<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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)
<PAGE>
CSG SYSTEMS INTERNATIONAL, INC.
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<C> <S>
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.
</TABLE>
_________________
* 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.
<PAGE>
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
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telephony and high speed data/Internet billing management (the "CCS
Services").
* Schedule AA - CSG's personal computer based System ("CableMax").
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* Schedule B - CSG technical and consulting services (the "Technical
----------
Services").
* Schedule C - CSG's ACSR Telephony, CSG Vantage(TM), ACSR(TM), and Computer
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Based Training add-on products (the "CCS Products").
* Schedule D - Fees
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* Schedule E - CSG's data warehouse product ("CSG VantagePoint(TM)")
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* 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
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Rights
* Schedule Q - CSG's ISP Domain middleware software ("ISP Domain")
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* Schedule R - CSG's usage handling system (the "Usage Handling System")
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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
<PAGE>
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:
<TABLE>
<CAPTION>
Number of Subscribers Per System Site 200cps 400cps 410 1pm
--------------------------------------- ------ ------ -------
<S> <C> <C> <C>
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
</TABLE>
(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
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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
<PAGE>
(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
<PAGE>
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
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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
<PAGE>
(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
<PAGE>
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
<PAGE>
(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
<PAGE>
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
<PAGE>
(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
<PAGE>
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
<PAGE>
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.
<TABLE>
<CAPTION>
If to Customer: If to CSG:
<S> <C>
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
</TABLE>
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
<PAGE>
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
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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
<PAGE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
ATTACHMENT 3
CUSTOMER/CSG PERFORMANCE STANDARDS MATRIX
-----------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
STANDARD PERFORMANCE
DESCRIPTION STANDARD ASSUMPTIONS NOTES CURE PROCESS PENALTY
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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.
(******).
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission"
ATTACHMENT 3
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE PERFORMANCE ASSUMPTIONS NOTES CURE PROCESS PENALTY
STANDARD STANDARD
DESCRIPTION
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
ATTACHMENT 3
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
STANDARD PERFORMANCE
DESCRIPTION STANDARD ASSUMPTIONS NOTES CURE PROCESS PENALTY
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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 (************
********************
*******************).
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
ATTACHMENT 3
<TABLE>
<CAPTION>
PERFORMANCE PERFORMANCE ASSUMPTIONS NOTES CURE PROCESS PENALTY
STANDARD STANDARD
DESCRIPTION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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. **********************
********************).
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
ATTACHMENT 3
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE PERFORMANCE ASSUMPTIONS NOTES CURE PROCESS PENALTY
STANDARD STANDARD
DESCRIPTION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
ATTACHMENT 3
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
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.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
<TABLE>
<CAPTION>
"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
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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)
- --------------------------------------------------------------
<TABLE>
<CAPTION>
Win 3.11 Win NT Apple MAC SUN Solaris Win 95
--------- ------- ---------- ------------ ------
<S> <C> <C> <C> <C> <C>
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
</TABLE>
(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
<PAGE>
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
<PAGE>
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.
<TABLE>
<CAPTION>
<S> <C>
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
</TABLE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
"Confidential Treatment Requested
1. CCS WIRELINE VIDEO AND CABLEMAX PROCESSING- and the Redacted Material has been
- -------------------------------------------------- separately filed with the Commission."
</TABLE>
Basic Monthly Subscriber Charge (herein after referred to as BSC) - $(***)
<TABLE>
<CAPTION>
MINIMUMS:
<S> <C> <C>
(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*
</TABLE>
*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:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
ITEM MONTHLY ON-LINE MONTHLY PER
ALLOWANCE PER SUBSCRIBER OVERAGE CHARGE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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 $(***)
- ---------------------------------------------------------------------------------------------------
</TABLE>
CCS(TM) - ANCILLARY SERVICE FEES
<TABLE>
<CAPTION>
ANCILLARY SERVICE FEES
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
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 $(***)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
<TABLE>
<CAPTION>
"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
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(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 $(***)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
<TABLE>
<CAPTION>
"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
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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 $(***)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
<TABLE>
<CAPTION>
"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
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"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:
- --------------------------------
<TABLE>
<CAPTION>
PROGRAMMATIC CONVERSION SITE SIZE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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 $ (***) $ (***) $ (***) $ (***)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
*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
<PAGE>
"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) -
<TABLE>
<CAPTION>
Monthly Subscriber Volume Monthly Fee Per Subscriber
------------------------- --------------------------
<S> <C>
0 to 99,999 $(***)
100,000 to 349,999 $(***)
350,000 to 749,999 $(***)
750,000 to 999,999 $(***)
1,000,000 and greater $(***)
</TABLE>
Monthly Per System/Principle Charge included in BSC.
On-Line Allowance And Overage Charges:
<TABLE>
<CAPTION>
Year Monthly Subscriber Minimums Monthly Fee Minimums
---- --------------------------- --------------------
<S> <C> <C>
1998 10,000 $ (***)
1999 100,000 $ (***)
2000 350,000 $ (***)
2001 750,000 $ (***)
2002 1,000,000 $ (***)
2003 to 2012*
</TABLE>
*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.
<TABLE>
<CAPTION>
ITEM MONTHLY ON-LINE MONTHLY PER
ALLOWANCE PER SUBSCRIBER OVERAGE CHARGE
--------------------------------------------------------------------------------------------
<C> <S> <C> <C>
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 $ (***)
--------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatement Requested
and the Redacted Material has been
separately filed with the Commission."
CCS-ISP ANCILLARY SERVICE FEES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ANCILLARY SERVICE FEES
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM ONE TIME MONTHLY MONTHLY
CHARGE CHARGE PER CHARGE PER PER ITEM
PER SYSTEM SYSTEM SUBSCRIBER
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ANCILLARY SERVICE FEES
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM ONE TIME MONTHLY MONTHLY
CHARGE CHARGE PER CHARGE PER PER ITEM
PER SYSTEM SYSTEM SUBSCRIBER
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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 $(***)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*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
<PAGE>
"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
<TABLE>
<CAPTION>
MINIMUMS:
Year Monthly Subscriber Minimums Monthly Processing Fee Minimums
---- --------------------------- -------------------------------
<S> <C> <C>
1998 10,000 $ (***)
1999 20,000 $ (***)
2000 30,000 $ (***)
2001 40,000 $ (***)
2002 50,000 $ (***)
2003 to 2012*
</TABLE>
*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:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
ITEM MONTHLY ON-LINE MONTHLY PER
ALLOWANCE PER SUBSCRIBER OVERAGE CHARGE
--------------------------------------------------------------------------------------------
<C> <S> <C> <C>
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 $ (***)
--------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
CCS TELEPHONY - ANCILLARY SERVICE FEES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ANCILLARY SERVICE FEES
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM ONE TIME MONTHLY MONTHLY
CHARGE CHARGE PER CHARGE PER PER ITEM
PER SYSTEM SYSTEM SUBSCRIBER
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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 $(***)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ANCILLARY SERVICE FEES
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM ONE TIME CHARGE MONTHLY CHARGE PER MONTHLY CHARGE PER
PER SYSTEM SYSTEM SUBSCRIBER PER ITEM
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*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
<PAGE>
"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.
<TABLE>
<CAPTION>
Year Discount Factor
- ----------------------------------------- ---------------
<S> <C>
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 (***)%
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
6. CCS PRINT AND MAIL SERVICES FEES-
- ------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
ITEM/DESCRIPTION PRICE
<S> <C>
- --------------------------------------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------------------------------------
</TABLE>
*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.
<TABLE>
<CAPTION>
<S> <C>
- --------------------------------------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
ITEM/DESCRIPTION PRICE
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
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.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"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):
- ---------------------------------------
<TABLE>
<CAPTION>
SYSTEM SITE SUBSCRIBER COUNT START UP FEE
---------------------------- ------------
<S> <C>
0 to 49,999 $(***)
50,000 to 99,999 $(***)
100,000 and greater $(***)
</TABLE>
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
<PAGE>
"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
<PAGE>
"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
<PAGE>
"Confidential Treament Requested
and the Redacted Material has been
separately filed with the Commission."
ACSR/CIT/ACSR Telephony-Startup And Installation- Additional Services
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION PRICE PER PRICE PER PRICE PER PRICE PER PRICE PER
DAY DEVICE HOUR ITEM MONTH
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"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.
<TABLE>
<CAPTION>
* THIRD PARTY LICENSE AND MAINTENANCE FEES License (1 time) Maint (annual)
<S> <C> <C>
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 $ (***) $ (***)
</TABLE>
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
<PAGE>
"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
<PAGE>
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
<PAGE>
"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)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
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)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
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
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
DATA COMMUNCATION SERVICES - (WITH DBAN)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER OF MAXIMUM PRINTERS CIRCUIT SPEED/With DBAN INSTALLATION MONTHLY
DEVICES* SUPPORTED** (P-P = DEDICATED CIRCUIT PER LOCATION) CHARGE CHARGE****
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
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
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"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
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
CIRCUIT SPEED INSTALLATION MONTHLY*
(P-P = DEDICATED CIRCUIT PER LOCATION) CHARGE CHARGE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
NETWORK SERVICES - TIMELINES AND PRICING
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
# OF WORK DAYS
TYPE OF SERVICE (Mon. - Fri. excluding holidays) PRICING
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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)
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE>
"Confidential Treatment Requested
and the Redacted Material has been
separately filed with the Commission."
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
# OF WORK DAYS
TYPE OF SERVICE (Mon. - Fri. excluding holidays) PRICING
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* 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
<PAGE>
"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
<PAGE>
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
<PAGE>
"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
<PAGE>
"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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
"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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
(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
<PAGE>
(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
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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
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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%
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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
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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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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
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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
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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
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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.
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(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
<PAGE>
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
<PAGE>
(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.
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(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
<PAGE>
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
<PAGE>
($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
<PAGE>
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
<PAGE>
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
<PAGE>
-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.
<PAGE>
-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,
<PAGE>
-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
<PAGE>
-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.
<PAGE>
-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
<PAGE>
-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
<PAGE>
-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.
<PAGE>
-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
<PAGE>
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.
<PAGE>
-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.
<PAGE>
-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
<PAGE>
-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.
<PAGE>
-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
<PAGE>
-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
<PAGE>
-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
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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
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<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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
================================================================================
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
"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.
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"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.,
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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.
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"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
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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.
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"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
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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;
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(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.
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"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.
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"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
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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
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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.
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"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.
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"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.
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"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
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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.
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"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.
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"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.
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"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.
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"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.
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"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.
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"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.
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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.
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(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,
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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
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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.
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(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.
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(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
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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
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(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.
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(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
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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
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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,
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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.
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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.
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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.
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(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
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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.
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(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
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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
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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
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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
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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.
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(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.
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(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.
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(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
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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
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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.
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(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
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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
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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.
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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
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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
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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.
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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
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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.
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(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:
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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.
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(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
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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
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(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
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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%).
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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.
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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
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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
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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;
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(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.
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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
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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.
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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).
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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
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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
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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
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(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
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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.
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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
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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
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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
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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
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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
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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.
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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.
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(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
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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
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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
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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
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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
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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
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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
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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
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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
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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.
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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
<PAGE>
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
<PAGE>
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
