's, broker's or investment banker's fee in connection with the transactions contemplated hereby or by the SUMMITrak Acquisition Documents. 58 SECTION 5.25 REPRESENTATIONS AND WARRANTIES CONTAINED IN THE SUMMITRAK PURCHASE AGREEMENT. To the best of the Borrowers' knowledge, after Due Inquiry, all of the representations and warranties made by TCI SUMMITRAK Texas, TCI SUMMITrak and TCI Technology Ventures in Section 5 of the SUMMITrak Purchase Agreement are true, accurate and complete as if made as of the Closing Date immediately prior to giving effect to the consummation of the SUMMITrak Acquisition, which representations and warranties, and all accompanying schedules, are incorporated herein and made a part of this Agreement as if made by the Borrowers to the best of their knowledge, after Due Inquiry, on the Closing Date; provided, however, that such incorporated representations and warranties shall speak only as of the Closing and, notwithstanding anything to the contrary, shall not be included in any subsequent bring-down of the representations and warranties contained in this ARTICLE V. ARTICLE VI INSURANCE SECTION 6.1 INSURANCE BY THE BORROWERS. The Borrowers shall obtain at their own expense and maintain in full force and effect at all times policies of insurance of the types set forth in SECTION 6.2 with insurance carriers authorized to do business in the State of Nebraska or Colorado, as may be appropriate, with a Best's Key Rating Guide rating of A - X or better, with limits and coverage sufficient to satisfy the provisions set forth in this ARTICLE VI. SECTION 6.2 GENERAL INSURANCE REQUIREMENTS. The Borrowers shall maintain in full force and effect at all times so long as any Commitment shall be available hereunder or any Loan or other payment Obligation shall remain unpaid or unsatisfied all of the following: (a) WORKERS' COMPENSATION INSURANCE. As required by applicable state laws, workers' compensation insurance, including employer's liability insurance, with a $1,000,000 minimum limit per accident. (b) COMMERCIAL GENERAL LIABILITY. Commercial general liability insurance on an occurrence basis against claims for personal injury (including bodily injury and death) and property damage. Such insurance shall provide coverage for products-completed operations, blanket contractual, explosion, collapse and underground coverage, broad form property damage and personal injury insurance with a $1,000,000 minimum limit per occurrence for combined bodily injury and property damage and not less than a $2,000,000 aggregate annual limit. (c) AUTOMOBILE LIABILITY INSURANCE. Automobile liability insurance against claims for personal injury (including bodily injury and death) and property damage covering all owned, leased non-owned and hired motor vehicles, including loading and unloading, with a $1,000,000 minimum limit per occurrence for combined bodily injury and property damage. (d) EXCESS INSURANCE. Excess liability insurance on an occurrence basis covering claims in excess of and following the terms of the underlying insurance as set forth in 59 the foregoing SUBSECTIONS 6.2(a), (b) and (c) with a $10,000,000 minimum limit per occurrence and not less than a $15,000,000 aggregate annual limit. (e) AMOUNT OF INSURANCE. The amounts of insurance required in the foregoing SUBSECTIONS 6.2(a), (b), (c) and (d) may be satisfied by the Borrowers' purchasing coverage in the amounts specified or by any combination thereof, so long as the total amount of insurance meets the requirements specified above. (f) PROPERTY DAMAGE INSURANCE. In addition to the insurance required pursuant to the Leasehold Deeds of Trust, property damage insurance on an all- risk basis, including coverage against damage or loss caused by flood (as to the Chandler Road Property and the North Park (Building 6) Property, providing coverage for the Chandler Road Property and the North Park (Building 6) Property in a minimum aggregate amount equal to the "full replacement value" of such Properties (except a sublimit in the amount of $1,000,000 per occurrence shall be permitted for flood). (g) EXTRA EXPENSE/BUSINESS INTERRUPTION INSURANCE. Extra expense/business interruption insurance covering not less than $5,000,000 of the actual loss sustained of the Borrowers arising from a loss insured by the policies of insurance required under this SECTION 6.2. (h) ERISA INSURANCE. Fidelity coverage in an amount to cover the employee dishonesty insurance requirements with respect to pension and welfare funds under any Pension Plan. SECTION 6.3 ENDORSEMENTS. All policies of liability, property, and extra expense/business interruption insurance to be maintained by the Borrowers shall provide for waivers of subrogation in favor of the Agent and each Lender and their respective officers, employees and agents. All policies of liability insurance required to be maintained by the Borrowers under SECTION 6.2 shall be endorsed as follows: (a) To provide a severability of interest or cross liability clause (with wording to the effect that coverage applies as though separate policies had been issued to each insured); (b) That the insurance shall be primary and not excess to or contributing with any insurance or self-insurance maintained by the Agent or any Lender; (c) To name the Agent and each Lender and their respective officers, employees and agents as additional insureds, except for workers' compensation insurance. SECTION 6.4 CONDITIONS. (a) The Borrowers shall promptly notify the Lender of any loss covered by any insurance maintained pursuant to SECTION 6.2. 60 (b) All policies of property insurance required to be maintained pursuant to SECTION 6.2 shall provide that the proceeds of such policies shall be payable to the Agent, on behalf and for the ratable benefit of the Lenders, pursuant to a standard first mortgage endorsement substantially equivalent to the New York Standard Mortgage Endorsement or Lenders Loss Payable Endorsement 438 BFU, without contribution. All policies (other than with respect to liability or workers compensation insurance) shall insure the interests of the Agent and the Lenders regardless of any breach or violation by either of the Borrowers of warranties, declarations or conditions contained in such policies, any action or inaction of either of the Borrowers or others. (c) All policies of insurance required to be maintained pursuant to this ARTICLE VI shall provide the Agent with at least thirty (30) days' prior written notice of reduction, cancellation, expiration or lapse. SECTION 6.5 EVIDENCE OF INSURANCE. On an annual basis at each policy anniversary, the Borrowers shall furnish the Agent with approved certification of all required insurance. Such certification shall be executed by each insurer or by an authorized representative of each insurer where it is not practical for such insurer to execute the certificate itself. Such certification shall identify underwriters, the type of insurance, the insurance limits and the policy term and shall specifically list the special provisions enumerated for such insurance required by this ARTICLE VI. Upon request, the Borrowers will promptly furnish the Lender with copies of all insurance policies, binders and cover notes or other evidence of such insurance required by this ARTICLE VI. SECTION 6.6 NO DUTY OF THE LENDERS TO VERIFY. No provision of this ARTICLE VI or any other provision of this Agreement shall impose on the Agent or the Lenders any duty or obligation to verify the existence or adequacy of the insurance coverage maintained by the Borrowers, nor shall the Agent or any Lender be responsible for any representations or warranties made by or on behalf of either of the Borrowers to any insurance company or underwriter. ARTICLE VII AFFIRMATIVE COVENANTS OF THE BORROWERS Each of the Borrowers covenants and agrees, on a joint and several basis, that, so long as any Commitment shall be available hereunder or any Loan or other payment Obligation shall remain unpaid or unsatisfied, unless Required Lenders shall otherwise waive compliance in writing: 61 SECTION 7.1 RECORDS AND REPORTS. Each of the Borrowers shall maintain a system of accounting administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP and deliver to the Agent and each Lender: (a) QUARTERLY BORROWER-PREPARED FINANCIAL STATEMENTS. As soon as practicable and in any event within forty-five (45) days after the end of each Fiscal Quarter for the first three Fiscal Quarters of each Fiscal Year and concurrent with the annual audited financial statements furnished pursuant to SUBSECTION 7.1(B) for the fourth Fiscal Quarter in each Fiscal Year, (i) a consolidated (and consolidating) balance sheet of Holdings as at the end of such period and as at the end of the immediately preceding Fiscal Year, (ii) a consolidated (and consolidating) statement of operations of Holdings for such Fiscal Quarter and for such Fiscal Year to date, setting forth in each case in comparative form the figures for the corresponding periods of the previous Fiscal Year, (iii) a consolidated (and consolidating) statement of cash flows of Holdings for such Fiscal Year to date, setting forth in comparative form the figures for the corresponding period for the immediately preceding Fiscal Year, all in reasonable detail and certified by the chief financial officer or controller/principal accounting officer of Holdings that they (1) are complete and fairly present the financial condition of Holdings and its Subsidiaries as at the dates indicated and the results of the operations and changes in cash flow of Holdings and its Subsidiaries for the periods indicated, (2) disclose all liabilities of Holdings and its Subsidiaries that are required to be reflected or reserved against under GAAP, whether liquidated or unliquidated, fixed or contingent and (3) have been prepared in accordance with GAAP, subject to the absence of footnotes and changes resulting from audit and normal year-end adjustment and (iv) a report setting forth for such period the beginning total subscribers serviced by CSG, new subscribers (detailed by major Customer Services Client) added by CSG during such period, and deconverted subscribers (detailed by major Customer Services Client) whose servicing by CSG was terminated during such period; (b) ANNUAL AUDITED FINANCIAL STATEMENTS. As soon as practicable and in any event within ninety (90) days after the end of each Fiscal Year, a consolidated (and consolidating) balance sheet of Holdings as at the end of such Fiscal Year and the related consolidated (and consolidating) statements of operations, stockholders' equity and cash flows of Holdings for such Fiscal Year, setting forth in each case, in comparative form the figures for the previous Fiscal Year, all in reasonable detail and, in the case of such financial statements, accompanied by a report thereon of Arthur Andersen LLP or other independent public accountants of recognized national standing selected by Holdings and reasonably satisfactory to the Agent, which report shall not contain an adverse opinion, a disclaimer of opinion or be qualified or limited because of a restricted or limited examination by such accountant of any material portion of Holdings' records and shall state that such financial statements present fairly the financial position of Holdings and its Subsidiaries as at the dates indicated and the results of operations and changes in financial position of Holdings and its Subsidiaries for the periods indicated in conformity with GAAP and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards, certified by the chief financial officer or controller/principal accounting officer of Holdings; provided, however, that all consolidating financial statements required under this SUBSECTION 7.1(b) may be unaudited. 62 (c) ACCOUNTANTS' STATEMENT. Together with each delivery of audited financial statements of Holdings pursuant to SUBSECTION 7.1(B), a written statement by the independent public accountants giving the report thereon (i) stating that their audit examination has included a review of the terms of this Agreement and the Notes as they relate to accounting matters, (ii) stating whether, in connection with their audit examination, any condition or event which constitutes a Default or an Event of Default as it relates to accounting matters has come to their attention, and if such a condition or event has come to their attention, specifying the nature and period of existence thereof; provided that such accountants shall not be liable by reason of any failure to obtain knowledge of any such Default or Event of Default that would not be disclosed in the course of their audit examination, and (iii) stating that based on their audit examination nothing has come to their attention which causes them to believe either or both that the information contained in the certificates as they relate to accounting matters delivered therewith pursuant to SUBSECTION 7.1(b) is not correct or that the matters set forth in the Compliance Certificates delivered therewith for the applicable Fiscal Year are not stated in accordance with the terms of this Agreement; (d) COMPLIANCE CERTIFICATE. As soon as practicable and in any event within forty-five (45) days after the end of each Fiscal Quarter for the first three Fiscal Quarters of each Fiscal Year and concurrent with the annual audited financial statements furnished pursuant to SUBSECTION 7.1(b) for the fourth Fiscal Quarter in each Fiscal Year, a Compliance Certificate dated as of the last day of such Fiscal Quarter, duly executed by the chief financial officer or controller/principal accounting officer of each of the Borrowers, with appropriate insertions satisfactory to the Agent; (e) BORROWING BASE CERTIFICATE. As soon as practicable and in any event within forty-five (45) days after the end of each Fiscal Quarter, a Borrowing Base Certificate dated as of the last day of each month, duly executed by the chief financial officer or controller/principal accounting officer of each of the Borrowers, with appropriate insertions satisfactory to the Agent; (f) FINANCIAL FORECASTS. As soon as practicable and in no event later than the last day of each Fiscal Year, financial forecasts, including a projected balance sheet and statement of operations and statement of cash flows of Holdings and its Subsidiaries, in each case set forth on a monthly basis for the following Fiscal Year, and a five (5) year forecasted statement of operations set forth on an annual basis, and including a substantive description of each of the material underlying assumptions used in preparing such consolidated financial forecasts, as prepared by management of Holdings; (g) SEC FILINGS. Promptly upon transmission thereof, copies of all prospectuses and regular and periodic financial information, proxy materials and other information and reports, if any, which either of the Borrowers or any of their respective Subsidiaries shall file with the SEC or any Governmental Authorities substituted therefor; (h) OTHER REPORTS. Promptly upon receipt thereof, copies of all reports submitted to Holdings by independent public accountants in connection with each annual, interim 63 or special audit of the financial statements of Holdings made by such accountants, including the comment letter submitted by such accountants to management in connection with their annual audit; (i) NOTICES. Promptly upon any officer of either of the Borrowers obtaining knowledge (i) of any condition or event which constitutes a Default or an Event of Default under this Agreement, (ii) that any Person has given any notice to the Borrower or taken any other action with respect to a claimed default or event or condition of the type referred to in SUBSECTION 10.1(c), (iii) of the institution of any litigation or investigation by any Person, including any Governmental Authority involving any alleged (regardless of whether insured) liability of either of the Borrowers equal to or greater than $1,000,000 or any adverse determination in any litigation involving a potential liability of either of the Borrowers equal to or greater than $1,000,000, (iv) of receipt of any notice of default or notice of termination from any Customer Services Client in respect of any Customer Services Agreement having remaining contracted for payments aggregating in excess of $5,000,000 or (v) of any Material Adverse Change, a certificate of a Responsible Person of each of the Borrowers specifying the notice given or action taken by such Person and the nature of such claimed Default, Event of Default, event or condition and what action the Borrower has taken, is taking and proposes to take with respect thereto; (j) TERMINATION EVENTS/PROHIBITED TRANSACTION. Promptly upon becoming aware of the occurrence of any (i) Termination Event in connection with any Pension Plan or (ii) "prohibited transaction" (as such term is defined in ERISA and the Code) in connection with any Employee Benefit Plan or any trust created thereunder, a written notice specifying the nature thereof, what action the Borrowers have taken, are taking or propose to take with respect thereto, and, when known, any action taken or threatened by the IRS or the PBGC with respect thereto; (k) ERISA. With reasonable promptness, copies of (i) all notices received by either of the Borrowers or any of their respective ERISA Affiliates of the PBGC's intent to terminate any Pension Plan or to have a trustee appointed to administer any Pension Plan, (ii) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by either of the Borrowers or any of their respective ERISA Affiliates with the IRS with respect to each Pension Plan covering employees of either of the Borrowers and (iii) all notices received by either of the Borrowers or any of their ERISA Affiliates from a Multiemployer Plan sponsor concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA; (l) PENSION PLANS. Promptly upon receipt by either of the Borrowers, any challenge by the IRS to the qualification under Section 401 or 501 of the Code of any Pension Plan; (m) TAX RETURNS. Upon the request of the Agent or any Lender, copies of all federal, state, local and foreign tax returns and reports in respect of income, franchise or other taxes on or measured by income (excluding sales, use or like taxes) filed by or on behalf of either of the Borrowers; and 64 (n) OTHER INFORMATION. With reasonable promptness, such other reports, information and data, including lists of Property and accounts, budgets, agreements with insurers, forecasts and reports, with respect to either of the Borrowers as from time to time may be reasonably requested by the Agent or any Lender. All financial statements of Holdings to be delivered by the Borrowers to the Agent pursuant to this SECTION 7.1 will be complete and correct and present fairly the financial condition of Holdings as of the date thereof; will disclose all liabilities of Holdings that are required to be reflected or reserved against under GAAP, whether liquidated or unliquidated, fixed or contingent; and will have been prepared in accordance with GAAP. All tax returns submitted to the Agent by either of the Borrowers will, to the best of the Borrowers' knowledge, be true and correct. Each of the Borrowers hereby agrees that each time it submits a financial statement or tax return to the Agent, the Borrowers shall be deemed to represent and warrant to the Lenders that such financial statement or tax return complies with all of the preceding requirements set forth in this paragraph. SECTION 7.2 MAINTENANCE OF RIGHTS AND PROPERTIES. Each of the Borrowers shall: (a) MAINTENANCE OF EXISTENCE AND RIGHTS. Maintain and preserve in full force and effect its corporate existence and all rights, licenses, leases, qualifications, privileges, franchises and other authority adequate for the conduct of its business except where the lapsing of any of the foregoing could not, with reasonable likelihood, cause or result in a Material Adverse Change; and (b) MAINTENANCE OF PROPERTIES. Maintain, preserve and protect its properties, assets, equipment and facilities required for the conduct of the Business in the ordinary course in good order and working repair and condition (taking into consideration ordinary wear and tear) and from time to time make, or cause to be made, all needful and proper repairs, renewals and replacements thereto. SECTION 7.3 TAXES AND OTHER LIABILITIES. Promptly pay and discharge all Charges when due and payable, except (a) such as may be paid thereafter without penalty or (b) such as may be contested in good faith by appropriate proceedings and for which an adequate reserve has been established and is maintained in accordance with GAAP. The Borrowers shall promptly notify the Agent of any material challenge, contest or proceeding pending by or against either of the Borrowers before any taxing authority. SECTION 7.4 INSPECTION OF BOOKS AND RECORDS. From time to time during normal business hours and upon reasonable notice (except that if an Event of Default shall have occurred and be continuing, no such notice is required), permit the Agent or any Lender or any agent, representative or employee thereof, to examine and make copies of and abstracts from the financial records and books of account of each of the Borrowers and to discuss the affairs, finances and accounts of the Borrowers with any of their respective executive officers to the extent any of the foregoing may be relevant to the Borrowers' obligations under the Loan 65 Documents. All such inspections pursuant to this SECTION 7.4 shall be at the Borrowers' expense. SECTION 7.5 INSPECTION AND AUDIT OF COLLATERAL. From time to time during normal business hours and upon reasonable notice (except that if an Event of Default shall have occurred and be continuing, no such notice is required), permit the Agent or any agent, representative or employee thereof, to conduct periodic inspections and audits of the Collateral. Only one such inspection and audit of the Collateral pursuant to this SECTION 7.5 during any calendar year shall be at the Borrowers' expense (except that if and so long as an Event of Default shall have occurred and be continuing, such limitation shall not apply and all inspections and audits conducted during the continuation of an Event of Default shall be at the Borrowers' expense). SECTION 7.6 COMPLIANCE WITH LAWS. Exercise due diligence in order to comply with the requirements of all applicable Requirements of Laws, non-compliance with which could, with reasonable likelihood, cause or result in a Material Adverse Change; provided, however, that Borrowers may appeal or contest any act, regulation, judgment, order, decree or direction in any reasonable manner which shall not, in the opinion of Required Lenders, adversely affect the Lenders' rights hereunder or adversely affect the priority of the Agent's or any Lender's Lien in, on and to any of the Collateral. SECTION 7.7 AGREEMENTS. Perform, within all required time periods (after giving effect to any applicable grace periods), all of its obligations and enforce all of its rights under each agreement to which it is a party, including any leases to which it is a party, where the failure to so perform and enforce could, with reasonable likelihood, cause or result in a Material Adverse Change. Neither of the Borrowers shall terminate or modify any provision of any agreement to which it is a party with respect to which such termination or modification could, with reasonable likelihood, cause or result in a Material Adverse Change. SECTION 7.8 SUPPLEMENTAL DISCLOSURE. From time to time (in the event that such information is not otherwise delivered by the Borrowers to the Agent or the Lenders pursuant to this Agreement), so long as there are Obligations outstanding hereunder, disclose to the Agent in writing any material matter hereafter arising which, if existing or occurring at the date of this Agreement, would have been required to be set forth or described by the Borrowers under the terms of this Agreement or any of the other Loan Documents or which is necessary to correct any information set forth or described by the Borrowers hereunder or thereunder or in connection herewith which has been rendered inaccurate thereby. SECTION 7.9 INTEREST RATE PROTECTION. Have in place not later than ninety (90) days following the Closing, and maintain for such time as any principal balance of the Loans shall remain outstanding, a Rate Contract capping the Borrowers' interest rate risk during each Fiscal Year on notional amounts equal to not less than fifty percent (50.0%) of the sum of the aggregate principal balance of the Term Loans, as such principal balance is scheduled to be amortized pursuant to SECTION 2.3, at an all-in rate of interest not to exceed thirteen percent (13.0%). 66 SECTION 7.10 COPYRIGHT REGISTRATION AND RECORDATION. (a) UNREGISTERED COPYRIGHT. Set forth in ITEM 7.10 of the DISCLOSURE SCHEDULE is a list of all Copyrights owned or held by either of the Borrowers or its Subsidiaries, after giving effect to the SUMMITrak Acquisition, which are material to the Business (whether in the form of software or other products or new, enhanced or upgraded formats or versions of previously existing products) which have not yet been registered with the United States Copyright Office. Each of the Borrowers shall, or shall cause its Subsidiaries to, apply for the registration of the Copyrights set forth in ITEM 7.10 of the DISCLOSURE SCHEDULE as soon as practicable following the Closing Date and thereafter diligently, using all commercially reasonable efforts, pursue and obtain the earliest practicable registration of such Copyrights. Upon the registration of such Copyrights, such Borrower shall, or shall cause its Subsidiaries to, execute and acknowledge (or cause to be executed and acknowledged) and deliver to the Agent all documents, and take all actions, that may be reasonably requested by the Agent or the Lenders from time to time to enable the Agent, on behalf of the Lenders, to record its Lien in such Copyrights with the United States Copyright Office. (b) NEWLY DEVELOPED INTELLECTUAL PROPERTY. From time to time when either of the Borrowers or any of its Subsidiaries develop material Intellectual Property, such Borrower shall, or shall cause its Subsidiaries to, promptly apply for, i.e., in no event more than sixty (60) days thereafter, and diligently pursue the registration, recordation, filing or issuance, as the case may be, of such Intellectual Property with or by the United States Copyright Office or the United States Patent and Trademark Office or the applicable foreign Governmental Authority, as applicable. Upon the registration, recordation, filing or issuance, as the case may be, of such newly-developed material Intellectual Property, such Borrower shall, or shall cause its Subsidiaries to, execute and acknowledge and deliver to the Agent all documents, and take all actions, that may reasonably be requested by the Agent or the Lenders from time to time to enable the Agent to register, record or file, as the case may be, its Lien in such Intellectual Property with the United States Copyright Office or United States Patent and Trademark Office, as applicable, or as to Intellectual Property registered, recorded or filed with or issued by a foreign Governmental Authority, with such foreign Governmental Authority. SECTION 7.11 FURTHER ASSURANCES. In addition to the obligations and documents which this Agreement expressly requires the Borrowers to execute, acknowledge, deliver and perform, each of the Borrowers shall execute and acknowledge (or cause to be executed and acknowledged) and deliver to the Agent all documents, and take all actions, that may be reasonably requested by the Agent or the Lenders from time to time to confirm the rights created or now or hereafter intended to be created under the Loan Documents, to protect and further the validity, priority and enforceability of the Liens created under the Collateral Documents, to subject to the Liens created under the Collateral Documents any Property intended by the terms of any Loan Document to be covered by the Collateral Documents, or otherwise to carry out the purposes of the Loan Documents and the transactions contemplated thereunder. 67 ARTICLE VIII NEGATIVE COVENANTS OF THE BORROWERS Each of the Borrowers hereby covenants and agrees, on a joint and several basis, that, so long as any Lender shall have any Commitment hereunder, or any Loan or other payment Obligation shall remain unpaid or unsatisfied, unless the Required Lenders waive compliance in writing: SECTION 8.1 LIMITATION ON LIENS. Neither of the Borrowers shall, or shall permit any of its Subsidiaries to, directly or indirectly, make, create, incur, assume or suffer to exist any Lien upon or with respect to any part of its Property, whether now owned or hereafter acquired, other than the following (collectively, the "Permitted Liens"): (a) Liens created under any Loan Document in favor of the Agent or any Lender; (b) the Permitted Title Exceptions; (c) other Liens existing as of the Closing Date disclosed in ITEM 8.1 of the DISCLOSURE SCHEDULE, provided that the obligations secured thereby do not increase; (d) Liens for taxes, fees, assessments or other governmental Charges which are not delinquent or remain payable without penalty, or to the extent that non-payment thereof is permitted by this Agreement; provided that no notice of lien has been filed or recorded under the Code; (e) Liens (other than any Lien imposed by ERISA and other than on the Collateral) consisting of pledges or deposits required in the Ordinary Course of Business in connection with workers' compensation, unemployment insurance and other social security legislation; (f) Liens securing Capital Lease Obligations on assets subject to such Capital Leases, provided that such Capital Leases are permitted under SUBSECTION 8.7(b); (g) purchase money Liens on any Property acquired or held by either of the Borrowers or their Subsidiaries in the Ordinary Course of Business, other than the Collateral, securing Indebtedness incurred or assumed for the purpose of financing all or any part of the cost of acquiring such Property; provided that (i) any such Lien attaches to such Property concurrently with or within twenty (20) days after the acquisition thereof and (ii) such Lien attaches solely to the Property so acquired in such transaction; (h) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the Ordinary Course of Business which are not delinquent or remain payable without penalty or which are being contested in good faith and by 68 appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the Property subject thereto; (i) Liens securing (i) the non-delinquent performance of bids, trade contracts (other than for borrowed money) or statutory obligations, (ii) Contingent Obligations in respect of surety and appeal bonds, (iii) obligations arising in connection with workers' compensation, unemployment insurance and other types of social security or employee benefits and (iv) other non- delinquent obligations of a like nature, in each case incurred in the Ordinary Course of Business, provided all such Liens in the aggregate could not (even if enforced), with reasonable likelihood, cause or result in a Material Adverse Change; (j) easements, rights-of-way, restrictions and other similar encumbrances incurred in the Ordinary Course of Business which, in the aggregate, are not substantial in amount and which do not in any case materially detract from the value of the Property subject thereto or interfere with the ordinary conduct of the businesses of the Borrowers and their respective Subsidiaries; (k) Leases or subleases granted to others not interfering with the ordinary conduct of the Borrowers' businesses or the business of any of their respective Subsidiaries; (l) Any interest or title of a lessor; (m) Any money judgment, writ or warrant of attachment or similar process entered or filed against either of the Borrowers or any of their respective Subsidiaries if the judgment it secures shall, within thirty (30) days after the entry thereof, have been discharged or execution thereof has been stayed pending appeal, or shall have been discharged within thirty (30) days after the expiration of such stay; (n) Liens arising solely by virtue of any contractual or statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository institution; provided that (i) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by either of the Borrowers in excess of those set forth by regulations promulgated by the Federal Reserve Board, and (ii) such deposit account is not intended by either of the Borrowers or any of their respective Subsidiaries to provide collateral to the depository institution; (o) Liens securing Indebtedness arising under any Rate Contract permitted pursuant to SUBSECTION 8.4(b); and (p) Liens other than the Liens referred to above securing Indebtedness, obligations or other liabilities in an aggregate amount not to exceed $1,000,000. SECTION 8.2 CONSOLIDATIONS AND MERGERS. Neither of the Borrowers shall merge or consolidate with or into, directly or indirectly, whether by operation of law or otherwise, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of 69 transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person. SECTION 8.3 LOANS AND INVESTMENTS. Neither of the Borrowers shall, or shall permit any of its Subsidiaries to, make, purchase or acquire any Investment in, any Person or make any advance, loan, extension of credit or capital contribution to any Person, including any Affiliate of such Borrower, or make any commitment with respect to any of the foregoing, except for: (a) investments in Cash Equivalents; (b) the existing Investment of Holdings in the Stock of CSG and Bytel existing as of the Closing Date and of CSG in the Stock of IntelliTEK existing as of the Closing Date; (c) Investments of the Net Issuance Proceeds of new cash equity raised or received by either of the Borrowers subsequent to the Closing to the extent that such Net Issuance Proceeds may be retained by the Borrowers pursuant to SUBSECTION 2.8(d); provided that such retained Net Issuance Proceeds are invested in the Business, including any Acquisition of any Person engaged in the same Business; and provided further that no Event of Default shall have occurred and be continuing at the time any such Investment is made; (d) Investments in an amount equal to $25,000,000; provided that such amounts are invested in the Business, including any Acquisition of any Person engaged in the same or similar Businesses; and provided further that no Event of Default shall have occurred and be continuing at the time any such Investment is made; (e) Investments in the form of any Rate Contract entered into with any counterparty; (f) loans and other advances of money made to officers or employees of either of the Borrowers or their respective Subsidiaries with respect to the relocation of such Persons to other facilities of either of the Borrowers or their respective Subsidiaries in an aggregate principal amount not to exceed $500,000 during any Fiscal Year; (g) loans made to officers or employees of either of the Borrowers solely for the purpose of financing the purchase by such Person of Stock of Holdings in an aggregate principal amount not to exceed $1,000,000; (h) extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or the rendering of services in the Ordinary Course of Business; (i) loans and other advances existing on the Closing Date from Holdings to CSG and Bytel and from CSG to Bytel as set forth in ITEM 8.5 to the DISCLOSURE SCHEDULE; (j) loans and other advances between the Borrowers; 70 (k) loans and other advances (A) between either of the Borrowers and a wholly-owned Subsidiary of either of the Borrowers and (B) between a wholly-owned Subsidiary of either of the Borrowers and either of the Borrowers, in the aggregate amount not to exceed $2,000,000; and (l) Investments not otherwise expressly permitted by this SECTION 8.3 in the aggregate amount not to exceed $1,000,000. SECTION 8.4 LIMITATION ON INDEBTEDNESS. Neither of the Borrowers shall, or shall permit any of its Subsidiaries to, create, incur, assume, suffer to exist, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except: (a) Indebtedness incurred pursuant to this Agreement, the Notes and the other Loan Documents; (b) Indebtedness incurred pursuant to any Rate Contract entered into with any counterparty; (c) accounts payable to trade creditors for goods and services and current operating liabilities (not the result of the borrowing of money) incurred in the Ordinary Course of Business in accordance with customary terms and paid within the specified time, unless contested in good faith by appropriate proceedings and reserved for in accordance with GAAP; (d) Indebtedness existing on the Closing Date and set forth in ITEM 8.4 of the DISCLOSURE SCHEDULE; (e) endorsements for collection or deposit in the Ordinary Course of Business; (f) Indebtedness incurred in connection with Capitalized Leases and Operating Leases permitted pursuant to SECTION 8.7; (g) Indebtedness secured by Liens permitted under SUBSECTION 8.1(G) in an aggregate principal amount not to exceed $1,000,000; (h) Contingent Obligations of either of the Borrowers or their respective Subsidiaries in respect of (x) Indebtedness of the other Borrower or the Subsidiaries of either of the Borrowers or (y) obligations of the other Borrower or the Subsidiaries of either of the Borrowers pursuant to contracts, leases and other agreements to which such other Borrower or Subsidiary is a party; (i) Indebtedness of either Borrower to the other Borrower; and (j) In addition to the other Indebtedness permitted under this SECTION 8.4, unsecured Indebtedness in the aggregate principal amount outstanding at any time not to exceed $10,000,000. 71 SECTION 8.5 TRANSACTIONS WITH AFFILIATES. Neither of the Borrowers shall, or shall permit any of its Subsidiaries to, enter, directly or indirectly, into or be a party to any agreement or transaction (including the purchase, sale, lease or exchange of any Property or the rendering of any services) with any Affiliate of such Borrower, except (a) as set forth in ITEM 8.5 to the DISCLOSURE SCHEDULE and (b) in the Ordinary Course of Business and upon fair and reasonable terms that are approved by such Borrower's board of directors, fully disclosed to the Agent and no less favorable to such Borrower than would obtain in a comparable arm's length transaction with a Person not an Affiliate of such Borrower; provided, however, that this SECTION 8.5 shall not apply to agreements or transactions in the Ordinary Course of Business between the Borrowers. SECTION 8.6 USE OF PROCEEDS. Each of the Borrowers shall use the Loan proceeds only for the purposes described in SECTION 2.1 and in no event shall use any portion of such proceeds, directly or indirectly, (a) to purchase or carry Margin Stock, (b) to repay or otherwise refinance indebtedness of either of the Borrowers or others incurred to purchase or carry Margin Stock, (c) to extend credit for the purpose of purchasing or carrying any Margin Stock or (d) to acquire any security in any transaction that is subject to Section 13 or 14 of the Securities and Exchange Act of 1934. SECTION 8.7 LEASE OBLIGATIONS . Neither of the Borrowers shall, or shall permit any of its Subsidiaries to, create or suffer to exist any obligations for the payment of rent for any Property under lease or agreement to lease, except for: (a) Operating Leases entered into by either of the Borrowers or any of their respective Subsidiaries in the Ordinary Course of Business; and (b) Capital Leases entered into by either of the Borrowers or any of their respective Subsidiaries to finance the acquisition of equipment; provided that the aggregate annual rental payments for all such Capital Lease Obligations shall not exceed $5,000,000 in any Fiscal Year. SECTION 8.8 CAPITAL EXPENDITURES. The Borrowers shall not, and shall not permit any of its Subsidiaries to, make or commit to make Capital Expenditures during any of the following Fiscal Years in excess of the following amounts: FISCAL YEAR CAPITAL EXPENDITURES 1997 (4th Fiscal Quarter only) $ 3,000,000 1998 $15,000,000 1999 $20,000,000 2000 $25,000,000 2001 and $30,000,000 thereafter 72 plus any unutilized portion of the immediately preceding Fiscal Year's permitted Capital Expenditures provided that any such unutilized portion carried forward shall not in any Fiscal Year exceed $5,000,000 for Capital Expenditures in total. For purposes of this SECTION 8.8 only, the term "Capital Expenditures" shall mean an amount equal to "Capital Expenditures," as defined in SECTION 1.1 this Agreement exclusive of the amount of the SUMMITrak/Phoenix Capex Adjustment. SECTION 8.9 RESTRICTED PAYMENTS. Unless the Borrowers shall have delivered to the Agent in accordance with SUBSECTION 7.1(d) a Compliance Certificate indicating that (a) the Leverage Ratio as calculated as of the last day of the immediately preceding Fiscal Quarter is less than 1.50 and (b) there has not occurred and is continuing as of the end of the immediately preceding Fiscal Quarter or at such time any Default or Event of Default, Holdings shall not, and shall not suffer or permit any of its Subsidiaries (other than a wholly-owned Subsidiary) to, declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any shares of any class of its Stock, or purchase, redeem or otherwise acquire for value any shares of its Stock or any warrants, rights or options to acquire such shares, now or hereafter outstanding; provided, however, that Holdings from time to time (i) may repurchase its Stock from the public at fair market value in an aggregate amount for all such transactions not to exceed $20,000,000 and (ii) may re-purchase shares of "Restricted Stock" and "Performance Stock" sold pursuant to the CSG Employee Stock Purchase Plan from a holder of such Stock whose employment with Holdings and its Subsidiaries has terminated; provided that the repurchase price paid for any such Restricted Stock or Performance Stock shall not exceed, in the case of Performance Stock, the purchase price initially paid by such Person for such Performance Stock or, in the case of Restricted Stock, the higher of the purchase price initially paid by such Person for such Restricted Stock or the Book Value (as defined in the applicable purchase agreement) of such Restricted Stock. ection 8.10 MODIFICATION OF CERTAIN AGREEMENTS. Neither of the Borrowers shall, without the prior written approval of Required Lenders, amend, supplement or modify or consent to any amendment, supplement or other modification of any of the terms or provisions contained in, or applicable to (a) the TCI Services Agreement, if such modification would (i) reduce the net revenues receivable by CSG under the TCI Services Contract in any Fiscal Year by an amount greater than ten percent (10.0%) from the amount originally contemplated for such Fiscal Year under the copy of the TCI Services Agreement delivered to the Agent prior to the Closing Date or (ii) reduce the term of the TCI Services Agreement, (b) the SUMMITrak Purchase Agreement with respect to the amount or timing of the Contingent Earn-Out Payments or (c) any of its material Organizational Documents, except that Required Lenders' prior approval shall not be required for any amendment, supplement or modification which does not in any material way adversely affect either of the Borrowers' ability to pay and perform the Obligations or the Agent's or any Lender's rights or remedies under any of the Loan Documents. SECTION 8.11 MAINTENANCE OF BUSINESS. Neither of the Borrowers nor any of their Subsidiaries shall engage in any business other than the Business and other activities normally associated with the operation of the Business. 73 SECTION 8.12 ERISA. (a) Neither the Borrowers nor any ERISA Affiliate of the Borrowers shall incur any obligation to contribute to a Pension Plan required by a collective bargaining agreement or as a consequence of the acquisition of an ERISA affiliate, unless (i) such Borrower or such ERISA Affiliate shall notify the Agent in writing that it intends to incur such obligation and (ii) after the Agent's receipt of such notice, the Agent notifies such Borrower that Required Lenders consent to the establishment or maintenance of, or such Borrower's incurring an obligation to contribute to, the Pension Plan, which consent may not unreasonably be withheld or delayed but may be subject to such reasonable conditions as Required Lenders may require. (b) If the Borrowers or any ERISA Affiliate of the Borrowers incur any obligation to contribute to any Pension Plan, then the Borrowers shall not (i) terminate, or permit such ERISA Affiliate to terminate, any Pension Plan so as to result in any liability that might have or result in a Material Adverse Change or (ii) make or permit such ERISA Affiliate to make a complete or partial withdrawal (within the meaning of Section 4201 of ERISA) from any Multiemployer Plan so as to result in any liability that might have or result in a Material Adverse Change. SECTION 8.13 NO USE OF ANY LENDER'S NAME. The Borrowers shall not use or authorize any other Person to use any Lender's name or marks in any press releases, signage, publication or other publicity or medium, including any prospectus (but excluding any necessary or appropriate filings or submissions to Governmental Authorities, including the filing of this Agreement with the SEC solely as an exhibit evidencing an existing material agreement of the Borrower), without the Agent's or such Lender's advance written authorization. SECTION 8.14 ACCOUNTING CHANGES. Neither of the Borrowers shall make any significant change in accounting treatment or reporting practices, except as required by GAAP. ARTICLE IX FINANCIAL COVENANTS OF HOLDINGS Each of the Borrowers covenants and agrees, on a joint and several basis, that so long as any Loans shall be outstanding hereunder or any Commitment shall be available hereunder, unless Required Lenders shall otherwise consent in writing, the Borrowers shall perform all of the following financial covenants. In connection with performance of the Borrowers' obligations under this ARTICLE IX, each of the Borrowers agrees and understands that (except as expressly provided herein) all covenants under this ARTICLE IX shall be subject to quarterly compliance (as measured as of the last day of each Fiscal Quarter) and in each case review by the Lenders of the respective Fiscal Quarter's consolidated financial statements delivered to the Agent by the Borrowers pursuant to SUBSECTION 7.1(a). 74 SECTION 9.1 MAXIMUM LEVERAGE RATIO. The Borrowers shall not permit the Consolidated Leverage Ratio of Holdings and its Subsidiaries, as measured as of the last day of each Fiscal Quarter set forth below, to be greater than the following: MAXIMUM PERIOD LEVERAGE RATIO December 31, 1997 4.00:1.00 March 31, 1998 3.50:1.00 June 30, 1998 3.25:1.00 September 30, 1998 3.00:1.00 December 31, 1998 2.75:1.00 March 31, 1999 2.50:1.00 June 30, 1999 2.25:1.00 September 30, 1999 2.00:1.00 December 31, 1999 1.75:1.00 March 31, 2000 1.75:1.00 June 30, 2000 1.75:1.00 September 30, 2000 1.75:1.00 December 31, 2000 1.75:1.00 March 31, 2001 and 1.50:1.00 thereafter SECTION 9.2 MINIMUM FIXED CHARGE COVERAGE RATIO. The Borrowers shall not permit the Fixed Charge Coverage Ratio of Holdings and its Subsidiaries, as measured on the last day of each Fiscal Quarter commencing with the Fiscal Quarter ended December 31, 1997, to be less than 1.25:1.00. SECTION 9.3 MINIMUM INTEREST COVERAGE RATIO. The Borrowers shall not permit the Interest Coverage Ratio of Holdings and its Subsidiaries, as measured as of the last day of the Fiscal Quarter ended December 31, 1997 and the last day of each Fiscal Quarter during each of the Fiscal Years set forth below, to be less than the following: DATE MINIMUM INTEREST COVERAGE RATIO Fiscal Quarter ended December 31, 1997 only 4.00:1.00 1998 4.00:1.00 1999 5.00:1.00 2000 and thereafter 6.00:1.00 75 ARTICLE X EVENTS OF DEFAULT AND REMEDIES SECTION 10.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following shall constitute an Event of Default: (a) INSTALLMENTS OF PRINCIPAL. The Borrowers fail to pay any scheduled installment of principal under this Agreement or any of the Notes on the date such installment shall become due and payable; or (b) OTHER PAYMENTS. The Borrowers fail to pay any installment of interest on any Loan or any of the other Obligations of the Borrowers to the Lenders or the Agent arising under this Agreement, the Notes or any of the other Loan Documents when and as the same shall become due and payable, whether by acceleration or otherwise, and such failure shall not have been cured within five (5) calendar days; or (c) CROSS DEFAULTS. Either of the Borrowers (i) fails to make any payment in respect of any Indebtedness having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $5,000,000 when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) and such failure continues after the applicable grace or notice period, if any, specified in the document relating thereto on the date of such failure; or (ii) fails to perform or observe any other material condition or covenant, or any other event shall occur or condition exist, under any agreement or instrument relating to any such Indebtedness, and such failure continues after the applicable grace or notice period, if any, specified in the document relating thereto on the date of such failure if the effect of such failure, event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, such Indebtedness to be declared to be due and payable prior to its stated maturity (or any Contingent Obligation to become payable or cash collateral in respect thereof to be demanded); or (d) REPRESENTATIONS AND WARRANTIES. Any representation or warranty made by or on behalf of either of the Borrowers in this Agreement or any statement or certificate at any time given in writing pursuant hereto or in connection herewith shall be false, misleading or incomplete in any material respect when made; or (e) SPECIFIC DEFAULTS. Either of the Borrowers fails or neglects to perform, keep or observe any term, covenant or agreement contained in ARTICLE VIII (other than SECTION 8.1) or ARTICLE IX; or (f) OTHER DEFAULTS. Subject to SUBSECTIONS 10.1(a), (b) and (e), either of the Borrowers fails or neglects to perform, keep or observe any other term, covenant, provision or agreement contained in this Agreement or in any of the other Loan Documents or any other 76 document or agreement executed by such Borrower in connection therewith and the same has not been cured to Required Lenders' satisfaction within ten (10) calendar days after such Borrower shall become aware thereof, whether by written notice from the Agent or any Lender or otherwise, or should reasonably have been aware thereof; provided that if such Default is not reasonably susceptible to cure within ten (10) days, then such Borrower shall have such additional time as it reasonably takes to effect such cure, but in no event longer than thirty (30) days from the occurrence of such Default, so long as such Borrower promptly commences and diligently pursues such cure; or (g) INSOLVENCY; VOLUNTARY PROCEEDINGS. Either of the Borrowers or any of their Subsidiaries (other than IntelliTEK) (i) ceases or fails to be Solvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any, whether at stated maturity or otherwise; (ii) voluntarily liquidates, dissolves or ceases to conduct its business in the ordinary course; (iii) commences any Insolvency Proceeding with respect to itself; or (iv) takes any action to effectuate or authorize any of the foregoing; or (h) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency Proceeding is commenced or filed against either of the Borrowers or any of their Subsidiaries (other than IntelliTEK), or any writ, judgment, warrant of attachment, execution or similar process, is issued or levied against a substantial part of the Borrowers' or any of their respective Subsidiaries' Properties, and any such proceeding or petition shall not be dismissed, or such writ, judgment, warrant of attachment, execution or similar process shall not be released, vacated or fully bonded within forty-five (45) days after commencement, filing or levy; (ii) either of the Borrowers or any of their respective Subsidiaries admits the material allegations of a petition against it in any Insolvency Proceeding, or an order for relief (or similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) either of the Borrowers or any of their respective Subsidiaries acquiesces in the appointment of a receiver, trustee, custodian, conservator, liquidator, mortgagee in possession (or agent therefor), or other similar Person for itself or a substantial portion of its Property or business; or (i) MATERIAL ADVERSE CHANGE. A Material Adverse Change shall have occurred; or (j) MONETARY JUDGMENTS. One or more final (non-interlocutory) judgments, orders or decrees shall be entered against either of the Borrowers involving in the aggregate a liability (not covered by independent third-party insurance) as to any single or related series of transactions, incidents or conditions in excess of $2,000,000, and the same shall remain unsatisfied, unvacated and unstayed pending appeal for a period of thirty (30) days after the entry thereof; or (k) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or decree shall be rendered against either of the Borrowers which does or could, with reasonable likelihood, cause or result in a Material Adverse Change, and there shall be any period of thirty 77 (30) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or (l) COLLATERAL. Any of the Loan Documents shall for any reason other than the satisfaction in full of the Obligations thereunder cease to be, or be asserted by either of the Borrowers not to be, a legal, valid and binding obligation of the Borrowers party to such Loan Documents, enforceable in accordance with its terms, or any of the Liens purported to be created by any of the Collateral Documents or the Holdings Collateral Documents with respect to any of the Collateral shall for any reason, other than the satisfaction in full of the Obligations thereunder, cease to be, or be asserted by either of the Borrowers not to be, a first priority, validly perfected Lien (subject to the Permitted Liens), and such occurrence has not been cured to the Required Lenders' satisfaction within ten (10) days after the Borrowers shall have received notice of such failure from the Agent or any Lender or within thirty (30) days after the Borrowers shall have become aware thereof (whichever period is less); or (m) RATE CONTRACTS. Either of the Borrowers shall breach or default under any Rate Contract, if the effect of such breach or default is to allow the counterparty to proceed against, or otherwise realize from, either of the Borrowers or any Collateral to satisfy any claim of the counterparty against such Borrower in respect of such Rate Contract; or (n) GOVERNMENTAL ACTION. Any Governmental Authority enters a decree, order or ruling ("Government Action") which will materially and adversely affect either of the Borrowers' financial condition, operations or ability to perform or pay its Obligations unless such Borrower, within thirty (30) days after the earlier of the date (a) such Borrower first discovers it is the subject of such Government Action or (b) the Agent or any Lender or any Governmental Authority gives notice of such Government Action, takes such steps as are necessary to obtain relief (including by means of discharge, dismissal or release, as appropriate) from such Government Action. For the purpose of this SUBSECTION 10.1(N), "Government Action" shall include (i) any decree, order, or ruling entered by a Governmental Authority resulting in a monetary liability on the part of either of the Borrowers of more than $500,000 which is not paid or discharged within thirty (30) days after the date of entry or (ii) any disqualification of or other limitation on the operation of either of the Borrowers which, in the reasonable determination of the Required Lenders, could, with reasonable likelihood, cause or result in a Material Adverse Change; or (o) CHANGE OF CONTROL. A Change of Control shall have occurred; or (p) FAILURE TO BE PUBLICLY REPORTING COMPANY. Holdings ceases to be a publicly reporting company under the Securities Exchange Act of 1934, as amended. SECTION 10.2 WAIVER OF DEFAULT. Any Event of Default may be waived only with the written consent of the Required Lenders; except that an Event of Default under any of SUBSECTIONS 10.1(a), 10.1(b), 10.1(g) or 10.1(h) may only be waived with the written consent of all Lenders. Any Event of Default so waived shall be deemed to have been cured and not 78 to be continuing; but no such waiver shall be deemed a continuing waiver or shall extend to or affect any subsequent like default or impair any rights arising therefrom. SECTION 10.3 REMEDIES. Upon the occurrence and continuance of any Default or Event of Default, the Lenders shall have no obligation to advance money or extend any additional credit to or for the benefit of the Borrowers, whether in the form of Loans or otherwise. In addition, upon the occurrence and during the continuance of an Event of Default, the Lenders or the Agent, on behalf and for the ratable benefit of the Lenders, may, at the option of the Required Lenders, do any one or more of the following, all of which are hereby authorized by each of the Borrowers: (a) Make advances of Revolving Loans after the occurrence of any Event of Default, without thereby waiving their right to demand payment of the Obligations under this Agreement, the Notes or any of the other Loan Documents, or any other rights or remedies described in this Agreement, and without liability to make any other or further advances, notwithstanding the Agent's or any Lender's previous exercise of any such rights and remedies; (b) Declare all or any of the Obligations of the Borrowers under this Agreement, the Notes, the other Loan Documents and any other instrument executed by either of the Borrowers pursuant to the Loan Documents to be immediately due and payable, and upon such declaration such obligations so declared due and payable shall immediately become due and payable; provided that if such Event of Default is under SUBSECTIONS 10.1(g) or (h), then all of the Obligations shall become immediately due and payable forthwith without the requirement of any notice or other action by the Lenders or the Agent; (c) Terminate this Agreement (and the Commitments of the Lenders set forth herein) as to any future liability or obligation of the Lenders, but without affecting the Lenders' rights in and to Liens in and on the Collateral; and (d) Exercise, in addition to all other rights and remedies granted hereunder, any and all rights and remedies granted under the Collateral Documents and other Loan Documents or otherwise available at law or in equity. SECTION 10.4 SET-OFF. (a) RIGHTS OF SET-OFF. Regardless of the adequacy of any Collateral but subject to SUBSECTION 10.4(B), during the continuance of an Event of Default, any deposits or other sums credited by or due from any Lender to either of the Borrowers may be set off against the Obligations and any and all other liabilities, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, of either of the Borrowers to the Lenders. (b) REQUIRED LENDERS' CONSENT TO SET-OFF REQUIRED. Each Lender agrees that it shall not, and that it shall not attempt to, exercise any right of set-off, banker's lien or similar remedy against any of the Property of either of the Borrowers without the prior written consent of the Required Lenders. 79 SECTION 10.5 SHARING OF PAYMENTS. If, other than as expressly provided elsewhere herein, any Lender shall receive from either of the Borrowers or any other source whatsoever on account of the Loans made by it any payment (whether voluntary, involuntary, through the exercise of any right of set-off, bankers' lien, counterclaim, cross-action, enforcement of any claim evidenced by this Agreement or any of the other Loan Documents or by proof thereof in any case under the Bankruptcy Code or similar proceeding or otherwise) which is in excess of its respective Commitment Percentage of payments on account of the Term Loans or the Revolving Loans, as the case may be, obtained by all the Lenders with respect to such Loans, such Lender shall forthwith (a) notify the Agent of such fact and (b) make such dispositions and arrangements with each other Lender with respect to such excess, either by way of distribution until the amount of such excess has been exhausted, assignment of claims, subrogation or otherwise, as shall result in each such Lender receiving in respect of the amounts due such Lender, under this Agreement its ratable share of such payments; provided, however, that if all or any part of such excess payment is thereafter recovered from such Lender, such disposition and arrangements shall be rescinded and the amount restored to the extent of such recovery, but without interest. SECTION 10.6 RIGHTS AND REMEDIES CUMULATIVE. The Lenders' and the Agent's rights and remedies under this Agreement shall be cumulative. The Lenders and the Agent shall have all other rights and remedies not inconsistent herewith as provided by law or in equity. No exercise by any Lender or the Agent of one right or remedy shall be deemed an election. No delay by any Lender or the Agent shall constitute a waiver, election or acquiescence by such party. ARTICLE XI THE AGENT SECTION 11.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby irrevocably appoints, designates and authorizes Banque Paribas as the Agent under this Agreement and under each of the other Loan Documents and irrevocably authorizes the Agent to take such action on its behalf under and subject to the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Agent. SECTION 11.2 DELEGATION OF DUTIES. The Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The 80 Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care. SECTION 11.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document (except for its own gross negligence or willful misconduct), or (b) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by either of the Borrowers or any Affiliate of the Borrowers, or any officer thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any other Loan Document, or for the value of any Collateral or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of either of the Borrowers or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the Properties, books or records of the Borrowers or any of the Borrower's Affiliates. SECTION 11.4 RELIANCE BY THE AGENT. (a) The Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Borrowers), independent accountants and other experts selected by the Agent. The Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders. (b) For purposes of determining compliance with the conditions precedent specified in ARTICLE IV, each Lender that has executed this Agreement or shall hereafter execute and deliver an Assignment and Acceptance in accordance with SUBSECTION 12.11(a) shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter either sent by the Agent to such Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender, unless an officer of the Agent responsible for the transactions contemplated by the Loan Documents shall have received notice from the Lender prior to the initial Borrowing specifying its objection thereto and either such objection shall not have been 81 withdrawn by notice to the Agent to that effect or the Lender shall not have made available to the Agent the Lender's ratable portion of such Borrowing. SECTION 11.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Agent on behalf and for the benefit of the Lenders, unless the Agent shall have received written notice from a Lender or the Borrowers referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Agent receives such a notice, the Agent shall give notice thereof to the Lenders. The Agent shall take such action with respect to such Default or Event of Default as shall be requested by the Required Lenders in accordance with ARTICLE X; provided, however, that unless and until the Agent shall have received any such request, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem in the best interest of the Lenders. SECTION 11.6 CREDIT DECISION. Each Lender expressly acknowledges that none of the Agent-Related Persons has made any representation or warranty to it and that no act by the Agent hereinafter taken, including any review of the affairs of the Borrowers, shall be deemed to constitute any representation or warranty by the Agent to any Lender. Each Lender confirms to the Agent that it has not relied, and will not rely hereafter, on the Agent to check or inquire on such Lender's behalf into the adequacy, accuracy or completeness of any information provided by either of the Borrowers or any other Person under or in connection with the Loan Documents or the transactions herein contemplated (whether or not the information has been or is hereafter distributed to such Lender by the Agent). Each Lender represents to the Agent that it has, independently and without reliance upon the Agent and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrowers, and all applicable bank regulatory laws relating to the transactions contemplated thereby, and made its own decision to enter into this Agreement and extend credit to the Borrowers under and pursuant to this Agreement. Each Lender also represents that it will, independently and without reliance upon the Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrowers. Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Agent, the Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrowers which may come into the possession of any of the Agent-Related Persons. The Agent shall not be responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any other Loan Document or for any representations or warranties, recitals or statements made herein or therein or made in any written or oral statements, or in any financial or other statements, instruments, reports or 82 certificates or any other documents furnished or made by the Agent to the Lenders or by or on behalf of the Borrowers to the Agent or any Lender in connection with the Loan Documents and the transactions contemplated thereby or for the financial condition or business affairs of the Borrowers or any other Person liable for the payment of any Obligations, nor shall the Agent be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Loan Documents or as to the use of the proceeds of the Loans or as to the existence or possible existence of any Default or Event of Default. SECTION 11.7 INDEMNIFICATION. Whether or not the transactions contemplated hereby shall be consummated, the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of the Borrowers and without limiting the obligation of the Borrowers to do so), ratably from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind whatsoever which may at any time (including at any time following the repayment of the Loans and the termination or resignation of the related Agent) be imposed on, incurred by or asserted against any such Person in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by any such Person under or in connection with any of the foregoing; provided, however, that no Lender shall be liable for the payment to the Agent-Related Persons of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Person's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender shall reimburse the Agent upon demand for its ratable share of any costs or other out- of-pocket expenses (including Attorney Costs) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein to the extent that the Agent is not reimbursed for such expenses by or on behalf of the Borrowers. Without limiting the generality of the foregoing, if the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that the Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify the Agent of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason), such Lender shall indemnify the Agent fully for all amounts paid, directly or indirectly, by the Agent as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to the Agent under this SECTION 11.7, together with all costs and expenses (including Attorney Costs). The obligation of the Lenders in this SECTION 11.7 shall survive the payment of all Obligations. SECTION 11.8 AGENT IN INDIVIDUAL CAPACITY. Banque Paribas and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory or other business with either of the Borrowers and their Affiliates as though Banque Paribas were not the 83 Agent hereunder and without notice to or consent of the Lenders. With respect to its Loans, Banque Paribas shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent, and the terms "Lender" and "Lenders" shall include Banque Paribas in its individual capacity. SECTION 11.9 SUCCESSOR AGENT. The Agent may, and at the request of the Required Lenders shall, resign as Agent upon thirty (30) days' notice to the Borrowers and the Lenders. If the Agent shall resign as Agent under this Agreement, the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders. If no successor agent is appointed prior to the effective date of the resignation of the Agent, the Agent may appoint, after consulting with the Lenders and the Borrowers, a successor agent from among the Lenders. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Agent, the term "Agent" shall mean such successor agent and the retiring Agent's appointment, powers and duties as Agent shall be terminated. After any retiring Agent's resignation hereunder as Agent, the provisions of this ARTICLE XI and SECTIONS 12.5 and 12.6 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor agent has accepted appointment as Agent by the date which is thirty (30) days following a retiring Agent's notice of resignation, the retiring Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. SECTION 11.10 COLLATERAL MATTERS. (a) The Agent is authorized on behalf of all the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time to take any action with respect to any Collateral, the Collateral Documents or the Holdings Collateral Documents, which may be necessary to perfect and maintain perfected the security interest in and Liens upon the Collateral granted pursuant to the Collateral Documents or the Holdings Collateral Documents. (b) The Lenders irrevocably authorize the Agent, at its option and in its discretion, to release any Lien granted to or held by the Agent upon any Collateral (i) upon termination of the Commitments and payment in full of all Loans and all other Obligations payable under this Agreement and under any other Loan Document; (ii) constituting Property sold or to be sold or disposed of as part of or in connection with any disposition permitted hereunder; (iii) constituting Property in which neither of the Borrowers owned an interest at the time the Lien was granted or at any time thereafter; (iv) constituting Property leased to the either of the Borrowers under a lease which has expired or been terminated in a transaction permitted under this Agreement or is about to expire and which has not been, and is not intended by either of the Borrowers to be, renewed or extended; (v) consisting of an instrument evidencing Indebtedness or other debt instrument, if the indebtedness evidenced thereby has been paid in full; or (vi) if approved, authorized or ratified in writing by the Required Lenders or all the Lenders, as the case may be, as provided in SUBSECTION 12.1(f). Upon request by the Agent at any time, the Lenders will confirm in writing the Agent's authority to release particular types or items of Collateral pursuant to this SUBSECTION 11.10(b). Required Lenders may also deliver 84 written directions to the Agent not to take any specific action permitted by this SUBSECTION 11.10(B) and, following receipt of such notice, but subject to the other terms of this ARTICLE XI, the Agent shall cease from taking such action. ARTICLE XII MISCELLANEOUS SECTION 12.1 AMENDMENTS AND WAIVERS. No amendment, modification or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by the Borrowers therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders and acknowledged by the Agent, and then such waiver shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by all the Lenders and acknowledged by the Agent, do any of the following: (a) increase or extend the Commitment of any Lender (or reinstate any Commitment terminated pursuant to SUBSECTION 10.3) or subject any Lender to any additional obligations; (b) postpone or delay any date fixed for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any Loan Document (including in respect of any Mandatory Prepayment); (c) reduce the principal of, or the rate of interest specified herein on any Loan, or of any fees or other amounts payable hereunder or under any Loan Document; (d) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans which shall be required for the Lenders or any of them to take any action hereunder; (e) amend this SECTION 12.1; or (f) release all or any substantial part of the Collateral except as otherwise may be provided in the Collateral Documents or this Agreement or except where the consent of the Required Lenders only is specifically provided for; (g) discharge or release either Borrower or any subsequent guarantor from the Obligations; and, provided further that no amendment, modification, waiver or consent shall, unless in writing and signed by the Agent in addition to the Required Lenders or all the Lenders, as the case may be, affect the rights or duties of the Agent under this Agreement or any other Loan Document. 85 SECTION 12.2 NOTICES. (a) All notices, requests and other communications provided for hereunder shall be in writing (including, unless the context expressly otherwise provides, by facsimile transmission, provided that any matter transmitted by the Borrowers by facsimile (i) shall be immediately confirmed by a telephone call to the recipient at the number specified on the applicable signature page hereof, and (ii) shall be followed promptly by a hard copy original thereof) and mailed, faxed or delivered, to the address or facsimile number specified for notices on the applicable signature page hereof; or, if directed to the Borrowers or the Agent, to such other address as shall be designated by such party in a written notice to the other parties, and if directed to any other party, at such other address as shall be designated by such party in a written notice to the Borrowers and the Agent. (b) All such notices, requests and communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next day) delivery, or transmitted by facsimile machine, respectively, or if delivered, upon delivery, except that notices pursuant to ARTICLE II or ARTICLE XI shall not be effective until actually received by the Agent. (c) Each of the Borrowers and the Lenders acknowledge and agree that any agreement of the parties to receive certain notices by telephone and facsimile is for their mutual benefit and convenience. Any party shall be entitled to rely on the authority of any Person purporting to be a Person authorized by any other party to give such notice, and the party relying on such authorization shall not have any liability to any other Person on account of any action taken or not taken by such party in reliance upon such telephonic or facsimile notice. The obligation of each of the Borrowers to repay the Loans shall not be affected in any way or to any extent by any failure by the Agent to receive written confirmation of any telephonic or facsimile notice or the receipt by the Agent of a confirmation which is at variance with the terms understood by the Agent to be contained in the telephonic or facsimile notice. SECTION 12.3 NO WAIVER BY THE AGENT OR THE LENDERS. No failure or delay on the part of the Agent or any Lender in the exercise of any power, right or privilege under this Agreement, the Notes or any of the other Loan Documents shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. SECTION 12.4 ENTIRE AGREEMENT; CONSTRUCTION. (a) This Agreement, the Notes and each of the other Loan Documents dated as of the date hereof, taken together, constitute and contain the entire agreement among the Borrowers, the Lenders and the Agent and supersede any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof. 86 (b) This Agreement is the result of negotiations between and has been reviewed by each of the Borrowers, the Lenders executing this Agreement as of the Closing Date and the Agent and their respective counsel; accordingly, this Agreement shall be deemed to be the product of the parties hereto, and no ambiguity shall be construed in favor of or against the Borrowers, the Lenders or the Agent. The Borrowers, the Lenders and the Agent each severally agree that they intend the literal words of this Agreement and the other Loan Documents and that no parol evidence shall be necessary or appropriate to establish the Borrowers', any Lender's or the Agent's actual intentions. SECTION 12.5 INDEMNIFICATION. To the fullest extent permitted by law, each of the Borrowers agrees to protect, indemnify, defend and hold harmless the Agent, each Lender and each of their respective directors, officers, employees and agents and any Person which controls any of them within the meaning of the federal, state and foreign securities laws (each an "Indemnitee") from and against any liabilities, losses, obligations, damages, penalties, expenses or costs of any kind or nature and from any suits, judgments, claims or demands (including in respect of or for Attorney Costs and other reasonable fees and other disbursements of counsel for and consultants of such Indemnitees in connection with any investigative, administrative or judicial proceeding, whether or not such Indemnitees shall be designated a party thereto) based on any federal, state, local or foreign law or other statutory regulation, including securities, environmental and commercial law or other statutory regulation, which arises under common law or at equitable cause or in contract or otherwise on account of or in connection with any matter or thing or any action or failure to act by Indemnitees, or any of them, arising out of or relating to the Loan Documents or any agreement or instrument executed pursuant to the Loan Documents, except to the extent such liability arises from the willful misconduct or gross negligence of any of the Indemnitees (collectively, the "Indemnified Matters"). Upon receiving knowledge of any suit, claim or demand asserted by any Person that the Agent or any Lender believes is covered by this indemnity, the Agent or such Lender shall give the Borrowers notice of the matter and an opportunity to defend it, at the Borrowers' sole cost and expense, with legal counsel of the Borrowers' choice, which legal counsel shall be reasonably satisfactory to the Agent and the Lenders. The Agent or Lenders may also require the Borrowers to defend the matter. The obligations of the Borrowers under this SECTION 12.5 shall survive the payment and performance of the Obligations and the termination of this Agreement. To the extent that the undertaking to indemnify, pay and hold harmless set forth in this SECTION 12.5 may be unenforceable because it is violative of any law or public policy, the Borrowers shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Matters incurred by the Indemnitees. SECTION 12.6 COSTS AND EXPENSES. The Borrowers shall, whether or not the transactions contemplated hereby shall be consummated: (a) pay or reimburse Banque Paribas (including in its capacity as the Agent) within thirty (30) days after demand for all costs and expenses incurred by Banque Paribas (including in its capacity as the Agent) in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Agreement, any other Loan 87 Document and any other documents prepared in connection herewith (including any commitment letter and related documents preceding this Agreement) or therewith, and the consummation of the transactions contemplated hereby and thereby, including the reasonable Attorney Costs incurred by Banque Paribas (including in its capacity as the Agent) with respect hereto and thereto; (b) pay or reimburse the Agent and each Lender within thirty (30) days after demand for all costs and expenses incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies (including in connection with any "workout" or restructuring regarding the Loans, and including in any Insolvency Proceeding or appellate proceeding) under this Agreement, any other Loan Document, and any such other documents, including Attorney Costs incurred by the Agent and any Lender; and (c) pay or reimburse Banque Paribas (including in its capacity as the Agent) within thirty (30) days after demand for all audit, environmental inspection and review, search and filing, registration and recording costs, fees and expenses incurred or sustained by Banque Paribas (including in its capacity the Agent) in connection with the matters referred to under clauses (a) and (b) of this SECTION 12.6. SECTION 12.7 RELIANCE BY THE LENDERS. All covenants, agreements, representations and warranties made herein by the Borrowers shall, notwithstanding any investigation by the Lenders or the Agent, be deemed to be material to and to have been relied upon by the Lenders. SECTION 12.8 MARSHALLING; PAYMENTS SET ASIDE. The Lenders shall be under no obligation to marshall any assets in favor of the Borrowers or any other Person or against or in payment of any or all of the Obligations. To the extent that (a) the Borrowers make a payment or payments to the Lenders or the Agent, or (b) the Lenders or the Agent, on behalf and for the benefit of the Lenders, enforce their or its Liens or exercise their or its rights of set-off, and such payment or payments or the proceeds of such enforcement or set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under the Bankruptcy Code or under any other similar federal or state law, common law or equitable cause, then to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or set-off had not occurred. SECTION 12.9 NO SET-OFFS BY THE BORROWERS. All sums payable by the Borrowers pursuant to this Agreement, the Notes or any of the other Loan Documents shall be payable without notice or demand, except as otherwise specifically provided in this Agreement, and shall be payable in United States Dollars without set-off or reduction of any manner whatsoever. SECTION 12.10 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that neither of the Borrowers may assign or transfer any of its rights or 88 obligations under this Agreement without the prior written consent of the Agent and each Lender. SECTION 12.11 ASSIGNMENTS, PARTICIPATIONS, ETC. (a) Any Lender may, with the written consent of the Borrowers (at all times other than during the existence of an Event of Default in which event the Borrowers' consent shall not be required) and the Agent (and written notice to each other Lender), which consents shall not be unreasonably withheld, at any time assign and delegate to one or more Eligible Assignees (provided that no written consent of the Borrowers or the Agent shall be required in connection with any assignment and delegation by any Lender to a Lender Affiliate of such Lender) (each an "Assignee") all of the Loans, the Commitments and the other rights and obligations of such Lender hereunder or any ratable part thereof, in a minimum amount of $5,000,000; provided, however, that (i) the Borrowers and the Agent may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (A) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee shall have been given to the Borrowers and the Agent by such Lender and the Assignee; (B) such Lender and its Assignee shall have delivered to the Borrowers and the Agent an Assignment and Acceptance in the form of EXHIBIT F ("Assignment and Acceptance") together with any Note or Notes subject to such assignment; and (C) the assignor Lender or Assignee has paid to the Agent a processing fee in the amount of $3,000; provided that no processing fee shall be charged for any assignment to a Lender or a Lender Affiliate, and further provided that the Borrowers shall not be required to pay any fees or costs in connection with such assignment. (b) From and after the date that the Agent notifies the assigning Lender that it has received an executed Assignment and Acceptance and payment of the above-referenced processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under the Loan Documents. (c) Within five (5) Business Days after its receipt of notice by the Agent that it has received an executed Assignment and Acceptance and payment of the processing fee, the Borrowers shall execute and deliver to the Agent new Notes on the same terms and conditions as the original Notes evidencing such Assignee's assigned Loans and Commitments and, if the assignor Lender has retained a portion of its Loans and its Commitments, replacement Notes in the principal amount of the Loans retained by the assignor Lender (such Notes to be in exchange for, but not in payment of, the Notes held by such Lender). Immediately upon each Assignee's making its processing fee payment under the Assignment and Acceptance, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom. The 89 Commitments allocated to each Assignee shall reduce such Commitments of the assigning Lender pro tanto. (d) Any Lender may at any time sell to one or more commercial banks or other Persons not Affiliates of the Borrowers (a "Participant") participating interests in any Loans, the Commitment of that Lender and the other interests of that Lender (the "Originating Lender") hereunder and under the other Loan Documents; provided, however, that (i) the Originating Lender's obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) the Borrowers and the Agent shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender's rights and obligations under this Agreement and the other Loan Documents, and (iv) no Lender shall transfer or grant any participating interest under which the Participant shall have rights to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Documents, except to the extent such amendment, consent or waiver would require unanimous consent of the Lenders as described in clauses (a), (c) and (d) of the first proviso to SECTION 12.1. In the case of any such participation, the Participant shall be entitled to the benefit of SECTIONS 3.1, 3.3, 3.5, 3.6, 12.1 (but solely with respect to those matters set forth in clauses (a), (c) and (d) thereof requiring the consent of all Lenders), and 12.5 as though it were also a Lender hereunder, and if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set- off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interests were owing directly to it as a Lender under this Agreement. (e) Each Lender agrees to take normal and reasonable precautions and exercise due care to maintain the confidentiality of all information identified as "confidential" by the Borrowers and provided to it by the Borrowers, or by the Agent on the Borrowers' behalf, in connection with this Agreement or any other Loan Document, and neither it nor any of its Affiliates shall use any such information for any purpose or in any manner other than pursuant to the terms contemplated by this Agreement; except to the extent such information (i) was or becomes generally available to the public other than as a result of a disclosure by the Lender, or (ii) was or becomes available on a non- confidential basis from a source other than the Borrowers, provided that such source is not bound by a confidentiality agreement with the Borrowers known to the Lender; provided, however, that any Lender may disclose such information (A) at the request or pursuant to any requirement of any Governmental Authority to which the Lender is subject or in connection with an examination of such Lender by any such authority; (B) pursuant to subpoena or other court process; (C) when required to do so in accordance with the provisions of any applicable Requirement of Law; and (D) to such Lender's independent auditors and other professional advisors, provided that such auditors and professional advisors shall be required to similarly protect the confidentiality of such information. Notwithstanding the foregoing, the Borrowers authorize each Lender to disclose to any Participant or Assignee (each, a "Transferee") and to any prospective Transferee, such financial and other information in such Lender's possession concerning the Borrower which has been delivered to the Agent or the Lenders pursuant to this Agreement or which has been 90 delivered to the Agent or the Lenders by the Borrowers in connection with the Lenders' credit evaluation of the Borrowers prior to entering into this Agreement; provided that, unless otherwise agreed by the Borrowers, such Transferee agrees in writing to such Lender to keep such information confidential to the same extent required of the Lenders hereunder. (f) Notwithstanding any other provision contained in this Agreement or any other Loan Document to the contrary, any Lender may assign all or any portion of the Loans or Notes held by it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank, provided that any payment in respect of such assigned Loans or Notes made by the Borrowers to or for the account of the assigning or pledging Bank in accordance with the terms of this Agreement shall satisfy the Borrowers' obligations hereunder in respect to such assigned Loans or Notes to the extent of such payment. No such assignment shall release the assigning Bank from its obligations hereunder. SECTION 12.12 HEADINGS. Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. SECTION 12.13 SEVERABILITY. Whenever possible, each provision of this Agreement, the Notes and each of the other Loan Documents shall be interpreted in such a manner as to be valid, legal and enforceable under the applicable law of any jurisdiction. Without limiting the generality of the foregoing sentence, in case any provision of this Agreement, the Notes or any of the other Loan Documents shall be invalid, illegal or unenforceable under the applicable law of any jurisdiction, the validity, legality and enforceability of the remaining provisions, or of such provision in any other jurisdiction, shall not in any way be affected or impaired thereby. SECTION 12.14 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Lender shall notify the Agent in writing of any changes in the address to which notices to such Lender should be directed, of addresses of its Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as the Agent shall reasonably request. SECTION 12.15 NO THIRD PARTIES BENEFITTED. This Agreement is made and e ntered into for the sole protection and legal benefit of the Borrowers, the Lenders and the Agent, and their permitted successors and assigns, and except as otherwise expressly provided in this Agreement, no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents. Neither the Agent nor any Lender shall have any obligation to any Person not a party to this Agreement or other Loan Documents. SECTION 12.16 RELATIONSHIP OF PARTIES. The relationship between the Borrowers, on the one hand, and the Lenders and the Agent, on the other, is, and at all time shall remain solely that of a borrower and lenders. Neither the Lenders nor the Agent shall under any 91 circumstances be construed to be partners or joint venturers of either of the Borrowers or any of their Affiliates; nor shall the Lenders or the Agent under any circumstances be deemed to be in a relationship of confidence or trust or a fiduciary relationship with either of the Borrowers or any of their Affiliates, or to owe any fiduciary duty to either of the Borrowers or any of their Affiliates. The Lenders and the Agent do not undertake or assume any responsibility or duty to either of the Borrowers or any of their Affiliates to select, review, inspect, supervise, pass judgment upon or otherwise inform either of the Borrowers or any of their Affiliates of any matter in connection with its or their Property, any Collateral held by the Agent or any Lender or the operations of either of the Borrowers or any of their Affiliates. Each of the Borrowers its Affiliates shall rely entirely on its own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by any Lender or the Agent in connection with such matters is solely for the protection of the Lenders and Agent, and neither of the Borrowers nor any Affiliate is entitled to rely thereon. SECTION 12.17 TIME. Time is of the essence as to each term or provision of this Agreement and each of the other Loan Documents. SECTION 12.18 COUNTERPARTS. This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. SECTION 12.19 EQUITABLE RELIEF. The Borrowers recognize that, in the event the Borrowers fail to perform, observe or discharge any of their obligations or liabilities under this Agreement, the Notes or any of the other Loan Agreements, any remedy at law may prove to be inadequate relief to the Lenders or the Agent; therefore, the Borrowers agree that the Lenders or the Agent, if the Lenders so request, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages. SECTION 12.20 GOVERNING LAW. Except as otherwise expressly provided in any of the Loan Documents, in all respects, including all matters of construction, validity and performance, this Agreement and the Obligations arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of California applicable to contracts made and performed in such state, without regard to the principles thereof regarding conflict of laws, and any applicable laws of the United States of America. SECTION 12.21 OBLIGATIONS OF EACH BORROWER. Each Borrower agrees that the liability hereunder and under the other Loan Documents, including the Obligations, shall be the immediate, direct, and primary obligation of such Borrower on a joint and several basis and shall not be contingent upon the Agent's or any Lender's exercise or enforcement of any remedy it may have against any other Borrower or any other Person, or against the Collateral or any security for the Obligations. Without limiting the generality of the foregoing, the Obligations 92 shall remain in full force and effect without regard to, and shall not be impaired or affected by, nor shall such Borrower be exonerated or discharged by, any of the following events: (a) Insolvency, bankruptcy, reorganization, arrangement, adjustment, composition, assignment for the benefit of creditors, death, liquidation, winding up or dissolution of either Borrower or any guarantor of the Obligations; (b) Any limitation, discharge, or cessation of the liability of either Borrower or any guarantor of the Obligations due to any statute, regulation or rule of law, or any invalidity or unenforceability in whole or in part of the documents evidencing the Obligations or any guaranty of the Obligations; (c) Any merger, acquisition, consolidation or change in structure of either Borrower or any guarantor of the Obligations or any sale, lease, transfer or other disposition of any or all of the assets or shares of either Borrower or any guarantor of the Obligations; (d) Any assignment or other transfer, in whole or in part, of any Lender's interests in and rights under this Agreement or any of the other Loan Documents, including, without limitation, any assignment or other transfer, in whole or in part, of the Agent's interests in and to the Collateral; (e) Any claim, defense, counterclaim or setoff, other than that of prior performance, that either Borrower or any guarantor of the Obligations may have or assert, including, but not limited to, any defense of incapacity or lack of corporate or other authority to execute any documents relating to the Obligations or the Collateral; (f) The Agent's or any Lender's amendment, modification, renewal, extension, cancellation or surrender of any agreement, document or instrument relating to this Agreement, the Obligations or the Collateral, or any exchange, release, or waiver of any Collateral; (g) The Agent's or any Lender's exercise or nonexercise of any power, right or remedy with respect to the Obligations or the Collateral, including, but not limited to, the compromise, release, settlement or waiver with or of either Borrower or any other Person; (h) The Agent's or any Lender's vote, claim, distribution, election, acceptance, action or inaction in any bankruptcy case related to the Obligations or the Collateral; and (i) Any impairment or invalidity of the Collateral or any failure to perfect any of the Agent's Liens thereon. SECTION 12.22 SURETYSHIP WAIVERS. Each Borrower hereby expressly waives (a) diligence, presentment, demand for payment, protest, benefit of any statute of limitations affecting such Borrower's liability under the Loan Documents; (b) discharge due to any disability 93 of either Borrower; (c) any defenses of either Borrower to obligations under the Loan Documents not arising under the express terms of the Loan Documents or from a material breach thereof by the Agent or any Lender which under applicable law has the effect of discharging either Borrower from the Obligations as to which this Agreement is sought to be enforced; (d) the benefit of any act or omission by the Agent and the Lenders which directly or indirectly results in or aids the discharge of either Borrower from any of the Obligations by operation of law or otherwise; (e) except as expressly provided herein, all notices whatsoever, including, without limitation, notice of acceptance of the incurring of the Obligations; (f) any right it may have to require the Agent or the Lenders to disclose to it any information that the Agent or the Lenders may now or hereafter acquire concerning the financial condition or any circumstances that bears on the risk of nonpayment by the other Borrower, including, without limitation, the release of such other Borrower from its Obligations hereunder; and (g) any requirement that the Agent and the Lenders exhaust any right, power or remedy or proceed against the other Borrower or any other security for, or any guarantor of, or any other party liable for, any of the Obligations, or any portion thereof. Each Borrower specifically agrees that it shall not be necessary or required, and the Borrowers shall not be entitled to require, that the Agent and the Lenders (i) file suit or proceed to assert or obtain a claim for personal judgment against the other Borrower for all or any part of the Obligations; (ii) make any effort at collection or enforcement of all or any part of the Obligations from either Borrower; (iii) foreclose against or seek to realize upon the Collateral or any other security now or hereafter existing for all or any part of the Obligations; (iv) file suit or proceed to obtain or assert a claim for personal judgment against either Borrower or any guarantor or other party liable for all or any part of the Obligations; (v) exercise or assert any other right or remedy to which the Agent or any Lender is or may be entitled in connection with the Obligations or any security or guaranty relating thereto to assert; or (vi) file any claim against assets of one Borrower before or as a condition of enforcing the liability of any other Borrower under this Agreement or the Notes. Without limiting the generality of the foregoing, each Borrower expressly waives the benefit of California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899 and 1432. Each Borrower acknowledges that all or any portion of the Obligations may now or hereafter be secured by a Lien or Liens upon real property evidenced by certain documents including, without limitation, deeds of trust and assignments of rents. The Agent may, pursuant to the terms of said real property security documents and applicable law, foreclose under all or any portion of one or more of said Liens by means of judicial or nonjudicial sale or sales. Each Borrower agrees that the Agent may exercise whatever rights and remedies it may have with respect to said real property security, all without affecting the liability of the Borrowers hereunder, except to the extent the Lenders or the Agent realize payment by such action or proceeding. No election to proceed in one form of action or against any party or on any obligation shall constitute a waiver of the Agent's right to proceed in any other form of action or against either Borrower or any other Person, or diminish the liability of such Borrower, or affect the right of the Lenders or the Agent to proceed against such Borrower for any deficiency, except to the extent the Lenders or the Agent realize payment by such action, notwithstanding the effect of such action upon such Borrower's rights of subrogation, reimbursement or indemnity, if any, against any other Borrower or any other Person. Without limiting the generality of the foregoing, each Borrower expressly waives all rights, benefits and defenses, if any, applicable or available to such Borrower under either California Code of Civil 94 Procedure Sections 580a or 726, which provide, among other things, that the amount of any deficiency judgment which may be recovered following either a judicial or nonjudicial foreclosure sale is limited to the difference between the amount of any indebtedness owed and the greater of the fair value of the security or the amount for which the security was actually sold. Without limiting the generality of the foregoing, each Borrower further expressly waives all rights, benefits and defenses, if any, applicable or available to such Borrower under either California Code of Civil Procedure Sections 580b, providing that no deficiency may be recovered on a real property purchase money obligation, or 580d, providing that no deficiency may be recovered on a note secured by a deed of trust on real property if the real property is sold under a power of sale contained in the deed of trust. WITHOUT LIMITING THE FOREGOING IN ANY WAY, EACH BORROWER HEREBY IRREVOCABLY WAIVES AND RELEASES: (a) ANY AND ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISING DIRECTLY OR INDIRECTLY, BY OPERATION OF LAW, CONTRACT OR OTHERWISE) TO REQUIRE THE MARSHALING OF ANY ASSETS OF ANY BORROWER, WHICH RIGHT OF MARSHALING MIGHT OTHERWISE ARISE FROM ANY SUCH PAYMENTS MADE OR OBLIGATIONS PERFORMED; (b) UNTIL SUCH TIME AS THE OBLIGATIONS HAVE BEEN SATISFIED IN FULL, ANY AND ALL RIGHTS THAT WOULD RESULT IN SUCH BORROWER BEING DEEMED A "CREDITOR" UNDER THE UNITED STATES BANKRUPTCY CODE OF ANY OTHER BORROWER OR ANY OTHER PERSON, ON ACCOUNT OF PAYMENTS MADE OR OBLIGATIONS PERFORMED BY SUCH BORROWER; AND (c) UNTIL SUCH TIME AS THE OBLIGATIONS HAVE BEEN SATISFIED IN FULL, ANY CLAIM, RIGHT OR REMEDY WHICH IT MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST ANY OTHER BORROWER THAT ARISES HEREUNDER AND/OR FROM THE PERFORMANCE BY IT HEREUNDER INCLUDING, WITHOUT LIMITATION, ANY CLAIM, REMEDY OR RIGHT OF SUBROGATION, REIMBURSEMENT, EXONERATION, CONTRIBUTION, INDEMNIFICATION, OR PARTICIPATION IN ANY CLAIM, RIGHT OR REMEDY OF ANY LENDER OR THE AGENT AGAINST ANY OTHER BORROWER OR ANY COLLATERAL SECURITY WHICH THE LENDERS OR THE AGENT NOW HAVE OR MAY HEREAFTER ACQUIRE, WHETHER OR NOT SUCH CLAIM, RIGHT OR REMEDY ARISES IN EQUITY, UNDER CONTRACT, BY STATUTE, UNDER COMMON LAW OR OTHERWISE. SECTION 12.23 REFUND CHECK PROCESSING ACCOUNT. One of the businesses of CSG is the disbursement on behalf of CSG's customers of refunds due to subscribers of such customers. Such disbursements are made by CSG's issuance of checks drawn on an account maintained by CSG exclusively for such purpose, as disclosed in ITEM 5.20 of the DISCLOSURE SCHEDULE. Such account is funded in advance solely by CSG's customers for the purpose of providing funds to cover the refund checks issued by CSG. Because (i) the funds contained in such account (with the exception of non-material amounts of interest earned by CSG on the account balance pending the clearance of checks drawn on such account) are not the property of CSG, (ii) the checks drawn upon such account are not issued in payment of liabilities of CSG, (iii) the funds deposited in such account are not recorded by CSG as revenues, and (iv) the checks issued on 95 such account are not recorded by CSG as expenses, the Borrowers, the Lenders and the Agent agree that neither the funds on deposit in such account at any time nor the checks drawn on such account which are outstanding at any time shall be taken into account for any purpose of this Agreement, and such funds shall not be subject to the security interest granted by CSG in the Security Agreement. SECTION 12.24 NOTICE OF CLAIMS; CLAIMS BAR. EACH OF THE BORROWERS HEREBY AGREES THAT IT SHALL GIVE PROMPT NOTICE AFTER BECOMING AWARE OF ANY CLAIM OR CAUSE OF ACTION IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE AGAINST ANY LENDER OR THE AGENT, WHETHER SUCH CLAIM IS BASED IN LAW OR EQUITY, ARISING UNDER OR RELATED TO THIS AGREEMENT, THE nOTES OR ANY OF THE OTHER lOAN dOCUMENTS OR TO THE lOANS (OR THE COLLATERAL THEREFOR) CONTEMPLATED HEREBY OR THEREBY OR ANY ACT OR OMISSION TO ACT BY ANY LENDER OR THE AGENT WITH RESPECT HERETO OR THERETO, AND THAT IF IT SHALL FAIL TO GIVE SUCH NOTICE TO THE AGENT PRIOR TO THE FIRST ANNIVERSARY OF HAVING BECOME AWARE OF ANY SUCH CLAIM OR CAUSE OF ACTION, IT SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER BARRED FROM BRINGING OR ASSERTING SUCH CLAIM OR CAUSE OF ACTION IN ANY SUIT, ACTION OR PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY. SECTION 12.25 WAIVER OF PUNITIVE DAMAGES. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, EACH OF THE BORROWERS HEREBY AGREES THAT IT SHALL NOT SEEK FROM THE LENDERS OR THE AGENT, UNDER ANY THEORY OF LIABILITY, INCLUDING ANY THEORY IN TORTS, ANY PUNITIVE DAMAGES. SECTION 12.26 WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, EACH LENDER AND THE AGENT HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OF THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. 96 WITNESS the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above. BORROWERS CSG SYSTEMS, INC., a Delaware corporation By: /s/ Greg Parker ------------------------------------------ Greg Parker, Vice President and Chief Financial Officer CSG SYSTEMS INTERNATIONAL, INC., a Delaware corporation By: /s/ Greg Parker ------------------------------------------ Greg Parker, Vice President and Chief Financial Officer Notices to be sent to: CSG Systems, Inc. 2525 North 117th Avenue P.O. Box 34965 Omaha, Nebraska 68134 Attention: Randy Wiese, Controller/Principal Accounting Officer Telephone: 402/431-7574 Facsimile: 402/431-7254 with a copy to: CSG Systems International, Inc. 7887 East Belleview Avenue, Suite 1000 Englewood, Colorado 80111 Attention: Chief Financial Officer Telephone: 303/796-2856 Facsimile: 303/796-2881 AGENT BANQUE PARIBAS By: /s/ Lee S. Buckner ----------------------------------------------- Lee S. Buckner, Managing Director, Merchant Banking By: /s/ Robert N. Pinkerton ----------------------------------------------- Robert N. Pinkerton, Director, Merchant Banking Agent's Payment Office: Bank of America, NT & SA ABA No. 1210-0035-8 San Francisco, California for credit to: Banque Paribas Los Angeles Agency Account No.: 62902-10150 Notices to be sent to: Banque Paribas 101 California Street, Suite 3150 San Francisco, CA 94111 Attention: Robert N. Pinkerton, Director Telephone: 415/398-6811 Facsimile: 415/398-4240 LENDERS BANQUE PARIBAS By: /s/ Lee S. Buckner ----------------------------------------------- Lee S. Buckner, Managing Director, Merchant Banking By: /s/ Robert N. Pinkerton ----------------------------------------------- Robert N. Pinkerton, Director, Merchant Banking Domestic Lending Office: Banque Paribas 2029 Century Park East, Suite 3900 Los Angeles, CA 90067 Attention: Shirley Williams Telephone: 310/551-7300 Facsimile: 310/556-8759 Notices to be sent to: Banque Paribas 101 California Street, Suite 3150 San Francisco, CA 94111 Attention: Robert N. Pinkerton, Director Telephone: 415/398-6811 Facsimile: 415/398-4240 -----END PRIVACY-ENHANCED MESSAGE-----