UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

OR

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                       

Commission file number 0-27512

 

CSG SYSTEMS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

47-0783182

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

9555 Maroon Circle

Englewood, Colorado 80112

(Address of principal executive offices, including zip code)

(303) 200-2000

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES   x            NO   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES   x            NO   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

x

  

Accelerated filer

 

¨

 

 

 

 

Non-accelerated filer

 

¨   (Do not check if a smaller reporting company)

  

Smaller reporting company

 

¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES   ¨             NO    x

Shares of common stock outstanding at November 3, 2014: 34,329,434

 

 

 

 


 

CSG SYSTEMS INTERNATIONAL, INC.

FORM 10-Q for the Quarter Ended September 30, 2014

INDEX

 

 

 

Page No.

 

 

 

Part I -FINANCIAL INFORMATION

 

 

 

 

Item 1.

Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013 (Unaudited)

3

 

 

 

 

Condensed Consolidated Statements of Income for the Quarters and Nine Months Ended September 30, 2014 and 2013 (Unaudited)

4

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the Quarters and Nine Months Ended September 30, 2014 and 2013 (Unaudited)

5

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013 (Unaudited)

6

 

 

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

7

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

14

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25

 

 

 

Item 4.

Controls and Procedures

26

 

 

 

Part II -OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

27

 

 

 

Item 1A.

Risk Factors

27

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

27

 

 

 

Item 6.

Exhibits

28

 

 

 

 

Signatures

29

 

 

 

 

Index to Exhibits

30

 

 

 

2


 

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands, except per share amounts)

 

 

 

September 30,

 

 

December 31,

 

 

 

2014

 

 

2013

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

75,573

 

 

$

82,686

 

Short-term investments

 

 

107,886

 

 

 

128,151

 

Total cash, cash equivalents and short-term investments

 

 

183,459

 

 

 

210,837

 

Trade accounts receivable:

 

 

 

 

 

 

 

 

Billed, net of allowance of $2,736 and $2,359

 

 

191,024

 

 

 

178,511

 

Unbilled

 

 

39,513

 

 

 

38,365

 

Deferred income taxes

 

 

8,691

 

 

 

15,085

 

Income taxes receivable

 

 

6,633

 

 

 

3,815

 

Other current assets

 

 

30,514

 

 

 

28,762

 

Total current assets

 

 

459,834

 

 

 

475,375

 

Non-current assets:

 

 

 

 

 

 

 

 

Property and equipment, net of depreciation of $135,483 and $129,522

 

 

36,762

 

 

 

35,061

 

Software, net of amortization of $85,209 and $77,504

 

 

44,861

 

 

 

43,565

 

Goodwill

 

 

230,798

 

 

 

233,599

 

Client contracts, net of amortization of $85,451 and $75,382

 

 

45,699

 

 

 

55,191

 

Deferred income taxes

 

 

9,654

 

 

 

7,447

 

Income taxes receivable

 

 

2,170

 

 

 

1,930

 

Other assets

 

 

17,606

 

 

 

16,812

 

Total non-current assets

 

 

387,550

 

 

 

393,605

 

Total assets

 

$

847,384

 

 

$

868,980

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

20,625

 

 

$

15,000

 

Client deposits

 

 

32,952

 

 

 

30,431

 

Trade accounts payable

 

 

31,082

 

 

 

33,376

 

Accrued employee compensation

 

 

40,163

 

 

 

58,434

 

Deferred revenue

 

 

46,899

 

 

 

47,131

 

Income taxes payable

 

 

2,258

 

 

 

2,814

 

Other current liabilities

 

 

21,764

 

 

 

19,620

 

Total current liabilities

 

 

195,743

 

 

 

206,806

 

Non-current liabilities:

 

 

 

 

 

 

 

 

Long-term debt, net of unamortized original issue discount of $15,656 and $19,950

 

 

237,469

 

 

 

250,050

 

Deferred revenue

 

 

9,270

 

 

 

9,221

 

Income taxes payable

 

 

1,613

 

 

 

1,909

 

Deferred income taxes

 

 

15,116

 

 

 

20,274

 

Other non-current liabilities

 

 

14,921

 

 

 

14,616

 

Total non-current liabilities

 

 

278,389

 

 

 

296,070

 

Total liabilities

 

 

474,132

 

 

 

502,876

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, par value $.01 per share; 10,000 shares authorized; zero shares issued and outstanding

 

 

-

 

 

 

-

 

Common stock, par value $.01 per share; 100,000 shares authorized;  34,527 and 33,745 shares outstanding

 

 

667

 

 

 

658

 

Additional paid-in capital

 

 

483,193

 

 

 

473,190

 

Treasury stock, at cost, 32,222 and 32,030 shares

 

 

(743,608

)

 

 

(738,372

)

Accumulated other comprehensive income (loss):

 

 

 

 

 

 

 

 

Unrealized gain on short-term investments, net of tax

 

 

34

 

 

 

41

 

Unrecognized loss on change in fair value of interest rate swap contracts, net of tax

 

 

-

 

 

 

(98

)

Cumulative foreign currency translation adjustments

 

 

(4,511

)

 

 

1,674

 

Accumulated earnings

 

 

637,477

 

 

 

629,011

 

Total stockholders' equity

 

 

373,252

 

 

 

366,104

 

Total liabilities and stockholders' equity

 

$

847,384

 

 

$

868,980

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3


 

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(in thousands, except per share amounts)

 

 

 

Quarter Ended

 

 

Nine Months Ended

 

 

 

September 30, 2014

 

 

September 30, 2013

 

 

September 30, 2014

 

 

September 30, 2013

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Processing and related services

 

$

140,981

 

 

$

133,294

 

 

$

419,696

 

 

$

399,112

 

Software and services

 

 

22,079

 

 

 

30,294

 

 

 

72,553

 

 

 

87,049

 

Maintenance

 

 

21,943

 

 

 

22,592

 

 

 

65,340

 

 

 

66,758

 

Total revenues

 

 

185,003

 

 

 

186,180

 

 

 

557,589

 

 

 

552,919

 

Cost of revenues (exclusive of depreciation, shown separately below):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Processing and related services

 

 

69,225

 

 

 

65,184

 

 

 

205,016

 

 

 

189,725

 

Software and services

 

 

17,508

 

 

 

19,942

 

 

 

60,699

 

 

 

63,887

 

Maintenance

 

 

7,737

 

 

 

9,772

 

 

 

24,541

 

 

 

29,398

 

Total cost of revenues

 

 

94,470

 

 

 

94,898

 

 

 

290,256

 

 

 

283,010

 

Other operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

26,329

 

 

 

27,600

 

 

 

77,773

 

 

 

83,693

 

Selling, general and administrative

 

 

39,036

 

 

 

38,444

 

 

 

113,475

 

 

 

110,629

 

Depreciation

 

 

3,553

 

 

 

4,609

 

 

 

10,479

 

 

 

14,379

 

Restructuring and reorganization charges

 

 

7,784

 

 

 

76

 

 

 

9,041

 

 

 

939

 

Total operating expenses

 

 

171,172

 

 

 

165,627

 

 

 

501,024

 

 

 

492,650

 

Operating income

 

 

13,831

 

 

 

20,553

 

 

 

56,565

 

 

 

60,269

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(2,582

)

 

 

(2,615

)

 

 

(7,900

)

 

 

(8,724

)

Amortization of original issue discount

 

 

(1,460

)

 

 

(1,351

)

 

 

(4,294

)

 

 

(3,975

)

Interest and investment income, net

 

 

169

 

 

 

174

 

 

 

607

 

 

 

517

 

Other, net

 

 

106

 

 

 

(130

)

 

 

(171

)

 

 

950

 

Total other

 

 

(3,767

)

 

 

(3,922

)

 

 

(11,758

)

 

 

(11,232

)

Income before income taxes

 

 

10,064

 

 

 

16,631

 

 

 

44,807

 

 

 

49,037

 

Income tax provision

 

 

(4,831

)

 

 

(1,331

)

 

 

(20,480

)

 

 

(6,767

)

Net income

 

$

5,233

 

 

$

15,300

 

 

$

24,327

 

 

$

42,270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

32,604

 

 

 

32,084

 

 

 

32,514

 

 

 

32,114

 

Diluted

 

 

33,996

 

 

 

32,664

 

 

 

33,858

 

 

 

32,553

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.16

 

 

$

0.48

 

 

$

0.75

 

 

$

1.32

 

Diluted

 

 

0.15

 

 

 

0.47

 

 

 

0.72

 

 

 

1.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share:

 

$

0.1575

 

 

$

0.1500

 

 

$

0.4650

 

 

$

0.3000

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

4


 

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - UNAUDITED

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

Nine Months Ended

 

 

 

 

September 30, 2014

 

 

September 30, 2013

 

 

September 30, 2014

 

 

September 30, 2013

 

 

Net income

 

$

5,233

 

 

$

15,300

 

 

$

24,327

 

 

$

42,270

 

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(10,260

)

 

 

6,359

 

 

 

(6,185

)

 

 

(3,330

)

 

Unrealized holding gains (losses) on short-term investments arising during period

 

 

(17

)

 

 

81

 

 

 

(7

)

 

 

25

 

 

Defined benefit pension plan:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss arising from period (net of tax effect of $0, $0, $0, and $(119))

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(183

)

 

Amortization of net actuarial loss included in net periodic pension cost (net of tax effect of $0, $0, $0, and $28)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

43

 

 

Partial settlement of pension plan liability (net of tax effect of $0, $0, $0 and $336)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

546

 

 

Net change in defined benefit pension plan

 

 

-

 

 

 

-

 

 

 

-

 

 

 

406

 

 

Cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on change in fair value of interest rate swap contracts (net of tax effect of $0, $199, $110, and $549)

 

 

-

 

 

 

313

 

 

 

195

 

 

 

865

 

 

Reclassification adjustment for losses included in net income (net of tax effect of $0, $(101), $(55), and $(280))

 

 

-

 

 

 

(160

)

 

 

(97

)

 

 

(442

)

 

Net change in cash flow hedges

 

 

-

 

 

 

153

 

 

 

98

 

 

 

423

 

 

Other comprehensive income (loss), net of tax

 

 

(10,277

)

 

 

6,593

 

 

 

(6,094

)

 

 

(2,476

)

 

Total comprehensive income (loss), net of tax

 

$

(5,044

)

 

$

21,893

 

 

$

18,233

 

 

$

39,794

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


5


 

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(in thousands)

 

 

 

Nine Months Ended

 

 

 

September 30, 2014

 

 

September 30, 2013

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

24,327

 

 

$

42,270

 

Adjustments to reconcile net income to net cash provided by operating activities-

 

 

 

 

 

 

 

 

Depreciation

 

 

10,479

 

 

 

14,379

 

Amortization

 

 

25,207

 

 

 

28,413

 

Amortization of original issue discount

 

 

4,294

 

 

 

3,975

 

Loss on short-term investments and other

 

 

973

 

 

 

1,264

 

Gain on disposition of business operations

 

 

(222

)

 

 

-

 

Deferred income taxes

 

 

(25

)

 

 

1,083

 

Excess tax benefit of stock-based compensation awards

 

 

(2,044

)

 

 

(619

)

Stock-based employee compensation

 

 

12,250

 

 

 

11,497

 

Changes in operating assets and liabilities, net of acquired amounts:

 

 

 

 

 

 

 

 

Trade accounts receivable, net

 

 

(15,559

)

 

 

75

 

Other current and non-current assets

 

 

(5,866

)

 

 

(4,641

)

Income taxes payable/receivable

 

 

(1,825

)

 

 

1,359

 

Trade accounts payable and accrued liabilities

 

 

(16,369

)

 

 

(15,724

)

Deferred revenue

 

 

286

 

 

 

3,251

 

Net cash provided by operating activities

 

 

35,906

 

 

 

86,582

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(21,406

)

 

 

(18,986

)

Purchases of short-term investments

 

 

(126,982

)

 

 

(129,259

)

Proceeds from sale/maturity of short-term investments

 

 

146,417

 

 

 

62,720

 

Acquisition of and investments in client contracts

 

 

(4,235

)

 

 

(5,349

)

Proceeds from the disposition of business operations

 

 

1,130

 

 

 

1,734

 

Net cash used in investing activities

 

 

(5,076

)

 

 

(89,140

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

1,053

 

 

 

1,283

 

Payment of cash dividends

 

 

(15,461

)

 

 

(9,630

)

Repurchase of common stock

 

 

(11,456

)

 

 

(15,124

)

Payments on acquired asset financing

 

 

(1,097

)

 

 

(1,894

)

Payments on long-term debt

 

 

(11,250

)

 

 

(11,250

)

Excess tax benefit of stock-based compensation awards

 

 

2,044

 

 

 

619

 

Net cash used in financing activities

 

 

(36,167

)

 

 

(35,996

)

Effect of exchange rate fluctuations on cash

 

 

(1,776

)

 

 

(2,457

)

 

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

(7,113

)

 

 

(41,011

)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

 

82,686

 

 

 

133,747

 

Cash and cash equivalents, end of period

 

$

75,573

 

 

$

92,736

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for-

 

 

 

 

 

 

 

 

Interest

 

$

7,331

 

 

$

8,247

 

Income taxes

 

 

21,718

 

 

 

3,554

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 


6


 

CSG SYSTEMS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

1. GENERAL

We have prepared the accompanying unaudited condensed consolidated financial statements as of September 30, 2014 and December 31, 2013, and for the third quarters and nine months ended September 30, 2014 and 2013, in accordance with accounting principles generally accepted in the United States of America (“U.S.”) (“GAAP”) for interim financial information, and pursuant to the instructions to Form 10-Q and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position and operating results have been included. The unaudited Condensed Consolidated Financial Statements (the “Financial Statements”) should be read in conjunction with the Consolidated Financial Statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contained in our Annual Report on Form 10-K for the year ended December 31, 2013 (our “2013 10-K”), filed with the SEC. The results of operations for the quarter and nine months ended September 30, 2014 are not necessarily indicative of the expected results for the entire year ending December 31, 2014.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in Preparation of Financial Statements. The preparation of the accompanying Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our Financial Statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Reclassifications . Maintenance revenues, as well as the cost of maintenance revenues, previously included in software, maintenance and service revenues and software, maintenance and services costs of revenues, respectively, have been presented separately in our Condensed Consolidated Statements of Income (“Income Statements” or “Income Statement”) for the quarter and nine months ended September 30, 2013. In addition, certain other 2013 amounts have been reclassified to conform to the 2014 presentation.

Cash and Cash Equivalents. We consider all highly liquid investments with original maturities of three months or less at the date of the purchase to be cash equivalents. As of September 30, 2014 and December 31, 2013, our cash equivalents consist primarily of institutional money market funds, commercial paper, and time deposits held at major banks.

As of September 30, 2014 and December 31, 2013, we had $4.8 million and $4.5 million, respectively, of restricted cash that serves to collateralize outstanding letters of credit. This restricted cash is included in cash and cash equivalents in our Condensed Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”).

Short-term Investments and Other Financial Instruments . Our financial instruments as of September 30, 2014 and December 31, 2013 include cash and cash equivalents, short-term investments, accounts receivable, accounts payable, an interest rate swap contract, and debt. Because of their short maturities, the carrying amounts of cash equivalents, accounts receivable, and accounts payable approximate their fair value.

Our short-term investments and certain of our cash equivalents are considered “available-for-sale” and are reported at fair value in our Balance Sheets, with unrealized gains and losses, net of the related income tax effect, excluded from earnings and reported in a separate component of stockholders’ equity. Realized and unrealized gains and losses were not material in any period presented.

Primarily all short-term investments held by us as of September 30, 2014 and December 31, 2013 have contractual maturities of less than two years from the time of acquisition. Our short-term investments as of September 30, 2014 and December 31, 2013 consisted almost entirely of fixed income securities. Proceeds from the sale/maturity of short-term investments for the nine months ended September 30, 2014 and 2013 were $146.4 million and $62.7 million, respectively.

7


 

The following table represents the fair value hierarchy based upon three levels of inputs, of which Levels 1 and 2 are considered observable and Level 3 is unobservable, for our financial assets and liabilities measured at fair value (in thousands):

 

 

 

September 30, 2014

 

 

December 31, 2013

 

 

 

Level 1

 

 

 

Level 2

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

9,810

 

 

$

 

 

$

9,810

 

 

$

13,761

 

 

$

 

 

$

13,761

 

Commercial paper

 

 

 

 

 

13,248

 

 

 

13,248

 

 

 

 

 

 

19,629

 

 

 

19,629

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

 

 

 

62,105

 

 

 

62,105

 

 

 

 

 

 

76,786

 

 

 

76,786

 

Municipal bonds

 

 

 

 

 

19,317

 

 

 

19,317

 

 

 

 

 

 

29,106

 

 

 

29,106

 

U.S. government agency bonds

 

 

 

 

 

14,027

 

 

 

14,027

 

 

 

 

 

 

18,050

 

 

 

18,050

 

Asset-backed securities

 

 

 

 

 

12,437

 

 

 

12,437

 

 

 

 

 

 

 

4,209

 

 

 

4,209

 

Total

 

$

9,810

 

 

$

121,134

 

 

$

130,944

 

 

$

13,761

 

 

$

147,780

 

 

$

161,541

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap contract (1)

 

$

 

 

$

 

 

$

 

 

$

 

 

$

154

 

 

$

154

 

Total

 

$

 

 

$

 

 

$

 

 

$

 

 

$

154

 

 

$

154

 

 

(1)

As of December 31, 2013, the fair value of the interest rate swap contract was classified on our Balance Sheet in other current liabilities.

Valuation inputs used to measure the fair values of our money market funds were derived from quoted market prices. The fair values of all other financial instruments are based upon pricing provided by third-party pricing services. These prices were derived from observable market inputs.

We have chosen not to measure our debt at fair value, with changes recognized in earnings each reporting period.  The following table indicates the carrying value and estimated fair value of our debt as of the indicated periods (in thousands):

 

 

September 30, 2014

 

 

December 31, 2013

 

 

Carrying
Value

 

 

Fair
Value

 

 

Carrying
Value

 

 

Fair
Value

 

Credit Agreement (carrying value including current maturities)

$

123,750

 

 

$

123,750

 

 

$

135,000

 

 

$

135,000

 

Convertible debt (par value)

 

150,000

 

 

 

187,065

 

 

 

150,000

 

 

 

199,800

 

The fair value for our Credit Agreement was estimated using a discounted cash flow methodology, while the fair value for our convertible debt was estimated based upon quoted market prices or recent sales activity, both of which are considered Level 2 inputs.

 

Income Taxes.    Our current income tax provisions for the quarter and nine months ended September 30, 2014 do not reflect any benefit from research and development (“R&D”) tax credits, as they have not yet received Congressional approval for 2014.  If enacted prior to the end of the year, we will include those income tax benefits in our 2014 effective income tax rate.

 

For the third quarter and nine months ended September 30, 2013, the effective income tax rate was unusually low driven mainly by incremental R&D income tax credits claimed for the development activities from previous years and partially by the reduction of certain tax allowances related to foreign operations.

 

Accounting Pronouncement Issued But Not Yet Effective. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606).  This ASU is a single comprehensive model which supersedes nearly all existing revenue recognition guidance under U.S. GAAP.  Under the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services.  The ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The updated accounting guidance is effective for annual and interim reporting periods in fiscal years beginning after December 15, 2016.  Early adoption is not permitted.  An entity may choose to adopt this ASU either retrospectively or through a cumulative effect adjustment as of the start of the first period for which it applies the standard.  We are currently in the process of evaluating the impact that this new guidance will have on our consolidated financial statements and our method of adoption.

8


 

 

3. STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION PLANS

Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board of Directors (the “Board”), authorizing us to repurchase our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”). During the nine months ended September 30, 2014 and 2013, we repurchased 0.2 million shares of our common stock for $5.2 million (weighted-average price of $27.26 per share) and 0.5 million shares of our common stock for $10.1 million (weighted-average price of $20.23 per share), respectively. As of September 30, 2014, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled 1.9 million shares.

Stock Repurchases for Tax Withholdings. In addition to the above mentioned stock repurchases, during the nine months ended September 30, 2014 and 2013, we repurchased and then cancelled 0.2 million shares of common stock for $6.7 million and 0.3 million shares of common stock for $5.0 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

Dividends.   In June 2013, the Board approved the initiation of a quarterly cash dividend to be paid to our stockholders.  During the third quarter of 2014, the Board approved a quarterly cash dividend of $0.1575 per share of common stock, totaling $5.5 million. During the third quarter of 2013, the Board approved a quarterly cash dividend of $0.15 per share of common stock, totaling $5.1 million. Dividends declared for the nine months ended September 30, 2014 and 2013, totaled $16.0 million and $10.2 million, respectively.    

 

Warrants.   On July 25, 2014, we entered into an amendment to our current agreement with Comcast Corporation (“Comcast”) (the “Amended Agreement”).  The Amended Agreement provides the framework for Comcast to consolidate its residential customer accounts onto our Advanced Convergent Platform (“ACP”) customer care and billing solution.  As an additional incentive for Comcast to migrate new customer accounts to ACP, the Amended Agreement includes the issuance of stock warrants (the “Warrant Agreement”) for the right to purchase up to approximately 2.9 million shares of our common stock (the “Stock Warrants”), 1.9 million warrants relate to Comcast’s existing residential business and the remaining 1.0 million warrants relate to additional residential customer accounts that Comcast may acquire and migrate onto ACP in the future.  The Stock Warrants have a 10-year term and an exercise price of $26.68 per warrant.

 

Of the 1.9 million of Stock Warrants, 25% (0.5 million) vest in January 2015, with the remainder vesting at various points in time only after the successful migration of customer accounts based on predetermined threshold migration levels up to 10 million customer accounts.  The remaining 1.0 million Stock Warrants that relate to additional residential accounts that Comcast may acquire and migrate onto ACP in the future only vest proportionately with acquired customer accounts migrated onto ACP from other providers’ billing platforms, with full vesting based on a target of 5 million newly migrated customer accounts.  Fifty percent of the unvested Stock Warrants become fully vested upon a fundamental change (including a change in control) of the Company, as defined, proportionally reducing the number of Stock Warrants eligible for vesting based on future performance conditions.

 

Once vested, Comcast may exercise the Stock Warrants and elect either physical delivery of common shares or net share settlement (cashless exercise).  Alternatively, the exercise of the Stock Warrants may be settled with cash based solely on our approval, or if Comcast were to beneficially own or control in excess of 19.99% of the common stock or voting of the Company.

 

The fair value of the 0.5 million Stock Warrants that vest in January 2015 was $3.7 million at the grant date, as determined using the Black-Sholes option-pricing model.  This amount is being recorded ratably over the vesting period as a client incentive asset with the corresponding offset to additional paid-in capital.  The client incentive asset is being amortized as a reduction in processing and related services revenues over the remaining term of the Comcast amended agreement.  As of September 30, 2014, we recorded a client incentive asset related to these Stock Warrants of $1.2 million and have amortized $0.1 million as reduction in processing and related services revenues.  

 

The remaining Stock Warrants will be accounted for as client incentive assets in the period the performance conditions necessary for vesting have been met.  As of September 30, 2014, none of the performance conditions related to these Stock Warrants had been met.

Stock Incentive Plan.   In May 2014, our stockholders approved an increase of 2.9 million shares authorized for issuance under the 2005 Stock Incentive Plan, from 15.8 million shares to 18.7 million shares.  


9


 

Stock-Based Awards. A summary of our unvested restricted common stock activity during the third quarter and nine months ended September 30, 2014 is as follows (shares in thousands):

 

 

Quarter Ended
September 30, 2014

 

Nine Months Ended
September 30, 2014

 

Shares

 

 

Weighted-
Average  Grant

Date Fair Value

 

Shares

 

Weighted-
Average  Grant

Date Fair Value

 

Unvested awards, beginning

 

1,832

 

 

$

21.27

 

 

1,922

 

 

$

18.57

 

Awards granted

 

629

 

 

 

26.64

 

 

1,279

 

 

 

26.46

 

Awards forfeited/cancelled

 

(16

)

 

 

20.72

 

 

(67

)

 

 

20.43

 

Awards vested

 

(38

)

 

 

23.36

 

 

(727

)

 

 

18.78

 

Unvested awards, ending

 

2,407

 

 

$

22.64

 

 

2,407

 

 

$

22.64

 

Included in the awards granted during the nine months ended September 30, 2014, are performance-based awards for 0.1 million restricted common stock shares issued to members of executive management, which vest in equal installments over three years upon meeting either pre-established financial performance objectives or pre-established stock price objectives. The performance-based awards become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment.

All other restricted common stock shares granted during the quarter and nine months ended September 30, 2014 are time-based awards, which vest annually over primarily three or four years with no restrictions other than the passage of time. Certain shares of the restricted common stock become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment.

We recorded stock-based compensation expense for the third quarters of 2014 and 2013 of $4.5 million and $4.0 million, respectively, and for the nine months ended September 30, 2014 and 2013 of $12.3 million $11.5 million, respectively.

 

4. EARNINGS PER COMMON SHARE

Basic and diluted earnings per common share (“EPS”) amounts are presented on the face of the accompanying Income Statements.

No reconciliation of the basic and diluted EPS numerators is necessary as net income is used as the numerators for all periods presented.  The reconciliation of the basic and diluted EPS denominators related to the common shares is included in the following table (in thousands):

 

 

Quarter Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2014

 

 

2013

 

2014

 

 

2013

 

 

Basic weighted-average common shares

 

32,604

 

 

 

32,084

 

 

 

32,514

 

 

 

32,114

 

 

Dilutive effect of common stock options

 

 

 

 

 

 

 

 

 

 

1

 

 

Dilutive effect of restricted common stock

 

575

 

 

 

580

 

 

 

565

 

 

 

438

 

 

Dilutive effect of 2010 Convertible Notes

 

813

 

 

 

 

 

 

778

 

 

 

 

 

Dilutive effect of Stock Warrants

 

4

 

 

 

 

 

 

1

 

 

 

 

 

Diluted weighted-average common shares

 

33,996

 

 

 

32,664

 

 

 

33,858

 

 

 

32,553

 

 

 

There were no potentially dilutive common shares related to stock options and unvested shares of restricted common stock for the third quarters of 2014 and 2013 and nine months ended September 30, 2014 and 2013 excluded from the computation of diluted EPS related to common shares.

The 2010 Convertible Notes have a dilutive effect only in those quarterly periods in which our average stock price exceeds the current effective conversion price (see Note 5).

The Stock Warrants have a dilutive effective only in those quarterly periods in which our average stock price exceeds the exercise price of $26.68 per warrant (under the treasury stock method), and are not subject to performance vesting conditions.  The Stock Warrants that vest in January 2015 (0.5 million Stock Warrants) were included in computation of diluted EPS for the period of time

10


 

they were outstanding.  The remaining Stock Warrants were excluded from the computation of diluted EPS as the performance conditions associated with the vesting of those Stock Warrants had not been met as of September 30, 2014.

 

5. DEBT

Our long-term debt, as of September 30, 2014 and December 31, 2013, was as follows (in thousands):

 

 

September 30,

2014

 

 

December 31,
2013

 

2012 Credit Agreement:

 

 

 

 

 

 

 

Term loan, due November 2017 (or December 2016 if certain conditions exist), interest at adjusted LIBOR plus 2.00% (combined rate of 2.24% at September 30, 2014 and 2.25% at December 31, 2013)

$

123,750

 

 

$

135,000

 

$100 million revolving loan facility, due November 2017 (or December 2016 if certain conditions exist), interest at adjusted LIBOR plus applicable margin

 

 

 

 

 

Convertible Debt Securities:

 

 

 

 

 

 

 

2010 Convertible Notes – senior subordinated convertible notes; due March 1, 2017; cash interest at 3.0%; net of unamortized OID of $15,656 and $19,950, respectively

 

134,344

 

 

 

130,050

 

 

 

258,094

 

 

 

265,050

 

Current portion of long-term debt

 

(20,625

)

 

 

(15,000

)

Total long-term debt, net

$

237,469

 

 

$

250,050

 

2012 Credit Agreement. During the nine months ended September 30, 2014, we made $11.3 million of principal repayments.

As of September 30, 2014, we were in compliance with the financial ratios and other covenants related to the 2012 Credit Agreement and had no borrowings outstanding on our revolving loan facility and had the entire $100 million available to us.

2010 Convertible Notes.   Upon conversion of the 2010 Convertible Notes, we will settle our conversion obligation as follows: (i) we will pay cash for 100% of the par value of the 2010 Convertible Notes that are converted; and (ii) to the extent the value of our conversion obligation exceeds the par value, we will satisfy the remaining conversion obligation in our common stock, cash or any combination of our common stock and cash.

As the result of us declaring a cash dividend in September 2014 (see Note 3), the previous conversion rate for the 2010 Convertible Notes of 42.1363 shares of our common stock for each $1,000 in principal amount of the 2010 Convertible Notes (equivalent to a conversion price of $23.73 per share of our common stock) has been adjusted to 42.3766 shares of our common stock for each $1,000 in principal amount of the 2010 Convertible Notes (equivalent to a conversion price of $23.60 per share of our common stock).

Refer to Note 6 in our 2013 10-K for disclosure of the 2010 Convertible Notes’ three contingent conversion features. As a result of the cash dividend declaration in September 2014, prior to September 1, 2016, holders of the 2010 Convertible Notes can convert their securities at any time the price of our common stock trades over $30.68 per share, or 130% of the $23.60 conversion price (previously $30.85 per share, or 130% of the $23.73 conversion price) for a specified period of time.

As of September 30, 2014, none of the contingent conversion features have been achieved, and thus, the 2010 Convertible Notes are not convertible by the holders.

    

6. LONG-LIVED ASSETS

Goodwill. The changes in the carrying amount of goodwill for the nine months ended September 30, 2014, were as follows (in thousands):

 

January 1, 2014 balance

$

233,599

 

Adjustments related to prior acquisitions

 

(44

)

Effects of changes in foreign currency exchange rates

 

(2,757

)

September 30, 2014 balance

$

230,798

 

11


 

Other Intangible Assets. Our intangible assets subject to ongoing amortization consist primarily of client contracts and software. As of September 30, 2014 and December 31, 2013, the carrying values of these assets were as follows (in thousands):

 

 

September 30, 2014

 

 

December 31, 2013

 

 

Gross
Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net
Amount

 

 

Gross
Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net
Amount

 

Client contracts

$

131,150

 

 

$

(85,451

)

 

$

45,699

 

 

$

130,573

 

 

$

(75,382

)

 

$

55,191

 

Software

 

130,070

 

 

 

(85,209

)

 

 

44,861

 

 

 

121,069

 

 

 

(77,504

)

 

 

43,565

 

Total

$

261,220

 

 

$

(170,660

)

 

$

90,560

 

 

$

251,642

 

 

$

(152,886

)

 

$

98,756

 

The total amortization expense related to intangible assets for the third quarters of 2014 and 2013 were $7.8 million and $9.1 million, respectively, and for the nine months ended September 30, 2014 and 2013 were $23.5 million and $26.6 million, respectively. Based on the September 30, 2014 net carrying value of our intangible assets, the estimated total amortization expense for each of the five succeeding fiscal years ending December 31 are: 2014 – $30.8 million; 2015 – $23.5 million; 2016 – $16.6 million; 2017 – $12.9 million; and 2018 – $9.7 million.

 

7.  RESTRUCTURING AND REORGANIZATION

During the third quarter of 2014 and 2013, we recorded restructuring expenses of ($0.2) million and $0.1 million, respectively, and for the nine months ended September 30, 2014 and 2013, we recorded restructuring expenses of $1.0 million and $0.9 million, respectively.  

In 2009, we entered into an incentive arrangement with certain employees to develop and then grow our Content Direct solution (the “Arrangement”).  The Arrangement included certain liquidation options for the employees in the event of a change of control of the Content Direct solution.  Because of the contingent nature of the Arrangement (i.e., payable only upon the occurrence of a change of control related to the Content Direct solution), we had not recognized any amounts in our financial statements related to this matter up to this point.   In July 2014, in conjunction with the reorganization of our Content Direct solution to facilitate its integration with our other offerings, we terminated the Arrangement in exchange for a one-time cash payment of $8.0 million, which is reflected as a reorganization charge in the third quarter of 2014.

 

8. COMMITMENTS, GUARANTEES AND CONTINGENCIES

Warranties. We generally warrant that our solutions and related offerings will conform to published specifications, or to specifications provided in an individual client arrangement, as applicable. The typical warranty period is 90 days from the date of acceptance of the solution or offering. For certain service offerings we provide a limited warranty for the duration of the services provided. We generally warrant that services will be performed in a professional and workmanlike manner. The typical remedy for breach of warranty is to correct or replace any defective deliverable, and if not possible or practical, we will accept the return of the defective deliverable and refund the amount paid under the client arrangement that is allocable to the defective deliverable. Our contracts also generally contain limitation of damages provisions in an effort to reduce our exposure to monetary damages arising from breach of warranty claims. Historically, we have incurred minimal warranty costs, and as a result, do not maintain a warranty reserve.

Product and Services Indemnifications. Our arrangements with our clients generally include an indemnification provision that will indemnify and defend a client in actions brought against the client that claim our products and/or services infringe upon a copyright, trade secret, or valid patent. Historically, we have not incurred any significant costs related to such indemnification claims, and as a result, do not maintain a reserve for such exposure.

Claims for Company Non-performance. Our arrangements with our clients typically cap our liability for breach to a specified amount of the direct damages incurred by the client resulting from the breach. From time-to-time, these arrangements may also include provisions for possible liquidated damages or other financial remedies for our non-performance, or in the case of certain of our outsourced customer care and billing solutions, provisions for damages related to service level performance requirements. The service level performance requirements typically relate to system availability and timeliness of service delivery. As of September 30, 2014, we believe we have adequate reserves, based on our historical experience, to cover any reasonably anticipated exposure as a result of our nonperformance for any past or current arrangements with our clients.

Indemnifications Related to Officers and the Board of Directors. We have agreed to indemnify members of our Board and certain of our officers if they are named or threatened to be named as a party to any proceeding by reason of the fact that they acted in such capacity. We maintain directors’ and officers’ (D&O) insurance coverage to protect against such losses. We have not historically incurred any losses related to these types of indemnifications, and are not aware of any pending or threatened actions or claims against

12


 

any officer or member of our Board. As a result, we have not recorded any liabilities related to such indemnifications as of September 30, 2014. In addition, as a result of the insurance policy coverage, we believe these indemnification agreements are not significant to our results of operations.

Favorable Settlement of Claims .  In March 2014, we executed a settlement agreement ending litigation we asserted against a third party for patent infringement and misappropriation of trade secrets.  In exchange for the release from the lawsuit initiated, we will receive a total of $6 million, with a portion paid in 2014 and the remainder over the next three years.  We have recorded a total $3.9 million (net of a time value discount and legal costs incurred) as a reduction of selling, general and administrative (“SG&A”) expenses during the nine months ended September 30, 2014.

Legal Proceedings. From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. We are not presently a party to any material pending or threatened legal proceedings.

 

 

 

13


 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this MD&A should be read in conjunction with the Financial Statements and Notes thereto included in this Form 10-Q and the audited consolidated financial statements and notes thereto in our 2013 10-K.

Forward-Looking Statements

This report contains a number of forward-looking statements relative to our future plans and our expectations concerning our business and the industries we serve.  These forward-looking statements are based on assumptions about a number of important factors, and involve risks and uncertainties that could cause actual results to differ materially from estimates contained in the forward-looking statements.  Some of the risks that are foreseen by management are outlined within Part I Item 1A. Risk Factors (“Risk Factors”) of our 2013 10-K.  Readers are strongly encouraged to review that section closely in conjunction with MD&A.

Company Overview

We are one of the world’s largest and most established business support solutions providers primarily serving the communications industry.  Our proven approach and solutions are based on our broad and deep experience in serving clients in the communications industry as their businesses have evolved from a single product offering to a highly complex, highly competitive, multi-product service offering.  Our approach has centered on using the best technology for the various functions required to provide world-class solutions.

Our solutions help service providers streamline and scale operations, introduce and adapt products and services to meet customer demands, and address the challenges and opportunities brought about by change.  Our broad suite of solutions helps our clients improve their business operations by creating more compelling product offerings and an enhanced customer experience through more relevant and targeted interactions, while at the same time, more efficiently managing the service provider’s cost structure.  Over the years, we have focused our R&D and acquisition investments on expanding our solution set to address the ever expanding needs of communications service providers to provide a differentiated, real-time, and personal experience for their consumers.  This extensive suite of solutions includes revenue management, content management and monetization, customer interaction management, and business intelligence.  

We generate approximately 65% of our revenues from the North American cable and satellite markets, approximately 25% of our revenues from wireline and wireless communication providers, and the remainder from a variety of other verticals, such as financial services, logistics, and transportation.  Additionally, during the nine months ended September 30, 2014, we generated approximately 85% of our revenues from the Americas region, approximately 10% of our revenues from the Europe, Middle East and Africa region, and approximately 5% of our revenues from the Asia Pacific region.

We are a S&P Small Cap 600 company.

Management Overview of Quarterly Results

Third Quarter Highlights .   A summary of our results of operations for the third quarter of 2014, when compared to the third quarter of 2013, is as follows (in thousands, except per share amounts and percentages):  

 

 

Quarter Ended

 

 

September 30,

2014

 

September 30,

2013

 

Revenues

$

185,003

 

 

$

186,180

 

Operating Results:

 

 

 

 

 

 

 

Operating income

 

13,831

 

 

 

20,553

 

Operating income margin

 

7.5

%

 

 

11.0

%

Diluted EPS

$

0.15

 

 

$

0.47

 

Supplemental Data:

 

 

 

 

 

 

 

ACP customer accounts (end of period)

 

50,036

 

 

 

49,151

 

Restructuring and reorganization charges

$

7,784

 

 

$

76

 

Stock-based compensation

 

4,536

 

 

 

3,979

 

Amortization of acquired intangible assets

 

3,790

 

 

 

4,757

 

Amortization of OID

 

1,460

 

 

 

1,351

 

 

14


 

Revenues.   Our revenues for the third quarter of 2014 were $185.0 million, a decrease of 1% when compared to $186.2 million for the same period in 2013.  The decrease in revenues can be attributed to lower software and services revenues of $8.2 million for the quarter and to a much lesser degree, a business divestiture completed at the end of 2013 (discussed in our 2013 Form 10-K) which resulted in approximately $2 million of divested revenues for the third quarter.  These decreases were offset to a large degree by growth in our processing revenues for the quarter.

Operating Results.   Operating income for the third quarter of 2014 was $13.8 million, or a 7.5% operating income margin percentage, compared to $20.6 million, or an 11.0% operating income margin percentage, for the third quarter of 2013.  The year-over-year decreases in operating income and operating income margin percentage are mainly due to the $7.8 million of restructuring and reorganization charges recorded in the third quarter of 2014 primarily associated with the reorganization of our Content Direct solution to facilitate its alignment across our offerings, including management programs and incentives (see Note 7 to our Financial Statements).

Diluted EPS.   Diluted EPS for the third quarter of 2014 was $0.15 compared to $0.47 for the third quarter of 2013.  The third quarter of 2014 diluted EPS was negatively impacted by the $7.8 million of restructuring and reorganization charges for the quarter, discussed above, which had a negative impact of $0.12 per diluted share.  Additionally, the third quarter of 2013 benefited from an unusually low GAAP effective income tax rate of 8%, primarily as result of the recognition of incremental R&D income tax credits claimed for development activities from previous years and partially by the reduction of certain tax allowances related to foreign operation.  The lower tax rate provided a benefit of approximately $6 million, or $0.17 per diluted share for the third quarter of 2013.

Cash and Cash Flows.   As of September 30, 2014, we had cash, cash equivalents and short-term investments of $183.5 million, as compared to $189.6 million as of June 30, 2014, and $210.8 million as of December 31, 2013.  Our cash flows from operating activities for the third quarter of 2014 were $19.6 million, compared to $25.2 million for the same period last year.  The third quarter 2014 cash flows were negatively impacted by the reorganization charge of $8.0 million, referenced above, and by approximately $12 million related to the timing of a large client’s monthly invoice payment, discussed below.  See the Liquidity section below for further discussion of our cash flows.

Significant Client Relationships

Client Concentration.   A large percentage of our historical revenues have been generated from our three largest clients, which are Comcast, DISH Network Corporation (“DISH”), and Time Warner Cable, Inc. (“Time Warner”).  Revenues from these clients represented the following percentages of our total revenues for the indicated periods:

 

 

Quarter Ended

 

 

September 30,

2014

 

  

June 30,

2014

 

 

September 30,

2013

 

Comcast

 

22

%

 

  

21

%

  

  

19

%

DISH

 

15

%

 

 

16

%

 

 

15

%

Time Warner

 

11

%

 

 

11

%

 

 

11

%

The percentages of net billed accounts receivable balances attributable to our largest clients as of the indicated dates were as follows:

 

 

As of

 

 

September 30,

2014

 

 

June 30,

2014

 

  

March 31,

2014

 

 

December 31,

2013

 

Comcast

 

22

%

 

 

20

%

 

 

19

%

 

 

21

%

DISH

 

19

%

 

 

13

%

 

 

13

%

 

 

14

%

Time Warner

 

11

%

 

 

16

%

 

 

13

%

 

 

9

%

As the table above indicates, at September 30, 2014 and June 30, 2014, we experienced delays in the monthly payments received at quarter-end.  However, these monthly payments were received subsequent to quarter-end.  

See our 2013 10-K for additional discussion of our business relationships and contractual terms with the above mentioned significant clients.

Comcast.   On July 25, 2014, we entered into an amendment to our Master Subscriber Management System Agreement with Comcast (the “Amended Agreement”).  The Amended Agreement provides the framework for Comcast to consolidate its residential customer accounts onto our ACP customer care and billing solution.  Key changes included in the Amended Agreement, and possible impacts to our business, are as follows:

15


 

Term Extension

·

The terms of the Amended Agreement are effective July 1, 2014, and run through June 30, 2019 (a five-year initial term).  In addition, Comcast has the option to extend the Amended Agreement for two consecutive one-year terms by exercising renewal options no later than January 1, 2019 for the first extension option, and January 1, 2020 for the second extension option.

Migration of Comcast Residential Customer Accounts

·

The Amended Agreement modifies and adds pricing tiers above the level of customer accounts we currently process for Comcast, which will provide Comcast lower pricing per unit for incremental customer accounts brought under the Amended Agreement.

·

Initially under the Amended Agreement, Comcast plans to add approximately 2.3 million residential customer accounts onto ACP in early 2015.  As a result, the Amended Agreement is not expected to have a material impact to our 2014 results of operations.  We have the opportunity for additional customer account migrations to CSG as part of any future consolidation or standardization by Comcast of their residential business.

·

The timing of and the number of customer accounts to be migrated to CSG, if any, is at the discretion of Comcast.  Therefore, there can be no assurances as to the timing and/or the number of customer accounts migrated to us by Comcast, or whether we will experience any material increase in revenues or profits under the Amended Agreement.

Issuance of Warrants

·

As an additional incentive for Comcast to migrate new customer accounts to ACP, the Amended Agreement includes the issuance of stock warrants (the “Warrant Agreement”) for the right to purchase up to approximately 2.9 million shares of our common stock (the “Stock Warrants”), 1.9 million warrants relate to Comcast’s existing residential business and the remaining 1.0 million warrants relate to additional residential customer accounts that Comcast may acquire and migrate onto ACP in the future.  The Stock Warrants have a 10-year term and an exercise price of $26.68 per warrant.

·

The Stock Warrants represent potentially dilutive shares to earnings per share only to the extent the shares are “in the money” (under the treasury stock method), and not subject to performance vesting conditions.

·

Comcast’s ability to exercise the Stock Warrants is tied primarily to the number of customer accounts Comcast migrates onto ACP.  The vesting of the Stock Warrants is summarized as follows:

-

Current Comcast Residential Business. Up to 1.9 million of the Stock Warrants relate to Comcast’s existing residential business and vest as follows:

§

The first 25% of these Stock Warrants (approximately 0.475 million Stock Warrants) vest in January 2015, which approximates the expected beginning of the above mentioned 2.3 million customer account migrations.

§

The next 25% of these Stock Warrants vest after the successful migration of the first 0.5 million customer accounts.

§

The next 25% of these Stock Warrants vest only after 5 million additional customer accounts are migrated onto ACP.

§

The last 25% of these Stock Warrants vest only after and proportionate to approximately 5 million additional customer accounts are migrated onto ACP.

 

-

Potential Future Comcast Acquired Residential Business. Should Comcast acquire additional residential customer accounts in the future, up to 1.0 million additional Stock Warrants will vest proportionately should these acquired customer accounts be migrated  onto ACP from other providers’ billing platforms, with full vesting based on a target of 5 million newly migrated customer accounts.

A copy of the Amended Agreement, along with the Warrant Agreement, with confidential information redacted, is filed as exhibit 10.22I to this Form 10-Q.

Risk of Client Concentration.   We expect to continue to generate a significant percentage of our future revenues from our three largest clients mentioned above.  There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of clients.  Should a significant client: (i) terminate or fail to renew their contracts with us, in whole or in part, for any reason; (ii) significantly reduce the number of customer accounts processed on our solutions, the price paid for our services, or the scope of services that we provide; or (iii) experience significant financial or operating difficulties, it could have a material adverse effect on our financial condition and results of operations.  

Critical Accounting Policies

The preparation of our Financial Statements in conformity with accounting principles generally accepted in the U.S. requires us to select appropriate accounting policies, and to make judgments and estimates affecting the application of those accounting policies.  In

16


 

applying our accounting policies, different business conditions or the use of different assumptions may result in materially different amounts reported in our Financial Statements.

We have identified the most critical accounting policies that affect our financial position and the results of our operations.  Those critical accounting policies were determined by considering the accounting policies that involve the most complex or subjective decisions or assessments.  The most critical accounting policies identified relate to: (i) revenue recognition; (ii) allowance for doubtful accounts receivable; (iii) impairment assessments of goodwill and other long-lived assets; (iv) income taxes; (v) business combinations and asset purchases; and (vi) loss contingencies.  These critical accounting policies, as well as our other significant accounting policies, are discussed in our 2013 10-K.

Results of Operations

Total Revenues.   Total revenues for the:  (i) third quarter of 2014 were $185.0 million, a 1% decrease when compared to $186.2 million for the third quarter of 2013; and (ii) nine months ended September 30, 2014 were $557.6 million, a 1% increase when compared to $552.9 million for the nine months ended September 30, 2013 .  The components of total revenues, discussed in more detail below, are as follows (in thousands):

 

 

Quarter Ended
September 30,

 

 

Nine Months Ended

September 30,

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Processing and related services

$

140,981

 

 

$

133,294

 

 

$

419,696

 

 

$

399,112

 

Software and services

 

22,079

 

 

 

30,294

 

 

 

72,553

 

 

 

87,049

 

Maintenance

 

21,943

 

 

 

22,592

 

 

 

65,340

 

 

 

66,758

 

Total revenues

$

185,003

 

 

$

186,180

 

 

$

557,589

 

 

$

552,919

 

We use the location of the client as the basis of attributing revenues to individual countries.  Revenues by geographic regions for the quarters and nine months ended September 30, 2014 and 2013 were as follows (in thousands):

 

 

Quarter Ended
September 30,

 

 

Nine Months Ended

September 30,

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

Americas (principally the U.S.)

$

156,594

 

 

$

158,209

 

 

$

475,722

 

 

$

470,422

 

Europe, Middle East, and Africa

 

19,259

 

 

 

20,613

 

 

 

57,149

 

 

 

57,564

 

Asia Pacific

 

9,150

 

 

 

7,358

 

 

 

24,718

 

 

 

24,933

 

Total revenues

$

185,003

 

 

$

186,180

 

 

$

557,589

 

 

$

552,919

 

Processing and related services revenues.   Processing and related services revenues for the:  (i) third quarter of 2014 increased 6% to $141.0 million , from $133.3 million for the third quarter of 2013; and (ii) nine months ended September 30, 2014 increased 5% to $419.7 million, from $399.1 million for the nine months ended September 30, 2013.   The increases in p rocessing and related services revenues are due mainly to the following key items:  (i) continued growth in our ACP processing revenues and several of our related ancillary products and services; (ii) growth in our international managed services offering as a result of recent contract wins and service launches; and (iii) special project work for certain clients completed in the first quarter of 2014.  These increases were offset to a certain degree by divested revenues resulting from the sale of a small print operation in July 2013 and our marketing analytics business at the end of 2013, which combined, had a total net impact of approximately $2 million and $7 million of processing revenues, respectively, for the third quarter and nine months ended September 30, 2014.

Additional information related to processing and related services revenues is as follows:

·

Amortization of our client contracts intangible assets related to investments in client contracts (reflected as a reduction of processing and related services revenues) for the third quarters of 2014 and 2013 were $1.6 million and $1.5 million, respectively; and (ii) nine months ended September 30, 2014 and 2013 were $4.7 million and $4.6 million, respectively.  

·

Total customer accounts processed on our ACP solution as of September 30, 2014 were 50.0 million, compared to 49.9 million as of June 30, 2014, and 49.2 million as of September 30, 2013.  

Software and Services Revenues.   Software and services revenues for the:  (i) third quarter of 2014 decreased 27% to $22.1 million, from $30.3 million for the third quarter of 2013; and (ii) nine months ended September 30, 2014 decreased 17% to $72.6 million, from $87.0 million for the nine months ended September 30, 2013.  These decreases in software and services revenues can be mainly attributed to extended sales cycles in our software and professional services business and continued low market demand for large

17


 

transformational software and service deals , and to a much lesser degree, the divested services revenues related to our marketing analytics business at the end of 2013, which resulted in decreases of approximately $1 million and $3 million, respectively, for the quarter and nine months ended September 30, 2014.  

Maintenance Revenues.   Maintenance revenues for the: (i) third quarter of 2014 were $21.9 million, relatively consistent when compared to $22.6 million generated in the third quarter of 2013; and (ii) nine months ended September 30, 2014 were $65.3 compared to $66.8 million for the nine months ended September 30, 2013.

Total Expenses.   Our operating expenses for the:  (i) third quarter of 2014 were $171.2 million, a 3% increase when compared to $165.6 million for the third quarter of 2013; and (ii) nine months ended September 30, 2014 were $501.0 million, a 2% increase when compared to $492.7 million for the nine months ended September 30, 2013.  These increases are mainly attributed to the $7.8 million of restructuring and reorganization charges recorded in the third quarter of 2014, discussed above.

Additionally, during the first quarter of 2014, we incurred expenses related to the following unique items.  These items essentially offset each other within our total expenses, but are classified in different line items within our Income Statement for the nine months ended September 30, 2014:

·

We recorded a provision of approximately $4 million (included in the cost of software and services) for estimated cost overruns related to a large software and services implementation project.  Because of the complexity of the overall project, the estimated costs and efforts required to complete the project have increased significantly from our original expectations.  In addition, we may experience additional changes in our overall estimated costs to complete this project over the remainder of 2014.  

·

We executed a settlement agreement ending litigation that we had asserted against a third party for patent infringement and misappropriation of trade secrets.  In exchange for the release from the lawsuit we initiated, we will receive a total settlement of $6 million, with a portion to be paid in 2014 and the remainder over the next three years.  As a result, we recorded $3.9 million (net of a time value discount and legal costs incurred) as a reduction of SG&A expenses for the first quarter of 2014.

The components of total expenses are discussed in more detail below.

Cost of Revenues.   See our 2013 10-K for a description of the types of costs that are included in the individual line items for cost of revenues.

Cost of Processing and Related Services (Exclusive of Depreciation).   The cost of processing and related services for the:  (i) third quarter of 2014 increased 6%, to $69.2 million, from $65.2 million for the third quarter of 2013; and (ii) nine months ended September 30, 2014 increased 8% to $205.0 million, from $189.7 million for the nine months ended September 30, 2013.  These increases are primarily due to the following key items: (i) an increase in our ACP data processing costs resulting from our clients’ continued growth and increasing complexities of their businesses, thus requiring more computing resources; (ii) reassignment of resources related to increases in client directed and funded work on our ACP platform and our international managed services offering; and (iii) an increase in certain other variable costs related to corresponding increases in related revenues, to include our managed services offering.   Total processing and related services cost as a percentage of our processing and related services revenues for the:  (i) third quarters of 2014 and 2013 were 49.1% and 48.9%, respectively; and (ii) nine months ended September 30, 2014 and 2013 were 48.8% and 47.5%, respectively.  

Cost of Software and Services (Exclusive of Depreciation).   The cost of software and services for the:  (i) third quarter of 2014 decreased 12%, to $17.5 million, from $19.9 million for the third quarter of 2013; and (ii) nine months ended September 30, 2014 decreased 5% to $60.7 million, from $63.9 million for the nine months ended September 30, 2013.  These decreases in cost of software and services is reflective of the lower revenues for the periods and a result of the reassignment of personnel and the related costs previously assigned internally to software and consulting projects to other projects, with the year-to-date amount offset to certain degree by the estimated cost overruns related to the large software and services implementation project, discussed above.  Total software and services cost as a percentage of our software and services revenues for the:  (i) third quarters of 2014 and 2013 were 79.3% and 65.8%, respectively; and (ii) nine months ended September 30, 2014 and 2013 were 83.7% and 73.4%, respectively.

Variability in quarterly revenues and operating results are inherent characteristics of companies that sell software licenses and perform professional services.  Our quarterly revenues for software licenses and professional services may fluctuate, depending on various factors, including the timing of executed contracts and revenue recognition, and the delivery of contracted solutions.  However, the costs associated with software and professional services revenues are not subject to the same degree of variability (e.g., these costs are generally fixed in nature within a relatively short period of time), and thus, fluctuations in our cost of software and services as a percentage of our software and services revenues will likely occur between periods.  

18


 

Cost of Maintenance (Exclusive of Depreciation).   The cost of maintenance for the: (i) third quarter of 2014 decreased 21%, to $7.7 million, from $9.8 million for the third quarter of 2013; and (ii) nine months ended September 30, 2014 decreased 17% to $24.5 million, from $29.4 million for the nine months ended September 30, 2013, with the decreases mainly attributed to a decrease in amortization expense for certain technology assets that became fully amortized in previous periods and to the reassignment of personnel and the related costs previously assigned internally to maintenance projects to other projects.   Total cost of maintenance as a percentage of our maintenance revenues for the: (i) third quarters of 2014 and 2013 were 35.3% and 43.3%, respectively; and (ii) nine months ended September 30, 2014 and 2013 were 37.6% and 44.0%, respectively.   

R&D Expense .  R&D expense for the: (i) third quarter of 2014 decreased 5%, to $26.3 million, from $27.6 million for the third quarter of 2013; and (ii) nine months ended September 30, 2014 decreased 7% to $77.8 million, from $83.7 million for the nine months ended September 30, 2013.   These decreases in R&D expense between years are primarily a result of the reassignment of resources previously assigned to development projects to other areas of the business, primarily client directed and funded work on our ACP platform.   As a percentage of total revenues, R&D expense was 14.2% for the third quarter of 2014 compared to 14.8% for the third quarter of 2013.  

Our R&D efforts are focused on the continued evolution of our solutions that enable service providers worldwide to provide a more personalized customer experience while turning transactions into revenues.  This includes the continued investment in our business support solutions aimed at improving a providers’ time-to-market, flexibility, scalability, and total cost of ownership.  We expect that our R&D investment activities in the near-term will be relatively consistent with previous quarters, with the level of R&D spend highly dependent upon the opportunities that we see in our markets.  

SG&A Expense .  SG&A expense for the: (i) third quarter of 2014 increased slightly to $39.0 million, from $38.4 million for the third quarter of 2013; and (ii) nine months ended September 30, 2014 increased 3% to $113.5 million, from $110.6 million for the nine months ended September 30, 2013.    These increases are mainly due to the investments we are making in the business towards new initiatives, to include our cyber security offering (i.e., our Invotas product).  Additionally, included in the first quarter 2014 SG&A expense is the $3.9 million reduction of expense related to the settlement agreement discussed above.  

Our SG&A costs as a percentage of total revenues for the third quarters of 2014 and 2013 were 21.1% and 20.6%, respectively.

Depreciation Expense .  Depreciation expense for the: (i) third quarter of 2014 decreased 23%, to $3.6 million, from $4.6 million for the third quarter of 2013; and (ii) nine months ended September 30, 2014 decreased 27% to $10.5 million, from $14.4 million for the nine months ended September 30, 2013, w ith the decreases a result of certain assets that became fully depreciated over the past year and assets sold as part of our 2013 divestures .

Restructuring and Reorganization Charges. Restructuring and reorganization charges for the:  (i) third quarter of 2014 were $7.8 million, compared to $0.1 million for the third quarter of 2013; and (ii) nine months ended September 30, 2014 were $9.0 million, compared to $0.9 million for the nine months ended September 30, 2013. During the third quarter of 2014, we recorded restructuring and reorganization charges of $7.8 million primarily associated with the reorganization of our Content Direct solution to facilitate its alignment across our offerings, including management programs and incentives (see Note 7 to our Financial Statements).

Operating Income. Operating income and operating income margin percentages for the:  (i) third quarter of 2014 was $13.8 million, or 7.5% of total revenues, compared to $20.6 million, or 11.0% of total revenues for the third quarter of 2013; and (ii) nine months ended September 30, 2014 was $56.6 million, or 10.1% of total revenues, compared to $60.3 million, or 10.9% of total revenues for the nine months ended September 30, 2013. These decreases in operating income and operating income margin percentage are mainly due to the reorganization charge of $8.0 million recorded in the third quarter of 2014, discussed above.

Income Tax Provision .  The effective income tax rates for the third quarters of 2014 and 2013 and nine months ended September 30, 2014 and 2013 were as follows:

 

Quarter Ended
September 30,

 

 

 

Nine Months Ended

September 30,

2014

 

 

2013

 

 

 

2014

 

 

2013

 

48

%

 

8

%

 

 

46

%

 

14

%

 

For the full-year 2014 we are currently estimating an effective income tax rate of 46%, which does not include any benefit from R&D tax credits generated during the year, as they have not yet received Congressional approval.  If enacted prior to the end of the year, we would include those income tax benefits in our 2014 effective income tax rate.

19


 

For the third quarter and nine months ended September 30, 2013, the effective income tax rate was unusually low driven mainly by incremental R&D income tax credits claimed for the development activities from previous years and partially by the reduction of certain tax allowances related to foreign operations.  The lower tax rates provided a benefit of $5.6 million and $11.5 million for the third quarter and nine months ended September 30, 2013, respectively.

 

Liquidity

Cash and Liquidity

As of September 30, 2014, our principal sources of liquidity included cash, cash equivalents, and short-term investments of $183.5 million, compared to $189.6 million as of June 30, 2014 and $210.8 million as of December 31, 2013.  We generally invest our excess cash balances in low-risk, short-term investments to limit our exposure to market and credit risks.  

As part of our Credit Agreement, we have a $100 million senior secured revolving loan facility (“Revolver”) with a syndicate of financial institutions that expires in November 2017 (or December 31, 2016 if certain conditions exist).  As of September 30, 2014, there were no borrowings outstanding on the Revolver.  The Credit Agreement contains customary affirmative covenants and financial covenants.  As of September 30, 2014, and the date of this filing, we believe that we are in compliance with the provisions of the Credit Agreement.  

Our cash, cash equivalents, and short-term investment balances as of the end of the indicated periods were located in the following geographical regions (in thousands):

 

 

September 30,

2014

 

 

December 31,
2013

 

Americas (principally the U.S.)

$

159,113

 

 

$

187,596

 

Europe, Middle East and Africa

 

20,350

 

 

 

18,665

 

Asia Pacific

 

3,996

 

 

 

4,576

 

Total cash, equivalents and short-term investments

$

183,459

 

 

$

210,837

 

We generally have ready access to substantially all of our cash, cash equivalents, and short-term investment balances, but may face limitations on moving cash out of certain foreign jurisdictions due to currency controls.  As of September 30, 2014, we had $4.8 million of cash restricted as to use to collateralize outstanding letters of credit.

Cash Flows From Operating Activities   

We calculate our cash flows from operating activities in accordance with GAAP, beginning with net income, adding back the impact of non-cash items or non-operating activity (e.g., depreciation, amortization, amortization of OID, impairments, deferred income taxes, stock-based compensation, etc.), and then factoring in the impact of changes in operating assets and liabilities.  See our 2013 10-K for a description of the primary uses and sources of our cash flows from operating activities.  

20


 

Our 2013 and 2014 net cash flows from operating activities, broken out between operations and changes in operating assets and liabilities, for the quarters ended are as follows (in thousands):

 

Operations

 

 

Changes in
Operating
Assets and
Liabilities

 

 

Net Cash
Provided by
Operating
Activities –
Totals

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

2013:

 

 

 

 

 

 

 

 

 

 

 

March 31

$

41,320

 

 

$

(18,776

)

 

$

22,544

 

June 30

 

31,308

 

 

 

7,494

 

 

 

38,802

 

September 30

 

29,634

 

 

 

(4,398

)

 

 

25,236

 

Year-to-date total

$

102,262

 

 

$

(15,680

)

 

$

86,582

 

2014:

 

 

 

 

 

 

 

 

 

 

 

March 31(1)

$

27,983

 

 

$

(36,561

)

 

$

(8,578

)

June 30

 

24,804

 

 

 

43

 

 

 

24,847

 

September 30 (2)

 

22,452

 

 

 

(2,815

)

 

 

19,637

 

Year-to-date total

$

75,239

 

 

$

(39,333

)

 

$

35,906

 

(1)

Cash flows from operating activities for the quarter ended March 31, 2014 reflect the negative impact of the following timing items on working capital for the quarter: (i) the increase in the accounts receivable balance primarily related to the timing around certain monthly client payments that were received after the quarter ended; and (ii) the payment of 2013 year-end accrued employee incentive compensation.

(2)

Cash flows from operating activities for the quarter ended September 30, 2014 were negatively impacted by: (i) the $8.0 million charge associated with the reorganization of our Content Direct solution to facilitate its alignment across our offerings, including management programs and incentives (see Note 7 to our Financial Statements); and (ii) an approximately $12 million delayed client invoice payment that was received subsequent to quarter-end.

We believe the above table illustrates our ability to generate recurring quarterly cash flows from our operations, and the importance of managing our working capital items. The variations in our net cash provided by operating activities are related mostly to the changes in our operating assets and liabilities (related mostly to fluctuations in timing at quarter-end for such things as client payments and changes in accrued expenses), and generally over longer periods of time, do not significantly impact our cash flows from operations.

Significant fluctuations in key operating assets and liabilities between 2014 and 2013 that impacted our cash flows from operating activities are as follows:

Billed Trade Accounts Receivable

Management of our billed accounts receivable is one of the primary factors in maintaining consistently strong quarterly cash flows from operating activities.  Our billed trade accounts receivable balance includes significant billings for several non-revenue items (primarily postage, sales tax, and deferred revenue items).  As a result, we evaluate our performance in collecting our accounts receivable through our calculation of days billings outstanding (“DBO”) rather than a typical days sales outstanding (“DSO”) calculation.  DBO is calculated based on the billings for the period (including non-revenue items) divided by the average monthly net trade accounts receivable balance for the period.  

Our gross and net billed trade accounts receivable and related allowance for doubtful accounts receivable (“Allowance”) as of the end of the indicated quarterly periods, and the related DBOs for the quarters then ended, are as follows (in thousands, except DBOs):

Quarter Ended

 

Gross

 

 

Allowance

 

 

Net Billed

 

 

DBOs

 

2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31

 

$

182,711

 

 

$

(3,618

)

 

$

179,093

 

 

64

 

June 30

 

 

176,271

 

 

 

(3,750

)

 

 

172,521

 

 

65

 

September 30

 

 

177,800

 

 

 

(3,043

)

 

 

174,757

 

 

65

 

2014:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31

 

$

198,840

 

 

$

(3,104

)

 

$

195,736

 

 

64

 

June 30

 

 

194,413

 

 

 

(2,798

)

 

 

191,615

 

 

69

 

September 30

 

 

193,760

 

 

 

(2,736

)

 

 

191,024

 

 

70

 

21


 

During the second and third quarters of 2014, we experienced a deterioration of our DBO, which has historically been a relatively consistent metric for us, as evidenced by the table above.  This increase in our DBO can be mainly attributed to our international software and services business, which has seen a decrease in billings during 2014, without a corresponding decrease in accounts receivable due to project milestone timing, delayed payments, and monetary restrictions in certain jurisdictions.  Additionally, we experienced an increase in gross and net billed accounts receivable in the first three quarters of 2014 related primarily to the timing around certain recurring client payments (all from different clients) that were delayed at each quarter end, which also negatively impacted our DBO.  As these monthly payments were received subsequent to each quarter-end, they do not raise any collectability concerns.

As a global provider of software and professional services, a portion of our accounts receivable balance relates to clients outside the U.S.  As a result, this diversity in the geographic composition of our client base may adversely impact our DBOs as longer billing cycles (i.e., billing terms and cash collection cycles) are an inherent characteristic of international software and professional services transactions.  For example, our ability to bill (i.e., send an invoice) and collect arrangement fees may be dependent upon, among other things: (i) the completion of various client administrative matters, local country billing protocols and processes (including local cultural differences), and/or non-client administrative matters; (ii) us meeting certain contractual invoicing milestones; or (iii) the overall project status in certain situations in which we act as a subcontractor to another vendor on a project.

Unbilled Trade Accounts Receivable

Revenue earned and recognized prior to the scheduled billing date of an item is reflected as unbilled accounts receivable.  Our unbilled accounts receivable as of the end of the indicated periods are as follows (in thousands):

 

 

2014

 

 

2013

 

March 31

$

39,541

 

 

$

26,836

 

June 30

 

39,592

 

 

 

35,426

 

September 30

 

39,513

 

 

 

41,347

 

The unbilled accounts receivable balances above are primarily the result of several transactions with various milestone and contractual billing dates which have not yet been reached.  Unbilled accounts receivable are an inherent characteristic of certain software and professional services transactions and may fluctuate between quarters, as these type of transactions typically have scheduled invoicing terms over several quarters, as well as certain milestone billing events.

Accrued Employee Compensation

Accrued employee compensation decreased $18.2 million, from $58.4 million as of December 31, 2013 to $40.2 million as of September 30, 2014.  This decrease is primarily due to:  (i) the payment of 2013 employee incentive compensation that were fully accrued for at December 31, 2013, offset to a certain degree by the accrual for the 2014 employee incentive compensation; and (ii) the timing of payment of employee wages and other benefits.     

Cash Flows From Investing Activities

Our typical investing activities consist of purchases/sales of short-term investments, purchases of property and equipment, and investments in client contracts, which are discussed below.  Additionally, during the third quarter of 2013, we sold a small print and mail facility which resulted in net proceeds from the disposition of $1.1 million and 1.7 million, respectively, during the nine months ended September 30, 2014 and 2013.

Purchases/Sales of Short-term Investments.   During the nine months ended September 30, 2014 and 2013, we purchased $127.0 million and $129.3 million, respectively, and sold (or had mature) $146.4 million and $62.7 million, respectively, of short-term investments.  We continually evaluate the appropriate mix of our investment of excess cash balances between cash equivalents and short-term investments in order to maximize our investment returns and will likely purchase and sell additional short-term investments in the future.


22


 

Property and Equipment/Client Contracts.   Our capital expenditures for the nine months ended September 30, 2014 and 2013, for property and equipment, and investments in client contracts were as follows (in thousands):

 

 

Nine Months Ended

September 30,

 

 

2014

 

 

2013

 

Property and equipment

$

21,406

 

 

$

18,986

 

Client contracts

 

4,235

 

 

 

5,349

 

The property and equipment expenditures during the nine months ended September 30, 2014 consisted principally of investments in: (i) computer hardware, software, and related equipment; and (ii) facilities and internal infrastructure items.

The investments in client contracts for the nine months ended September 30, 2014 and 2013 relate to client incentive payments ($3.0 million and $4.7 million, respectively) and the deferral of costs related to conversion/set-up services provided under long-term processing contracts ($1.2 million and $0.6 million, respectively).  

Cash Flows From Financing Activities

Our financing activities typically consist of activities associated with our common stock and our long-term debt.  

Cash Dividends Paid on Common Stock.   During the nine months ended September 30, 2014 and 2013, we paid Board approved dividend payments totaling $15.5 million and $9.6 million, respectively.

Repurchase of Common Stock.   During the nine months ended September 30, 2014 and 2013, we repurchased approximately 0.2 million and 0.5 million shares of our common stock under the guidelines of our Stock Repurchase Program for approximately $5 million and $10 million, respectively.  Outside of our Stock Repurchase Program, during the nine months ended September 30, 2014 and 2013, we repurchased from our employees and then cancelled approximately 0.2 million and 0.3 million shares of our common stock for $6.7 million and $5.0 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

Long-term Debt.   During the nine months ended September 30, 2014 and 2013, we made $11.3 million of principal repayments during each period.

Capital Resources

The following are the key items to consider in assessing our sources and uses of capital resources:

Current Sources of Capital Resources.

·

Cash, Cash Equivalents and Short-term Investments. As of September 30, 2014, we had cash, cash equivalents, and short-term investments of $183.5 million, of which approximately 86% is in U.S. Dollars and held in the U.S. We have $4.8 million of restricted cash, used primarily to collateralize outstanding letters of credit. For the remainder of the monies denominated in foreign currencies and/or located outside the U.S., we do not anticipate any material amounts being unavailable for use in running our business.

·

Operating Cash Flows. As described in the Liquidity section above, we believe we have the ability to generate strong cash flows to fund our operating activities and act as a source of funds for our capital resource needs.

·

Revolving Loan Facility. We have a $100 million senior secured revolving loan facility with a syndicate of financial institutions that expires in November 2017 (or December 2016 if certain conditions exist—see Note 5 to our Financial Statements for additional details). As of the date of this filing, we have $100 million of the revolving loan facility available to us.

23


 

Uses/Potential Uses of Capital Resources. Below are the key items to consider in assessing our uses/potential uses of capital resources:

·

Common Stock Repurchases. We have made repurchases of our common stock in the past under our Stock Repurchase Program.  During the nine months ended September 30, 2014, we repurchased 192,100 shares of our common stock for $5.2 million ($27.26 per share). As of September 30, 2014, we have 1.9 million shares authorized for repurchase remaining under our Stock Repurchase Program. Our Credit Agreement places certain limitations on our ability to repurchase our common stock. We continue to evaluate the best use of our capital going forward, which from time-to-time, may include additional share repurchases as market and business conditions warrant.

·

Cash Dividends. In June 2013, our Board approved the initiation of a quarterly cash dividend to be paid to our stockholders. During the nine months ended September 30, 2014, we made dividend payments totaling $15.5 million.  Going forward, we expect to pay cash dividends each year in March, June, September, and December, with the amount and timing subject to the Boards’ approval.

·

Acquisitions. As part of our growth strategy, we are continually evaluating potential business and/or asset acquisitions and investments in market share expansion with our existing and potential new clients.

·

Capital Expenditures. During the nine months ended September 30, 2014, we spent $21.4 million on capital expenditures. At this time, we expect our 2014 capital expenditures to be relatively consistent with that of 2013. As of September 30, 2014, we have made no significant capital expenditure commitments.

·

Investments in Client Contracts. In the past, we have provided incentives to new or existing U.S. processing clients to convert their customer accounts to, or retain their customer’s accounts on, our customer care and billing solutions. In addition, we incurred direct and incremental costs related to conversion/set-up services provided under long-term processing contracts. During the nine months ended September 30, 2014, we made client incentive payments and incurred deferred conversion/set-up services costs totaling $4.2 million. As of September 30, 2014, we had commitments to make $3.0 million of client incentive payments, $1.5 million in 2015 and 2016, respectively.

On July 25, 2014, we entered into an Amended Agreement with Comcast.  As an additional incentive for Comcast to migrate new customer accounts to ACP, the Amended Agreement includes the issuance of Stock Warrants for the right to purchase up to approximately 2.9 million shares of our common stock, with vesting tied primarily to the number of customer accounts Comcast migrates onto ACP. Once vested, Comcast may exercise the Stock Warrants and elect either physical delivery of common shares or net share settlement (cashless exercise).  Alternatively, the exercise of the Stock Warrants may be settled with cash based solely on our approval, or if Comcast were to beneficially own or control in excess of 19.99% of the common stock or voting of the Company. As of September 30, 2014 none of the Stock Warrants had vested.

·

Long-Term Debt Service. As of September 30, 2014 our long-term debt consisted of: (i) 2010 Convertible Notes with a par value of $150.0 million; and (ii) Credit Agreement term loan borrowings of $123.8 million. During the next twelve months, there are no scheduled conversion triggers on our 2010 Convertible Notes, and therefore, our expected cash debt service at this time related to the 2010 Convertible Notes is the $4.5 million of interest payments. Over the next 12 months, the mandatory repayments and the cash interest expense (based upon current interest rates) for our Credit Agreement are approximately $20.6 million and $3.0 million, respectively. We have the ability to make prepayments on our Credit Agreement without penalty.

·

We continue to evaluate the best use of our capital going forward, which from time-to-time, may include common stock repurchases, repurchases of our 2010 Convertible Notes, and/or prepayments on our Credit Agreement, as market and business conditions warrant.

In summary, we expect to continue to have material needs for capital resources going forward, as noted above. We believe that our current cash, cash equivalents and short-term investments balances and our revolving loan facility, together with cash expected to be generated in the future from our current operating activities, will be sufficient to meet our anticipated capital resource requirements for at least the next 12 months. We also believe we could obtain additional capital through other debt sources which may be available to us if deemed appropriate.

 

 


24


 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential loss arising from adverse changes in market rates and prices.  As of September 30, 2014, we are exposed to various market risks, including changes in interest rates, fluctuations and changes in the market value of our cash equivalents and short-term investments, and changes in foreign currency exchange rates.  We have not historically entered into derivatives or other financial instruments for trading or speculative purposes.  

Interest Rate Risk.   

The interest rate on our convertible debt is fixed, and thus, as it relates to our convertible debt borrowings, we are not exposed to changes in interest rates.  

The interest rates under our Credit Agreement are based upon an adjusted LIBOR rate plus an applicable margin, or an alternate base rate plus an applicable margin.  As of September 30, 2014, we were exposed to fluctuations in interest rate movements on $123.8 million of our term loan.  See Note 5 to our Financial Statements for further details of our long-term debt.

A hypothetical adverse change of 10% in the September 30, 2014 adjusted LIBOR rate would not have had a material impact upon our results of operations.

Market Risk Related to Cash Equivalents and Short-term Investments.  

Our cash and cash equivalents as of September 30, 2014 and December 31, 2013 were $75.6 million and $82.7 million, respectively.    Certain of our cash balances are “swept” into overnight money market accounts on a daily basis, and at times, any excess funds are invested in low-risk, somewhat longer term, cash equivalent instruments and short-term investments.  Our cash equivalents are invested primarily in institutional money market funds, commercial paper, and time deposits held at major banks.  We have minimal market risk for our cash and cash equivalents due to the relatively short maturities of the instruments.  

Our short-term investments as of September 30, 2014 and December 31, 2013 were $107.9 million and $128.2 million, respectively.  Currently, we utilize short-term investments as a means to invest our excess cash, primarily in the U.S.  The day-to-day management of our U.S. short-term investments is performed by a large financial institution, using strict and formal investment guidelines approved by our Board.  Under these guidelines, short-term investments are limited to certain acceptable investments with:  (i) a maximum maturity; (ii) a maximum concentration and diversification; and (iii) a minimum acceptable credit quality.  At this time, we believe we have minimal liquidity risk associated with the short-term investments included in our portfolio.

Foreign Currency Exchange Rate Risk .

Due to foreign operations around the world, our balance sheet and income statement are exposed to foreign currency exchange risk due to the fluctuations in the value of currencies in which we conduct business.  While we attempt to maximize natural hedges by incurring expenses in the same currency in which we contract revenue, the related expenses for that revenue could be in one or more differing currencies than the revenue stream.

During the nine months ended September 30, 2014, we generated approximately 88% of our revenues in U.S. dollars.  We expect that, in the foreseeable future, we will continue to generate a very large percentage of our revenues in U.S. dollars.

As of September 30, 2014 and December 31, 2013, the carrying amounts of our monetary assets and monetary liabilities on the books of our non-U.S. subsidiaries in currencies denominated in a currency other than the functional currency of those non-U.S. subsidiaries are as follows (in thousands, in U.S. dollar equivalents):

 

 

September 30, 2014

 

 

December 31, 2013

 

 

Monetary
Liabilities

 

 

Monetary
Assets

 

 

Monetary
Liabilities

 

 

Monetary
Assets

 

Pounds sterling

$

(4

)

 

$

2,445

 

 

$

(39

)

 

$

3,075

 

Euro

 

(76

)

 

 

6,080

 

 

 

(41

)

 

 

5,618

 

U.S. Dollar

 

(314

)

 

 

12,642

 

 

 

(191

)

 

 

18,996

 

Other

 

(75

)

 

 

2,642

 

 

 

(8

)

 

 

2,686

 

Totals

$

(469

)

 

$

23,809

 

 

$

(279

)

 

$

30,375

 

A hypothetical adverse change of 10% in the September 30, 2014 exchange rates would not have had a material impact upon our results of operations.

25


 

 

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures

As required by Rule 13a-15(b), our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), conducted an evaluation as of the end of the period covered by this report of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e). Based on that evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

(b) Internal Control Over Financial Reporting

As required by Rule 13a-15(d), our management, including the CEO and CFO, also conducted an evaluation of our internal control over financial reporting, as defined by Rule 13a-15(f), to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

During the third quarter of 2014, we completed a global-wide initiative to consolidate our financial processing systems onto a single, enterprise-wide system solution.  Prior to this, we had been utilizing primarily two separate systems.  In connection with this initiative and resulting business process changes, we continue to enhance the design and documentation of our internal control over financial reporting processes to maintain effective controls over our financial reporting.

 

Except as discussed above, the CEO and CFO concluded that there have been no changes in our internal control over financial reporting during the third quarter of 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 


26


 

CSG SYSTEMS INTERNATIONAL, INC.

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business.  We are not presently a party to any material pending or threatened legal proceedings.

 

Item 1A. Risk Factors

A discussion of our risk factors can be found in Item 1A. Risk Factors in our 2013 Form 10-K.  There were no material changes to the risk factors disclosed in our 2013 Form 10-K during the third quarter of 2014, with the exception of certain updates to the following risk factor:

Our Business is Dependent Upon the Economic and Market Condition of the Global Communications Industry.

Since the majority of our clients operate within the global communications industry sector, the economic state of this industry directly impacts our business. The global communications industry has undergone significant fluctuations in growth rates and capital investment cycles in the past decade. Current economic indices suggest a slow stabilization of the industry, but it is impossible to predict whether this stabilization will persist or be subject to future instability. In addition, industry consolidation continues as service providers look for ways to expand their markets and increase their revenues.  A byproduct of this consolidation is that there could be fewer providers in the market, each with potentially greater bargaining power and economic leverage due to their larger size, which may result in our having to lower our prices to remain competitive, retain our market share, or comply with the surviving client’s current more favorable contract terms.

Continued consolidation, a significant retrenchment in investment by communications providers, or even a material slowing in growth (whether caused by economic, geo-political, competitive, or consolidation factors) could cause delays, cancellations or downward pricing pressure on our sales and services. This could cause us to either fall short of revenue expectations or have a cost model that is misaligned with revenues, either or both of which could have a material adverse effect on our financial position and results of operations.

We expect to continue to generate a significant portion of our future revenues from our North American cable and satellite operators. These clients operate in a highly competitive environment. Competitors range from traditional wireline and wireless providers to new entrants like digital lifestyle service providers such as Hulu, YouTube, Google, Netflix, Apple, and Amazon. Should these competitors be successful in their strategies, it could threaten our clients’ market share, and thus our source of revenues, as generally speaking these companies do not use our core solutions and there can be no assurance that new entrants will become our clients. In addition, demand for spectrum, network bandwidth and content continues to increase and any changes in the regulatory environment could have a significant impact to not only our clients’ businesses, but in our ability to help our clients be successful.

 

It em 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information with respect to purchases of company common stock made during the third quarter of 2014 by CSG Systems International, Inc. or any “affiliated purchaser” of CSG Systems International, Inc., as defined in Rule 10b-18(a)(3) under the Exchange Act.

 

Period

Total
Number of Shares
Purchased (1)

 

 

Average
Price Paid
Per Share

 

 

Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs

 

 

Maximum Number
(or Approximate
Dollar Value) of
Shares that May
Yet Be Purchased
Under the Plan or
Programs

 

July 1 – July 31

 

2,733

 

 

$

26.74

 

 

 

-

 

 

 

2,130,881

 

August 1 – August 31

 

74,884

 

 

 

27.81

 

 

 

72,300

 

 

 

2,058,581

 

September 1 – September 30

 

119,800

 

 

 

26.92

 

 

 

119,800

 

 

 

1,938,781

 

Total

 

197,417

 

 

$

27.26

 

 

 

192,100

 

 

 

 

 

(1)

The total number of shares purchased that are not part of the Stock Repurchase Program represents shares purchased and cancelled in connection with stock incentive plans.

27


 

 

Item 3. Defaults Upon Senior Securities

None

 

Item 4. Mine Safety Disclosures

None

 

Item 5. Other Information

None

 

Item 6. Exhibits

The Exhibits filed or incorporated by reference herewith are as specified in the Exhibit Index.

 

 

 

28


 

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 thereunto duly authorized.

Dated: November 6, 2014

 

CSG SYSTEMS INTERNATIONAL, INC.

 

/s/ Peter E. Kalan 

Peter E. Kalan

President and Chief Executive Officer

(Principal Executive Officer)

 

/s/ Randy R. Wiese

Randy R. Wiese

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

 

/s/ Rolland B. Johns

Rolland B. Johns

Chief Accounting Officer

(Principal Accounting Officer)

 

 

 

 

29


 

CSG SYSTEMS INTERNATIONAL, INC.

INDEX TO EXHIBITS

 

Exhibit
Number

 

Description

10.22I*

 

Ninth Amendment to the CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Comcast Cable Communications Management, LLC

10.22J*

 

Tenth Amendment to the CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Comcast Cable Communications Management, LLC

10.23AH*

 

Forty-second Amendment to the Master Subscriber Management System Agreement between CSG Systems, Inc. and DISH Network L.L.C.

10.23AI*

 

Forty-third Amendment to the Master Subscriber Management System Agreement between CSG Systems, Inc. and DISH Network L.L.C.

10.23AJ*

 

Forty-fourth Amendment to the Master Subscriber Management System Agreement between CSG Systems, Inc. and DISH Network L.L.C.

10.23AK*

 

Forty-fifth Amendment to the Master Subscriber Management System Agreement between CSG Systems, Inc. and DISH Network L.L.C.

10.23AL*

 

Forty-sixth Amendment to the Master Subscriber Management System Agreement between CSG Systems, Inc. and DISH Network L.L.C.

10.24AI*

 

Eighty-seventh Amendment to the CSG Master Subscriber Management System Agreement Between CSG Systems, Inc. and Time Warner Cable Inc.

10.24AJ*

 

Eighty-eighth Amendment to the CSG Master Subscriber Management System Agreement Between CSG Systems, Inc. and Time Warner Cable Inc.

10.24AK*

 

Eighty-ninth Amendment to the CSG Master Subscriber Management System Agreement Between CSG Systems, Inc. and Time Warner Cable Inc.

10.24AL*

 

Ninetieth Amendment to the CSG Master Subscriber Management System Agreement Between CSG Systems, Inc. and Time Warner Cable Inc.

10.24AM*

 

Ninety-first Amendment to the CSG Master Subscriber Management System Agreement Between CSG Systems, Inc. and Time Warner Cable Inc.

31.01

 

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.02

 

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.01

 

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

101.INS

 

 

XBRL Instance Document

 

101.SCH

 

 

XBRL Taxonomy Extension Schema Document

 

101.CAL

 

 

XBRL Taxonomy Extension Calculation Linkbase Document

 

101.DEF

 

 

XBRL Taxonomy Extension Definition Linkbase Document

 

101.LAB

 

 

XBRL Taxonomy Extension Label Linkbase Document

 

101.PRE

 

 

XBRL Taxonomy Extension Presentation Linkbase Document

 

*

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.

30

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 (***).

Exhibit 10.22I

 

NINTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC

 

 

 

 

This NINTH AMENDMENT (the “Amendment”) is made by and between CSG Systems, Inc . (“CSG”) and Comcast Cable Communications Management, LLC (“Customer”). The effective date of this Amendment is July 1, 2014 (“Amendment Effective Date”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement (CSG document #2501940) with an effective date of March 1, 2013 (as amended modified or supplemented from time to time, the “Agreement”) and now desire to amend the Agreement in accordance with the terms and conditions set forth in this Amendment. To the extent any of the terms and conditions in this Amendment conflict with the terms and conditions of the Agreement, the terms and conditions of this Amendment shall control. Any capitalized terms not defined in this Amendment shall have the meanings given to such terms in the Agreement. Upon execution of this Amendment by the Parties, any subsequent reference to the Agreement between the Parties shall mean the Agreement as amended as and to the extent provided in this Amendment. Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

 

RECITALS

 

WHEREAS, Customer desires to migrate certain of its current subscribers who are currently receiving billing and account services from another party to CSG’s ACP billing platform; and

 

WHEREAS, Customer may in the future add additional subscribers by acquisition and may desire to migrate such subscribers to Customer’s instance of CSG’s ACP billing platform under the terms of this Amendment; and

 

WHEREAS, CSG desires to provide billing and account services to such Customer subscribers; and

 

WHEREAS, the Parties desire to amend the Agreement to set forth, the terms on which such migrations shall occur.

 

AGREEMENT

 

In consideration of the mutual covenants, terms and conditions, and intending to be legally bound hereby, CSG and Customer agree that the Agreement is amended as provided below.

 



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

1.

Amendment to Article 1 (Overview)

 

(a)

The Agreement is amended by deleting Section 1.2 in its entirety and replacing it with the following:  

 

1.2 Term.   Unless earlier terminated pursuant to Section 6.1 or Section d.(v) of Schedule L, this Agreement shall commence on the Effective Date and remain in effect thereafter for an initial term expiring on June 30, 2019 (“Initial Term”).  The term of any specific license for the Products and the term for any specific Services to be provided shall be effective from the Effective Date or the date set forth in the applicable amendment and shall terminate with this Agreement, unless stated otherwise herein or as otherwise provided in the applicable Schedule, Exhibit or amendment.  

 

(a)   First Extension Option .  CSG shall provide Customer with written notice no later than nine (9) months prior to the expiration of the Initial Term that the Initial Term is approaching its expiration.  Customer has the option in its sole discretion to extend the Agreement for one additional year beyond the end of the Initial Term upon written notice to CSG no later than six (6) months prior to the end of the Initial Term (“First Extension Term”), subject to the fees set forth in Schedule F .

 

(b)   Second Extension Option .  If Customer has exercised its option for the First Extension Term, pursuant to the terms of Subsection 1.2 (a), CSG shall provide Customer with written notice no later than nine (9) months prior to the expiration of the First Extension Term that the First Extension Term is approaching its expiration.  Customer has the option in its sole discretion to extend the Term of the Agreement for one additional year beyond the end of the First Extension Term, upon written notice to CSG no later than six (6) months prior to the end of the First Extension Term (“Second Extension Term”), subject to the fees set forth in Schedule F .

 

(c)  The Parties agree that the Initial Term or any duly exercised First Extension Term or Second Extension Term shall be considered part of the “Term” and/or “the term of this Agreement.”  

 

(d)  For the duration of the Term following the Amendment Effective Date, the term “Contract Year” shall mean each twelve month period with the first Contract Year commencing on the Amendment Effective Date and ending June 30, 2015.  Each Contract Year thereafter, Contract Year shall mean each twelve month period during the Term.

 

(e)  If Customer does not notify CSG of its intent to extend the Agreement in accordance with subparagraphs (a) or (b) above, CSG shall not be required to extend the Term, subject to the obligations set forth in Section 6.2 (De-Conversion Services).  

 

(b)

The Agreement is amended by adding the following at the end of Section 1.5 (Exclusive Rights):

 

In addition to CSG’s right to be the sole provider of Print and Mail services for Connected Subscribers, Customer may have CSG provide Print and Mail services to other Customer subscribers that are not on CSG’s ACP billing platform at the same pricing as set forth in Schedule F (Fees) for such services.  In the event Customer desires to utilize Print & Mail Services subsequent to the migration of a subscriber onto CSG’s


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

billing platform, Customer shall be responsible for any related conversion fees applicable to such later conversion to Print & Mail Services.  As clarification, in the event Customer requests a converted subscriber to CSG’s billing platform also simultaneously be converted to CSG’s Print and Mail Services, Customer shall not be responsible for any Print & Mail conversion fees.  

 

At Customer’s written request, CSG agrees to meet with Customer within *** ************** (***) **** of the Amendment Effective Date, to discuss use of ********’* ********* ***** ****** for Print and Mail Services.  Nothing herein shall be construed as a requirement for CSG to *** ********’* ********* ***** ****** for Print and Mail Services.

 

2.

Amendment to Article 3 (Services)

 

The Agreement is amended by deleting Section 3.4 (Services Commitment) in its entirety and replacing it with the following:

 

3.4  Services Commitment

 

(a)

Subject to Customer’s payment of Any Development Hours (defined in CSG document #2504737), regardless of the effective date of CSG document #2504737, which are provided prior to the Amendment Effective Date, Customer may elect to continue to have CSG provide Any Development Hours under the existing Statement of Work (identified in CSG document #2504737) after the Amendment Effective Date and make payments as provided therein, or enter into a Change Order allocating the Any Development Hours provided in the Statement of Work after the Amendment Effective Date to the Annual Support Commitment (as defined below), which will result in a reduction in the Annual Support Commitment accordingly.  

 

(b)

Customer shall be responsible for payment of the Customer Re-Investment through February 28, 2014 and any Customer Re-Investment Hours which are unused through February 28, 2014, shall be forfeited.  For clarification, Customer Re-Investment as provided in this Section 3.4, shall have the definition provided in Section 3.4 of the Agreement prior to Amendment by the 9th Amendment entered into by the Parties.   

 

(c)

CSG shall continue to invoice and Customer agrees to pay the Customer Re-Investment through June 30, 2014.  Any payment made by Customer for the Customer Re-Investment which is invoiced by CSG for any month after February 28, 2014 for which there are unused Re-Investment Hours as of the Amendment Effective Date, shall be applied at Customer’s request to fulfill Customer’s obligations for the Service Commitment Fee. If as of the Amendment Effective Date, Customer has utilized more Re-Investment Hours than what it has paid in Customer Re-Investment, Customer and CSG shall proportionately decrement the Annual Support Commitment.  

 

( d )

CSG shall provide ****** ***** of services per ********** ******** ****, exclusive of Support and Maintenance and Migration services necessary to support the Migration SOW, to support the research and development of (including enhancements, updates and upgrades to) CSG’s ACP platform billing system unless otherwise agreed by the Parties (“Annual Support Commitment”). After the ***** ******** ****, Customer shall be entitled to use up to ****** ******* (***) of its


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Annual Support Commitment for services for *** ******* ******* ** *** ***** ** ******** *** *********** ** ***’* *** ******** ******* ****** but still related to CSG’s ACP platform billing system, which excludes fees for software, hardware or any third party fees, conditioned upon Customer providing CSG *** (*) ****** prior written notice of whether it intends to exercise this right in a subsequent ******** ****.  Notwithstanding anything contained in the first sentence of this subsection to the contrary, the Parties acknowledge and agree that the Annual Support Commitment and the corresponding Service Commitment Fee will be applied to work performed after the Amendment Effective Date under the QA Refresh Solution SOW (document #2505232) (for recurring fees only) and under the Dynamic Event Management and EST Couponing Solution SOW (document #2503499) (for *** ******* ***** (***) *********** ***** (excluding any recurring fees) only).  Further, any services hours which qualify under this Section 3.4 (a) and are performed after the Amendment Effective Date under SOWs executed prior to the Amendment Effective Date shall apply to the Annual Support Commitment and the corresponding Service Commitment Fee. Customer agrees to pay the fees provided in and pursuant to Schedule F (Fees) of the Agreement for the Annual Support Commitment (“Service Commitment Fee”) for the first ***** ******** *****.  The Service Commitment Fees identified in Schedule F (Fees) of the Agreement are non-refundable at the end of the applicable ******** ****, and are a commitment by Customer for payment regardless of Customer’s use of the Annual Support Commitment for any particular ******** ****.   Customer may carry over up to ***** of the Annual Support Commitment hours into the **** ******** ****, provided that any unused Annual Support Commitment hours at the end of a ******** **** ** ****** ** ***** shall be forfeited and shall not be carried over to the **** ******** **** by Customer.

 

( e )

The Service Commitment Fee will be invoiced *******, based on ** ***** ******* ********** of the applicable ****** fee.  Any service hours used by the Customer in excess of the Annual Support Commitment shall be paid at the rate set forth in Schedule F pursuant to a mutually agreed Statement of Work.

 

( f )

For any ******** **** after **** *** ****, Customer may, in its sole discretion, purchase Annual Support Commitment services upon entering into a Statement of Work for an Annual Service Commitment Fee as provided in Schedule F.  CSG shall notify Customer on ******* ** **** and ******* * of each ******** **** thereafter during the Term of Customer’s ability to purchase Annual Support Commitment services each ******** ****.  Customer must notify CSG of its intent to purchase the Support Commitment services no later than ******** ** of the ******** ******** **** and the Parties must execute the Statement of Work no later than *** * of the ******** **** prior to its use of the Annual Support Commitment.

 

3.

Amendment to Article 4 (Workforce Management)

 

The Agreement is amended by deleting Article 4 (Workforce Management) in its entirety and replacing it with the following:

 

ARTICLE 4

MIGRATION

 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

4.1

Customer shall identify Additional Subscribers for migration to CSG’s ACP billing platform (the “Migration”) as part of a Statement of Work which will identify Migration services and the responsibilities of the Parties (the “Migration SOW”).  “Additional Subscribers” shall mean those subscribers of Customer’s residential services who are receiving billing and account services from any platform other than CSG’s ACP billing platform as of the date immediately prior to the date of their migration to CSG’s ACP billing platform pursuant to the Migration SOW (excluding any New Subscribers, hereinafter defined).    

 

4.2

CSG shall perform Migration services and support for the Additional Subscribers as set forth in the Migration SOW, including but not limited to those development items identified in the Migration SOW as necessary to ensure that CSG can support the Migration (“Development Items”), ** ** **** ** ********, unless otherwise mutually agreed in writing or provided in the Migration SOW.  Customer shall provide the resources as set forth in the Migration SOW to perform its Migration obligations, including promptly providing the required information, assistance and approvals, ** ** **** ** ***, unless otherwise mutually agreed in writing.  

 

4.3

CSG shall migrate the Additional Subscribers in accordance with the Migration SOW.  The Migration SOW shall include a schedule for the Migration (“Migration Schedule”).  The Migration SOW shall include ******* ****** for which CSG shall be accountable during Migration (“********* ****”) and a governance structure which will identify necessary teams and level of participation by the Parties (“Governance Structure”).  The Migration SOW may be updated or modified by mutual written agreement of the Parties executed by the CIO of Customer and the COO of CSG or each of their duly authorized designees.   The Parties will comply with the Migration SOW, provided that it will be a working document and as such may be updated from time to time as provided herein.  

 

4.4

If Customer or a party for which Customer is responsible or controls pursuant to the Migration SOW causes a delay that materially and adversely impacts the Migration Schedule (a “Customer Delay”) CSG shall be excused on a reasonable and proportionate basis from its resulting inability to meet its Migration obligations and the remaining milestones in the Migration SOW, including adhering to the Migration Schedule.

  

4.5

The term “********* *****” means *** ***** ** *** ********* ****** ** *** ** *** ** ******** **** ***’* ******** ********* ************** ** **** ******** ********* ******* ** ******* ******* ********* ********* **** *** ********** **** *** * ******** ******* ****** ** *** ********* ******** ** ********’* ******** **********.  Within *********** (**) ***** of Customer’s Executive Director of Software Development and Engineering or someone of greater authority in Customer’s organization, notifying CSG’s CIO and V.P. of the Strategic Business Unit (e-mail shall be sufficient) that a ********* ***** has occurred and been documented in *******’* ******** ****** ******** ******, the Parties shall meet and confer in order to agree upon a ********** ******** *** * ********* ** ******* **** ********* *****.  If the Parties ****** ***** **** * ********** ******** ****** *********** (**) ***** of the foregoing notice, the Parties shall ******** *** ***** ** *** ********** ********* (as defined in the Migration SOW), which shall **** *********** (**) ***** from notice of the ******* ** ******* *** ******* *** ***** upon the ********** ******** *** *********.  If the ********** ********* cannot ***** * **********, the Parties shall further ******** *** ***** ** ***’* *** *** *** *** ********’* ***** ******** *** *** *** (the “Executives”), who shall **** *** ******* *** ******* *** ***** **** *** ********** ******** *** ********* ****** *********** (**) ***** of ********** ** *** ****** ** provided herein.  Customer shall ****** *** ********* **


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

******* ******** **** *** ********** ** *** ********* *****.  In the event ** ****** ********** ******** ** ******* * ********* ***** ** ************, the Parties agree ** ***** *** ******* *** ********** ** * ********* ***** **** ** ***** ** ******* *** ********* *****.  If the Executives ****** ***** ** ********** ******** **** **** **** (*) ******** ****’ ******* ****** ** *** and ******* ******* *** ** *** **** *********** ******* ** ********* *** ********* *** *** ** * ****** *** ******* ********* ** ********** ***********.  Further, if (i) the ********* ***** ******* ********** ** *** **********, (ii) ******** ** ** ****** ******* ** *** **** **** **** ********* ********* ** *** **** ** **** ********* *****, and (iii) ******** ********** *** ********* **** **** *** ***** ******* ******** ********** ********* ************* ** ****** ********** ***** ******** ** ******** ***** *** ********* ** ************ ********** ******** ******** ** *** *** ***** ** * ****** ****** ** *** ********** ********* ***** (the “********* ******”).  The Parties agree **** ** ** ***** ***** *** ********* ****** ****** **** ******* ******* ($************).  *** ******* ** *** ********* ****** ***** ** **** ** ******* ****** ****** (**) **** of the Parties’ agreement ** *** ****** ** *** ********** ********* ******.  In the event *** **** *** ********* ****** ** ******** ** **** ******* **** *** ******** ******* ****** ** ******** ** ******** * (*)(*) (*) and (*) of the ******* ******** ******** ** ******** ******** ****** ****  ** ** ***’* ******* ** ********’* ************ ** *********** ** *** ********* ***. Except for *** ******** ******** ** *** ******* ********, the *********** ** *** **** **** **** ********* ********* (if applicable), ** *** *********** ** *** ********* ****** (if applicable), *********** *** ** * ********* ***** ***** ** ********’* **** *** ********* ****** *** ***’* ********* *****.  Customer agrees, in the event ** **** *** ******** *** ***** ** ********* ** ******** ** **** ******* *** *** ** ******* ********* *****, it shall ******* ***** *** ***** ** ********* *** **** ********** ******* ********* *****.

 

4.6

Customer shall ** ******** ** ********* *** ********* **** ****** (**) ***’* ******* ****** ** *** ** *** **** ****** *** ***** ******* **** ** *** **** **** **** ********* *********, if applicable.

 

4.7

If Customer desires to bring other subscribers (whether such subscribers were previously on a CSG platform or a non-CSG platform and subsequently migrated to a CSG platform) under this Agreement after the closing of a direct or indirect acquisition (“Acquisition Closing Date”) of one or more entities occurring after the Amendment Effective Date that are not currently included in the Migration SOW (“New Subscribers”), the Parties will enter into the necessary amendment(s) to this Agreement to migrate such subscribers, as applicable, and bring all such desired subscribers under the terms of this Agreement as New Subscribers (the “Migration and/or Integration Amendment(s)”). For the avoidance of doubt, the ******* *********** *** ***** **** **** *********** *** **** ********** ** * *** ******** *** ** ******* ***** **** ********* ******* ******** ****** ** ***** ******* **** *********** ** ********’* ******** ** ***’* *** ******* ********. For all purposes under this Agreement ****** *** *** ******* ** *********** *** *** ** ******* ** ******** *, all New Subscribers who were (i) previously on a non-CSG billing platform and are migrated onto Customer’s instance of CSG’s ACP billing platform, or (ii) previously on a CSG platform and remain on a CSG platform after the Acquisition Closing Date, but are no longer subject to an agreement between CSG and the Acquired Entity (hereinafter defined) shall thereafter become Connected Subscribers.  For the avoidance of doubt, fees for New Subscribers shall be calculated using the *** ***** *** *** *********** ******** ** ******** *.

 

(a)  The Parties acknowledge it will be necessary to **** ** ******* ********* *** *********** ************** ** ******* *** ********* ********* ***/**


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

*********** ********** ** ******* *****, to bring New Subscribers under the Agreement.  In the interim, if Customer acquires an entity (for purposes of this subsection, an “Acquired Entity”) which is receiving CSG products and services under another agreement, and Customer desires ** ******* **** *** *** ********** ***** **** *********, but ******** ********* **** *** **** *** *********** ********** *** *********** ***** **** ********** *** *** *** ******** ****** **** ***** *** ******** ******’* ********* **** *** (“Acquired Entity’s Agreement”) ** ******* ** ******** ****** ******* *** ****** (as defined below) *** * ****** ** **** *** ** ****** *** (*) ****** (“Transition Period”) unless otherwise extended by the mutual written agreement of the Parties (the “Acquired Entity Agreement Amendment”).  The Parties shall work in good faith to negotiate the Migration and/or Integration Amendment(s) during the Transition Period.

 

(b)  The Acquired Entity ******* *** ****** ***** **** *** ****** ******** ** *** ******** ******’* ******* ***** **** *** ********* *********** (“******** ****** ******* *** ******”):

 

(i) CSG agrees to provide Customer with * ******** ********** *********** ********** ******** *** ******** ********* ** *** ******** ****** ***** *** ******** ****** ********* ***** *** **** ** * ******* ****** (“Acquired Entity ******* ***”) to Customer’s *** provided in Schedule F.  

 

(ii)  The Acquired Entity ******* *** ***** **** ** ******** ** ********* ***** (***** *** ** ****** ******** ** ******** *********** ********* **** *** *************) ******** ** *** ******** ****** ******* *** **** **** ** **** ** **** **** **** ***** **** ** * ******* ***** (e.g., ****** ********* ** ******* ******** *** ********* ****** ********* ******** ** ******* ********* ********) in order to ******* ** ******** ************** ** *** ******** ******’* ********* ******* **** *** ********* **********, provided under the Acquired Entity Agreement (“******** Acquired Entity ******* ***”).

 

(iii)  The ********** ******* *** ******** ******** ****** ******* *** *** *** ********** *** *** *** *********** (as shown in Schedule F, *** ***** *** *** ***********) shall be the ******* *** ****** (“******* *** ******”).    

 

(iv)  The Acquired Entity ******* *** ****** ***** ** *** ******* ** *** ****** ** ********* *********** ** *** ******** ****** ********** ** *** ******* *** ******.

 

(c)  The Parties agree **** ********** ********* *** ** ******** ** ********* *** ******** ****** ******* *** (** *** ******* *** ******** ******** ** **** *** *** ***** ******* ******* *** ******** *** *** ******** ******) *** *** ************* *********** ******** ** ********* *** ******** ******** ****** ******* ***.  The Parties agree to work in good faith ** ********** ********* ***** ***** ** *** ******** ****** ********* ********* *** ** ********* ****** *** ********* *** ****** *** ******* ***** ***** *** ** ******** ** * ***** ***** **** ******** **** *** ******* ****** ** *** ******* ***** ** ******** *** ********** ******* *** *********:

 

(i)

******** ******** ****** ******* ***, and

 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

(ii)

the *** **** ***** ** ********** ** *** ******** ******’* ********* *********** **** ********** *** *********** ***** *** *********.

 

The ********* ** ********* *** ********* ***** **** **** ************* **** **** ******* ** ******** **** *** *********** ******* **** *** ***** ** *** *** ** *** ***** ** ***** *** ******** ****** ******* *** ****** *** ** ****** *********.

 

Example ** ******** ****** ******* *** ******

 

****** *** ******** ****** ******* *** ** $****, *** *** ******** ************* *********** *** ********** ** * ********* ** $****.  **** ****** *** ********** *** **** **** *** ********** *** ***** *** *** *********** ** $******, *** *** ****** ** ********* *********** ** *** ******** ****** ** ********* *** *** ******  *** ******** ******** ****** ******* *** ***** ** $**** (******** ****** ******* *** ** $**** **** *** $**** ** ************* ***********).  *** ******** ****** ******* *** ****** ***** ** $****** (******** ******** ****** ******* *** ** $**** **** $****** ********** *** ********** *** ****).  *** ******** ****** ******* *** ****** ***** ** $******* (********* ******** ****** ********* *********** ********** ** *** ******** ****** ******* *** ****** ** $******).

 

(d) The Acquired Entity ******* *** ****** ***** **** ** ********* ***** *** ******** ****** ********* *********** ****** *** *********** *** *** ******** ****** ********* ** *********** *** ****** ********* ****** ** *** ******** ** ** ***** ***** *** ******** ****** ******* *** ****** ** ******** *** ****** **** *** ********** *******    **** *** ********* ** *** ******** ****** ********* ********** *** ******** ****** ******* *** ****** **** ** ******** ** *** ***** **** ******** ***** ********** ** *** *********** ******* ***** ******** **** ** *** ********* ** *** ******** ****** ********* ********* ****** ***** *** ***** **** ******** ***** ********** ** *** *********** ******* ***** **** ****** **** ** ******* **************  ** ********** *** ************** ** *** ******** ****** ******* *** ****** ** *** ******** ****** ******** *** ******** ****** ******* *** ****** ********** *** *** ***** ***** **** ** ******* ** *** ********* *****’* ******** ******’* ********  ** *** ***** *** ******** ****** ********* ** ********** *** ***** ** *** *********** ******** ****** ******* *** ****** **** ** **** ** ********* ********* ** ** ********* ** *** ******** ****** *********.  

 

Example of ************* ** ******** ****** ******* *** ******

 

****** *** *********** ******* **** ** ******* *** *****  **** *** ********* ** *** ******** ****** ********* ********** *** ***** ***** *** ******** ****** ******* *** ****** ***** ** ********* ***** ** *** *** ***** ** ******** *****  *** ******** ****** ******* *** ****** ********** *** ******** **** ***** **** ** ******* ** *** ***** **** ******** ****** ******* ********  *** **** ****** ***** ** ********* *** **** **** ***** ***** **** ** ******* ** *** ****** **** ******** ****** ******* ******* (**** *** (*) ****** ** ******* *******).

 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

(e)  In negotiating the Acquired Entity Agreement Amendment, CSG and the Acquired Entity shall consider the potential impact of the ***** ******* **** ********** *** as outlined in Schedule F, Section ******, and the *** ********* ****** outlined in Section **** will also be considered, as these are an integral part of the Customer’s ******* *** fee.

 

(f)  As a matter of clarification, ***** *** ******** ****** ********* ** *********** *** ******** ****** ***** ******** ** ** ******** *** *** ******** *** ******** ******** ***** *** ******** ****** ********** ******* **** ********* ** *** ******** ****** ********* ********** *** ******** ****** ***** ** ******** **** ** ******** ****** ******* *** ****** ** ********* ******.

 

4.8

If Customer acquires subscribers from another entity without acquiring such entity, the Parties shall ********* ** **** ***** ** ********* ** **** ********* ** ***** **** ******** *********** ***** **** ********* ** *** ***********.  The Parties acknowledge and agree **** **** ******** *********** ***** ***** ** ******* **** *** *** ********** ***** **** ********* ** *** ***** **** ******** ***** ********** ** *** ******* ** *** *********** ** **** ************ ******* ** **** *********** ***** ******* ***** **** ********* ****** ****** (**) ****** (** **** ***** ****** ** **** ****** ** ** *** *******) ** *** ******* ** *** *********** ** **** ************ ******** **** *** **** ******** *********** ********** ** * *** ********* *** ******* ***** *** *** ********** ** *********** ***** ************* ******* ** ***** ********* ** **** ******* *.

 

 

4.

Amendment to Article 5 (Payment Terms)

 

The Agreement is amended by deleting Section 5.4 (Adjustment to Fees) in its entirety and replacing it with the following:

 

5.4 Adjustment to Fees.   Effective January 1 of each year of the Term, fees included in this Agreement shall be increased annually by an amount equal to the ****** **: (1) ***** ******* (**), or (2) the ******* ******* ** *** ******** ****** ****** (******** ** *** ***** **** ** ******** ** *** **** ******* ****), ***** ** ***’* ******, of the ********* (“***”) ********* ***** ****** ***** ********** *** ****** ******** ********** ********* ** *** **** ********** ** ***** ** *** ********* ***** (“Annual Adjustment to Fees”).  The Annual Adjustment to Fees shall be communicated to the Customer no later than December 1 of the preceding year, but in no event shall Customer be relieved of the increase should CSG fail to provide timely notice described herein.  

 

The Annual Adjustment to Fees applies to the fees set forth in this Agreement, with the following exceptions:

 

a)

The ******* ***, as set forth in Schedule F , Section *** entitled “**********”.  The annual fee adjustments for these Services have already been considered within the structure of the pricing tables, and thus, no Annual Adjustment to Fees is applicable for these items.

 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

b)

The ***** ******* *** *** ***, as set forth in Schedule F, Section *** entitled “***** ******* *** *** *** ***********” until ******** *** ****.  Thereafter, the ***** ******* *** *** fee shall be subject to a ***** ****** ********** ** **** ********* ******* ** ****, and for each applicable year thereafter.  There is ** ****** ********** *** **** **** ***** ** ******* ** ****.

 

c)

The **** **** **** ********* *********, as set forth in Schedule F, Section *** entitled “**** **** **** ********* *********”.  There is no Annual Adjustment to Fees for this item during the Term of the Agreement.

 

d)

The ********* *********** ***, as set forth in Schedule F , Section ***. entitled “****** ********* (***** *** ****)”, subsection ***. entitled “********* *********** ***”.  There is no Annual Adjustment to Fees for this item during the Term of the Agreement.

 

e)

The ***** *** *********, as set forth in Schedule F , Section ***. entitled “****** ********* (***** *** ****)”, subsection ***. entitled “***** *** *********”.  There is no Annual Adjustment to Fees for this item during the Term of the Agreement.  CSG may increase the fees payable by Customer for ***** *** ********* (“*********”) at any time based upon the ****** ** a) ********** ******* ** ********* ***** **** *** ** ****** ***** ** *** **** *** ********* ******* or b) ****.  For the purpose of determining ********* fee increases, “****” shall mean the ******** **** ******** ** * ******* ***** ******** ***** ********* ** **** *** **** *** ***** *** ***** ******* ***** ******* ****** ***** ******* *** *** ******* *** ******** ***** ***** * ******** ********* ******** *** ******* ***** ****** *** **** ****** ************ (** ******* *** ***), *** *** **** **** ******** ** *** ********.  

 

In addition, the Parties agree that in the event CSG sells all or substantially all of its stock or assets, or is under the control of an acquiring entity, any increase in the fees for ********* ***** ** ***** **** *** ****** of a) ********** ******* ** ********* ***** **** *** ** ****** ***** ** *** **** *** ********* *******, or b) ****, or c) *** ******* (**).  In the event the **** is replaced, the Parties will discuss in good faith a replacement measure.  

 

f)

The ******* ********** ***, as set forth in Schedule F , Section ***** entitled “******* ********** ***” shall not be adjusted under this Section 5.4 until **** *** ****.  Thereafter, the ******* ********** Fee shall be subject to Annual Adjustment to Fees effective **** ** ****, and for each applicable Contract Year thereafter through the Term of the Agreement, including any extensions thereof.  

 

g)

The ******** ******* ****** **** *** *** *** ***** ********* *********** *** *****, as set forth in Schedule F, Section *** entitled “******** ******* ****** **** *** *** *** ***** ********* *********** *** *****”. There is no Annual Adjustment to Fees for this item during the Term of the Agreement.

 

 

5.

Amendment to Article 6 (Termination)

 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

(a)

The Agreement is amended by deleting subsections 3 and 4 of Section 6.2 C. in their entirety and replacing them with the following:

 

3.

*** ************** ** ********* *********** ******* ** ********* *********** ****** ***** *** ********* ** * ****** ** *** *********** ** ******** *** ******** ******** ******** **** **** ************** *** **** ********* ********** ** ******** *** ****; ****

 

4.

*** ****** ** ********* *********** ***** ** *** ***** ** ******** *** ** ********’* ******* ***********; ****

  

5.

*** ****** ** ********* *********** ***** ** *** ***** ** ******** *** ** *** *********** ** *** *** ******** *******.

 

(b)

The Agreement is amended by deleting subsection 3 and 4 of Section 6.2 D. in their entirety and replacing them with the following :

 

3.  *** *** ****** ********* ***** ** **** ** ******** *** ***** *** ***** ************ ****** ***** ** ********* ** *** ******* (*********) ********* *********** *** * ********** ***** ** *** ******* **** ******* ******** (*********) ********* ***********.  

 

4.  *** *** ****** ********* ******* ** **** *** ****** **** *** **** *** ***** ************ ****** ***** ** ** ****** ***** ** *** *** ***** ******* **** ******* ******** (*********) ********* *********** *** ***** **** *** **** ******* *** ********* ** *** ***** *** ***** ************ ****** ***** ** ** ****** ***** ** *** ** *** ********* ********* ***********.

 

(c)

The Agreement is amended by deleting Monthly Subscriber Commitment Shortfalls and its example under Section 6.2 D. in its entirety and replacing it with the following:

 

******* ********** ********** ***********   ** *** ***** ** ***** *** ****** ******* ********* *********** *** **** **** *** ******* ********** ********** (“******* ********** ********** *********”), ******** ****** ** *** *** ********** ******* **** ** *** ***** ** *** *********** *** ***** ******** ** ******* **** (*) ** *** ********* ********** ** *** ******* ********** ********** **********  ****** *** ****** ********* *********** ****** *** ******* ********** *********** ***** ***** *** ** * ******* ********** ********** ********* *** **** ******  *** ************* ** *** ********** *** **** *** ********** ****** ********* ** *** ***** ** ******** *** ******* **** *** *** ********** ****** **** ** ***** **** *** ******* ** ********’* ****** ********* *********** ** *** ******* ********** *********** ***** ******** *** ****** ** ************ ** **** ********** ********* *********** ** *** ***** ** *** **** ********* ** ********** ****** (********* ************ ******) ****** “**”.

 

** *** ** ******* ***** ** ** ***** ** ** *** **** *** ***** ****** ** ****** ******* ********* *********** ** ********** *** *** ******* ********** ********** ** *********** ***** ***** ** * ******* ********** ********** ********* ** ********* ********* *********** *** **** ******  ** * ******* ** ******** ** *** *** **** ******* ** ******** *** *** ********** ******


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

********* *********** ***** *** ***** ** **** ********** ******** ***** **** ** *********** *** *** ******* ** *** ******* ********** ********** ********* ** ********* ********* *********** ********** ** *** ********** ******* **** ** $****** (** ******** ** *** *********** *** ***** ** **** (*)), ** $********** *** **** *****.  

 

6.

Amendment to Article 8

 

The Agreement is amended by deleting Section 8.1 in its entirety and replacing it with the following:

 

8.1

Limited Warranty.   CSG warrants that the Products will (i) conform to CSG’s published specifications in effect on the date of delivery, and (ii) perform in a certified Designated Environment substantially as described in the accompanying Documentation for a period of ****** (**) **** after the date of delivery.  CSG warrants that, for a period of one year from the date the applicable Technical Services are performed, such Technical Services were performed in a professional and workmanlike manner.  CSG provides any Third Party Software that is not Embedded Third Party Software AS IS.  Other than as expressly set forth in this Section 8.1, Customer acknowledges that the Products and any such Third Party Software may not satisfy all of Customer’s requirements and the use of the Products and such Third Party Software may not be uninterrupted or error-free.  CSG further warrants that it has not knowingly inserted, or knowingly allowed to be inserted, and will use all commercially reasonable efforts to prevent insertion, into the Products, Services or Recurring Services, and the medium in which the Products, Services or Recurring Services, and other materials are provided to Customer by CSG, any program, information, code and commands, including viruses, bombs, worms, backdoors or Trojan horses (i) that are designed to cause the Products, Services or Recurring Services or any of Customer’s software or hardware systems to malfunction, self-destruct or deny services, (ii) that are designed to cause damage to or degrade performance of any computer, network, or any information, program or data contained therein, or (iii) that are designed to enable or allow unauthorized access to any of Customer’s software or hardware systems, or to any Confidential Information (as defined below) of Customer  or Customer Data. With respect to Customer’s access to Products, Services, or Recurring Services or to any CSG hardware or software, Customer  warrants that it will use all commercially reasonable efforts to prevent insertion of any program, information, code and commands, including viruses, bombs, worms, backdoors or Trojan horses (i) that are designed to cause the Products, Services or Recurring Services or any of CSG’s software or hardware systems to malfunction, self-destruct or deny services, (ii) that are designed to cause damage to or degrade performance of any computer, network, or any information, program or data contained therein, or (iii) that are designed to enable or allow unauthorized access to any of CSG’s software or hardware systems or to any Confidential Information (as defined below) or Customer Data.

 

7.

Amendment to Article 9 (Limitation of Remedies and Damages)

 

The Agreement is amended by deleting Sections 9.2 and 9.3. in their entirety and replacing them with the following:

 

9.2 No Consequential Damages/Limitation of Liability.  


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

EXCEPT FOR *************** *********** *** ***** ** ******* * OR * ****** ** ****** ***** ** ******* ** (***************), UNDER NO CIRCUMSTANCES WILL EITHER PARTY OR THEIR RELATED PERSONS, LICENSORS OR VENDORS BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE.  

 

EXCEPT FOR **** ******* ** *** *** ****** ******* ** *********** ******* ** ******** *** (*********** ********** *** ******** ****), *** ******* *** (************ *********), ******* ** (***************) OR **** (**************/********), IN NO EVENT WILL THE LIABILITY WHICH CSG, CUSTOMER, THEIR LICENSORS OR THEIR VENDORS INCUR UNDER THIS AGREEMENT EXCEED ****** ******* *** **/*** ******* ($*************) *** **** ******** **** (“DIRECT DAMAGES CAP”).  ANY AND ALL CLAIMS (OR SERIES OF RELATED CLAIMS) ARISING DURING A PARTICULAR CONTRACT YEAR OF THE TERM SHALL BE SUBJECT TO THE APPLICABLE LIABILITY LIMITATION FOR SUCH CONTRACT YEAR AS DESCRIBED HEREIN.  THE PARTIES AGREE THE DIRECT DAMAGES CAP SHALL BE ********* ** *********** ******* *** **/*** ******* ($*************) UPON CSG PROCESSING ******** ******* ********* ***********, THE DIRECT DAMAGES CAP SHALL BE ********* ** *********** ******* *** **/*** ******* ($*************) UPON CSG PROCESSING *********** ******* ********* *********** AND THE DIRECT DAMAGES CAP SHALL BE ********* ** ***** ******* *** **/*** ******* ($*************) UPON CSG PROCESSING ****** ******* ** **** ********* ***********.  IN ADDITION, THE PARTIES AGREE THAT SHOULD CUSTOMER DE-CONVERT CONNECTED SUBSCRIBERS THE DIRECT DAMAGES CAP SHALL BE REDUCED TO THE SAME LEVELS PROVIDED IN THE PRECEDING SENTENCE, BUT IN NO EVENT SHALL THE DIRECT DAMAGES CAP BE LESS THAN ****** ******* *** **/*** ******* ($*************). THE APPLICABLE DIRECT DAMAGES CAP SHALL BE DETERMINED AS OF THE DATE OF THE EVENT GIVING RISE TO THE CLAIM. IN THE EVENT THAT THERE ARE MULTIPLE CLAIMS IN A CONTRACT YEAR, AND SUCH CLAIMS OCCUR UNDER DIFFERENT DIRECT DAMAGES CAP AMOUNTS, IN NO EVENT SHALL THE DIRECT DAMAGES CAP ACROSS SUCH MULTIPLE CLAIMS BE CUMULATIVE.

 

THE AFOREMENTIONED EXCLUSIONS AND LIMITATIONS OF DAMAGES SHALL BE INDEPENDENT OF, AND SHALL SURVIVE, ANY FAILURE OF THE ESSENTIAL PURPOSE OF ANY WARRANTY OR LIMITED REMEDY STATED HEREIN, AND SHALL APPLY EVEN IF THE LIABLE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

9.3 Pay-Per-View Liability .  

 

 

(a) Notwithstanding anything to the contrary herein, ***’* ***** ********* **** ******* ** **** ************ *********** *** *** *** *** ******* ******** ****** ** ******** ******** ** ******** ******* ******** ** ********** *** ** ***’* ********** ** ************ *********** ** ********** **** ************ ******  (“*** ******”) ***** ** ******* ** *** ****** ******* ******** ******** ** ******** *** ****** ** ***’* ********** ** *** ******** ** ****


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

************ ***** ********* ***** ** ******* ** *** *********** *** ***** ** ******* *** *****.

 

(b)

Notwithstanding anything to the contrary herein, ***** *** ** ********** *** ******** **** ******* (*****) ** **** ************ ** ********** **** * ************ ***** ***** **** * *** ***** (“*** *****”), ***’* ***** ********* *** *** ******* ******** ****** ** ******** ******** ** ******** ******* ******** ** ********** *** ** ***’* ********** ** ************ *********** ***** ** ******* ** *** ****** ******* ******** ******** ** ******** *** ****** ** ***’* ********** ** *** ******** ** **** ************ ***** ********* ***** ** ** ***** ****** *** ******* ******** ******* ($**********) *** *** ***** (“*** ***** ***”).  ******** ******* ****** **** ***’* ********* ** ********** **** *** ********** ** *** *** **** *********** *** *** ****** ****** *** ******** **** ***** *** ****** **** ******* ******** ******* ($**********) (“******** **** *** ***”).  ** *** ***** *** ** ********** **** **** *** ******** **** ******* (*****) ************ ** ********** **** * *** ****** **** ***’* ********* ***** ** ******* ** *** *********** *** ***** ** ******* *** ******  *** ******** ** **** ******* **** “*** ******” ***** *** ******* *************** ******* *** ******* ***** *** *** ***** *** *** ******** **** *** *** ***** ** ********* ************ ** *** ******* ***** ******** ******* ($**********) *** *** ******* *********** ******** ******* ($**********) **** *** ********** ******** ******* ********* ************ *** *** ***** *** *** ******** **** *** *** ***** ** ********* ************ ** ***** ******* ***** ******** ******* ($**********) *** ***** ******* ************ ******** ******* ($**********) **** *** ********** *********** ******* ********* *********** *** *** *** ***** *** *** ******** **** *** *** ***** ** ********* ************ ** **** ******* ******** ******* ($**********) *** *** ******* ******* ($************) **** *** ********** ****** ******* ********* ************  ** ********* *** ******* ***** **** ****** ******** ********** ********* ************ *** *** ***** *** *** ******** **** *** *** ***** ** ******* ** *** **** ****** ******** ** *** ********* ********* *** ** ** ***** ***** *** *** ***** *** ** **** **** *** ******* ******** ******* ($**********) ** *** ******** **** *** *** ** **** **** **** ******* ******** ******* ($**********).  *** **** ********** ** *** ***** ***** **** ***** **** ******* ***(*) ***** ** ********** ** ** *** **** ** *** ***** ****** **** ** *** ******  ** *** ***** **** ***** *** ******** ****** ***** **** ******* ***(*) ** * ******** ***** *** **** ****** ***** ***** ********* ******** **** *** *** ******** ** ** ***** ***** *** ******** **** *** *** ****** **** ****** ** ***********

 

(c)

CSG further agrees that, ** *** ****** ** ********* *********** **** *** **** ***** ***** ******* (*********) ****** *** ****** ****** ********* *** ***** ****** **** ** * ***** ***** **** ******* **** ***’* ********* ***** ************ ***(*) ***** ** *** ******* ***** ******** ******* ($**********) *** *** ***** (“*** *** ***** ***”) *** ***’* ********* ********* ***** ** ***** ******* ***** ******** ******* ($**********) *** *** ****** ****** *** ******** **** (“*** ******** **** *** ***”). *** ******* ***** *** *** *** ***** *** *** *** ******** **** *** *** ***** ** ********* ************ ** ***** ******* ****** ******** **** ******* ******* ($**********) *** **** ******* ************ ******** **** ******* ******* ($**********) **** *** ********** ******** ******* ********* ************ *** *** *** ***** *** ***


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

*** ******** **** *** *** ***** ** ********* ************ ** **** ******* ************ ******** **** ******* ******* ($**********) *** *** ******* ***** ******* ****** ******** **** ******* ******* ($************) **** *** ********** *********** ******* ********* *********** *** *** *** *** ***** *** *** *** ******** **** *** *** ***** ** ********* ************ ** **** ******* ******** ******* ($**********) *** *** ******* **** ******* ******** ($************) **** *** ********** ****** ******* ********* ************  ** ********* *** ******* ***** **** ****** ******** ********** ********* ************ *** *** *** ***** *** *** *** ******** **** *** *** ***** ** ******* ** *** **** ****** ******** ** *** ********* ********* *** ** ** ***** ***** *** *** *** ***** *** ** **** **** *** ******* ***** ******** ******* ($**********) ** *** *** ******** **** *** *** ** **** **** ***** ******* ***** ******** ******* ($**********). *** **** ********** ** *** ***** ***** **** ***** **** ******* ***(*) ***** ** ********** ** ** *** **** ** *** ***** ****** **** ** *** ******  ** *** ***** **** ***** *** ******** ****** ***** **** ******* ***(*) ** * ******** ***** *** **** ****** ***** ***** ********* *** ******** **** *** *** ******** ** ** ***** ***** *** *** ******** **** *** *** ****** **** ****** ** **********.

 

(d)

*** ****** **** ** *** ** ******** ** ********** **** ***’* ********** ** ************ *********** ** ********** **** **** ******* *** ***** ** ** *** **** ** * ****** ******* ** *** ** ********’* ******* ******* **** ****  ******** **** ****** *** ** ******* ****** ***** (**) **** ** *** ********* ** *** *****(*) ****** **** ** * ***** ***** **** ******* ****  ** ****** ****** ** *** ******** ** *** ****** **** ***** (**) *** ******* **** ******** ****** **** *** ***** **** ** ********* ********** *** ******* ******* **** ***’* **** ** ********* ********** **** ************ ********** ****** *** ****** ** ******** ** ******** ** ********* **** *****************  *** ****** ***** ********* ** ******** ***** ******* *** ******* ********* *** *** ** ***** * ********* *****  **** ******* ***** ** *** ***** ************ ********** **** ******* ** ******* *** ******** ** ********* *********** ******* **** ** *********** ** ******** **** ***** **** **** ** *** ********* **********  ******** ************ **** *** ******* ******* ** ******** ***** **** ******* ***(*) *** ******* ** ***’* ***** ** ******* ** ******* ***.  

 

8.

Amendment to Article 10 (Confidential Information)

 

The Agreement is amended by deleting Article 10 in its entirety and replacing it with the following:

 

ARTICLE 10

 

CONFIDENTIAL INFORMATION

 

10.1

No Disclosure .   Each Party agrees that during and after the term of this Agreement, neither the receiving Party nor any person, firm, corporation or other entity affiliated with, owned in whole or in part by, employed by or otherwise connected with the receiving Party, shall directly or indirectly, without the express written consent of the disclosing Party, divulge, use, sell, exchange, furnish, give away, or transfer in any way any Confidential Information (as hereinafter defined) of the disclosing Party, unless otherwise expressly provided for in this Article 10.


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

 

10.2

Purpose of Access . Each Party acknowledges that any Confidential Information that has been disclosed to it by the disclosing Party, or that the receiving Party has come into possession of, has been disclosed solely for the purpose of enabling the receiving Party to perform its obligations hereunder.  Each Party agrees that all Confidential Information, whether provided by the disclosing Party prior to or after the commencement date hereof or that the receiving Party otherwise comes into possession of, is the exclusive property of the disclosing Party and, in addition, CSG further agrees that all of Customer’s subscribers are and shall remain customers of Customer, until or unless Customer de-converts such subscribers to another provider for whom CSG provides billing services.

 

Customer shall indemnify, defend and hold harmless CSG, its Affiliates, successors and assigns from any and all third-party claims, demands, liabilities, costs or expenses, including reasonable attorneys’ fees, resulting from Customer’s access to or use of Former Subscribers’ Customer Data retained by CSG during the Customer-specified data retention period.  

 

10.3

Compelled Disclosure . If either Party is served with any form of process purporting to require the disclosing Party to disclose any Confidential Information to any third party, the receiving Party shall immediately notify the disclosing Party who shall, in addition to the receiving Party’s similar efforts, if any, have the right to seek to quash such process.  The receiving Party shall cooperate with the disclosing party in a commercially reasonable manner to quash such process or otherwise to limit the scope of any required disclosure.  

 

10.4

Confidential Information Defined .  The term “Confidential Information” shall include, without limitation, information provided to a receiving Party by a disclosing Party that the disclosing Party designates as confidential; information provided to CSG by Customer that Customer designates as confidential; this Agreement (and all amendments thereto) and all of its terms and conditions; all manuals and training materials provided to CSG by Customer or provided to Customer by CSG; the names, addresses, e-mail addresses, telephone numbers, government issued identifiers, and financial and payment and related identifiers of all past, present, and subsequently acquired Connected Subscribers to any product or service offered by or in conjunction with Customer, as well as all other personally identifiable information relating to such Connected Subscribers and Former Subscribers as further defined by applicable local, state or federal regulations or law and applicable generally accepted industry standards (collectively “PII”), subject to section 10.2 above and section 10.5 below; any other information relating to any Connected Subscribers, Former Subscribers, and Customer or CSG employees, including all lists or other records containing any such information, even if such information is aggregated; and all financial, technical, business, and credit information relating to Customer, including without limitation, all market analyses and market expansion plans, all revenue and profit analyses and projections and all commission structures and statements; all technical information provided by Customer, including, without limitation, all implemented or planned product and service improvements or changes, and all information about Customer’s network configuration, plant or any equipment attached thereto; and all other information relating to the operations of Customer which was disclosed or provided to CSG or became known to CSG through its relationship with Customer; all other information not generally known to the public relating to Customer; each Party’s trade secrets, know-how, design, inventions, plan or process; information relating to its business operations, services, Products, research, and development; each


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Party’s vendors’ or licensors’ information and products; and all other information that the receiving Party should reasonably know from the markings or the circumstances of disclosure to contain confidential information.  The obligations of confidentiality and restriction on use in this Article 10 shall not apply to any Confidential Information that:

 

(a)

was lawfully in the public domain prior to the date of this Agreement or subsequently lawfully came into the public domain through no fault of the receiving Party;

 

(b)

is rightfully obtained by the receiving Party from a third Party authorized to make such disclosure without restriction or being in breach of any confidentiality duty owed to the disclosing Party or an affiliate of the disclosing Party;

 

(c)

is required to be disclosed in a judicial or administrative proceeding, but only for purposes of such required disclosure, and only after all reasonable legal remedies for maintaining such information in confidence have been exhausted including, but not limited to, giving the disclosing Party as much advance notice of the possibility of such disclosure as is practical so that the disclosing Party may attempt to stop such disclosure or obtain a protective order concerning such disclosure; or

(d)

is independently developed by or for the receiving Party without reference to, access to, or use of the Confidential Information disclosed to it under this Agreement.

 

10.5

Subscriber Information .  CSG hereby acknowledges that Customer has a responsibility under the law to keep PII private and confidential.  CSG also acknowledges that the PII to which it will have access pursuant to this Agreement (if any) constitutes Customer Confidential Information and that CSG in no way possesses or shall gain possession of any ownership or other proprietary rights with respect to such PII.  CSG acknowledges and understands that PII is subject to the subscriber privacy protections set forth in Section 631 of the Cable Communications Policy Act of 1984, as amended (47 USC Sec. 551) (“Section 631”), as well as other applicable local, state and federal regulations and laws and applicable information industry standards, provided however to the extent that Customer informs CSG of a local law expanding the foregoing definition of PII, CSG shall only be required to use commercially reasonable efforts to comply with such expanded local requirements.  CSG agrees that it shall use all such information in confidence, and in connection with its receipt and use of such information, it shall perform its obligations under this Agreement in strict compliance with applicable requirements of Section 631 (e.g., excluding (i) requirements to provide a subscriber with access to his/her PII, (ii) requirements to draft privacy notices to subscribers regarding the cable operators collection, use and disclosure of subscriber PII, and (iii) requirements that apply to actions or obligations that CSG does not undertake under this Agreement) and all other applicable laws, rules and regulations governing the use, collection, disclosure, storage and disposal of such information.    CSG further agrees to restrict disclosure of such PII to those currently existing CSG sub-contractors with a need to know and who are bound by confidentiality restrictions that are materially similar to those herein and shall not further disclose such information to any third Party except at the direction of or with the prior written consent of Customer.  As of the Effective Date, CSG shall cause all CSG employees and newly hired sub-contractors to be bound by confidentiality provisions at least as restrictive in all material respects as those contained


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

herein.  In addition, CSG shall cause all renewals of any agreements that CSG has in place with its subcontractors to include confidentiality provisions at least as restrictive in all material respects as those contained herein.   CSG shall be liable for any breach by CSG of the confidentiality provisions contained in this Article 10, regardless of whether such breach was caused by CSG and its employees or any CSG vendor or subcontractor.  In addition, should a security audit conducted by Customer pursuant to Schedule N reveal that any CSG subcontractor is out of compliance with the confidentiality provisions contained in this Article 10, then Customer shall have the right to cause CSG to cease using such contractor on any matters in which such subcontractor may come into contact with any PII.  Customer agrees that at all times during the term of this Agreement, in connection with its performance under this Agreement, it will comply with its obligations under all applicable privacy and other applicable laws in relation to Subscriber Information, and where required by law, Customer will either obtain the appropriate consents or provide the necessary disclosures, as applicable, from its subscribers prior to such collection, use and disclosure to CSG.

 

10.6

Usage and Employee Data .  Confidential Information shall include any and all data relating to account activity and Subscriber usage of products and services or other information collected from or about or otherwise regarding Connected Subscribers (“Usage Data”) or a Party’s employees (“Employee Data”), in each case whether in individual or aggregate form.  Such Employee Data or Usage Data is and shall remain the property of the disclosing Party.  To the extent that  a receiving Party has access to or collects such Usage Data or Employee Data, it does so solely on behalf of  the disclosing Party  pursuant to the receiving Party’s  obligations hereunder and shall maintain the confidentiality of such data as required in this Article 10 and shall treat it in accordance with applicable law.  A Party shall not use Usage Data or Employee Data for any purpose other than to perform its obligations under this Agreement and shall not disclose such data, whether in aggregate or individual form, to any third party. A Party shall not collect or maintain such Usage Data or Employee Data except to the extent necessary to perform its obligations under this Agreement.  

 

10.7

Security .  

(a)

CSG shall employ commercially reasonable controls for and shall limit access to, and shall render unreadable prior to discarding, all records containing Customer Data.  All Employee Data, PII and Usage Data that is collected, stored or otherwise maintained by  a receiving Party  pursuant to this Agreement shall be maintained in a secure environment that meets or exceeds prevailing industry standards, taking into consideration the type of data and the services provided hereunder, and that is subject to an information security program that contains administrative, technical and physical safeguards reasonably designed to prevent unauthorized access to and disclosure and use of Confidential Information and Customer Data and reasonably designed to protect the security and confidentiality of  Confidential Information.  Any PII, Employee Data or Usage Data that is collected or obtained by a receiving Party must be stored and transmitted in encrypted or otherwise secure form.  In the course of providing services under this Agreement, CSG may obtain access to or otherwise store, process or transmit payment card information of Connected Subscribers and Former Subscribers.  In connection therewith, and in addition to its obligations under subsections (a) and (b) hereof, CSG shall comply with PCI DSS rules and standards applicable to a Level 1 Service Provider  in connection with CSG’s


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

networks, facilities, employees and operations.  CSG will provide to Customer, as requested, evidence of its compliance as a Level 1 Service Provider with the PCI DSS requirements and its registration as a Service Provider with the Card Networks.    In addition to the foregoing, in connection with the performance of its obligations, CSG shall comply with Schedule N and the Exhibits attached thereto, to the extent applicable to CSG under the circumstances.

 

(b)

In the event of  an actual breach of security, or if a receiving Party suspects based on reasonable evidence available to it that a breach of security of any system, website, database, equipment or storage medium or facility in the control of that party or its subcontractor or vendor may have occurred and has resulted or may result in an unauthorized use, access, disclosure, acquisition or loss of PII or Customer Data in the possession or control of CSG or its vendor or subcontractor, (i) the Party with such knowledge shall notify the other Party promptly after discovery or notification, in the most expedient way possible and without unreasonable delay, consistent with applicable law enforcement requirements or any measures necessary to determine the scope of the breach and restore as soon as reasonably possible the integrity of the system, (ii) CSG shall take all such action as may be required under law, by the Card Networks or under rules applicable to CSG or as required under this Agreement, and in any event shall use its best efforts to secure its system as soon as reasonably possible; and (iii) CSG shall cooperate with Customer, the Card Networks, and law enforcement authorities, as appropriate, and keep Customer informed as to its investigation and remediation efforts.   In the event Customer obtains any data of employees or other customers of CSG, Customer shall be subject to the terms of this Section, as applicable, with regard thereto.  

 

(c)

In the event that there is a breach or reasonably suspected breach of security as described in 10.7(b) of the Agreement, or Customer has a good faith belief that CSG’s conduct in the performance of the Services may be in violation of applicable law and could give rise to liability for Customer , Customer or its designee will have the right, upon reasonable written notice and subject to CSG’s reasonable security procedures and the confidentiality requirements of the Agreement, to conduct a review of the books, records, operations and facilities of CSG or its third party subcontractors or vendors to determine or verify CSG’S compliance with its security and confidentiality obligations under this Agreement and compliance with applicable law to the extent non-compliance could give rise to liability for Customer.  Such audit shall include inspection of the books and records and all other documents, materials and equipment and facilities in the possession or control of CSG and its subcontractors and vendors that relate directly to CSG’s compliance with the security and confidentiality requirements herein and compliance with applicable law to the extent non-compliance could give rise to liability for Customer, but shall not include details of CSG’s security infrastructure except as may be required by a card network, which will be provided to the card network as requested.  Customer shall have free and full access thereto for such purposes that are within the scope of the audit

 

 

(d)  

In the event of any breach as described in section 10.7(b), if Customer is required by a Card Network or its card processor to have a third party forensics expert conduct an examination of CSG’s security related to Card transactions, upon


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

reasonable notice and subject to CSG’s reasonable security procedures, CSG shall permit any person acceptable to that Card Network or card processor and CSG to examine and audit the records, operations and systems directly relevant to such inquiry.  The scope and standards of such examination will be determined by the Card Network requesting it, and CSG agrees to cooperate with such Card Network and forensic examiner.  After receiving the results of the examination, which may include identified audit deficiencies, CSG further agrees to work with Customer and the Card Networks in good faith to (i) promptly take such corrective action to sufficiently remediate any  audit deficiency in order to be in compliance with the PCI DSS standards, or (ii) to the extent permitted under PCI DSS standards, employ sufficient compensating or mitigating controls to remedy any identified breaches of the Agreement or deficiencies that could reasonably be expected to lead to a breach of security of card data.  

 

(e)

CSG shall be responsible for all data security and compliance with law with regard to that portion of the Kiosks within CSG’s Point of Demarcation (as defined in Schedule L).

 

10.8

Remote Access .  To the extent that CSG is authorized by Customer to gain remote access to Customer’s networks or equipment for purposes of performing its obligations hereunder, CSG shall ensure that (a) such access is restricted to authorized employees, subcontractors and vendors; (b) it provides Customer with a list of all such authorized employees, subcontractors and vendors at Customer’s request; (c) such remote access is used solely for purposes of fulfilling CSG’s obligations under this Agreement; (d) such remote access is obtained through a secure connection; (e) CSG uses such remote access capability only to access equipment or software that is directly involved in CSG’s performance of its obligations hereunder and does not access any other Customer or third party systems, databases, equipment or software; and (f) CSG complies with the provisions of Schedule N as applicable to this subsection.  Upon Customer’s request, CSG will provide updates on the results of periodic security audits of its access system and methods and will change authentication elements periodically to maintain the integrity and security of CSG’s access as long as such access and change does not cause a disruption to CSG’s business.

 

To the extent that Customer is authorized pursuant to this Agreement to gain remote access to CSG’s networks, systems, facilities or equipment,  Customer shall ensure that such access is restricted to authorized employees, subcontractors and vendors whose access is required for purposes of this Agreement.  Customer agrees further that any remote access to CSG networks, systems, facilities or equipment will comply with CSG’s reasonable security practices and controls that CSG will provide to Customer and as may be amended by CSG from time to time, upon reasonable notice to Customer.  

 

10.9

Publicity . Except for disclosures required by law or outlined herein, each Party will submit to the other all public disclosure(s), advertising and other publicity matters relating to this Agreement in which the other Party’s name or mark is mentioned or language from which the connection of said name or mark may be inferred or implied, and will not publish or use such advertising or publicity matters without the express prior written approval of the other Party, said approval shall not be unreasonably withheld or delayed.  Regardless of anything to the contrary herein, CSG may, without the prior written consent of Customer, make reference to the existence of this Agreement and use Customer’s name and mark on CSG’s customer reference lists, in CSG’s newsletters, in


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

CSG’s disclosure documents submitted to the SEC and posted on EDGAR, and on the websites of CSG or its parent company.  The Parties agree that CSG shall provide Customer the redacted version of this Agreement and related documents (which shall not include letters seeking confidential request or a filing on form K or a filing on form Q, as applicable) to be filed with the Securities Exchange Commission and filed on EDGAR and allow Customer no less than *********** (**) ***** review prior to CSG’s filing.

 

10.10

Destruction/Return of Information . Upon the expiration or termination of this Agreement and, except as permitted in Section 1.7, upon payment of Undisputed Fees or charges, or during the Term of the Agreement, upon the disclosing Party’s request, the receiving Party shall return all (or such portion of) Confidential Information to the disclosing Party or at the disclosing Party’s option, destroy or return all (or such portion of) Confidential Information upon such timetable as may be mutually negotiated in good faith by the Parties, but in any case no more than ****** (**) **** of the date of implementation of such return or destruction activities.  Upon completion of such activities, the receiving Party shall provide, a written certification signed by an officer of the receiving Party, certifying that all Confidential Information in all formats, including without limitation, paper, electronic and disk form, and all backup copies thereof,  have been returned or destroyed, as the case may be.  The requirements of this Section 10.10 shall not be applicable to the extent necessary to be retained by a Party in the performance of its obligations expressly provided for herein, provided, that such information shall be returned or destroyed in compliance with this section upon completion of any such additional performance.  

 

10.11   Indemnity Injunctive Relief .  Each Party will indemnify, defend and hold harmless the other Party and its respective Affiliates, and respective directors, officers, employees and representatives from and against all claims, damages, losses , liabilities, costs, expenses and reasonable attorneys’ fees arising out of such Party’s breach of any portion of this Section 10.  Each Party understands and agrees that the other Party will suffer irreparable harm in the event that the receiving Party of Confidential Information breaches any of its obligations under this Section 10 and that monetary damages will be inadequate to compensate the non-breaching Party.  In the event of a breach or threatened breach of any of the provisions of this Section 10, the non-breaching Party, in addition to and not in limitation of any other rights, remedies or damages available to it at law or in equity, shall be entitled to seek a temporary restraining order, preliminary injunction and/or permanent injunction in order to prevent or to restrain any such breach by the other Party.

 

10.12   Compliance with Law .  In addition to any obligations of the parties in Section 12.16 of the Agreement:  (i) CSG agrees that in connection with CSG’s provision of the Products and Services and performance of its obligations under this Agreement, it will not violate any applicable privacy, data security or consumer protection laws and regulations; and (ii) Customer agrees that in connection with Customer’s use of the Products and Services and performance of its obligations under this Agreement, it will not violate any applicable privacy, data security or consumer protection law and regulations.

 

 

9.

Amendment to Article 11 (Equitable Relief and Meetings)

 

The Agreement is amended by deleting subsection 11.1 “Governance and Steering Committee” in its entirety and replacing it with the following:

 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

11.1  Intentionally Left Blank.

 

 

10.

Amendment to Article 12 (General Terms and Conditions)

 

(a)

The Agreement is amended by deleting Section 12.3(b) in its entirety and replacing it with the following:

 

(b)

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********** ** ********** ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

*********** ** ****/**** ** *******

***** *** (*) ******* *****  ****** (**)

***** ******** (**) ******* ***** *********** (**)

***** *********** (**) ******* ***** ********** (**)

***** ************ (**) ******* ***** *********** (**)

***** ********** (**) ******* ***** ********* (**)

********** ** ********** ********* *********** (***

********* **********)

$******

$******

$******

$******

$******

********** ** ********** ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********** ************ ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********** ** ********** ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********** ** ********** ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********** ** ********** ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********** ** ********** ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********** ** ********** ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********** ** ********** ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********* ** ********* ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********* ** ********* ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********* ** ********* ********* *********** (*** ********* *********r)

$******

$******

$******

$******

$******

********* ** ********* ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********* ** ********* ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

********* *** ***** ********* *********** (*** ********* **********)

$******

$******

$******

$******

$******

 

*** “***** *** **** ************** ***” ***** ** ********** ** (*) *** ************** ******* ********** ** ************ ******* (***), ********** ** $****** (***** ****** ***** ** ******* ** ******* **** ********** ** ****),


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

*** **** ********** ** *** ****** ** ****** ********* ** *** ************ **** ** ** *** ********* **** ** ************ **** (**) *** **** ** ******** ****** ********* (** ********’* ********* *** ****** ******** ****** ********* *** ** ********* ** *** ** ******* ** ********* ******** ***** ******* ** ********).

 

(b)

The Agreement is amended by deleting the example contained in the second paragraph of Section 12.3 (c) in its entirety and replacing it with the following:

 

** *** ** ******* ***** ****** *** *********: (*) ******** *** ********** ********* *********** ** *** **** ** ********’* *********** ************ ** *** *** ******** ********** **** ********* ** ********** ** ********** (*) *****; (**) *** ************** ****** ** ********** ** **** ********** *** *** ******* ***** ** *** ***** ***** *** *********** *********** *** ********* ************; *** (***) *** ********* **** ** *********** ** ** ** **** ***** *** ************** *** ****** ***** *** *********** *** ****** ** $*************** ********** ** ******* (***** *** *** ** **** ******):

 

******

****** ** ****** ********* ** *** ******* ** *** **** ******* ** *** ********** ************** ****

************** ******

*********** *** (*** *** *********** *** *****)

******* ** *** *******

**** **** ******* ******** ****

*

**********

$******

$*************

***** **** ******* ******** ****

**

**********

$******

$*************

******* **** ******* **** ****

*

*********

$******

$*************

********** ************** ***

 

 

 

$**************

 

* ***** **** *** ***** *** ********** ************** *** ***** ** ****** ** **********.

 

******

****** ** ****** ********* ** *** ******* ** *** **** ******* ** *** ***** *** **** ************** ***

************** ****** ********** ** ***

***** *** **** *** *

********

**** **** ******* ******** ****

*

**********

$******

$************

***** **** ******* ******** ****

**

*********

$******

$************

******* **** ******* **** ****

*

*********

$******

$************

***** *** **** ************** ***

 

 

 

$***************

 

* **** *** ************ ******** **** *** ** ***** **** *** **** ** ***** ******** ***** ******* ***** ** **** *** *****  ****** **** **** ** ***** ** *** ************ **** ** ****** ** *** **** ** *** ***********.

 

 

***** ************** *** ***** **** *******:

 

· ********** ************** *** $ **************

· ***** * **** ************** ***    $***************

***** ************** *** $ **************

 

** ****:    *** ******* ***** **** ** *** ***** *** ** ****** ** ****** ******** ****** ********** *** *** ******* *** ***** *** **** ******** ****** ********* ** ******** ** *** ***** ************** ***.

 

(c)

The Agreement is amended by adding the following subsection (f) to Section 12.3 Discontinuance:


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

 

(f) The Parties acknowledge and agree that the **** **** **** ********* ********* provided in Schedule F is a ******** ********* **** *** ***** **** ***** *** ******* **** ******* **** **** **********

 

(d)

The Agreement is amended by deleting Section 12.16 in its entirety and replacing it with the following:

 

12.16

Compliance with Law; No Assumption of Obligations.   In connection with its performance under this Agreement, each Party, and all of its Products, Services and Deliverables, shall comply with, and each Party agrees that its performance under all Schedules and Exhibits hereto is subject to, all applicable federal, state, and local laws, rules and regulations, and all amendments thereto, now enacted or hereafter promulgated in force during the term of this Agreement.  Unless agreed otherwise in this Agreement or a Schedule, nothing in this Agreement shall be construed as requiring a Party to assume any of the other Party’s obligations, responsibilities or liabilities under applicable law, regulations and rules, and neither Party shall be obligated to validate or perform any investigation into the other Party’s compliance with laws.  Each Party will indemnify, defend and hold harmless the other Party, its Affiliates, successors and assigns from any and all third-party claims, demands, liabilities, costs or expenses, including reasonable attorneys' fees (“Liabilities”) resulting from a violation by the indemnifying Party of this Section 12.16 of this Agreement.  The foregoing shall be subject to and limited by the terms of Section 9.2 No Consequential Damages/Limitation of Liability.

 

 

11.

Amendment to Schedule A (Definitions)

 

(a)

The Agreement is amended by adding the following defined terms to Schedule A:

 

“Amendment Effective Date” shall mean July 1, 2014, which applies to the Ninth Amendment entered into by the Parties under CSG document #2504963.

 

“Card Network” shall mean **** **** ***** ********** ************** ******** ******* and ******** ****.

 

(b)

The Agreement is amended by deleting the definitions of “ACH Funds,” “Data,” and “Unclaimed Funds.”

 

(c)

The Agreement is amended by deleting the definition of “Customer Data,” and replacing it with the following:

 

“Customer Data” shall mean PII, as defined above, and any and all documents, data, files or other information provided to CSG by Customer, its subscribers, or to the extent that Customer Data is provided by other third parties on behalf of Customer, or its subscribers, or is developed or obtained by CSG in its performance under this Agreement and pertaining to subscribers, including and not limited to compilations, summaries or the derivative information processed, created or maintained by CSG relating thereto.  Without limiting the foregoing, Customer Data shall include *** ********** ****** **** (********* **** ******* ******** *** ******* ******), ***************** ******* (********** ******** ****** *** ****** (**) **** *********** ***** ** *** ******** ** **** *******), ***** ****** ***** *** *** ***** ******* **** **


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

***** **** ** *** ** *** ******* or subcontractors on behalf of Customer.  Customer Data shall at all times remain the sole and exclusive property of Customer.  Customer Data shall include data maintained by CSG by virtue of this Agreement on current Subscribers and Former Subscribers (for periods when they were subscribers or customers).

 

(d)

The Agreement is amended by adding the definition of “Former Subscriber” as follows:

 

“Former Subscriber” shall mean a customer or subscriber that is no longer an active user of Customer’s services, whether or not the customer has been de-converted to another entity.

 

12.

Amendment to Schedule C and associated Exhibits (Recurring Services)

 

(a)

The Agreement is amended by deleting Exhibit C-3(f) (Stored Payment Instruments) in its entirety.

 

(b)

The Agreement is amended by deleting Section 5 (Non-Production ACP Services) of Exhibit C-1 (Advanced Convergent Platform (ACP)) in its entirety and replacing it with the following:

 

5.   Non-Production ACP Services.     All SysPrins will have data processing functionality equivalent to those SysPrins used to provide the production ACP Services described in section 1 of this Exhibit.  Each test SysPrin shall be limited to a maximum of *** ******** (*****) ********** ******** before per subscriber monthly service fees are assessed in accordance with Schedule F for subscriber counts in excess of *** ******** (*****).   

 

(c)

The Agreement is amended by adding the following to Exhibit C-1:

 

No more than **** ** *** ****** ***** ******, Customer may request and CSG shall provide Customer with access to *** ********** *** ******* ************* ***** ******** ******** ** ***’* ******** ******** *********** ************* *** ************* ************.  As part of such a meeting, the Parties shall discuss communications and notice procedures in the event of a disaster.

 

(d)

The Agreement is amended by adding the following new Section 5 to Exhibit C-4 (CSG Care Express Service Bureau):

 

5. Run Book.   CSG and Customer agree to ******* ****** *** ** ********* ****** ** *********** *** **** (“*** ****”) which shall be mutually agreed upon by both Parties for Care Express as it relates to CSG’s Kiosk Product only on a ********* *****.   The *** **** shall be approved by the Parties within *** (*) ****** of the Amendment Effective Date.  In the event the *** **** has not been approved by the CIO of CSG and the CIO of Customer, the Parties shall escalate the matter as provided in the Agreement or the Migration SOW to executive management of the respective Parties for resolution.

 

(e)

The Agreement is amended by deleting Exhibit C-13 (Intelligent Business Reporting) in its entirety and replacing it with the following:

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Exhibit C-13

 

InfoCast Files

 

InfoCast Files are scheduled applications that create data extracts which are compressed, (if necessary) encrypted, and sent to an FTP directory maintained by CSG on behalf of Customer (“InfoCast Pick Up Site”).  CSG authors the logic to create the report files from Vantage data and enhances or modifies the logic in the event the Vantage data objects change.  InfoCast Files applications can be scheduled to run intraday, daily, weekly, monthly, or at specific intervals.  Customer accesses the InfoCast Pick Up Site to retrieve the extracted data.  CSG maintains the extracted data on the InfoCast Pick Up Site until the earlier of pick up by Customer or *********** (**) *****.  CSG also maintains a backup copy of each extracted dataset for *** ******* ****** (***) *****.  At Customer’s request, CSG will restore a backup copy of an extracted dataset to the InfoCast Pick Up Site.  See Schedule F in the Agreement for applicable service fee per restoration.

 

 

13.

Amendment to Schedule F (Fees)

The Agreement is amended by deleting Schedule F in its entirety and replacing it with the new Schedule F attached to this Amendment.  The fees provided in Schedule F shall be effective on the Amendment Effective Date.

 

14.

Amendment to Schedule H (Support Services for the Products)

 

The Agreement is amended by inserting the following as an additional provision at the end of Schedule H, Section I (Strategic Business Unit):

 

CSG and Customer agree to hold ******* ********* ****** ******** **** ********** ** ***’* ***** ********* ******* *** ***** ********** ******* *** ********** ** ****** ** ******** ** ********’* ***** ********* ******* ** ***** *********** *******.  In addition, CSG and Customer agree to **** ** * ******** ******* ***** **** *** *** ********’* ********** ***** ********* ******** ** **********.  The ******** may include, but not be limited to, such things as ******** ******* ** *** ********* **** ********* ****** *** *** ******* ********* ***’* *********** ************ *** ***’* ******* **** *** *** ******* ******** *********.

 

15.

Amendment to Schedule K (Guidelines for Passer and Transfer Program Requests)

 

The Agreement is amended by deleting the final paragraph of Schedule K in its entirety and replacing it with the following:

 

During the Term, *** ***** ******* ******** * ***** ** ***** ****** *** ******** ***** *** *** ** ****** *** ***** ******** ******* ******** ** ******** ** ******** * (“** *****”).  Such Services shall be documented in a mutually agreeable Statement of Work and will be provided to Customer ** ** ********** *******  ** *** ***** **** ******** **** *** ******* *** ***** ** ***** ** *** ******** ***** *** ********* ** ***** ***** ** **********  ** *** ***** **** ******** ******** **** **** ***** ***** ** *** ******** *****


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

******** **** *** *** ***** *** ***** ** ******** * *** **** ******** ** ****** ** *** ** *****.  CSG agrees ** ******** *** ****** ** ** ***** ** ***** ***** **** ******** ********* ********** ********* ************ ***** ** ***** **** ******** ********* ********** ********* *********** *** ***** ** ***** **** ******** ********* ********** ** **** ********* ************  *** ********** ** ***** ***** ** ******** ******** ** *** ** ********** **** *** ***** ** **** ******** *.  Further the Parties agree that any necessary Passers or Agent Transfers which are necessary to support the Migration SOW (********* ******* ** ******* ** *********** *****), as determined by CSG, shall be ** ** ********** ****** ** ******** *** ***** *** ********* ** ******** *** ** ****** ** *** ***** ** * ******* ******* *** ******* **** *** ********* ** ******* ** ***** ********* ** ******* *** ********* **** *** ******* ***** ****** *** ******* ********** ********** *** ***** ** *** ********* ****  *** ******** ** *********** *** ****** ** ** ***** ********** *** ***** *** *** ****** ** ********* *********** ** *** ***** ***** ** **** ******** ******* ** ********* *** ****** ** ** ***** ********* ********** **** ******** ******* ** **** ******** **** ** * ******** *****.

 

16.

Amendment to Schedule L (Performance Standards and Remedies)

 

The Agreement is amended by deleting Schedule L in its entirety and replacing it with the new Schedule L attached to this Amendment.  

 

 

17.

Amendment to Schedule N and associated Exhibits (Partner Connection Requirements)

 

The Agreement is amended by deleting Schedule N, Section 1.2 in its entirety and replacing it with the following:

 

1.2

Audit and Inspection of Records.   CSG will engage an independent external auditor who is subject to CSG’s reasonable confidential and security procedures to conduct an audit in accordance with SSAE16, in conjunction with the Services provided to Customer under this Agreement.  On an ****** *****, CSG shall provide Customer with a copy of CSG’s most recent SSAE16, but shall not be required to include detail of CSG’s security infrastructure.  

 

Prior to *** ****** ***** *** ********** ******** ** ********, CSG and Customer agree to utilize existing assessment reports and certifications (SSAE16 and PCI Certification), to validate CSG’s compliance with confidentiality requirements provided in Section 10 and security and privacy requirements set forth therein and in Exhibit N-1.   In the event such reports and certifications are unable to provide reasonable assurance of the security and privacy requirements, Customer may ******* *** ****** ********** ** ********* CSG’s compliance with security and privacy requirements set forth therein and in Exhibit N-1. ******** **** ** *********** *** *** ***** ********** **** *** *********** ** ******. CSG will reasonably cooperate in all such audits or assessments.  Customer (or through a third party designated by Customer) may ******* ******* *********** ** ***’* ********** ****** ****** ******** ****** **** *** (**) ******** ****’ ****** *** ******* ** ********** *************** *** ******** ************  **** ****** ***** ** ********* ** * ******** ****** **** **** *** ***** ** ********* ****** * ************ ********** ****** ** ****.  If audit results find that CSG is not in substantial compliance with security and


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

privacy requirements set forth therein and in Exhibit N-1, then ******** ***** ** ******** ** ******* *** (*) ********** ***** ** **** **** ** ********** **** *** ********* ********* ** **** ******** ******** **** ******* ** *** * **** ** **** ****** ******** ** ********** **** *** **** ***** ****** ***** (**) **** *** ******* ******** ********* *** *********** ***** *** ************ ** ********** *********  *** ****** ** (*) ******** **** ****** ** *** ******* ** ******* ***** ******* ** ***** ********** ** *** **** ***** **** ******* ** **** ********* ********** **** *** ******** ********** ** *** ******** *** ******* ************ *** ***** ******* *** ** ******* *** ** (**) ******** ********** ************ ** ********** ********.

 

 

18.

Amendment to Schedule Q (Scenarios Illustrating Monthly Subscriber Commitments and Related Items)

 

The Agreement is amended by deleting Schedule Q in its entirety and replacing it with the new Schedule Q attached to this Amendment.

 

19.

Amendment to Schedule R (Governance and Steering Committee Members)

 

The Agreement is amended by deleting Schedule R in its entirety and replacing it with the new Schedule R-1 (Common Stock Purchase Warrant) and R-2 (Registration Rights Agreement) attached to this Amendment.

 

20.

Section II, Subsections 1 through 6, of the Second Amendment to the Agreement is hereby deleted in its entirety and replaced with the following language and the associated Fees shall be provided for in Schedule F:

 

(a)

Schedule C, Recurring Services, of the Agreement shall be amended to add the following to the list of Recurring Services:

 

WFX Scheduling…………………………………………………….Exhibit C-30

WFX Resource Allocation Manager………………………………..Exhibit C-30

 

(b)

Additionally, Schedule C, Recurring Services, of the Agreement shall be further amended by adding thereto the attached Exhibit C-30

 

(c)

CSG and Customer agree that CSG will provide ** ******* ************** **** ********'* ********** *********** *** ********'* *********** ******(*) ("**(*)") (*** "******* **************") *** * ***** ****** (*** "***** ******") ** ** ********* ** * ********* ** **** ** ** ******** ** *** *******.

 



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

21.

Additional Amendments

 

(a)

The Agreement is amended by deleting all references to the “Stored Payment Instruments.”

 

(b)

The Agreement is amended by deleting all references to “Intelligent Business Reporting” and replacing them with “InfoCast Files.”

 

(c)

The Agreement is amended by adding the following as a new Section f) Kiosk PCI Responsibilities to Attachment A to Exhibit C-4 under Module E- Branded Payment Kiosk:

 

f)   Kiosk PCI Responsibilities.   CSG and Customer agree the provision and use of the Kiosk Product and its related Services shall be in accordance with each Party’s respective responsibilities provided in the Kiosk PCI-Security document which shall be binding on the Parties, subject to the terms of this Agreement and may be updated from time to time by mutual agreement of the Parties.  The Kiosk PCI-Security document (document #2507493) shall be updated periodically to identify roles and responsibilities related to the Kiosk Product in a manner consistent with then-current industry standards and PCI-DSS standards.  Any modification or revision of the Kiosk PCI-Security document shall be approved by the CIO of CSG and the General Counsel of Customer.  In the event the Parties are unable to agree upon any modification or revision to the Kiosk PCI-Security, the Parties shall escalate the matter as provided in the Agreement or the Migration SOW to executive management of the respective Parties for resolution.  CSG acknowledges and agrees that it is responsible for cardholder data which it possesses or stores in relation to its Kiosk Product and related Services.

 

 

IN WITNESS WHEREOF the Parties hereto have caused this Amendment to be executed by their duly authorized representatives.

 

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC (“CUSTOMER”)

 

CSG SYSTEMS, INC. (“CSG”)

 

By:  /s/ Peter Kiriacoulacos

 

By:  /s/ Randy Wiese

 

Name: Peter Kiriacoulacos

 

Name:  Randy Wiese

 

Title:  Executive Vice President & Chief Procurement Officer

 

Title:  CFO / EVP

 

Date:  July 22, 2014

 

Date:  July 25, 2014

 



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

List of documents attached to the 9th Amendment

 

 

Schedule F Fees

 

Schedule L Performance Standards and Remedies

 

Schedule Q Scenarios Illustrating Monthly Subscriber Commitments and Related Items

 

Schedule R-1

Warrant Document entitled “Common Stock Purchase Warrant”

 

Schedule R-2 Registration Rights Agreement

 

Exhibit C-30 WFX Scheduling and WFX Resource Allocation Manager

 

 



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Schedule F

FEES

 

INDEX

 

 

 

DEFINITIONS

 

I.

Processing

A.

Basic Services Charge (herein after referred to as “BSC”) for Non-Rated Video and Non-Rated High-Speed Data and Residential Voice Services

B.

***** ******* *** *** *** ***********

C.

**** **** **** ********* *********

 

II.

Threshold Usage Items

A.

Data Processing, Smartlink BOS (“SLBOS”) and Event Notification Interface (“ENI”)

1.

***** ******* **** ********** ***

2.

******* **** ********** *** *** *** ****** ***********

3.

******** ***** / *** ************ *** ****** (“***”) for New and Additional Subscribers

4.

PVU Cost Management Committee

B.

BSC Threshold Level

 

III.

Direct Solutions (print and mail)

I.

AESP Statement processing

A.

Processing for AESP Statement Format

B.

Additional physical page

C.

Full Color Processing– Front and/or Back Side of Each Physical Page

D.

Additional logical page-ad/coupon

E.

Statement Composition Fee

II.

Customer letter processing

A.

Legacy customer letters

B.

Additional physical page for legacy customer letters

C.

Enhanced customer letters

D.

Additional physical page for enhanced customer letters

III.

Past due notice processing

A.

Legacy past due notices

B.

Enhanced past due notices

C.

Additional physical page

D.

Additional logical page-ad/coupon

E.

Modified generic/bilingual revision charge

IV.

Delinquency labels

A.

Spooled to site

B.

Printed 4-up labels

C.

Printed Cheshire labels

D.

Printed LAB labels

E.

Reports

V.

Inserts

A.

Printing services

B.

Processing

C.

Late insert notification

D.

Late arrival of Non-CSG printed inserts

E.

Holds or notification of insufficient inserts

F.

Returns to customer

G.

Destruction of inserts

H.

Affidavit

VI.

Other print and mail ancillary service fees

A.

Other print and mail ancillary service fees

B.

Support services

C.

Other services

D.

Mail Trace

E.

Braille/Large Print Statement Functionality


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

F.

Special Printer/Inserter Setup Fee

VII.

Paper and Envelopes

VIII.

Postage

A.

Statements

B.

Customer letters

C.

Past due notices and reminders

 

IV.

Ancillary Products and Services

A.

Ancillary services for Non-Rated Video and Non-Rated High-Speed Data and Residential Voice Services

B.

CSG Care Express (Payment Kiosk) Module E

C.

Refund checks

D.

Check Verification

E.

Collections

F.

CSG’s Home Security Module (HSM)

G.

Configurable Lines of Business Functionality ("C-LOB Functionality")

H.

SLBOS / ENI Hardware / Data Processing - Software, Cost per PVU, and Data Processing Fees

I.

Ancillary services for Workforce Management

J.

Third Party Software That May be Procured Through CSG

K.

Content Direct System and Services

 

V.

Technical Services/ Implementation Services/Training

A.

Technical Services/Professional Services

1.

Technical Services/Professional Services

2.

Services Commitment Fees

B.

Implementation and Startup Services

C.

Additional training and documentation

1.

User training at CSG facility

2.

Virtual classroom training

3.

On-site user training at Customer’s requested location

4.

Vantage training

5.

BCE Training Development-West Division

D.

Equipment Installation /Technical and Engineering Support Services

 

Schedule F-1: LISTING OF PRODUCTS AND SERVICES INCLUDED IN THE BSC

 

I.

Processing

II.

Interfaces

III.

Payment Procurement

IV.

Credit Management and Collections

V.

Manual and Programmatic Conversion Services

VI.

Additional training and documentation

VII.

Other Applications/Solutions

VIII.

CSG LICENSED PRODUCTS

IX.

MISCELLANEOUS

X.

DATA COMMUNICATIONS SERVICES

XI.

Network Services – timelines

 

Schedule F-2: PRICING FOR EXCESS BSC THRESHOLD LEVEL

 

A.

Precision eMail™

 

Schedule F-3: SUPPORTING EXAMPLES FOR SECTIONS I & II OF SCHEDULE F

 

 

 

 

 

 

 

 



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Schedule F

FEES

 

DEFINITIONS

 

Definitions provided in this Schedule may be captured elsewhere in the Agreement or in this Schedule, but in the event they are not defined in this Schedule, they shall still have the meaning provided in the Agreement or Schedule F.

 

 

 

1.

Connected Subscribers – as previously defined in Schedule A, Definitions, means an active subscriber as identified in the subscriber master file and ledger activity report on the last processing day of a processing month.  ** * ***** ** ************** ** *** ***** **** * ******** ** ********* **** **** *** ******* (**** ***** *** ***) ** * ****** ********** ******* ** *** **** ********** *** ** * ********** ****** **** ******** ***** ** ******* ** *** (*) ********* ***********  ******** ** *** ***** **** * ******** ** ********* **** **** *** ******* (**** ***** *** ***) ** *** ******** ********** ******** ** *** **** ********** *** ** * ********** ****** **** ******** ***** ** ******* ** *** (*) ********* ************  ******** ************ **** ***** ***’* ******** ********** ******** (“***”), ******** ********** ******** *** ******** ** *** **** ** * ******** *** ******* ** **** ******** ********** ******** ** ******** ** ******** ******** ***** ******** ** **** *********  ** ** ******** ** *** ***** **** * ******** ******* ** ******* **** **** *** ******* (**** ***** *** ***) *** **** ******* ** **** * ******** ********* (********** ** *****) ********* *** **** ******** **** ******** ***** ** ******** ***** *** ** ** *** ** ** *** ******** ********** ******** *** ********* ***** ** ******* ** *** (*) ********* ***********.  

 

2.

Additional Subscribers – as previously defined in the Article 4, Migration, shall mean those subscribers of Customer’s residential services who are receiving billing and account services from any platform other than CSG’s ACP billing platform as of the date immediately prior to the date of their migration to CSG’s ACP billing platform pursuant to the Migration SOW (excluding any New Subscribers, hereinafter defined).    

 

3.

New Subscribers – as previously defined in Article 4, Migration, means other subscribers brought (whether such subscribers were previously on a CSG platform or a non-CSG platform and subsequently migrated to a CSG platform) under this Agreement after the closing of a direct or indirect acquisition of (“Acquisition Closing Date”) of one or more entities occurring after the Amendment Effective Date, that are not currently included in the Migration SOW.  If Customer acquires subscribers from another entity without acquiring such entity, the Parties shall negotiate in good faith to bring such acquired subscribers under this Agreement as provided by Section 4.8 of the Agreement as amended.

 

4.

Amendment Effective Date as previously defined in Schedule A (Definitions) shall mean July 1, 2014, which is the effective date of the amendment entered into by the Parties under CSG document #2504963.

 

5.

******* ******* *** *** ***** ***** $**********.

 

6.

***** ******* *** *** ***** ***** *** ******* ** *** ******* ******* *** *** ********** ** *** ******* *** *** ***** ** ********** **** **** ** ****.

 

7.

Connected Subscribers for Invoicing Purposes shall mean the ********** ******* 1) ********* *********** ***** 2) ***** *** *********** ********.

 

8.

Planned Full Migration Subscribers Target ***** **** ********** ********* *********** *** ********* ********.

 

9.

New Subscribers Migrated During the Month shall mean those New Subscribers that became a Connected Subscriber during the then current month.   *** ************* ********* *** *** *********** ****** ** ******** ** *** ***** ** ***** *** *** *********** *** ******* ***** **** *********; ** ********** ** ******* *** (*********) ** *** ********** *** ** *** ******** ** * ********** ***** *** *** ******* ******* ******* ** ***** *** *********** **** *** ******  *** ******* ******* ******* ** *** *********** **** *** ***** ***** *** ****** **** **** *** ******* ***** **** ********* *** ******** ** * ********* ********** ***** **** *********; ** ********** ** ******* *** (*********) ** *** ********** *** *** ******** ** *** *** *********** *******.

 

10.

New Subscribers Migrated During Prior Periods shall mean the cumulative total of New Subscribers that became a Connected Subscriber from the Amendment Effective Date through the end of the prior month.

 

11.

Total New Subscribers Migrated shall mean the *** **: 1) *** *********** ******** ****** *** ***** *** 2) *** *********** ******** ****** ***** *******.

 

12.

Total Monthly Cap Subscribers shall mean the *** **: 1) ******* **** ********* *********** ****** and 2) ***** *** *********** ********.

 

13.

******* *** *** ***** ***** **** *** ******* **: 1) ***** ******* *** *********** ******* ** ******* **** ********* *********** ******, or 2) ****.

 

14.

Transactions shall mean any transaction that processes through CSG’s billing infrastructure regardless of originating source including a composite business function (e.g., SLBOS call, ACSR function) and may be comprised of several individual transactions.


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

 

15.

Items shall mean one or more service codes, including zero dollar tracking codes, which Customer defines via CSG’s ACP back office and equates to one or more products and services offered by Customer to its subscribers and are related to each particular Connected Subscriber’s account.

16.

********* ************ *********** ****** ***** **** *** ********** ************ ******** ** ** ****** **** ********* (***** *:** ** **:** *** **:** ** **:**) ****** *** ********* *****.

 

17.

********* **** ************ ***** **** *** ******** ****** ** ************ ******** ****** *** ********* ************ *********** ******.

 

18.

Total Monthly Items shall mean the total number of Items at the end of each respective invoicing month (i.e., the 21st of each calendar month) by summing the total number of Items related to the number of Connected Subscribers for each respective invoicing month.

 

19.

**** ********* *********** ***** ***** ********** ********* ***********.

 

20.

PVU shall mean processing value unit.

 

21.

******* **** *** *** ***** ********* *********** ***** ** *****.

 

22.

PVU Subscribers shall be the *** ** 1) ******* **** ********* *********** ****** *** 2) ***** *** *********** ********.

 

23.

******* ********* **** ************ ***** ** ***** ** *** ********* **** ************ ******* ** *** ****** ** 1) ********* *********** or 2) *** ***********.

 

24.

******* ******* ***** ***** ** ***** ** *** ***** ******* ***** ******* ** *** ****** of 1) ********* *********** or 2) *** ***********.

 

25.

******* ******* *** *** ***** ********* *********** ***** ** ***** ** ***** ********** ** *** ******* of 1) ******* ********* **** ************ ********** ** 2) ******* ******* *****.

 

26.

******* ****** *** *** ***** ********* *********** ***** ** *** ******* ** 1) **** ** 2) ******* ******* *** *** ***** ********* *********** ***** ******* **** *** *** ***** ********* ***********.

 

27.

******** ********* *********** ***** ** *** *********** ***** ***** *** ** **** **** ****, of 1) ********* *********** ***** 2) **** ********* ***********.

 

28.

******** ********** ****** ***** ********** ***** ** *** ******* of 1) **** ** 2) **** **** *** ****** ** i) ******** ********* *********** ******* ** **) **** ********* ***********.

 

29.

******** ******* ****** *** *** ***** ********* *********** ***** ** *** ******* of 1) ******* ****** *** *** ***** ********* *********** ********** ** 2) *** ******** ********** ****** ***** **********.

 

30.

******* **** ********** *** ***** ** *** ******* of 1) ******** ******* ****** *** *** ***** ********* *********** ********** ** 2) ******** ******* ****** **** *** *** *** ***** (** ********** ** ******* ******).

 

31.

***** ******* **** ********** *** ***** ** *** ******* of 1) *** **** ******* ***** ******* **** ********** *** ** 2) *** ******* ******* **** ********** *** *** *** ***** ***** ** *** **** ******* ***** ********* **** *** ******* (**th) ***** ********* *** ********* ********* ****.

 

32.

*** ****** *********** ***** ** *** *********** ***** ***** *** ** **** **** ****, between 1) ********* *********** ***** 2) ***** ******* *** ***********.

 

33.

******* **** ********** *** *** *** ****** *********** ***** ** *** ******* of 1) *** ****** *********** ********** ** 2) **** ********** **** *** *** ****** ********** (** ********** ** ******* ******).

 



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

I.

Processing

A.

Basic Services Charge (herein after referred to as “BSC”) for Non-Rated Video and Non-Rated High-Speed Data and Residential Voice Services   

 

BSC Table for Connected Subscribers for Invoicing Purposes (as defined below)

 

*********** ** ****/**** ** *******

(*** ********* ********** *** ********* ********)

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

§ ** ** *********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********* ** *********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********* ** *********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********* ** *********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********* ** *********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********* ** *********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** ** **********

$******

$******

$******

$******

$******

$******

$******

$******

§ ********** *** *******

$******

$******

$******

$******

$******

$******

$******

$******

 

*** ***** *** *** ***********

 

*********** ** ****/**** ** *******

(*** *** **********)

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

******* *** **** ******** ****

§ ***** *** ***********

$******

$******

$******

$******

$******

$******

$******

$******

 

*** ********* ****** ********* *** *** *** ********* ***** *** ********* ********** **** *** *********** ***** ******** *** ******** *** ******** ***** **** *** ****** ** ********* *********** ***** ********* ** ****   ******* *** ** **** ******** * ******** * ******* ** ******** *** ******** ******** ** *** **** ** **** ** ********** ********** *** ******** ******** *** ******** ******** ** *** ****

 

1.

*** ******* *** *** ********* ***** *** ********* ********** **** *** *********** ***** ******** *** ********* *********** ** *** *** ** *** *** ********* ************ ** *********** *(*) *** *(*) (******** ** ****** *** “***** ******* ***”) ******* ** ********** ** ********** (*) ** **** *******:

 

a.

******** *** ****** ** ***** ******* ********* *********** ** * ***** ****** *** ******** **** **** ****** *** ***** *** *********** ******** **** *** ********** ***** *** ********* *********** *** ********* ********* *** **** ******** *** ********* *********** *** ********* ******** ** *** ********** ******* *** *** **** *********** ** *** ******* **** ** ***** ** *** *** ***** *** ********* *********** *** ********* ******** ***** *** *** ***** *****, ****


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

b.

***** *** *********** ******** ********** ** *** ********** ******* *** *** *** *** ********** **** ** ***** ** *** *** ***** *** *** *********** ***** *** *** ***** *****.

 

c.

** *** ********** ******* *** *** *** *** *** ***** *** ********* *********** *** ********* ******** **** ** (*) ** **** **** ** ***** ** *** ********** *** *** *** *** *** ***** *** *** *********** **** ** (*), **** *** ***** ******* *** ***** ** ********** ** ***** *** ********** ******* *** *** *** *** *** ***** *** ********* *********** *** ********* ******** **** ** (*) *** ******** **** ** *** ***** ******* ********* ***********.

 

******* * ** ***** ******* *** ***********

 

****** *** ****** ** ***** ********* *********** ** ******** **** ** *********** *** *** ***** *** *********** ******** ** *****  *** ********* *********** *** ********* ******** ** ***********  *** ********** ******* *** *** ** ** **** ** *** *********** **** *** *** ***** *** ********* *********** *** ********* ******** ***** ** ** *** ********** **** *** ***** ** $** **** .  *** ****** *** *** *** ***** ** ******** **** ***** ********** *** ***** ***** ** $********* (********** ********** ** $******).

 

*** ********** ******* *** *** *** *** *********** **** *** *** ***** *** *** *********** ** $******.  ***** *** ****** ** ***** *** *********** ******** ** ***** ***** ** ** ****** *** ***** ********** *(*) ***** *** *** ***** ** ******** ****.

 

*** ***** ******* *** ** ********** ** **** ******* *** *** *** ***** ** ******** **** ***** ** $*********.  

 

******* * ** ***** ******* *** ***********

 

****** *** ****** ** ***** ********* *********** ** ******* **** ** *********** *** *** ***** *** *********** ******** ** **********  *** ********* *********** *** ********* ******** ** ***********   *** ********** ******* *** *** ** ** **** ** *** *********** **** *** *** ***** *** ********* *********** *** ********* ******** ***** ** ** *** ********** **** *** ***** ** $** **** .  *** ****** *** *** *** ***** ** ******* **** ***** ********** **** ***** ***** ** $********* (********** ********** ** $******.).

 

*** ********** ******* *** *** *** *** *********** **** *** *** ***** *** *** *********** ** $******.  *** ****** ** ***** *** *********** ******** ** **********  *** ****** *** ***** ********** **** ***** *** *** ***** ** ******* **** ** $********* (********* ********** ** $******).

 

*** ***** ******* *** ** ********** ** **** ******* *** *** *** ***** ** ******* ***** ** $********** ($********* **** $*********).

 

******* * ** ***** ******* *** ***********

 

****** *** ****** ** ***** ********* *********** ** ******* **** ** *********** *** *** ***** *** *********** ******** ** ***********  *** ********* *********** *** ********* ******** ** ***********   *** ********** ******* *** *** ** ** **** ** *** *********** **** *** *** ***** *** ********* *********** *** ********* ******** ***** ** ** *** ********** **** *** ***** ** $** **** .  *** ****** *** *** *** ***** ** ******* **** ***** ********** **** ***** ***** ** $********** (********** ********** ** $******).

 

*** ********** ******* *** *** *** *** *********** **** *** *** ***** *** *** *********** ** $******.  *** ****** ** ***** *** *********** ******** ** ***********  *** ****** *** ***** ********** **** ***** *** *** ***** ** ******* ** $********* (********** ********** ** $******).

 

***** *** ********** ******* *** *** **** *** *** ***** *** ********* *********** *** ********* ******** ($******) ** **** **** *** ********** ******* *** *** *** *** *********** **** *** *** ***** *** *** *********** ($******), **** *** ***** ******* *** *** *** *** ***** ** ******* **** ********** ***** ********** **** ***** ***** ** *** ******* ** *** ***** ********* *********** ** ********** ********** ** *** ********** ******* *** *** **** *** *** ***** *** ********* *********** *** ********* ******** ** $****** ** $**********.

 

2.

*** ***** ******* *** *** ********** ** ******* * ***** ***** *** ****** *** ***** ******* *** ****  *** ***** ******* *** *** *** ** ******** ******** ** *** ***** ******** ** ******* **** ** **** ******** *.

 

******* ** *********** ** *** ***** ******* *** ***

 

****** *** ****** ** ***** ********* *********** ** *** **** ** *********** *** *** ***** *** *********** ******** ** *****  *** ********* *********** *** ********* ******** ** ***********  *** ********** ******* *** *** ** ** **** ** *** *********** **** *** *** ***** *** ********* *********** *** ********* ******** ***** ** ** *** ********** **** *** ***** ** $** **** .  

 

****** *** ***** ******* *** *** ** **** **** ** $********** ($********** ***** ******* *** *** **** *** ****** ** ** ****** ********** ** ***** ***** ** ***** ********* ******* ** ****).   *** ***** ******* *** *** ***** ** $*********** ** *** ***** ******* *** *** ********** ***** *** ****** ***** (*********** ********** ** $****** ****** $**********) ***** ****** *** ***** ******* *** ***.

 

3.

*** ***** ******* *** *** ******** * ****** *** ********** **** *** *** ***** ******* **** *** ********** ***** *** **** **** ******* *** ********** **** ******* ** *** **** **** **** ********* ********* (** ********** ** ******* **** ** ****


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

******** *), *** ** ********* ***** ***** (** ********** ** ******* ** ** **** ******** *) ***** *** ********* *** **** ****** ****** ********* (** ********** ** ******* **** ** **** ******** *), ********* ******** *** ******** (** ********** ** ******* *** ** **** ******** *), ********* ********/************** ********/******** (** ********** ** ******* ** ** **** ******** *), ** *** *** ******** ** ******** ****** ********* ****** ** *** ******* ** ******* ***** **** ****   *** **** ******* ** *** ********* ********** *** ******* *** ***** ******* *** *** ************ *** **** ***** ** ** ******** ** *** ***** ******* *** ***.

 

B.

***** ******* *** *** *** ***********

 

1.

*** ***** ******* *** *** ***** ** ********** ** *** ***** ********* *** **** ** ***** *** ********* *********** *** ********* ******** ** ********** ** ******* ******* ***** ** ******* **** *** ******* **** ********* *********** ******.

 

** ** *** ********* ********* ***** *** ******* ******* *** *** ***** ***** *** ***** ******* *** ****  *********** *********** ** *** ***** ******* *** *** (** ***) ***** ** ********** ** *******:  ***** ******* *** *********** ******* ** ******* **** *********** ****** ***** ***** *** ******* ** *** ******* *** *** ***** ** *****  *** ********* ******* *** *** ***** ** **** ********** ** *** ******* ******* *** **** ***** ***** ******* *** ***** ******* *** **** ***** ***** *** ** **** **** *** ******* ******* *** ***.

 

2.

*** **** ******* ***** ******* *** *** ***** ** ******* ** ******** ******** ** ******* **** ********** ** ***** ** *** ********* ********** ******* ** **** *** **** ********** ******** **** ******* *** ********* **** ** *** ********** ********* *** ********** ********  *** ****** ********** ** **** ** ***** ** **** ******** *** *** ***** ******* *** ***.

 

******* ** *********** ** ********** ** **** ******* *** ***** ******* *** ***

 

****** *** ********* ** ** *** **** ** ***********: *) ******* **** ********* *********** ****** ****** **********; *) ******* ******* *** *** ****** $**********; *) *** *********** ******** ****** *** ***** ****** *********; *) *** *********** ******** ****** ***** ******* ****** ****; *** *) *** ********** *** ********* ******** ** ******* **** ********** ** ***** ** **** *** *** ******.

 

**** *: *** *********** ******** ****** *** ***** (*********) **** *** *********** ******** ****** ***** ******* (****) ****** ***** *** *********** ******** ** *********.

 

**** *: ******* **** ********* *********** ****** (**********) **** ***** *** *********** ******** (*********) ****** ***** ******* *** *********** ** **********.

 

**** *: ***** ******* *** *********** (**********) ******* ** ******* **** ********* *********** ****** (********** ****** ******* *** *** ***** (******)

 

**** *: ******* *** *** ***** (******) ********** ** ******* ******* *** *** ($**********) ****** ***** ******* *** *** ** $**********.

 

**** *: ******** *** ***** ******* *** *** ** *** ********** ******** ** ***** ******** ** ******* **** ********** ** **** (********** **** *** ******* ********* ***** ******* ** ****).  *** ******** ** ***** ******** ** ******* **** ********** ** ***** ** **** *** *** ******; ********** *** ***** ******* *** *** ** $**********.

 

C.

**** **** **** ********* *********

 

1.

*** **** **** **** ********* ********** ** ********* ****** ***** ** ********** **** ** *** ***** ******** ******** **** **** ********* ********** ************ ***** ** *** ********** ** *** ******* **** ** *** **********  ** ******** **** *** ******* ** ***** ********* ********** *********** ******* ** * ********* ****** *** **** **** **** ********* ********* ***** *** ** ***********  ** *********** *** **** **** **** ********* ********* ***** ****** ********* ** *** ******** **** ** *** *********: (*) **** *** ******* ***** ** ******* ********** ** ******** ** *** ********* *** **** *****; (**) *** ********** ** *** ******* ****; ** (***) *** ********* ** ********** ** ******** ***** ** *** ********** ** *** ******* **** *** *** ****** ***** **** ******** ** ******* ***(*), ******* ***(*), ******* *** (*), ** ******* **(*) ** ******** * *** **** *********** ** ****** *********** ** ******** ** * ***** ******** ***** ***** ******* *****  *** ******** ** *********** *** **** **** **** ********* ********** *** ******** **** ********** ** *** ********* ******** ***** ** ********** *** *********** **** (“*********** ****”).

 

2.

** ******** ***** ** ******* ** ***** ********* ********** *********** ** ***** ** *** ********* *** ********** ** *** *th ********* ***** *** ********** ******** ** *** ********* ******* * ** *** *********** ***** ******** ***** *** * *** ***** **** *** ********* *********** (“**** **** **** ********* *********”):

 

a.

***** ****** ** ********** ******* ********* *********** **** *** ********* ********* **** ******* *** *********** **** ********** ** $*** ****

 

b.

* ******* ****** ***** ** *** ***** ****** ** ********* *********** ********** ** $**** ******* *** ********* **** ** **** *********.

 

3.

** ** **** ***** *** ********** ****** **** ** * **** **** **** ********* ********* ****** $********** ******* *** **** ** **** ********** ******** *** *** *********** **** ** ** *********** *** ********* ********* ** ********* *** ****** ******* ** **** ******** **** *** *********** ****** **** ********’* ******* ** ******* ********** *********** **


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

******** ** **** ********** ** (**** **** **** ********* *********).  ************ *** **** **** **** ********* ********* ** (*) ********** ******** *** *** * *******, (*) ********** *** *** **************** ** *** ******** ******* ** *** **** * ******* ** ******** ** ******* ** ***** ********* ********** *********** ** ******** ** *** ********* **** *** (*) ***’* **** *** ********* ****** *** ********’* ******* ** ******* ** ***** ********* ********** *********** ** ******** ** *** ********* ***.

 

******* **** **** **** ********* *********:

 

****** *** ******** *** ******** ********* ********** *********** ** ***** ** *** ********* *** ** **** ***** *** **** ****** *** ** ******* *** **** ********** *********** ****** *** *****  *** ******** ** **** ******** **** **** ** *** *********** *****  ***** ****** *** ****** ** ********* *********** *** ****** **** ** ********** *** ***** ****** ** ********** ******* ********* *********** **** *** ********* **** ******* **** **** ** ************  *** **** **** **** ********* ********* *** *** ****** **** *** ********* **** ** *** *********** **** **** ** ** *******:

 

·

$********* (*********** ********** ******* ********* ********** ********** ** $***), ****

·

*** *** ***** ** ****** ***** *** *** *** ***** ****** **** **** ********* ****** ****** *** ***** ***** ** $******* (********** ********* *********** ********** ** $****).

·

******** *** ***** ** *** ***** *** ************* ** ******* ** $********** **** *** **** ** *** *********.

 

 

II.

Threshold Usage Items

A.

Data Processing, Smartlink BOS (“SLBOS”) and Event Notification Interface (“ENI”)

 

1.

***** ******* **** ********** ***

 

*** ***** ******* **** ********** *** ***** ** ********** ** *** ********* ****** *** *** **** ** **** ********* *** *** ******* ** *** ***** ******* *** ****  **** ********** ****** ***** *** ** ********** *** ******** ** *********** *** ***** ******* **** ********** *** ***** ****** (**) ****** ********* *** ********* ********* **** (“***** ******* **** ********** *** ********* ****”) ** ******* ** ******** ***** *** ***** ***** **** ********** *** ********* ***** *** *** ********* ** ****** *** ******* *********** *** ***** **** **** *********** ***** *** ** ***** ** ********’* ***** **** *** ***** ***** ** *** ***** ******* **** ********** *** ********* ****.

 

**** * : ******* ****** ********* **** ************ *** ***** ******* ***** *** *** ******* ******  *** ******* ***** ***** **** * ******* ********* ****** ***** ******** ********** ******* ** ******* *** ************ ***** **** ******* ***** **** ******* * ******** ********* ** *********** ***** **** ******** *** ********* **** *************  *** ***** ******* **** ****** ** ******** ** *** *st ** **** *****.

 

**** *: ********* ******* ********* **** ************ *** ******* ******* *****

 

**** *: ********* ******* ****** ***’* *** ***** ********* ***********

 

**** *: ********* ******** ******* ****** *** *** ***** ********* ***********

 

**** *: ********* ******* **** ********** ***

 

**** *: ********* ***** ******* **** ********** ***

 

******* ** ***** ******* **** ********** ***

 

*** ******** *** *** ******* ******** ** *** ** ********* *** ***** ******* **** ********** ***

 

2.

******* **** ********** *** *** *** ****** ***********

 

*** ******* **** ********** *** *** *** ****** *********** ***** ** ********** ** *** ***** ** ***** *** ***** ******* *** *** ******* *** ***** ******* **** *** ********* ** ****** ** *** ***** ******* *** *** ** *** ********** ****** *** ********** ****** **** *** ***** ** **** ******* ***** *** ** ********** ** *** **** ************* *****.

 

******* ** ******* **** ********** *** *** *** ****** ***********

 

*** ******** *** *** ******* ******** ** *** ** ********* *** ******* **** ********** *** *** *** ****** ***********

 

3.

******** ***** / *** ************ *** ****** (“***”) *** *** *** ********** ***********

 

*** ******** ** *********** *** ******** ***** / *** ******** ** ** ********* ** ******** ***** *** ********* ********* ***** *** **** ***** / *** *** ** ** ******** ** *** ***** ** *** *** ** ** *** ********* ********* **** (“**** ***”).  *** ******* ******** ** ******** ***** ** ******** ********* ** ******* **** ******  *** **** *** ***** ** ******** ****** ** ****** *** ********** ********** ** *** ********** ******** **** *** ****** ************ ** ***.

 

*** ******** ****** *) ********** *********** ****** ********** *) *** *********** ****** ********* *** *) *** ****** *********** ****** ********** ** * ******* *** **** *** ***** ** ********* ** ********** (********* **** ********* ***** *********) ***** ** **** ** ********** ** ****** ** ***** ** ******** ** *** **** *** ** *** *** ** * ******* **** *** ****** ** ***** (*** **** ***).


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

 

*** ********* ********* ** ******** ********* ********** *** ***** **** ******** *** ************ ******** ********** ** *** *********** **** **** *** ******** **** *** ** ******* **** *** ******* *** ******** ** ********* *** ***** ****** *** ******* *** *** ********** ***** / *** ***************** ***** ******* **** ***** ************ *** ***** *** ** ********* ** ****** ** ******** *** ******* *******.

 

*** ******** ****** **** ***** ** *** ********** ** *** ********** ** *** ************ ******** ********* ** ********** *** *** *** $***** *** **** ** ******** ********’* *** ** *** (*** **** *** **** *** *********).  ***** (*) ****** ***** *** ******** ******** ******** ********* *** *** ********** *********** *** ******** ** ********** *** ** ******* *** ******** ************  ** * ****** ** *** ********** ********’* **** *** ***** ******** *** *** (********* ********** ** ******) *** * ***** ** *** *** (*** **** *** **** *** ******** **** ***).  ******** ** ***** ******* ******* *** ********* ** *** ********** *** ****** ******* ******* ******** **** **** ** ****** *** ** *** ** $***** *** ********* **** ****** **** *** ******** $******  ******** ******** ***** *** ** ******** * ****** *** *** *** *** ********* ****.

 

4.

*** **** ********** *********

 

*** *** ******** ***** ** ********* * ********* ********* ** *** (**) ****** ******* ** ** ***** ****** ** **** ** *** ******* (“*** **** ********** *********”).  *** ******* ********** ** *** *** **** ********** ********* ***** ** ********** ** ***’* *** *** ***’* ************ *** ********’* *** *** ********’* ************ *** **** ******* **** ***’* *** *** ********’* ****  **** ********** *** ** ******* **** **** ** **** ** ******* ************** ** *** *** **** ********** **********  *** ******* ******* ** *** *** **** ********** ********* ***** **** (“*** **** ********** ********* *******”) ** ***** **** ****** *** **** *** ** * ******* ***** ********** ****** *** ********* ****** ** ****** *** ******* ********.  

 

*** ******* ***** **** *** *** **** ********** ********* ***** **** ** **** ***** ** ******** ************* ** ******* ******* *** ******** ********** ** ***’* ******* *** ********’* ***** ** ***’* ******** *** ******** ** ***** **** *****’* ***** ********** **** ****  *** ******* *********** **** **** ***** ** ******* ** ******** ***** *** ******* ******* ** *** ***** **** ******* ****** ********* ***** ****** *** **** ***** ** *********** ****** *** ****** ** ***** ******** ***** *** ******* *** *** **** *** ***** **** *** ***** **** **** *** ***** *** ****** * ******** ******** ************ ** ******** ** *** ***** ***** **** ******** ** ******* ************  ** * ******* ** ** ***** * *********** ***** ****** *** **** ********** ********* ******** **** ***** ** ** ***** **** ** ***** *** ******* ***** ******** *** ******* *** ********* *********** *** ******* ** **** ***** ***** **** ******* ****** *** *** ******* ******* ***** ** **** ** **** ***** ** ******* * ********* ******** ** *** ***** ************ **** ** *** **** ********** ************ ************* ** ******** ** *** ***** *****.

 

B.

*** ********* *****

 

 

*** ******** *** ******** ******** ** *** *** *** ******** ** ******* **** ******  ******* ******** *** ******** ******** ** *** *** **** ******* ********* ***** *********** (“*** ********* *****”), ***** *** **** ********** ** ******* **** ** *** ****** *** *** ********* ***** ** ******** ** *** ***** ***** *** * ********* ******* ** ******* **** ** ******** ** *** *** *** (“****** *** ********* *****”), ** ********** *** (“****** *** ********* ***”) ** *** ******* *** ***** ******* *** ****  *** ****** *** ********* *** ** ********** ***** *** ******* *** ****** *** ********* ***** (** ******** *** ********* ** ******* ***) .

 

 

III.

Direct Solutions (print and mail)

 

Description of Item/Unit of Measure

Frequency

Fee

I.AESP Statement processing (Refer to Section V.B entitled “Implementation and Startup Services” for the fees associated with startup services, Section VII below for the fees associated with custom paper and custom envelopes, and Section VIII below for the fees associated with postage)

 

 

A.Processing for AESP Statement Format: First Physical Page (Duplex, Black Print Only).  ******** ***** ******** **** ******** *** ********* ********* ** ********* **** *** ********** ******** ** ****  ******** ********* *** ******** (*** ********** *** ****** *********)

 

 

§ ** ** ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** *** ******* ******* ******* **********

*******

$******

B.Additional physical page (Black Print Only) (*** ******** ***** *** ****** *********; **** *** ** ****** ***** **** ******* ******* ********* ******) (Note 1)

 

 

§ ** ** ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** *** ******* ******* ******* **********

*******

$******

C.Full Color Processing– Front and/or Back Side of Each Physical Page (Note 2)

******** ****

$******


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Description of Item/Unit of Measure

Frequency

Fee

D.Additional logical page-ad/coupon (per logical page, per system principle) (Note 3)

 

 

1. ****** *** ********* ******** (*** ******* ***** *** ****** *********)

*******

$******

2. ****** *** **** ***** ******** (** ********** **** *** ****** ****** ******* (***) (*** ******* ***** *** ****** *********)

*******

*/*

3. ****** *** **** ***** ******** (** ********** ** ******* **** ****** (*** ******* ***** *** ****** *********)

*******

*****

E.Statement Composition Fee (*** ********* ***** **********) (Note 4)

*******

$******

II.Customer letter processing (Refer to Section V.B entitled “Implementation and Startup Services” for the fees associated with startup services, Section VII below for the fees associated with custom paper and custom envelopes, and Section VIII below for the fees associated with postage)

 

 

A.Legacy customer letters

 

 

First physical page (black print only; includes generic paper, generic carrier envelope, generic remittance envelope, and the insertion of the letter and remittance envelope) (*** ******* *** ****** *********)

*******

$******

B.Additional physical page for legacy customer letters (black print only; includes generic paper) (*** ******** ***** *** ****** *********) (Note 1)

*******

$******

C.Enhanced customer letters (Note 5) (Note 6)

 

 

First physical page (black print only; includes the insertion of the letter and remittance envelope, if any) (******** ***** *** ********) (*** ******* *** ****** *********)

*******

$******

D.Additional physical page for enhanced customer letters (black print only; includes insertion of the letter) (******** *****) (*** ******** ***** *** ****** *********) (Note 1)

*******

$******

III.Past due notice processing (Refer to Section V.B entitled “Implementation and Startup Services” for the fees associated with startup services, Section VII below for the fees associated with custom paper and custom envelopes, and Section VIII below for the fees associated with postage)

 

 

A.Legacy past due notices

 

 

First physical page (black print only; includes generic paper, generic carrier envelope, generic remittance envelope, and the insertion of the notice and remittance envelope) (*** ******* *** ****** *********)

*******

$******

B.Enhanced past due notices

 

 

First physical page (duplex, black print only; includes generic paper, generic carrier envelope, generic remittance envelope, and the insertion of the notice and remittance envelope) (*** ******* *** ****** *********)

*******

$******

C.Additional physical page (black print only; includes generic paper) (*** ******** ***** *** ****** *********) (Note 1)

*******

$******

D.Additional logical page-ad/coupon (*** ******* ***** *** ****** *********) (Note 3)

*******

$******

E.Modified generic/bilingual revision charge (Note 7)

*** **********

$******

IV.Delinquency labels

 

 

A.Spooled to site (*** ****** *** ****** *********)

*** *******

$******

B.Printed 4-up labels (*** ****** *** ****** *********)

*** *******

$******

C.Printed Cheshire labels (*** ****** *** ****** *********)

*** *******

$******

D.Printed LAB labels (*** ****** *** ****** *********)

*** *******

$******

E.Reports (*** ******* *** ****** *********) ($****** *******)

*** *******

$*****

V.Inserts

 

 

A.Printing services

 

 

1.Marketing inserts/envelopes

*** *******

*****

2.Other communication

*** *******

*****

B.Processing (******* ** * ******* *** *********)

 

 

1. Non-CSG printed inserts – machine insertion (*** ******* *** ****** *********; **** *** ** ****** ***** **** ******* ******* ********* ******)

 

 

§ ** ** ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** *** ******* ******* ******* **********

*******

$******

2. CSG printed inserts - machine insertion (*** ******* *** ****** *********; **** *** ** ****** ***** **** ******* ******* ********* ******)

 

 

§ ** ** ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** *** ******* ******* ******* **********

*******

$******


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Description of Item/Unit of Measure

Frequency

Fee

3. Selectable business reply envelope credit (*** ********)

*** **********

*/*

C.Late insert notification (*** ******** *** ****** *********)

*** **********

$******

D.Late arrival of Non-CSG printed inserts (*** ******** *** ****** *********)

*** **********

$******

E.Holds or notification of insufficient inserts (*** ****** *********)

*** **********

$******

F.Returns to customer (handling fee, excluding shipping costs) (*** ****** *********)

*** **********

$*****

G.Destruction of inserts (*** ***** *******; ******* ** ***** *******; ******* ******* ** **** ******* ********) (*** ****** *********)

*** *******

$*****

H.Affidavit (*** ******** *** ***** *** ****** *********) (Note 8)

*** *******

$*****

VI.Other print and mail ancillary service fees

 

 

A.Other print and mail ancillary service fees (Note 17)

 

 

1. File Transfer Set Up

********

******

2. Statement Image Archive File Transfer

*****

******** ** ***

B.Support services (Note 9)

 

 

1. Marketing/creative services support (*** ******* *** ****)

*** *******

$******

2. Advanced ESP support services (*** ******* *** ****)

*** *******

$******

3. Statement design consultation (*** ******* *** ****)

*** *******

$******

C.Other services

 

 

1. Flat file transfer for statement creation off-site (*** ********* *** **** **********)

*** *******

*****

2. De-conversion fees

******* *** ** *** *********

D. Mail Trace

 

 

1.Mail Tracking, DirectNet View and Daily Scan File

 

 

a. Mail Trace Startup (Note 10)

*** *******

$********

b. Mail Trace Processing (per statement)

*******

$******

c. Mail Trace Scan Data View in ACSR B (Note 11)

*/*

*/*

d. Mail Trace – Data File Restoration (Note 12)

*** *******

$*****

e. Mail Trace Mailer Identification (MID) Fee (Note 13)

********

*****

f. Mail Trace Disk storage (*** ********) ($***** **** *** ********)

*******

$*****

2.Automatic Suspension of Delinquency Actions

 

 

a. Optional Mail Trace Automated Delinquency Delay Service (*** *********)   (Note 14) .  

*******

$******

E.Braille/Large Print Statement Functionality

 

 

1. Monthly Processing Fee (*** **** *****/*** ********** *** ******** **** *** ********** *** *******/***** ***** ********** (Note 15)   

*******

$******

2. Data File Restoration Fee (Note 16)      

*** *******

$*****

F. Special Printer/Inserter Setup Fee (*** ****** **** **** ***** ******* **********) (*** **** *** ****** *** ****** *********; **** *** ** ****** ***** **** ******* ******* ********* ******) (Note 18)

 

 

§ ** ** ********** ******* ******* **********

**********

$*****

§ ********** – ********** ******* ******* **********

**********

$*****

§ ********** – ********** ******* ******* **********

**********

$*****

§ ********** *** ******* ******* ******* **********

**********

******

VII.Paper and Envelopes:   (Statements, Customer Letters and Past Due Notices

 

 

1. Paper – 8-1/2 x 11, 24#, plain white with one perforation (used for SmartColor Printing) (per page; this fee is tiered based upon monthly printed statement volume))

 

 

§ Up to 14,000,000 monthly printed statements

*******

$******

§ 14,000,001 – 16,000,000 monthly printed statements

*******

$******

§ 16,100,001 – 18,000,000 monthly printed statements

*******

$******

§ 18,000,001 and greater monthly printed statements

*******

$******

2. Carrier Envelope – CSG standard #10 envelope, 20# paper with one poly-covered pistol window (*** ********; **** *** ** ****** ***** **** ******* ******* ********* ******))

 

 

§ ** ** ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** *** ******* ******* ******* **********

*******

$******

3. Remit Envelope – CSG standard #9 envelope, 20# paper with one open window (*** ********; **** *** ** ****** ***** **** ******* ******* ********* ******))

 

 

§ ** ** ********** ******* ******* **********

*******

$******

§ ********** – ********** ******* ******* **********

*******

$******


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Description of Item/Unit of Measure

Frequency

Fee

§ ********** – ********** ******* ******* **********

*******

$******

§ ********** *** ******* ******* ******* **********

*******

$******

4. Other Paper and Envelopes

*** *******

*****

5. Other Miscellaneous Shipping Materials (*** ***** *** ****** *********)

*** *******

*****

6. Custom Paper Set-up/Revision

*** *******

$******

VIII.Postage

 

 

A.Statements (*** ********* ******** *** ****** *********)

*******

****** *******

B.Customer letters (*** ****** ******** *** ****** *********)

*******

******** ************* ****

C.Past due notices and reminders (*** ****** ******** *** ****** *********)

*******

******** ************* ****

Note 1: ** ********** ******** **** ***** **** ****** **** ** ******* ******* ** **************** ********* ******** **** ******** **** ** ********** ******** **** **** ** **** ******** **** ***** ******** **** ** ******** *** *** ********* ******* ****** *** ** ********** *************  *** **** *** ******* ****** ******* ************ **** *** ******** *** *********** ******* ********** ********* ************ ****  ** ******** ** ***** **** ** ******** **** *** ******** **** ******** **** *** **** ******** ******* *** ** **** ** *** ********** ******** *****  ** ******** ** ***** **** ** ******** **** *** ******** *** ********** ******** **** *** ****** **********.

Note 2: Full Color is available on both sides of each physical statement page.  *** *** ***** ** ******** ******* ********’* ***** ******** **** ***** ** * ******* ***** ********** ** *** ****** ****** ** ******** ***** **** ******** ***** ********** (**** *** *** ** ******** ******* *** ******** **** ******** ***** ** ***) “**** ***** ********** ***”.  

Note 3: Additional logical page - ** ****/****** ** **** ********* *** ********* ***** **** ** ******** **** *** ********  ** ** ****/****** **** ***** ******** ********* ******* ** ************** ***** ***** ******** *** ****** ******* ********* ** ** ********** ******* *****  * ******* **** ** *** **** ** * ******** *****  ** ******** ** **** ****** *** ** ***** **** **** ***** *********  **** **** *** ** ********* *** **** **** *** ** ******* ** *** **** ****.

Note 4: The Statement Composition fee ** ******** *** ********** ********** **** **** **** ******** ***** ******** ******** *** **** ***********  **** *********** ** ** ****** ** *** ********** ***** ***** ******** *** ****** ** ******** **** **** ******** ** *** **********  ******** *** **** **** ****** ******** *** ********** ******** ***** ******** ** ********** *** ********’* ********* ************  *** ***** *** ****** **** **** *** ********** ******** ***** ******** ** ********** *** *** ******** *********** **** *** *** ********* ************  *** ******** *** ****** ****** ** ** ****** ******* **** ** *** ********** ******* ********’* ***** ********* *********** **** *** ***** ****** ** ******* **********.

Note 5: *** ***** ******* ******* *********** ********* ***** ********* *** ******** ******** *******.

Note 6: ******** *** ***** ** *** ******** ******* ****** ******* *** ******** ******** ******* ** ***** *** *** ******* ** ****** ****** ***** *********.

Note 7: ** *** ***** * ******** ***** ** ****** *** ****** ** ** ******** ******** *******/********* ******* **** **** ** ******* *** ******* **** ** **** *******  *** ******* ***** * ******* ** *** ****** **********.

Note 8: ** ********* ** ** ******** ********* **** *** ****** ******* ****** *********** ** *** ****** ** ********** ******** **** *** ********** *******  **** ********* ******** *** ***** ***** *** ***** *** ****** *** ***.

Note 9 :  *** ******* ******** *** *** ********** **** ***** ** *** ***** ** * ******** ****** **** ********* ** **** ** ***.

Note 10: **** ***** ***** ******** *** ******* ** ***** **** ****** ******* *** **** ** ****** ****** (****** ***** ******* ******** *********) ****** ** * *** **** ** *** ********* ***/** ******  **** ******** ** ********* ** **** ******** *** ******** *****  **** ***** **** ******* ****** ** ********* ****** *** ****** ** **** **** ******* * ****** ** **********  *** ******* ****** ** *** * ****** ********* ****** *** *** ***/***** *** ******** ******** ** ********* ******* ******* ** **** *********** *** ********** ** ***** **** **** *****.

Note 11: ****** ******** ** **** ** **** ** * ******** ********’* ******* **** ****.

Note 12: *** ******** ***** **** ***** * **** **** ********** *** ********’* ******** *********** (**) *****’ ***** ** **** **** *** **** ****** ** *** **** ****** ** ****** ** ********’* *** ******** **** *** ** ********* ** ******** *** ********* *** *********** (**) ******  *********** ***** *** ******** *** ****** (**) *****  ****** ******** ******* *** ** ******* ** ******** **** ***** ******** ***** *** *** **** **** *********** ***.

Note 13: *** **** ***** *** *** ** * **** ************ *** *** *** ******* ********  ******** *** **** **** **** *** **** ** ***** **** ******** ***** *** *** ****** *** *** **** ***.

Note 14: ********** *** (***** ** ****) ****** ** ***® ***** ******** ** (*) ****** ***** *********** ******* ** ******** *** (**) ******** *** **** ****** *** ***********  ******** ******** **** ********** *** ****** ** ***_***** ** *** *******® **** ********** ** *** *** ****** *** *** ******* **** * *** **** ******* ******  ****** *******:

(a)

***_***_***:  ***** *** ****** ** ****** *** *** ******** *** *** *******.

(b)

***_****_***_***:  ***** *** **** ** *** **** ****** ***** **** *** *** ********.

(c)

***_****_***_***:  ********** *** **** ** *** ***** ***** **** *** ********.

Note 15:   * **** ***** ********** * ******* ********* **** ** ****** ****** *** *** **********  *******: * ********** **** ********* ***** ***** * **** *******  *** ******* **** ***** ****** ** ******** ******* *** ********* **** ***** ***** ********* **** ****** ****** **** ** ***** *** ***** *****.

Note 16: *** **** ***** *** ********* *** * ****** ** ***** (*) ***** *********** ***** *** *********  ** *** ***** *** ** ***** ** ******* ** ******** **** ***** ******** ***** *** *** **** **** *********** ****  *** *********** **** ***** ******* ** *** *** ********** ********* *** **** ****** **** **** ******** ** *** ********* ******* ***** **** *** ******* *** ***** ******  *********** ***** **** ** **** ********* ** *** ******** **** ******* *** **** ** ****** **** *** ** *** *** ****** *** ********* ** *** ******.


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Note 17: **** ************** ** *** ********* ***** **** ******** **** *********** ******** ** **** ******* ********* ** **** ** ** ******** ** *** ******* (*** ******** *** *******) ("*** ********* ***** **** ******** ***"), *** ***** ******* *** ********* ***** **** ******** ** **** ** ********* ******** ** ** ***/**** ** ** **** ******** ** *** ***.

Note 18:   *** ************* ********* ******* *******/******** ***** *** ****** **** **** ***** ******* ********** ** ******** ** *** *** *** *********** ********* ***********; *** ******* *******/******** ***** *** ********** ***** ***** **** ** ******* *** ******* *******/******** ***** ** ******** ** ********** ********.

 

 

IV.

Ancillary Products and Services

 

A.

Ancillary services for Non-Rated Video and Non-Rated High-Speed Data and Residential Voice Services

 

Description of Item/Unit of Measure

Frequency

Fee

1. Database maintenance requests

 

 

a)Passers (variable lead time) (***  ******)

*** *******

******** *

b)Other mass adjustments (*** **** **********)

*** *******

******** *

2.De-conversion fees (Section 6.2 of the Agreement)

******* *** ** *** *********

 

B.

CSG Care Express (Payment Kiosk) Module E

 

1.

CSG Care Express (Payment Kiosk) Module E, Part 1 (Note 1)

 

Description of Item/Unit of Measure

Frequency

Fee

1. Payment Kiosk Unit (*** ****)

*** *******

    *****

2. Payment Kiosk Maintenance (*** ****) (Note 2)

********

   $********

3. Enterprise Care Express Kiosk Environment Configuration (*** *** *** ********)   (Note 3)

*** *******

$*********

4. Payment Kiosk Implementation and Set-up Fee (Note 4)

*** ******

$********

5. Payment Kiosk Extended Warranty (********* ******* ******** *** * ***** **** **** ** ********) (Note 5)

*** *******

*****

6. Custom Design Services (Note 6)

*** *******

*****

7. Attract Loop (Note 6)

*** *******

*****

8. Kiosk Equipment Upgrades (specified when ordered) 

*** *******

*****

9. Kiosk Spare Parts Component Kit

*** *******

*****

10. Subscription Model Benefits Premium (*** ******** ***** ** ** *** ** ***** ****) (*** ** ******** *** ******* ** * ******* ***** *** ** ******** ** ** ****** ***** ***** **** *** ****** *** ******** *********** *** ******* *** *** **** ****) (Note 7) (Note 8)

*******

$*****

Note 1: Fees subject to change ** * ******** ******* ***** ** ********** **** ***’* ***** ***** ****** ***********  ******* ******* ** *** ******** ******** ***** ************* (********** **** *** ******* **********).  ******** ******* ****** *** ***** ******** ************* *** ********* ** * “*** *****” ******  ******** ******** ******** *** * ****** ** *** (*) **** ****** ******** ******** **** ** ********* ** ********.

Note 2: ******** ****** *********** *** ******* ** *** ******** *** ****** *** ******* ************ ******** ** ***’* ********.

Note 3: * ******** *** ********* *************** *************** *** ******* **** ********* ** * ********* ** **** *** ***’* ************* ** *** *** **** ******* *********** *** *** ***** *********  *** ************* ********* *** **** “********” ****** ** *** ******* ************* *** ************* ** *** ******** *** ******** *** ********** ************* **** ******** *** ******* (**** ********* ************** ** ***** ******* ******* ************* *** ********* ** ***’* ******* ****).  ** **** ***** ********** ******** ************* **** ** ****** ** ****** ******** *********** ******* * ********* ** **** *** *** ******* ** ********** ******** ******.

Note 4: ********** ** *** ***** ********* ** **** ******** ****** * ******** ******/******** (*** *** ******** ** *** **** ******* (******* *****) * “******** ******”) ** * *** ******** ****** ***** *** **** ** ********’* ******** ******** (**) ******** ******** *** *** *** ********** ******** ******* ***** ***** *** ********* ** *** ********* *** *** ************** ** *** ******* ***** ********.

Note 5: ********** ******** ******** ******** **** **** ** ******** ** *** **** ** ******** *** ****** ** ********* ******* *** ** * ***** ****.

Note 6: *** ****** ****** **** **** ** ********* ******* * ******** ********* ** **** ******* ***** ***** ****** *** ****  *** **** ******* * ***** **** ** ******** ***** ** ********’* ************ *** *** ***** ******** ** ***** ***** ****** ******* *** ********* ** **** ********  ******** ***** *** *** ********* ******** **** *** ***** *** *** ***** ********.

Note 7: ************ ***** ******** ******* *** *** ******** ***** ********:

·

********* ******* ******* *** ********** *** ********* ******** **** *******.

·

******* ***** ******* *** ******** **** ** *** ***** ** ********** * ** ******* * ** *** ******** ****** ******** *** ****** ** **** ******** ** ***** ** *** ****** ****** ***** *** ******* ******* ** ******** *** ***** **** **** **** ** ******* ** *** ******** ******* *** ************ (**nd) ***** ** *** **** **** ******** **********.

·

********** ********** ******** ** *** ********* *** ** **** ************* *** *********** **** ********* ********* *** ************.

·

****** *** ********** *** ******* ******** ** *** *** *** ********* (**) ***** **** **** ** **** **** ******** ** *** ************ ***** ******** *** **** *** **** ******** ********* *** **** ****** *** ***** ***** **** ** ****** *** ********* ********** ***** ********* (**) ***** ***** **** ******* **** **** ***** ** ***** ********* ** ** ***** **** ** **** ***/** ***** **** **** ******** *** ***** *** ******** ******** ***** ******** ****** **** **** **** *** *******


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

*** ***** *** ******** **** ** ******* ** *** ******** ******** *** **** ******* *** ** **** ********** *** ******** *** *** *** ********** ** *** ** ** ****** *** ********** ************* ***** **** **** * ********** **** ****** **** ******** *** ******* **** ******** *** **** ******** ****** **** ** ******** **** *** ******** *** ****** **********

·

* ***** **** **** *** ********** ***** *** ******** ****** ** ******* *** ******** ** *** ******* ***** ***** *** *** *** ******** ******* ** ****** *** ******** *** ******** **** **** ******* *** *** ****.

·

*** ************* ********* *** ************ ***** ******** ******* *** *** ******** ***** **** *** ******* ***’* ******* ***** ***********.

·

*** ******* *********** *** ***** ** ******** ****** ******** *** ************ (**nd) ***** ** ***** **** ***** *** ***** ** ****** ******* ******** *** *** ******* ***** *********** *** *** ***** *** ******** ** *** ***** ***** ***** ** ********** **** ******* * ** *** ******** ****** *******.

Note 8: ******* ********* *** ***** **** ** ******** ******** ****:

** ********* **** ***** *** ***** **** ******* **** ********* **** **** ** ********* *** ********* ***** ** *** ******** (********** ** *** ****** **** *** *** ******** ******* ** *** **** ******* **** ** *** ******** ********** ** *** ********* ****** **** ** ********) **** ** ******** **** *** $**/***** ** ***** ** ********** *** *** ***** ****** **** *** ******* ******** ****** ** ******** *** **** **** ****** ** *** ******** ******* ******* ********** *** ********* ***** **** ************** ** *** ******** ******* *** **** ******* *** ********* ** **** ** *** * ************ ********* ** *** **** ****.

 

2.

Precision eCare® (Payment Kiosk) Module E-Kiosk Subscription Program

 

Description of Item/Unit of Measure

Frequency

Fee

1. Kiosk Subscription Fee (*** ****) (Note 1) (Note 2)

********

$********

Note 1: ********* ****** ********* ***** *** ********* **** ** *** ******** ****** ******** *** ***** ************ *** ***** ** ******** ******** *** * ****** ** ***** (*) ***** ****** *** **** ** **** *****  *** ***** ******* ***** ** ******** **** ******** ** **** ***** ***** *** *** ********* *** (*) ******** **** ** ******** **** **** ** *** *********** ***** ** **** **** ***** **** *** ********* **********  *** ***** ************ *** ** ************* *** *************** ******* ** *** ***** ** ******* * *** *** ********** *** ** ******* ** *********** **** ** ******** ** **** ** ***’* ***** ***** ********* *** ** ******* ** ****** ********* ******** ** ******* **** ********** ** ***** ** *** ********** ** *** ***** *** ***** ************ ** ********** *** *** ****** ***** **** ***** ** ********* ********** ****** **** *** ******* ******** **** ** ******** ** ********** **** *** ***** ** ******* ** ******* * ******** “ Cancelation/Termination Policy .

Note 2: ***** ************ *** ********:

·

***** **** *********

·

*********** *** ******** ** ****’* ********** ******* ********* *** ******** *******/*********  ***** ******** ********** ******* *** *** ******* ** *** ********** *** ***** ** ********** * ** ******* * ** *** ******** ****** *******.

·

*** ****** ****** ****** *** ****** **** ******** *** ******** *** *** ***** ** ** *** ********* **** ** *** ******** ****** ******** ** ***** ***** *** ******** ** ******* ** *** ****** ** ********* *** ******** *** ***** ** ******** *** ************ *****.

·

******* ***** *********** ***** ******** ****** *********** *** ******* ** *** ******** *** ****** *** ******* ************ ******** ** *** ********.

·

*** ******** ***** ***** ******** ******** ********* *** **’* ********* ******* *** *** ***** ***** *********** *** ****** ********.

·

*** ******* ********** / ************** ** *** ***** *** *********** *****.

·

********* ******* ******* *** ********** *** ********* ******** **** *******.

·

******** ********* (**) ***** ******* ***** ******* *** ******** **** ** *** ***** ** ********** * ** ******* * ** *** ******** ****** *******.

·

********** ********** ******** ** *** ********* *** ** **** ************* *** *********** **** ********* ********* *** ************.

·

****** ********** *********** (*** ******** ** ***** ***** “****** ***”) ********** *** ******* ******** ** *** *** *** ********* (**) ***** **** **** ** **** **** ** ******** ** *** ************ ***** ******** *** **** *** **** ******** ********* *** **** ****** *** ***** ***** **** ** ****** *** ********* ********** ***** ********* (**) ***** ****.

** *** ***** * ***** *** * ********* **** **** **** ********** ** *********** ** *** ********** *** ***** ** ******* ** ******* * ******** “ ***********/*********** ****** * ***** ****** ******* ** ****.

 

C.

Refund checks

 

******** ************ *** *** ** *** **** ***** ******* ********** ********* ******** *** *****  ******** ********* **** *** ******* *** **** ***** ****** ******* *** *** ******** ******* ******* ** ** **** ******  *** *********** *** ***** ** ******** ********** **** **** ********* ******* *** **** *** ***** ** ********* ** **** #********  ** *** ***** **** ******** ******* ** *** ***’* **** ***** ******* *********** *** ******** *** **** *** **** **** ** *** ***** ** * ******** ****** **** ********* ** *** *********.

 

D.



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Check Verification

 

Description of Item/Unit of Measure

Frequency

Fee

1. Service Option 1 (*** ***********) (Note 1)

*******

$******

2. Service Option 2 (*** ***********) (Note 2)

*******

$******

3. Setup and Implementation (*** ******)

*** ****

$*********

Note 1:   ******* ****** * ******** ** **** ******** ******* ****** *** ******** ******** ************.

Note 2:   ******* ****** * ******** ** ******* ****** * *** ******** ******** ************.

 

E.

Collections - **** ******** ********* *********** **** ********** ******* *********  ******* *** *** ********** ******* ******** ********.

 

F.

CSG’s Home Security Module (HSM)

 

Description of Item/Unit of Measure

Frequency

Fee

1. Home Security Module

 

 

a)Access Fee

********

(Note 5)

b)Monthly HSM Subscribers (Note 1) (Note 4)

 

 

§ ** ** ********* (*** *** **********)

*******

$******

§ ********* ** ********* (*** *** **********)

*******

$******

§ ********* ** ********* (*** *** **********)

*******

$******

§ ********* *** ******* (*** *** **********)

*******

$******

2. Implementation Services (Note 2)

*** *******

*****

3. Additional Complex Composite Services for HSM (*** ******* ********* *******)   (Note 3-4)

*******

$******

Note 1: *** ******* *** ********** ****** ****** ** *** ***** ** ******* * ** *** ***** ****** *** ******** ** ** ********** *** *** ************  *** ******** ** ******** *** ********* *** *********** ** *** ******* ******* ***** *** ******** **** ***** *** ******* ****** ********** ****** ** *** ********* *** *********** ***** ** $****** *** *** ***********  *** *********** *** *** ****** ** *********** *** *** ******* *** ********** ****** ***** ** ***** **** *** ****** ** ********* *********** **** *** ** *** **** ********** *** ** *** ********** ****** ***** ** ********* *** **st ** **** *****.  

Note 2: *** ******** ***** ** *** ************** ******** ***** ** *** ***** ** * ******** ********* ** ****.

Note 3:  “******* ********* ********” ***** **** * ******* ******* **** ** ****** ** ***’* ************ **** **** (***).  * ******* ******* ***** **** * ****** ******* (**** *******) **** *** ** *** *** **** ******** ******** (**** ****** ***).

Note 4:  *** ************* ********* *** ******* *** ********** ******* ** *** ***** ** ******* * ** *** ***** ****** ***** ******* ********** *** ** ** *** (*) ******* ********* ******* *** *********** *** ***** *** ** ********** *****  **** ********** ******* ********* ******* ***** ** ******* ** ********** $****** *** *********** *** *****.

Note 5: *** *** ******** *********** *** ***** **** *** *** ******** ($********** ** *** ** **** *** $********** ** ******* ** ****), *** ******** *** ***** *** ******* ******** **** ******** ****** ****** ***.

 

G.

Configurable Lines of Business Functionality ("C-LOB Functionality")

 

Description of Item/Unit of Measure

Frequency

Fee

1.Implementation Services (Note 1)

*** *******

*****

2.Configurable Line of Business Functionality (C-LOB Functionality)

 

 

a)Monthly Subscription Fee (*** ********* ***** ************* **********)                (Note 2)(Note 3)

 

 

§ ** ** *******

*******

$***

§ ******* ** *********

*******

$***

§ ********* ** *********

*******

$***

§ ********* ** *********

*******

$***

§ ********* *** *******

*******

$***

3.Complex Composite Services (*** ******* ********* *******) (Note 4)(Note 5)

*******

$***

Note 1: The specific terms of the implementation services shall be set forth in a mutually agreed upon Statement of Work.

Note 2: **** ****** ******* ******** *** ********** **** ********** **** *** ******** **** ** ******** **** ** ******* ******* *********** **** ******** *** ****** ***** ** *********** ***** *** ********** *********** *** ****** *********  *** **** ******* *** **** *** ************ **** ** ********* ** ** ****** ** ********* ** ** ******* ********** ****** ** ***********  **** **** ********** **** ** **** ****** *** ***** ****** (**) ****** ***** *** ***** ********** ** ********* ** *** *******  *** ********* **** ********** ***** *** **** ***** ***** ****** (**) ** *********** **** *** ******** ***** **** ** ********* *** *** **** ***** ******* *** *** ****** *** ******** ** ***** **** **** *********** **** ** ******* ** ********* ************  ** ******** ** *** **** ******** ****** *** ******** *** *** ********* ***** *** ********* ********** **** *** *********** ***** ******** ****** ** ******* *** ** ******** * ** *** ********* **** ***** ** *** ******** ********** **** *** ***** ************* *******.

Note 3 : *** ************* ********* *** ******* ***** ************* ************ **** ** *** ***** ** ******* *** ****** ***** ******* ********** *** ** ** *** (*) ******* ********* ******* *** ********* ***** ************* *********** *** ***** *** ** ********** ****.

Note 4 : ******* ********* ******** ***** **** * ******* ******* **** ** ****** ** ***’* ************ **** **** (***).  * ******* ******* ***** **** * ****** ******* **** *** ** *** *** **** ******** ********.

Note 5 : *** *** ****** ***** ***** ** ******* *** *** (*) ** **** ******* ********* ******* *** ********* ***** ************* *********** *** *****.


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

 

Note: *** ***** *** ** ******** ** ******* ***** ************* *********** ***** *** ******** ********** **** ** ******** ** ******** ** *** *** ********** *** *** ******* ***** **** * ******** ****** **** ********* ** **** *** ************** *** ******** ** *** ********** **** ** ********.

 

As a point of clarification, the C-LOB cannot be used for Video, High-Speed Data, Residential Voice Services, ACP Commercial or ACP Wireless.

 

H.

SLBOS / ENI Hardware / Data Processing - Software, Cost per PVU, and Data Processing Fees

 

Description of Item/Unit of Measure

Frequency

Fee

1.SLBOS / ENI Hardware - Software (Note 1)

 

 

a) Processing Level (********** ** ** *** ***) (Note 2)

*******

******** ** ***

b) Additional TPS (*** ********** ** ** ***)

******

$********  

2.Adjusted Average Excess Cost *** *** *** ***** ********* *********** *** *****    (Note 3)

*******

$******

3.Data Processing Rate *** *** ****** ********** (*** *** ****** **********)

*******

$******

Note 1: SLBOS / ENI Hardware – Software:

******** **** ******* *** **** * ******* ************ ****** *** ******* ***** ******** *** *** ******** ********** **** ******* ***** / *** ***** ** *** ***** *** ** **** ******** ******* ** ***** *** ** ******* *** ****** ********* *********** ** ** ***** ** *********** *** *** ******* ******** ** * ****** ** ***** *** ********** **** ********’* ************* *** *** ******** *** **** ******* ***** ** ** ********* ******* *** ****** *** **** ******** ******** **** *** ******** *** **** ******* ******* *** ******* *** ********** ****** *** **** ****** ******** ** *** ********** ** *** ********* ********* ******* *** ********* *** ********** *** ***/** ***** / *** ***************** ** ******** ** *** ***** ****** ** **** **** *** ********* *** **** ******* ******** **** * ****** ****** ******* **** ****** *** ***** ****** *** *** ******** **********.

****** *** **** *** ******** ** ********** ** ****** ** *** **** **** *** ***** ****** ******** *** ******** ***** **** *********** (**) ***** **** ******* ** **** ****** ** ****** (** *** **** **********) *** ** ****** *** ** *** ******** ******* (*) *** ***** ******* ***** ********** **** ** ********* ***** (*) *** ********’* ****** ***** ***** ** *** ****** ******** ** *** **** *** ** (*) *** ******** *** **** ***** ** *** *********** ****** *** ***** *** ******** ****** ** *** *** ********** **** ******** ** *** ***** ****** ** (**) ******** ****** ** ******** ********** *** *** ****** ** *** *** ********** **** ******** ** *** ***** ******  ** ******** ***** ** ****** *** ** *** ********* *** ***** ************* **** ******** *** ********** **** ******** ** *** ***** ***** *** *** ********** *** ******** ** ******* *** ****** ** *** **** ***.

******** **** ******* *** **** * **/* ********* *** ********** *** ******** ********* ********* ** *** ***** *** ***** ********** ** ********** * ********** ***** ********** **** *** ********’* *********** *** *** *** ** *** *********.

******** **** ****** **** ******** ** **** ** ******* ********* ***** ** *** ***** **** *** ********** ******* *** *** ********’* *********** ** ****** *** **** *** ******** *** *** ******* ** ***** * ************ ****** ** *********** ** ****** *** **** *********** ********** *** **** ********* ** ******* ********** *******.

******** *********** ******* ****** ** ******* ** **** (*) ****** *** ***** **** (*) ****** ******** *** * ***********.

*** ******** ***** ************ **** *** *** ********** *** *** *** ******** **** ******** ***** **** *** **** ** *** *** *** ******** *** ***** ***** ***** ************ **** ** *** ******* *** *** ******.

Note 2 : ********** ***** (********** ** ** *** ***) ***** ** ******** ****** ** ****** *** ********** ********** ** *** ********** ******** **** *** ****** ************ ** ***.

Note 3 :  **** *** ** *** ******* ** ******* **** ** *** ********* (********** ** ****).

 

I.

Ancillary services for Workforce Management

 

Description of Item/Unit of Measure

Frequency

Fee

1.WFX Enterprise Interface

 

 

a)WFX Enterprise Interface Maintenance and Support Fee ( Note 1 )

 

 

§ WFX Transaction Volume Tier (Note 2) (Note 3) (Note 4)

 

 

-* ** ********* (******* *** ************)

*******

$****

-********* ** ********* (******* *** ************)

*******

$********

-********* ** ********* (******* *** ************)

*******

$********

-******* **** ********* (******* *** ************) – *********** *** **** ********** ********* ******* *** *********** ******

*******

$********

2. WFX Scheduling and WFX Resource Allocation Manager

 

 

a) WFX Scheduling Implementation Fee for Trial and Initial Implementation  (***** ** **(*)) (Note 5)

********

$*********

b) WFX Resource Allocation Manager Implementation Fee for Trial and Initial Implementation (***** ** **(*)) (Note 5) (Note 6)

*/*

******** **** *** Scheduling

c) WFX Scheduling Implementation Fee for Additional FC(s), (***** ** **(*))

********

$*********

d) WFX Resource Allocation Manager Implementation Fee for Additional FC(s) (***** ** **(*) (Note 6)

*/*

******** **** *** ******** ********** *******


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

e) Monthly Service Fee For Xfinity Home National Dispatch Center (***** ***) (Note 7) (Note 8) (Note 9)

*******

$********

Note 1: *** ************** ** *** *** ********** ********* ***** ** ****** ******* *** ******* ********** **** *** ******** ***** * ******* *; *********** ** ******** **** *** ***** *** ******** *********** ******** ***** *** *** **************** *** ***** *** ***** ** *** ************** ***** ** ******* ** ******** ****** **** ********* ** ****.

Note 2: ***** ************ *** ************ ******** *** ***** ** ******* *** ******** ** ********** **** *** *** *********® / *** *********® *** *********** *** ************ *** ****** (“***”) **** ** ******** ** ******** ** ******* ** (********* ***** *****), ********* **** (******** ***** / *** ************ *** ****** (“***”) *** *** *** ********** ***********).

Note 3: *** ******* *** *********** ****** ****(*), ** *** ***** ** ******* * ** *** ***** ****** *** ******** ** ** ********** *** *** ***********; **** *** ********* ** *** ******* **** ********* ***** ***** ** *********** ** *** ********* ** ********* *****  *** ******** ** ******** *** ********* *** *********** ****** ** *** ******* ******* ****** *** ******* *** ********** ********* *********** *** ******* *** ** *** ********* *** ******* *** *********** ****** ***** ** $********.

Note 4: *** ******** ************ ******* *** *** ****** *** ** ******** ****** ******* **** *** ***** ********* *** ******* ******** *** ********* **** *** ******** **** *** ********* ** ****** ******** ****** ************* ***** *** ******* ****** *** ******* *** ********** ********* *********** ****.

Note 5: *** ******* ************** ** *** ********** *** *** ******** ********** ******* ***** ** *** ***** ** * ******** ****** **** ********* ** **** *** ***** ******* *** **(*) ** *** ********* (*** "*********") ********* ** **** ********* ** **** *** *** (*) ******** ******* ** ** ********* ****** *** ***** ****** ** *** ********* *********  *** ************** *** **** ** ******** ** *** ***** ** *** ***** ******* ***** ********* *** ********* **** ******.  

Note 6:   ** * ************ ** ******* *** *** ******** ********** ******* ******** ********** ******** **** ** * ******* *** ********.

Note 7: *** ******* ******* *** ** * ***** *** **** ******** ***** ** *** *** ******* ******** *** *** *** *********** ** *** ********** ******** ** *** ** *** ******* **** ******** ******** ******.

Note 8: *** ***** ** *** ******* ******* *** *** ******* **** ******** ******** ****** *** **** ********** ***** ** *** *********** **** *** ******** **** ***** **** ** ********* **** *** ** ****** *** ********** *** *** ******** ********** ******* ****** *** ********* ***********  *** ******** *** ***** ** ******** *** ***** ** *** ******* ******* *** *** ******* **** ******** ******** ****** ** *** ******** *** *** **** ** ***** **** **** ** ********* ** ****** *** ********** *** *** ******** ********** ******* ****** *** ********* ********** ****** ****** (**) **** **** *** **** ** ***** ****** **********.

Note 9: ****** ******** ***** ** ****** *** *** ** *** ********** *** *** ******** ********** ******* ****** *** ********* *********** *** ******* ***** **** *** ******* ******* *** *** *** ******* **** ******** ******** ****** ***** ** ********** ** *** ******* *** ********** *** *** ******** ********** ******* ********** **** ** ** *** ********* **** ** **** ********** *** ******* ***** **** ** **** ***** ** ****** *** *** ***** ************* ** *** ******* ******* *** *** *** ********** *** *** ******** ********** ******* ** *** ******* **** ******** ******** ****** ***** ** ******* ** * ******** ****** ** *** **** *********** ** *** ******* *** ********** *** *** ******** ********** ******* ********** ***.

 

J.

Third Party Software That May be Procured Through CSG

 

*** ***** ***** **** *** ******* ** ****** *** ***** ***** ****** ********** *** **** ** ******** ** ******** ** ***’* **** ******* ******  ******** ** ****** *********** *** *** *** *** **** ********** **** ***** ***** ***** ******** **** *** ** ******** ** *** ********** ***********.

 

K.

Content Direct System and Services

 

*** ***** *** ********** ** ********’* *** *** ***’* ********** ********* ********** ***** ** ******* ****** ****** *** ******** ***** ** ******** ** *** ***** *** ********** ** *** ** ******** ******** ***** *** ******** #*******.

 

 

V.

Technical Services/ Implementation Services/Training

 

A.

Technical Services/Professional Services

 

1.

Technical Services/Professional Services (Note 1)

 

The hourly rates listed in the table below are for general guidance only.  Actual fees may vary depending on the project requested by Customer via a Service Request Form.  All projects and the associated fees shall be set forth in a mutually agreed upon Statement of Work.

 

Description of Item/Unit of Measure

Frequency

Fee

1.Additional Annual Support Commitment Hours (Provided in addition to the Services Commitment Hours) (*** ******* *** ****) ($******** **** *** ***)

*** *******

$******

2.Professional Services (*** ******* *** ****)

*** *******

$******

Note 1: *** ** ***’* ********** ********* *** ********* ******** ********* ** ******** ******* *** *** ** ****** *********** ** ******** ********* ********** *** ******* ***** ** **** ***** ********* *** ***** *** **** ********* ********* *** **** *** **** ********* *** ** ****** * ******* ** $****** *** ****.

 

2.

Services Commitment Fees

 

Description of Item/Unit of Measure

Frequency

Fee

1. Contract Year through 6/30/2015

******

$************

2. Contract Year through 6/30/2016

******

$************

3. Contract Year through 6/30/2017

******

$************


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

4. Contract Year through 6/30/2018

******

$************

5. Contract Year through 6/30/2019 and beyond through the Term of the Agreement, including any extension periods as described in Section 3.4, Services Commitment of the Agreement (Note 4)

******

$************

Note 1: Beginning upon the Amendment Effective Date, *** ****** ** ******* ************** (******) ***** ** ******** *** ********** ******** ***** ********* ** ******* *** *********** *** ********* ******** ********* ** ******* *** ********* **** ** ******* *** ******** *** *********** ** ***’* *** ******** ******* ******* ****** ********* ****** ** *** ******* (“****** ******* **********”).

Note 2: The Services Commitment Fee is an ****** **** ******** ** ***** *********** ******* ** * ******* ****** ** ********** **** *** **** *** ***** ** *** ***** ******  *** *** ******** **** ***** “******** **** ******* */**/****”* ******** *** ******** ************** (******) ***** ** ********* ** ********** **** *** ******** ********** **** *** ***** ** *** ***** ****** *** *** ********** ******** **** ******** ** * ******** ****** ********* ** *****  *** ****** ****** ******* ********** ***** ** *** *** ** * ******** **** ***** ** ********* *** ***** *** ** ******* **** ** *** **** ******** ****.

Note 3: ** ********** ******** ********** **** ***** ****** ******* ***** **** *** ********** *********** **** ** ** ********* ****** *** *** ******* *********** *** ***** *** *** ******** **** ********* *** ***** ******** ** * ********* ** **** ******** ** *** *********.

Note 4: *** ************* ********* ******* **** ********** ** ***** ** *** ********* ***** ***** ** *** **** *** ***** ** *** ***** ***** ********* ** **** ** **** *** **** ********** ******** **** ******* *** **** ** *** ********** ********* *** ********** ******* .

 

B.

Implementation and Startup Services

 

§

All implementation and startup services, provided by CSG and the associated fees shall be set forth in a mutually agreed upon Statement of Work.

§

Interface startup service, certification and processing changes to existing addressable controllers, provided by CSG and the associated fees shall be set forth in a mutually agreed upon Statement of Work.

 

C.

Additional training and documentation

 

1.

User training at CSG facility

 

Description of Item/Unit of Measure

Frequency

Fee

1.Single seat (*** ***** *** *****)

*** *******

$******

§

Training materials will be provided by CSG.

§

Dates of specific class offering will be published by CSG.

§

****** ********* ******* *** ** ******** *** $*****.

§

******** **** ** ******* * *** ************ *** ** ***** ** ********* ** *********** ****** **** (*) ******** **** ** *** ***** *** ** *** ********* *****.

 

2.

Virtual classroom training

 

Description of Item/Unit of Measure

Frequency

Fee

1.Per instructor, per hour

*** *******

$******

2.Per port, per hour (******** *** ********* **** ******** ***** ****** *** *** *****)

*** *******

$*****

3.Per port, per hour (******** ******** **** ******** ***** ****** *** *** *****)

*** *******

$*****

§

One copy of class training materials will be provided by CSG for duplication by the customer in a quantity necessary to distribute to all learners.

§

Classes offered are generic to the application.  Custom developed classes can be arranged by a Quote.

§

******** **** ** ******* * *** ************ *** ** ***** ** ********* ** *********** ****** * ******** **** ** *** ***** *** ** *** ********* *****.

 

3.

On-site user training at Customer’s requested location

 

****** *** ******* *** $ ******** *******

§

*** **** ** ******** ********* **** ** ******** ** *** *** *********** ** ******** *** *** ********.

§

* ******** *** ** ******* ** *** *** ******* ** ********’* ******** *** ***** ***** (** * ******* *******) *** ***.

§

**** ******** ** *********** *** ********* * ******** **** **** * ******** *** ***** ******* *** ********** ****** ** *** **** ****** **** ******* **** ***** ** ***** ** ********.

§

****** ********* ******* *** ** ******** *** $*****.

§

******** **** ** ******* * *** ************ *** ** ***** ** ********* ** *********** ****** ** ******** **** ** *** ***** *** ** *** ********* *****.

§

********* ***** **** ** ***** ** ****** ******** *** *****.

 

4.

Vantage training

 

 

Standard Class Size

Rate (On-site)

(Per trainer, per day)

Additional Students

(Per student, per day)

Rate (at CSG facility)

(*** ******** *** ***)

Basic

*

$********

$******

$******

Advanced

*

$********

$******

$******

Database literacy

**

$********

$******

$******


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Note: All classes include the relevant training materials and documentation.

 

5.

BCE Training Development-West Division

 

Description of Item/Unit of Measure

Frequency

Fee

1.  Training Module (*** ******) (Note 1)

******

$********

Note 1: **** ******** ****** ******** ** ** *** (**) ***** ** *********** **** *** *****  ** **** ***** *** ******** *** * ******* ******** **** ** ****** ** *** *********** ****** **** *** **** **** ** ****** ** *** (**) ******  ********** ******** ******* ***** ** ********* ******** ** * ********* ** **** ******** ** **** ********  ******** ***** ** ******** *** ****** *** *** ******** ****** ******* ******** ** * ********* ** ****.

 

D.

Equipment Installation /Technical and Engineering Support Services

 

1.

********* ************ ******* ** ****** **** *****

 

*********** *** ********* *** ************** ********* ************ ****** *** ***** ** *:** ** *** *:** ** *** ****** ******* ****** ** ** ********** ****** ** *** ********* ** * ******** ******* ** **** * ****** ********* ******* *** *********** **** ****** ** * ******** ** * ******** *** ******** **** ** ****** ** * **** ** $****** *** **** (******* ** * ****) *** ********* **********.

 

2.

********* *** *********** ******* ********

 

*** ******* *** ********** ********* ************ ************ ******** *** ********* ********** ** ******** *****/****** ********* ** ******** *****/**** **** ********:

§

********* ****** ***** ** $****** *** **** (******* ** $******** *** ***)

§

********* ******* ******** *** ***** ** $****** *** **** (******* ** * ****)

§

*********** ****** ***** ** $****** *** **** (******* ** $******** *** ***)

§

*********** ******* ******** *** ***** ** $****** *** **** (******* ** * ****)



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Schedule F.1

LISTING OF PRODUCTS AND SERVICES INCLUDED IN THE BSC

 

The below table provides the following information: (i) the Products and Services included in the BSC for Non-Rated Video and Non-Rated High-Speed Data and Residential Voice Services, (ii) the BSC Threshold Level (as defined in Section II.B.1 above) for the Products and Services included in the BSC, and (iii) the Pricing for Excess BSC Threshold Level for the Products and Services included in the BSC.

 

*** ********

*** ********* ***** ******** ** ** *** *********

(***/**)

******* *** ****** *** ********* ***** (** **********)

I.**********

 

 

A.********* ******** *** ********* ***** *** ********* ********** **** *** *********** ***** ********

 

 

1. ******* ******* *** **** ****** ** ***** ********** ****** ******** ******* ****** ******** **** ***** ****** ******** ******** *********** ** ***** *** ****** ** ****.

**

**

2. **** ********** ****** ****** ** *** ***** **** ** ** ***** ********* ************  **** **** ****** ********** ******* *** *** *********** *** ******** ** ******** “***** **” ******** ******* ********* ********’* ****** *********  ******** **** ******** ** ******* *** *** ******* *** **** **** ****** *********.

***

*****

3. *** *** **** ************* ******** ******** ******* ******* *** ******* *** ***** ******** ********** *** ******* ******** ** *** ******** *********.

**

**

4. ********* ********* ********** **** *********** ********** *************** ********** ********* ***** ******* *** **** *** ********* ******** *** *** ******** ** *** ********* ******.

**

**

5. ****** ******* *** ****  *** ***** ******* ****** ******* ** ********’* ****** ***** ***** ****** *** **** ******** ******** (“***”).  ** ********* **** ******** *** **** **** ****** ** **** **** *** (*) *** ** **** **** ***** (*) ****** ** ********** ****** **** ** ******* ********’* ******** *** ******** ******** ********.

***

*****

6. ******** *********** *** *********** ********:

 

 

a) ******* ****** ****** ******: (*** ****** *********)

**

**

b) ***** ** *** ******* *** *********/****** *** *** ******

**

**

c) **** ********* *** ********* *** ********** **** *** *** ***** **** ******* **** ******** ********** ****** ***** ***** ****** ***** ********* ****** ***** ***** ***** ***** ******* ***** ******* **** ***** ******** ***** ********* ***** ******** ********* ****** ***** *** **** ***** ****.

**

**

d) ********* ****** (******** *** ************)

**

**

e) ***** ******/*****

**

**

f) ******* ****** ********:

 

 

§ ********* ******** *******; ********* ***** *******; ********* *****/*** *******; ********* ***/********* *******; ** ********* ***** ****** (*** **** ******* *** ****** *********)

**

**

§ ****** ******* ***** (********) (*** ******* *** ****** *********)

**

**

§ ******* ***** ****** ** **** ** ******* (*******) (*** ******* *** ****** *********)

**

**

§ ******* ******** ****** ** ******** (*** ****** *********)

**

**

g) **** ********:

 

 

§ ******* ****** ** ********* ******* (*** **** ***** *** ****** *********)

**

**

§ ******* ****** *** ********* ******* (*** ****** *********)

**

**

h) **** ****/****** **** ************* ******** ********:

 

 

§ **** **** **** **** ***** (*** ****** *********)

**

**

§ **** ******* **** **** ***** (*** ****** *********)

**

**

§ **** ********* ******* **** (*** ****** *********)

**

**

§ **** **** ***** (*** ****** *********)

**

**

§ ******* **** **** **** ***** (*** ****** *********)

**

**

§ ******* ******* **** **** ***** (*** ****** *********)

**

**

§ **** ***** ******* (*** ****** *********)

**

**

§ **** *** **** ***** **** ******* (*** ****** *********)

**

**

§ **** *** **** ************ (*** ****** *********)

**

**

§ ************ ******* (*** ****** *********)

**

**

B.********* ******** ******** ** *********** ***** ********* **** ********** *****:

 

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

*** ********

*** ********* ***** ******** ** ** *** *********

(***/**)

******* *** ****** *** ********* ***** (** **********)

****: ********* ******** ******** ** *** *** ******* ******** ********** *********** ******* ************ *** ******** *** ****** ***** ********** (****/****** *** **********).  ******** *** *** ************ ******** *** ********* ********* ********* ********* *** *** ******* *** ******* ********** ***** *********** ****** *********** ***** ******** ***** *********** *****

********** ***** ***** ******** *** ********* **** ***** *** ****** *** *********** *** ************** ** ********.

 

 

1. ***** **** ** *** ******** *********** **** **** ** *** ** ** ******* ******** ********* **** ******* ***.

***

*****

2. ******* ********** ******* ********** **** *** ******** ** *** ******* ***** ************ ********* **** **** ** ******** ** ******** ** ******* *** ************ ** ***** ****** ******* * ***** ***** ** ********’*.

***

*****

3. ******* ********** ******* ********** **** *** ******** ** *** ***** ********* **** **** ** ******** ** ******* ******* ******* *********** **** ** ******** ** *** **** ** ******** *********** ** ********’*.

***

*****

4. ***** ***** ********** ******** ********* ********** ** ***’* ******* ** ******* ******* *********** **** ********’* ******** ************  ******** **** ******** **** *** ********** ********* ******* ********** *** ******** ******* ********* *********.

**

**

5. ******* ********** ******* ********** **** *** ******** ** *** ******** ***** ***** ************ ********* *** *** ******** ** *** ******* ***** ***** ************ ********* **** **** ** ******** ** ******** ** ******* *** ***** ***** ************ ******* ******* * ***** ***** ** ********’*.

***

*****

6. ******* ********** ******* ********** **** *** ******** ** *** ***** **** ********* ** * ***** ***** ** ********’* **** **** ** ******** ** ******** ** ******* ********* ** ************ ***********.

***

*****

7. ******* ********** ******* ********** **** *** ******** ** *** ***** ***** (******* *******) ********* **** **** ** ******** ** ******** ** ******* *** **** ** ******** ******* *** ***** *********** **** *** ** ** ******** *********** ** ********’*.

***

*****

8. ******** ********* – ******* *********** ***** ******* **********.

**

**

9. ***** ******** ************  *** ********* *********** ***** *** ******* ** ** ******** *** ********* ** ******** ** ***** ******* ***** ******** *** *** *** **** ** ***’* ******* ******** ************** ** ***************  ******** ***** ** *********** *** *** *** *** **** ********** **** ***** *****.

§ ******* *********

§ ****** **********

§ ************* ************

§ ************ ******** **********

§ ****** ******* *** **********

§ ****** *** ******** ** ***** *******

§ ***** ***** ************ ** ***** ******

§ **** **********

§ ***** ***** ******** ******** ** *** **G

§ ******** *** ***** *********** ******** *** ********

**

**

C. **** ******* (*********) ************** **** (************ ************* ***********) *** ********** **** ************

**

**

D. ******* ********** *** ******** ******* ****** (***)

**

**

E. *** ***** ******* ***** **** (****) ********** ******* *** ************  ********** ******* ** ******* ** *** ******* ****** (***) ***** *** *****  ********** **** **** ** ******* *** ***** ********* **** ****** ***** *** **** ** *** ***** ** * ******** ********* ** **** ** ****** ** **************  *** ********** ******* *** *********** ****** **** ********** ******** ********* ********* ********** ********* *** ********* ******** ******** ********* *** ********* ******* *** ********* ******* ******** **********  **** ******** ******* **** ** ******** ** ****  ****** *********** *** ******* ** *** ****** **** ******** **** ** *** ***** ** * ******** ********* ********* ** *****  ****** ************ ******** *** *** *** ******* *** ******** *** ****** **** ******** ** ******* **** ******* ***** **** ****®*  ********** ******* *** *********** ** ******** ** ******* ********** ****** **** *** **** *** ******* *********** ******** ** *** ******* ** *** ****** **** ******** ******** ** *** *** ** *** ********* ********** ********* ** *********** ************* *******.

***

*****

F. ******* *********** ********** *** **** ********  ***** ** ******* **** ****** ********** ***** *********** *** ** ********* ** ********** ***** *********** **** *** ***********  ***** ** ******* **** ****** ********** *** ***** ******** ******** ********** **** ***** *** ****.

**

******* **** ****** *********

G. ***** *********  ******** ***** ******** *** *******.

***

*****

H.*******

 

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

*** ********

*** ********* ***** ******** ** ** *** *********

(***/**)

******* *** ****** *** ********* ***** (** **********)

a) *** ******* ***** *** ******** ************* *** ***** *********   *** ******* ********* ******* *** ******** *********** ***** ******** ******* *** ****** ******* ******* ******** *********** *** (*) *** ******* **** *** ******* *** *********** *** ***** ***** ******** **** ******* ******* ********* *********** (*****) (*** **** **/***

*******) (******** ******** ** ***** ***** ******** ******** ** ****** *** ******* *********  * ******* **** ** *** ******* *** (*) ** ******** *********  *** ******** * *** (**) ******* ******* **** ** *** ****** ** ** *** (**) ******* ************** ***** * ****** ******* **** **.

 

******** ****** ** *** *******®* ******* ** *** ********* ******:

§ ****** ****** * ********* ****** ** ******** ****** **** *** *** **** *******  ******** **** ****** ******** ** ** ******* ******  ********* ****** ****** ****** ***** *** **** *********.

§ ******** *********** ****** ****** * ****** **** ***** ** ******** *********** ****** *********.  ******** *** ******** ************ ********* *** ********** ******** ********* ***** *** *****  ******** *** ***** ** ** *** **** ** ****.

§ ********** ******** * **** ***** ********** ******** *********** **** **** ***** **********  ******** ********* *** ********* **** ***** ** ********** **** *** ******** ****.

§ *** ********* ********** *******

§ ******* ******

§ ***** ******** ******

§ *********** ***** *******

§ ******* ********** ****** ****** *******

§ ******** ******** ******

§ *** ***** ***** (******* **** ** ****** ** ** **** ********  ** ******** ******** ********* ****** ** ***** *** ******* *** **** *****.)

§ ******* *** ***** *** *** ******* *******

§ ***

§ ******** *****

§ ******/******** ******* ** *** ********** ***** ******

§ ******* ***** ******* **** **********

§ *** ********

§ ****** *** *** **** ******* * ************ **** ** ******** ** ******* *** *********** (**) ****.

§ ********* ********** ** *** *******®

 

***

*****

b) ******* ********* **** ******* ********* **** *****:

§ *** *** ******** ******** ** * **** ********* *********.

§ ******** ***** **** ****** ** ***’* ******* ********* **** ********* *****  *** ********* **** ********* *********** **** ******* ******* **** *** ****** **** ***** ********** ********** ******** ******** ****** ********** *** ********** **** **** ****   *** **** **** **** ********* ** **** **** **** ******* **** ***** *** ***.

§ ******** ***** **** ****** ** ***’* **** ******* **** (“***”) ********* ***** ***** ** * ********* ********* **** **** ****** *********** **** *** *** ******* ********.

§ ******** ***** **** ****** ** ***’* ******** *********** ****** ****** ********* ***** ***** ******* ***** *** ******* ** ***** *** ******* ************ ********* ** *** ******* ****** ********** *** *** ******* ** ******** ********* ************ **** ******** ****** *** ************ *** *** ***** ******** *********** ********* ** ***'* ******* *******  ******** *********** ****** ****** **** ** *** ** ****** *********; ********* ** ********* **** ** *** ***** ** * ******** ********* ******** (****** *** ** ***).

§ ******** ***** ** ******** ** ********* ****** ** ***’* ******* ********* **** ********* ****.

**

**

c) ******** *****

§ ******** ***** *** ********* ************ **** ****** **** ******** ***** *** *********** (** *********) ********** *** **** ** ** *** ********* ********** ** *** ** ****** ** ******** (“******** **** ** ****”).  *** ******* *** ***** ** ****** *** ****** ***** **** ******* **** *** ******** ** ******** *** ***** ** *** ***** *** ******* **** ******* *******  ******** ***** ************ *** ** ********* ** *** ********* ****** ******* ******** ** ** ******** **********  ******** ******** *** ******** **** ** **** ** ******** *** ********* *****  *** ********* *** ********* **** ** *** ******** **** ** **** ***** *** ******* ** **** ** ** ******** ** *********** (**) ******  *** **** ********* * ****** **** ** **** ********* ******* *** *** ******* ****** (***) ******  ** ********’* ******** *** **** ******* * ****** **** ** ** ********* ******* ** *** ******** **** ** ****.

**

**



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

I. ******* ************ * ******* ************* ******* (***) *** ******* ************ – ******** ***** ******* (***)

**

**

J. **** ****** ******** (***)

**

**

K. *** ********** ******* ******* *** ********’* ********** ********.

**

**

L. ***’* *** ******** ******

**

**

M. ****** *** (*** **** *****) *** ************ **** ** ******** ************* (***** *************)

**

**

N.***’* ***** ********** ******* *** ******* * *** *** ******** ******** **** ***** ******* *** *** ******* ** *** ******* *** ******** *** ****** **************  *** ******* *** ******* ** *** ******** *** ** ******* *** ** ********* ******.

 

§ ************* ********** *********** – ***** * *** ********** *********** ** ***** ***** ** **** *** (*) *********** ****** *** *** (*) ******** ****** **** ** ******** *************  **** *********** ******** ****** ******** ******* ** *** ***** ****** ***** *** *********** ****** ********** **** ***** *** ******* ** ** ************  ***** ** ** ******** ******** ** *** ************ ********* *** ********* *** ******** ****** ******** *** *** ******** ** *** ******** ******** ** *** ********* *** *** *********.

 

§ ** ** ********* ******* *************  *********** ****** ** ********** ***** **** *** ****** ** ******* ******** **** ***** ********** ********* **** ******** ** ********** ******** ********* ******** ** ************.

***

*****

O. *********** ******* *** *** **** (*** “****”) ****** **** *********** ** ** ****** ** ** ***** *** ****.

**

**

II.**********

 

 

A.***** ******** ***** (***) *** ********* ****** ************** (***)

 

 

1. ********* ******* ******** *** * ******** ***** ***** *** *** *** ************.

**

**

2. *********** ******* ********** **** ********* ***** ***** *** *** *** *************  ** *********** ****** ******* ** ******** ******** ** *** ** ******** ** ********’* ****** **** ** ******** ***** ***** *** ** *** *********** ********* ** **** ** ******* ***** ***** *** ** *** *********** **** ** **** ********* ** ***.

**

**

B. *****

 

 

1. ***** ********* ******* ******** *** * ******** ****** *********** **** ******* ********** **** ** **** ******* ********** **** ******** ******* ********** ***** ********* ******* *********** *** ******** ********* ***** ***** *** ************* *** ****** *** ****** (***** *** *** *** ***********).  ******** ** *********** *** ***** ***** ****** ********* ** ******** ** ****** *** ****** (***** *** *** *** ***********) *** *** ********** ****.

**

**

2. ******* ********* (****** ***********).  *** ** *** **** ********** **** *** (*) ********* ************* **** *** ** *** ****** ******* ********* ************  *** ********** ********* ************** ** ******* ** *** ******* ********* ************* *** ** ********* ***** * **** ******** ********* ** **** ** ***’* **** ******* *****.

 

***

*****

C.********** ****

 

 

1. ********* ******* ******** *** ********* ***** ***** ********** **** ************ ************.

**

**

2. **** ***** **** *** ***** ****** ********** (*** *********** ******)

**

**

D. *** *******

**

**

III.******* ***********

 

 

A.******** ******** ** ****** ********* (***** *** ****)

 

 

1. ******* *******/******** ***** *** ********* ****** **** *** **** **** ***** ******* *********** ******** ****** ****** **** *** **** **** *** ******* ******** *** **** *** ****** ****** **** *** **** **** *** *******.

**

**

2. ********* ***** ******* **** ******** *** **** **********.

**

**

3. ****** *********** – ******* ****** *******.

**

**

4. ********* ******* ********* ****** (**) ****** ** ******* ********* ******** *** ****** (*** ********* **********).

***

*****

B. **** ******* ******** (********** **** ***********) ********** **** *********** *** ******* **** *******.

**

**

C. **** ******* )************ *******)

**

**

D. ********* *****™* ***** ******* (**********) ********* ****** (**** ** ***********) *** ******** ****.

***

*** ******** ***

E. ******* ************ (************ *********** ******* ********* *** **********/***** ******** ******* ***** ********* *** ** ** *** ******)

**

**

F. ******** *** ********* ****** **** (******** ****** **** ******** ************* *** ***********)

**

**

G. ******* *******

**

**


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

H. ******** *** ********* ********** ******* (***) (******** *** ***** *** ********

************* ************ ***** ******* ************ ** ******* ********** *** ***********)

**

**

I. **** ******** ******** (******* *** **********).  **** ******** ********* ** *** * ********* ** ***** ******* ******** *** ******* *** ********** ******** ******** ********* ********* *** ******** **** ***** ** ******** *********** ******  ********** ******* *** ********* *** ***** ** ********* **** *******.

**

**

J. ***** ******* ******* ********

**

**

IV.****** ********** *** ***********

 

 

A. **** ********** (******* *********)

**

**

V.****** *** ************ ********** ********

 

 

A.****** ********** *********   ******** ****** ******** ************ **** ** ***** ***** *** ************ **** ** ********* **** *** ****** ********** ******** ********** **** ***** *** ********** **** ************  ******** ***’* ******** ********** *********  ****** *********** *** *********** *** *** ******** ** ******* ******** ********* **** **** **** **** ****** ************   *** ****** ********** ******** *** *** ********** **** ***** ** *** ***** ** * ******** ****** **** ********* ** ****.

**

**

B.************ ********** *********   ***** ********* *** ******* ********* ************ ********** ******** ********** **** ***** *** ********** **** ************  ******** ***’* ******** ********** *********  *** ************ ********** ******** *** *** ********** **** ***** ** *** ***** ** * ******** ****** **** ********* ** ****.

**

**

VI. ********** ******** *** *************

 

 

A. *********** ******* ************* *** ******** *** ******* ************* *** ***** (***’* ******** ******* ** *****://*****************).

**

**

VII. ***** ************/*********

 

 

A.******** ********** ********** ****** *********** ******** ********** ********** ****** *********** *** *** (*) ******* ****** *** *** (*) ******** *******  **** ****** ******** ** ******** ** ******* ***** **** *** **** ***** ******** ****** **** *********** ** ********’* ************  ********** ******* ** ******* ** ***** **** (**) ***** *** ******  ********** **** **** ** ******* *** ***** ********* **** ******* ***** *** **** ** *** ***** ** * ******** ********* ** **** ** ****** ** *************.

***

*****

B.***** ******* ******* ******** ********** ******* *** ************   ********** ******* **** ******** ***** *** ********** ** ***** ******* ******* ******** ** ***********  ********** ******* ** ******* ** *** ******* ******* (***) ***** *** *****  ********** **** **** ** ******* *** ***** ********* **** ****** ***** *** **** ** *** ***** ** * ******** ********* ** **** ** ****** ** **************  *** ****** ********** ******* *** *********** *** ****** **** ********** ******** ********* ********* ********** ********* *** ********* ******** ******** ********* *** ********* ******* *** ********* ******* ******** **********  *** **** ** *********** *** ********** ** ***** ******* ******* ******** ********  ****** *********** *** ******* ** *** ******** **** ** *** ***** ** * ******** ********* ********* ** *****  ****** ************ ******** *** *** *** ******* *** ******** *** ******** ** ******* **** ******* ***** **** ******  ********** ******* *** *********** ** ******** ** ******* ********** ****** **** *** **** *** ******* *********** ******** ** *** ******* ** *** ***** ******* ******* ******** ******** ** *** *** ** *** ********* ********** ********* ** *********** ************* *******.

***

*****

C.****** ***** ******* *********   ********** ******* **** ******** ***** *** ********** ** ****** ***** ******* ********** ******** ** ***********  ********** ******* ** ******* ** ****** (**) ***** *** *****  *** ****** ********** ******* *** *********** *** ****** **** ********** ******** ********* ********* ********** ********* *** ********* ******** ******** ********* *** ********* ******* *** ********* ******* ******** **********  *** **** ** *********** *** ********** ** ****** ***** ******* ********** ******** ********  ****** *********** *** ******* ** *** ******** **** ** *** ***** ** * ******** ********* ********* ** *****  ****** ************ ******** *** *** *** ******* *** ******** *** ******** ** ******* **** ******* ***** **** ****®*  ********** ******* *** *********** ** ******** ** ******* ********** ****** **** *** **** *** ******* *********** ******** ** *** ******* ** *** ****** ***** ******* ********** ******** ******** ** *** *** ** *** ********* ********** ********* ** *********** ************* *******.

***

*****

D.******* ******* ***** *********   ********** ******* **** ******** ***** *** ********** ** ******* ******* ***** ******** ** ***********  ********** ******* ** ******* ** ****** *** (**) ***** *** *****  ********** **** **** ** ******* *** ***** ********* **** ****** ***** *** **** ** *** ***** ** * ******** ********* ** **** ** ****** ** **************  *** ****** ********** ******* *** *********** *** ****** **** ********** ******** ********* ********* ********** ********* *** ********* ******** ******** ********* *** ********* ******* *** ********* ******* ******** **********  *** **** ** *********** *** ********** ** ******* ******* ***** ******** ********  ****** *********** *** ******* ** *** ******** **** ** *** ***** ** * ******** ********* ********* ** *****  ****** ************ *** ******** *** *** *** ******* *** ******** *** ******** ** ******* **** ******* ***** **** ****®*  ********** ******* *** *********** ** ******** ** ******* ********** ****** **** *** **** *** ******* *********** ******** ** *** ******* ** *** ******* ******* ***** ******** ******** ** *** *** ** *** ********* ********** ********* ** *********** ************* ********  *** **** **** *** ******* ******* ***** ******** ** *** ******* *** ******* *** (*) ******* ******** ** *** *** ********.

***

*****


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

E.*** ** ******** *** ******* ********* ********** ******* **** ******** ***** *** ********** ** ** ******** *** ******* ******** ** ***********  ********** ******* ** ******* ** *** ******* ******* (***) ***** *** *****  ********** **** **** ** ******* *** ***** ********* **** ******

***** *** **** ** *** ***** ** * ******** ********* ** **** ** ****** ** **************  *** ****** ********** ******* *** *********** *** ****** **** ********** ******** ********* ********* ********** ********* *** ********* ******** ******** ********* *** ********* ******* *** ********* ******* ******** **********  *** **** ** *********** *** ********** ** ** ******** *** ******* ******** ********  ****** *********** *** ******* ** *** ******** **** ** *** ***** ** * ******** ********* ********* ** *****  ****** ************ ******** *** *** *** ******* *** ******** *** ******** ** ******* **** ******* ***** **** ****®*  ********** ******* *** *********** ** ******** ** ******* ********** ****** **** *** **** *** ******* *********** ******** ** *** ******* ** *** ** ******** *** ******* ******** ******** ** *** *** ** *** ********* ********** ********* ** *********** ************* *******.

***

*****

VIII.*** ******** ********

 

 

A.******* ************ *** ***** ********** *****

 

 

1. ********** ******* *** ***** **** (*** *******), **** ****** *** **** ***** ***** ***** **** *** ****** *******/******* ******** *** ********* ******** *** ******** *** ********* *********** *** ********* ********** (****** ***********), *** *** ******** ******** ** ***** *********** *** *********** *** *** ******* ********* ************ ********** **** ***** ********* ********* *** *** ******* *** ******** *** *********** ************ *** *********.

**

**

2. ******* ******** *** ***** **** (***********), **** ****** *** **** ***** ***** ***** **** *** ****** *******/******* ******** *** ********* ******** *** *** *******.

**

**

3. *** ******** ******* ******** ********* ******* ******** ****** ******** ****** ************ *** ******** ***********.

**

**

4. ***** ***** ************* ******** *** *********** ***** ********.

**

**

5. *********** *********** **** (***)

**

**

6. *** ******* ********* ****** * ********** ******* *** *** ********’* ******** ******** **** ***** ******** *** ** ********’* ************  *************** *** ***** ********** ** *** ********** **** ********** ******* ** ******* ** *** ********** ***** *** ********* *********** ********* ********* ** ***’* *** ********* ***** ***** ******* ******* ****** *** ******** ** ********* ***********.

 

*** **** ******* *** ******** *** *********:

§ *********** *** *********** ***:

§ ***** ******** (“***”)

§ ******** **** *******/******** *********

§ ******** ********* ************* ****

§ ***** ***** ************* ******** *** ****** *** ********

§ ************** ******** *** *** *********:

§ ***

§ ***

§ ******** **** *******/******** *********

§ ******** ********* ************* ****

§ ***** ********

§ ******** *** *** *********:

§ ***

§ ***

§ *** ******* *** *** ******* ** ********

 

*** **** ******* *** **** *** ******* *** *********:

§ ******** *** *** *** ******

§ ************ ********

§ ****** ******* ***************

§ ***** ** ***** ************ ** *** *** ******

**

**

B.***** *** ******** ********

 

 

1. ********* ********** ********** *** ***********; ********* ******* ******* *** ********* ******* (*** *** ** **** ****** *** *****), *** (******** *******), *** ********* ******* ******* ******* *** ****** *** ******* (******** ************** *** ****** ********* ** ******* ******* *** ***** **** *********** ****** *** ** ********* ** ******* ***’* *** ****  *** ****** ** ******* ***** ** ********** ** *** ***** ****** ** ****** ******* **** **** **** ******* ** *** *** *** *** ****** *** ******** *** **** **** **** ****** ****** *** ***** ****** ******** **** *** ***** *** ** *** ***** ***** ******* *** ***** *** ** *** ***** ***** (*** “*** ***** *****”)), *** ****** ******* *** *** *******

**

**

2. ****** ***** ******* – **** ******* ******* * *** ************* ******** ** “****** *** ****** ***** ****” ***** ** ******* ** **** ****** ****** ***** ************** (***) **** ****** **** *** ****** *** ******* ******* ********** ** *** ********* **** * *** **** *** *******’* ************** ***** ******* **** ** ********* *** **** *** **** ** *** ******* ***** ** *** **** ** *** ********* ***** ** * *** ********* **************** ******* ******* ******* *** ****** *** ******* *** ********** ** *** ******** ****** *** *** ************** ****.

**

**



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

IX.*************

 

 

A.******* ***/** ****** ********* **** ******** ** ** *** ** *** (**** **** *** *** ************ ****** ** *** ***** ******* ** ******* ******* ** ******** *)

 

 

1. ******* ******* *** ********’* ******* ******** ********** ******** (“***”) ***** **** *********** ******** ** ***’* **** ****** *** ***** ** *** ********** ** ***** ******** *** ******** *** ****/*** *** *** ******* ** ***** ** ********* ********* ** ****** ****** (********’* ***** *). (*** #********)

**

**

2. *** **** ****** * ****** ******** ** **** *** ****/**** *** **** **** **** ** ********* ** *** *** *********** ** ******** *** ******** ********* ******** (**#* ******** #******** ** *** #********)

**

**

3. ******* ******** ******* *** ********’* ********* ******/***** ***** ****** *** ****** *** *** ***** ******* ************ ***** *** ******* ******** ********** ******** (“***”) ** ***’* **** *******  **** *** ** ******** ******** *** ********** *** ********* ******/***** ** ****** *** ********’* ******* ************* (*** #********)

**

**

4. “*** ***** ****** *** **** *** ** ******* **:   *******:  ****/****/**** **** ***** **** *** ** *** *****”* (** #* ******** #******** ** *** #********)

**

**

5. ******* ******** ******* *** ********’* ********* ******/***** ***** ****** *** ****** *** *** ***** ******* ************ ***** *** ******* ******** ********** ******** (“***”) ** ***’* **** *******  **** *** ** ******** ******** *** ********** *** ********* ******/***** ** ****** *** ********’* ******* ************* (*** #********)

**

**

6. ******* ******** ******* *** ********’* ********* ******/***** ***** ****** *** ****** *** *** ***** ******* ************ ***** *** ******* ******** ********** ******** (“***”) ** ***’* **** *******  **** *** ** ******** ******** *** ********** *** ********* ******/***** ** ****** *** ********’* ******* ************* (*** #********)

No

No

7. “*** ***** ****** *** **** *** ** ******* **: *********:  ****/**** **** ***** **** *** ** *** *****” (** #* ******** #******** ** *** #********)

**

**

8. *** ** *** ********* **** ********* *** *** ******** **** **** ******/**** ** **** *********** ** ****** * ****** ********** ** ******** ************ ** *********** ****** *** ******* **** * ********** ******* ***********  **** ******* ******* ******* *** **** ************ (*** #********)

**

**

9. ********* * ****** ******** ** ***’*® ********* *** **** ***’* **** **** *********** *** ******* ********* *** *********** ********(*** #********)

**

**

10. ************ ************** *** ************** ** *** *** *********® ******* ********* ****** (“***”) ********** (“*** *********”) ** ******* ** *** ********’* ******* ********* ***** *********** **** * *** ************* *********** *** ******** ********** ************ (*** #********)

**

**

11. *** *********** ** ********’* *********** ************ (“**********”), *********** *** ************* (“***”) *** *** ** *** ******* *** *** *********** ******** (********)

**

**

12. ************ ************** *** ************** ** ***’* ***** ************ ********* ** ******* ** *** ********’* ********** ******** *********** **** * *** ***********/************* ************ *********** **** *********** (****), ********** **** *********** (****), *** ******** ********** ************ (*** #********)

**

**

13. *** **** *** ** *** ********* ******* ****** (****/****) ** **** *** ****** ** ******* *** ******* **** ******* ******* ******* *** **** ************ (*** #********)

**

**

14. *** **** *** ** *** ********* ** ****** *** ********* *** (** ********) *** ****** ************* **** ******** **** ***** **** ** ** *********** ******* ** ****** *** ***** **** *********** *** ******** ** ****/***** (*** #********) (*** #********) (***********)

**

**

15. ************** *** *********** ** ******* * ******** *********® *** *********** **** ************ (*** #********)

**

**

16. *** ******* *** *** ****** ********** **** ******; ******* ***** **** ****** ********; ********* ** ***** (*** #********)

**

**

17. ****** ******* ******** **** ******* *************** (*** #********)

**

**

18. ****** *************** *** ****** ******* **** *** *** *********** ********** (*** #********)(**** *)(**** *)(**** *)

**

**

19. **** ***** *********** ******** (“****”) **** ****** *** *** *** ***(*** #********)(*** #********)

**

**

20. *** ** *** ********* ** ******** ** * ******* ******* ******* ****** (“****”) *********(*) *** *** ******** ****/**** ******/**** ** **** ************ *** ******** ** **** ********* **** ******* ****** ******* ** *** *** **** **** *** **** ******* ******** ******* ********* ** **** *** *********** ************ **** **** ******* *** ***** ********** *** ***** ********** ** *** ******** ****/**** ****** **** (*** #********)

**

**

21. *** *******®***** ******** **** ** ****** (*** #********)

**

**

22. ******** ******** ********* **** *** ************ (*** #********)

**

**


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

23. ************* *** ****** ********** ********** ** *** ******** **** *** **** (***

#********)

**

**

24. ******** ****** *********** **** *** **** *******® ******** (*** #********)

**

**

25. ********* ***** *** ** ******* * *** ******** **** ****** ********* ** **** **** *********** (*** #********)

**

**

26. ******* ********* ** ******* ********’* *********** ******* **** (*** #********)

**

**

27. *** *******® ************** (*** #********)

**

**

28. *** *******® ************** **** (*** #********)

**

**

29. *** ** *** ********* * ******** ******** ********* (** ********) *** * *** ********** *** *** **** **** ** **** (*** #********)

**

**

30. ***** *** ************* ** ****** *** ********* *** (*** #********)

**

**

31. ****** *** ********* * ******** ********* ** **** *** **** **** *** **** **** (*** #******** *** *** #********)

**

**

32. ******** ******* **** **** (‘***’) ********** (*** #********)

**

**

33. ********* ***** ************ ****** *** ******** ******* (*** #********)

**

**

34. *** **** ********* *** ******* *** ******* ****** *** *** **** *** *** ******** ********* ** **** *** ********** **** (****) *** ********** ************ *** ******** (** #* ******** #******** ** *** #********)

**

**

35. ****** *** ************** ** ***** ***** ******** ******* ** ******* ********* ** **** ******* (*** #********)

**

**

36. *** ** *** ********* ** *** ********* *** **** ****** ***** **** **** *** **** **** ** **** (*** #********)

**

**

37. ********* ***** *** ** ******* ******** ****** ***** **** **** *** **** **** ** **** **** *********** (*** #********)

**

**

38. *** ** *** ********* *** ******** ********** *** ****** ***** ****/**** *** ****/**** ** **** (*** #********)

**

**

39. *** ** *** ********* ******** *** ********** *** ****** ***** ****/**** *** ****/**** ** **** (*** #********)

**

**

40. ********* ***** *** ** ******* ******** ****** **** **** **** *** **** **** ** **** **** *********** (*** #********)

**

**

41. *** ** *** ********* *** ********* ****** (** ********) ********** *** ****** ***** ****/**** *** ****/**** ** **** (*** #********)

**

**

42. ********* *** ********* *******® *********** ******* ** **** (*** #********)

**

**

43. ************** ** ******** *** *******® ******** *** ********’* **** **** *********** (*** #********)

**

**

44. *** ** *** ********* ***** (*) ****** ***** *** *********** ********* ** **** (*** #********)

**

**

45. ********** ******* *** ********* *** ********* â *** ********* ** ******* ** *** ********’* ********* ****** ********** ******** ** ***** ** ******* ***** ** ****** ********** *** **** **** ****** * **** *********** ***** ******** ***’* ** *** **** ****** ** ******* ********’*  ********** ************ ********** (*** #********)

**

**

46. *** ** *** ********* *** (*) *** ****** ** ******* **** ********* *** *********® *** ** ******* ** *** ********’* ********* ****** ********** ******** (****) ** ***** ** ******* ***** ** ****** ********* (*** #********)

**

**

47. *** ****** *******® ****** *** ******** ** **** ****** ** *** ******** ******** (******** ******** ***** ******* *** ************ *******) (** #* ******** #******** ** *** ##********)

**

**

48. *** ** *** ********* *** (*) **** (** ********) ********* ****** *** **** **** ** **** (*** #********)

**

No

49. ********* ***** *** ** ******* ******** ****** **** **** **** ** **** **** *********** (*** #********)

**

**

50. ********* *** ******** ****** ** ***’* ****** *******®**** ******* (*** #********)

**

**

51. *** ********* *******® (***) ******* ** ******* ********************* ******* ***** (*** #********)

**

**

52. ********* ******** *** ********* *** ***** ************ ********* ** ******* ** *** ********’* **** ******* *** *********** (*** #********)

**

No

53. ********* *** ****** *******®**** ******* **** ***** ******* ************** ******** (*** #********)

**

**

54. ******* *** ********* ***** *** ** ******* ********’* ****** **** **** **** ** **** **** *********** (*** #********)

**

**

55. ********* *** ****** *******®**** ******* **** ****** ******* ***************** (*** #********)

**

**

56. *** *******®***** ******** **** ** ****** (*** #********)

**

**

57. *** ** *** ********* ****** ** ******* **** ****** *** **** *** **** ***** *** ******** ** **** ********* **** ******* ****** ******* ** *** ********’* ****** ******** *** **** ******* ******** ******* ********* ** **** *** *********** ************ **** **** ******* *** ***** ********** *** ***** ********** ** *** ******** ****/**** ****** **** (*** #********)

**

**


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

X. **** ************** ********

 

 

A.****

**

**

B.** ******* ******** ** ******* *** **** *** ******* (********* *********)

**

**

C. ****** ******* * *** *** ********* ** ***** ** ******* ******** **** ***** *** ********* *** ** ******* * ******** ** *** ********* ******** *** *******  ******** ** *********** *** *** *** *******(*) **** *** ******** ** **** ** *** ********* ********** **** **** ******** ********* *** **** ******* ***** *** ******(*).  *** **** ******* * "******" **** ***’* ***** ****** **********  ********* ******** *** ******** ******* ***’* ****** **********

 

*** ***** ***** ****** *********** **** ** ******** *** ******** ** * *** ********.

 

*** ****** ******* ******** *******:

1. ***** **** *** ***** **** *******

§ ***'* ****** ** *** ********* ********

§ ********* ***** ********

§ ********** *** "*** *******" ** ******* ********** *** ***********

§ ******* ** ***** ** * */** *********** *********

§ ******** **** ****

§ ******** *** ***** ********* ** ****** *** ***** *** ***’* *********

2. ******* ****

§ ********* ** ******* * "******" *** **** ******** ** * ******* ********* ******* ** *** *******

3. ********

§ ******* *** ********* **** ***** ** "*******" ***** *** *********

4. ******** ***** *****

§ * *********** *********** ***'* ******** *** *** ******** *********

5. ********* *** **********

§ *** **** * **** ********** **** *** ********** ** *** *********

6. ****** **********

§ ***** ** ******* *** ***** ******** ***** **** ******** *** ******** *******

§ ***** ** **** ** ******* ******** **** * ********* *** **** ********

§ ***** ** ** ****** ***** ********

§ ***** ** ******* ***********/******** ********

7. ******* ********

§ ** ******* ***'* ****** ******* *********

§ **** *** ******* ******** *** *** ********'* *********

 

******** **** ***** ***** ********** *** ******* ******** *** *** ***** ******** **** **** *** **** ****** *** ********** ****.

**

**

XI.******* ******** * *********

 

 

 

**** ** *******

# ** **** ****

(****** ******* ******* ********* ********)

 

 

A. **** ******* *************

** **** **** **** ***** **** ***’* ***** ******* ****** ***** ****** ****** ** **** ******* ************** ***** *** **** * ** ** *****

**

**

B. ********** ******* (****** ** *********)

** ******** ****

**

**

C. ******* ****

** **** ****

**

**

D. ******** ****

§ **********

§ ************** (*** ***** **)

****: *** ***** ** = *** ******* *** ***** ** ******** ******** ********  *** ******** *********** ******* **** ****** ********.

 

 

****** ** **** ****; ******* ** ********* (****)

**

**

E. ********

****** * **** ****; ******* * **** ****

**

**

F. ****** ******* (****** ******* ***** ** ******* ******/********* ***/******)

****** * **** ****; ******* * **** ****

**

**

G. *********** ** ****** (*** ********)

****** * **** ****; ******* * **** ****

**

**

H. *********** (****) ******** **********/******** ********* (******* ***** *****/******* ******* * ************* **  *** **********/*********** ******)

****** * **** ****; ******* * **** ****

**

**

I. ***/*********** ********* (****)

****** * **** ****; ******* * **** ****

**

**

J. *** *** *** ********* **’* *** ********** ********

****** * **** ****; ******* * **** ****

**

**

K. ****** ***

****** * **** ****; ******* * **** ****

**

**

L. ****** ***

*** **********

**

**


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

X. **** ************** ********

 

 

A.****

**

**

B.** ******* ******** ** ******* *** **** *** ******* (********* *********)

**

**

C. ****** ******* * *** *** ********* ** ***** ** ******* ******** **** ***** *** ********* *** ** ******* * ******** ** *** ********* ******** *** *******  ******** ** *********** *** *** *** *******(*) **** *** ******** ** **** ** *** ********* ********** **** **** ******** ********* *** **** ******* ***** *** ******(*).  *** **** ******* * "******" **** ***’* ***** ****** **********  ********* ******** *** ******** ******* ***’* ****** **********

 

*** ***** ***** ****** *********** **** ** ******** *** ******** ** * *** ********.

 

*** ****** ******* ******** *******:

1. ***** **** *** ***** **** *******

§ ***'* ****** ** *** ********* ********

§ ********* ***** ********

§ ********** *** "*** *******" ** ******* ********** *** ***********

§ ******* ** ***** ** * */** *********** *********

§ ******** **** ****

§ ******** *** ***** ********* ** ****** *** ***** *** ***’* *********

2. ******* ****

§ ********* ** ******* * "******" *** **** ******** ** * ******* ********* ******* ** *** *******

3. ********

§ ******* *** ********* **** ***** ** "*******" ***** *** *********

4. ******** ***** *****

§ * *********** *********** ***'* ******** *** *** ******** *********

5. ********* *** **********

§ *** **** * **** ********** **** *** ********** ** *** *********

6. ****** **********

§ ***** ** ******* *** ***** ******** ***** **** ******** *** ******** *******

§ ***** ** **** ** ******* ******** **** * ********* *** **** ********

§ ***** ** ** ****** ***** ********

§ ***** ** ******* ***********/******** ********

7. ******* ********

§ ** ******* ***'* ****** ******* *********

§ **** *** ******* ******** *** *** ********'* *********

 

******** **** ***** ***** ********** *** ******* ******** *** *** ***** ******** **** **** *** **** ****** *** ********** ****.

**

**

XI.******* ******** * *********

 

 

 

**** ** *******

# ** **** ****

(****** ******* ******* ********* ********)

 

 

M. *** ***** *** *********** ******* (*/* ****)

****** * **** ****; ******* * **** ****

**

**

N. ****** ***** *** *********** ******* (*/* **** *** *******)

****** * **** ****; ******* * **** ****

**

**

O. *** ** *** *********** ******* (*/* ****)

(******* ***** **** ** ******** ** *:** ** *** *** ******** *******  ******** ***** **** ** ******** ** *:** ** *** *** ******** *******.)

****** * **** ****; ******* * **** ****

**

**

P. *** ** ******* ****

******* ** * **** ****; **** ***** * ********

**

**

Q. *** **** *** ** ******* *************

****** * **** ****; ******* * **** ****

**

**

R. ****** **** *** ** ******* *************

******* * **** ****

**

**

S. *** ****** ****

****** * **** ****; ******* * **** ****

**

**

T. *** *** *** ****** (******** *** ***********)

****** * **** ****; ******* * **** ****

**

**

U. ****** *** *** ****** (******** *** ***********)

****** * **** ****; ******* * **** ****

**

**

V. *** *** *** ******** ****** ******* (******** **** *** *********** **********)

****** * **** ****; ******* ** **** ****

**

**

W. ****** *** *** ******** ****** *******

****** * **** ****; ******* ** **** ****

**

**

 



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Schedule F.2

PRICING FOR EXCESS BSC THRESHOLD LEVEL

 

 

A.

********* *****™

 

*********** ** ****/**** ** *******

*********

***

1.********* ****

 

 

a)****** **** ***** ** ****** ******* ******* ** *********** (**** ***)

 

 

§ ********** (******* *** $****** *** ********* *****™)

********

******** ** ***

§ *********** ********** *** * ***** ** ********** (******* *** $****** *** ********* *****™)

********

   $*********

§ *********** ********** *** * ***** ** ********** (******* *** $****** *** ********* *****™)

********

$*********

§ *********** ******* *** * ***** ** *********** (******* *** $****** *** ********* *****™)

********

$**********

§ *********** *********** *** * ***** ** *********** (******* *** $****** *** ********* *****™)

********

$**********

2.********* **********™

 

 

a)******** ** *******

*** ****

*****

Note 1: ********* *****™ ******* *** **** ** ****** ********  ******** ******** ** ******* ****** ****** ******** ** *** ***; ** ******** ******* ** ******** *** ***** ****** **** *** ** ******* ****** ****** **** ** * ****** ***** ****** ****** *** ****** ***** ******* *** **** ******* ******** *** *** *********** ***** ****** ** *** ******* *** ***** **** ** *** ******** ********* ****** ****** *****  **** *** ********** ** *** ************ ******* *** **** ******* ****** ** *** ************ **** *** *** *** ****** ****** ****** ****.

Note 2: ******* *** **** ** ******** ******* ** ******** *** **** ***** ** ******** ******* *** ****** ****** ******* ********** * *** ******.

Note 3: ********* *****™ ****** ******* ****** **** ** **** ****** *** ****** (**) ***** ******.

 

 

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Schedule F.3

Supporting Examples for Sections I & II of Schedule F

 

 

******** *

******** *

******** *

******** *

******** *

******** *

******* ******* * * ***********

 

 

 

 

 

 

**** ******* **** ** ***

             ******

               ******

             ******

               ******

               ******

               ******

********** ***********

                     *  

                 *****

               *****

                 *****

                 *****

                 *****

******* ******

                     *  

                       *  

               *****

                 *****

                 *****

                 *****

*********

           ******

               ******

             ******

               ******

               ******

               ******

 

 

 

 

 

 

 

*** *********** ******** ****** *** *****

                     *  

                       *  

                     *  

                 *****

                 *****

                       *  

*** *********** ******** ****** ***** *******

                     *  

                       *  

                     *  

                       *  

                 *****

                 *****

***** *** *********** ********

                     *  

                       *  

                     *  

                 *****

                 *****

                 *****

 

 

 

 

 

 

 

**** ****

                     *  

                       *  

                     *  

                       *  

                       *  

               (*****)

 

 

 

 

 

 

 

***** ********* ***********

             ******

               ******

             ******

               ******

               ******

               ******

**** ***** *** *********** ********

                     *  

                       *  

                       *  

                 *****

                 *****

                 *****

********* *********** *** ********* ********

             ******

               ******

             ******

               ******

               ******

               ******

 

 

 

 

 

 

 

********** ******* *** *** ********* **** (****)

$          ******

$           ******

$          ******

$           ******

$           ******

$           ******

********** ******* *** *** *** **** (****)

$          ******

$           ******

$          ******

$           ******

$           ******

$           ******

 

 

 

 

 

 

 

*** *** *** ********* ***********

$            *****

$           ******

$          ******

$           ******

$           ******

$           ******

*** *** *** ***** *** *********** ********

                     *  

                       *  

                     *  

                 *****

                 *****

***

                 *****

***** ******* ***

$             9,089

$           ******

$          ******

$           ******

$           ******

$           ******

 

 

 

 

 

 

 

******* ******* ***********

 

 

 

 

 

 

*) ********** ******* *** *** ********* **** (****)

$          ******

$           ******

$          ******

$           ******

$           ******

$           ******

*) ********** ******* *** *** *** **** (****)

$          ******

$           ******

$          ******

$           ******

$           ******

$           ******

 

 

 

 

 

 

 

** * **** **** *?

**

**

***

***

***

**

** *** **** *** ***** ******* *** ** ********** *****

 

 

 

 

 

 

 

 

 

 

 

 

 

** **** **** ***** ****** ****

**

**

$          ******

$           ******

$           ******

**

***** ******* *** ********** ***** ******* *******

$                  *  

$                    *  

$          ******

$           ******

$           ******

$                    *  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

******* ***** *********** * *********** ** *** *** ***

 

 

 

 

 

 

 

 

 

 

 

 

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

** ********* *********** *** ********* ******** > ******?

**

**

***

***

***

**

** *** **** *** ***** ******* *** *** ** ****

 

 

 

 

 

 

** **** *** ***** ** ******* ***** *****

$                  *  

$                    *  

$          ******

$           ******

$           ******

$                    *  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

***** ******* *** **** *****

$            *****

$           ******

$          ******

$           ******

$           ******

$           ******

***** ******* *** *** **** *****

$                  *  

$                    *  

$          ******

$           ******

$           ******

$                    *  

 

 

 

 

 

 

 

***** ******* ***

$            *****

$           ******

$          ******

$           ******

$           ******

$           ******

 

 

 

 

 

 

 

******* ***** * *** ***********

 

 

 

 

 

 

 

 

 

 

 

 

 

******* **** ********* *********** ******

             ******

               ******

             ******

               ******

               ******

               ******

***** *** *********** ********

                     *  

                       *  

                     *  

                 *****

                 *****

                 *****

 

 

 

 

 

 

 

***** ******* *** ***********

             ******

               ******

             ******

               ******

               ******

               ******

******* **** *********** ******

             ******

               ******

             ******

               ******

               ******

               ******

 

 

 

 

 

 

 

******* **: ******* *** *** ***** ** ****

****

****

****

****

****

****

******* ******* ***

$          ******

$           ******

$          ******

$            ******

$           ******

$            ******

***** ******* *** ***

$          ******

$           ******

$          ******

$           ******

$           ******

$           ******

 

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

 

 

Supporting Examples for Sections I & II of Schedule F

 

 

 

 

******** *

******** *

******** *

******** *

 

******** *

******** *

 

******** *

******** *

******** ********

(****** ********** ********* ****** **** ****** ******* **** ******* ********)

**** ****

******** ** ************ ***** *** *********** (** ****** ** ***** *** ***)

**** ******** ** ************ / ** ****** ** ***** ** ***********

*** ******** ** ***** / ** ****** ** ************ ** ***********

******** * **** *** ******** ** *********** (******* ** ****** ** *** ***** ***************)

 

*** ********* ***** ** *** ***** ** ****** ** ***** *****

*** ********* ***** ** *** ***** *** ****** ** ************

 

*** ********* ***** *** *** ***** ** ****** ** ***** *****)

*** ********* ***** ****** ***** *** ****** ** ************

**** *: ******* ****** ********* **** ************ *** ***** ******* ***** *** *** ******* *****

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

********* **** ************

            *********

            *********

            *********

            *********

            *********

 

            *********

            *********

 

            *********

            *********

 

***** ******* *****

       ***********

       ***********

       ***********

       ***********

       ***********

 

       ***********

       ***********

 

    *************

    *************

 

 

 

 

 

 

 

 

 

 

 

 

 

**** *: ********* ******* ********* **** ************ *** ******* ******* *****

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

********* ***********

          **********

          **********

          **********

          **********

          **********

 

          **********

          **********

 

          **********

          **********

 

 

 

 

 

 

 

 

 

 

 

 

 

 

******* ********* **** ************

                 ******

                 ******

                 ******

                 ******

                 ******

 

                 ******

                 ******

 

                 ******

                 ******

 

******* ******* *****

               *******

               *******

               *******

               *******

               *******

 

               *******

               *******

 

               *******

               *******

 

******* ******* *** *** ***** ********* ***********

                   *****

                    *****

                   *****

                    *****

                   *****

 

                    *****

                    *****

 

                    *****

                    *****

 

 

 

 

 

 

 

 

 

 

 

 

 

Step 3: Determine Excess PVU’s per 1,000 Connected Subscribers

 

 

 

 

 

 

 

 

 

 

 

 

******* ******* *** *** ***** ********* ***********

                    *****

                    *****

                    *****

                    *****

                    *****

 

                    *****

                    *****

 

                    *****

                    *****

 

******* **** *** *** ***** ********* ***********

                    *****

                    *****

                    *****

                    *****

                    *****

 

                    *****

                    *****

 

                    *****

                    *****


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

 

******* ****** *** *** ***** ********* ***********

                          *  

                          *  

                       ***

                         **

                         **

 

                          *  

                       ***

 

                          *  

                       ***

 

 

 

 

 

 

 

 

 

 

 

 

 

**** *: ********* ******** ****** *** *** ***** ********* ***********

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

********* ***********

          **********

          **********

          **********

          **********

          **********

 

          **********

          **********

 

          **********

          **********

 

****: **** ********* ***********

          **********

          **********

          **********

          **********

          **********

 

          **********

          **********

 

          **********

          **********

 

******** ********* ***********

                          *  

          **********

                          *  

                          *  

            *********

 

          **********

          **********

 

          **********

          **********

 

 

 

 

 

 

 

 

 

 

 

 

 

 

******** ********** ****** ***** **********

******

******

******

******

******

 

******

******

 

******

******

 

 

 

 

 

 

 

 

 

 

 

 

 

 

******** ******* ****** *** *** ***** ********* ***********

                          *  

                          *  

                       ***

                         **

                         **

 

                          *  

                       ***

 

                          *  

                    *****

 

 

 

 

 

 

 

 

 

 

 

 

 

**** *: ********* ******* **** ********** ***

 

 

 

 

 

 

 

 

 

 

 

 

******** ******* ****** *** *** ***** ********* ***********

                          *  

                          *  

                       ***

                         **

                         **

 

                          *  

                       ***

 

                          *  

                    *****

 

******** ******* ****** **** *** *** *** ***** ********* *********** *** *****

$                    ***

$                    ***

$                    ***

$                    ***

$                    ***

 

$                    ***

$                    ***

 

$                    ***

$                    367

 

******* **** ********** ***

$                       -  

$                       *  

$              ******

$                *****

$                *****

 

$                       *  

$            *******

 

$                       *  

$            *******

 

  ***** ** ** **** **** ****

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

**** *: ********* ***** ******* **** ********** ***

 

 

 

 

 

 

 

 

 

 

 

 

a) ******* ***** ***** ******* **** ********** *** (******* ****)

$                       *  

$                *****

$              ******

$                *****

$                       *  

 

$                       *  

$            *******

 

$                       *  

$            *******

 

b) ******* ***** ******* **** ********** ***

$                       *  

$                       *  

$              ******

$                *****

$                *****

 

$                       -  

$            *******

 

$                       -  

$            *******

 

 

 

 

 

 

 

 

 

 

 

 

 

 

******* ** *) ** *) ***** ****** ***** ******* **** ********** ***

$                       -  

$                *****

$              ******

$                *****

$                *****

 

$                       -  

$            *******

 

$                       -  

$            *******

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

******* *** ******* **** ********** *** *** *** ****** ***********

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

********* ***********

          **********

          **********

          **********

          **********

          **********

 

          **********

          **********

 

          **********

          **********

 

 

 

 

 

 

 

 

 

 

 

 

 

 

******* **** ********* *********** ******

          **********

          **********

          **********

          **********

          **********

 

          **********

          **********

 

          **********

          **********

 

*** *********** ********

                          -  

                          -  

                          -  

                          -  

                          -  

 

                          -  

                          -  

 

          10,000,000

          10,000,000

 

*** ***********

          **********

          **********

          **********

          **********

          **********

 

          **********

          **********

 

          **********

          **********

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*** ****** ***********

                          -  

                          -  

                          -  

                          -  

                          -  

 

            *********

            *********

 

            *********

            *********

 

********** ****** ****

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

**** ********** **** *** *** ****** **********

$              ******

$              ******

$              ******

$              ******

$              ******

 

$              ******

$              ******

 

$              ******

$              ******

 

 

 

 

 

 

 

 

 

 

 

 

 

 

******* **** ********** *** *** *** ****** ***********

*                       *  

*                       *  

*                       *  

*                       *  

*                       *  

 

$            *******

$            *******

 

$            *******

$            *******

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Schedule L

 

Performance Standards and Remedies

 

While this Agreement is in effect, CSG shall provide the Products and Services to Customer in accordance with the following performance standards:

 

a. *********** ********* (*) ******* (****)

 

(i) ****** *************   ***’* ******* ******* ** ******** ** ***’* *** **** ********* ***** ** ********* *** ******** *** ** *** ****** ***** ** ******* ** *********** (**) ***** *** **** ***** **** *** ***** *********** *** * **** ******* (*****) ** *** ***** ******** ** * ***** ****** ********* ******** ******* ******* *** ********* ********* *********   ** ********* ***’* ******* ******* ** ******** ** ***’* *** **** ******** ***** *** ** ************ *** **** **** ***** ******* (***) ********** ******* ** * ******** ****** ********* ******** ******* ******* *** ********* ********* *********  *** **** **** ** ************** *** *** ******** ******* ****** ** *** ************* ** ******* ******** ******** ** ******** ** *** ******** ****** ** ******** ** ******** ***** ** ****** ******** ** ******** ******* ** ******** *********  ******** ************ **** *** ****** ** *** *********** ******** ***** **** ************ (*)(*) ***** *** ********** * ****** ** *** *********** ********* *** ***** ** ************* (*)(**) – (*)(***) ******  *** ************* ********* ** ***’* *** **** ******** ** *** ********** *** **** *** ** ******* ** *** ********* *** ******* ** **** *** ** *** *********** ********* *** ***** ** ************* (*)(**) – (*)(***) **** ***** ***** ***’* *** **** ** ***********.

 

(ii) ******** ***** ****** *** ***** ** *:** **** (***) ** *:** ***. (***), ***** (*) **** * ***** ******** **** *** **** ******* *********** ***** ** ********** ** *** (*) ******* ** ***** ************ (***) ******* ** *** ***** ******** ** * ***** ***** ********* ******** ******* ******* *** ********* ********* *********  *** ******** ** **** ********** (*)(**), ******** **** *** **** ******* *********** ** ******** **** *** ***** **** ***’* *** **** *** **** **** ***’* *** **** *** **** *** ******* *** **** ********* **** ******* ** *** *** *****  **** ********’* ********** ******** *** **** ******* ******** **** * ***** ****** ** ***** **** *:** ** (***) ** ****** ******* ****** (********* ********) ** *** ******** ******** ***’* ******** *****  ******* ********* *** ****** ******** ***** ***** ** ******** ** *** ****** ********* ** ******** ** *******  *************** *** ********** *** **** ** ******* ** ***** **** *** **** ** ********’* ******* ** ******* *** ******* *** ***** ******** **** *******  ******** ****** *** ***** ****** (**) **** **** *** ********* ***** ***’* ******* ** ******* * ****** ** ********** **** *** ********** *** ***** ***** **** *** ******* *** ** *** ******* *** ***** ** ************ (*)(**) ****** ******* *** ***** *** ************ ********** ******* ** ******* * ****** ** **** **** ****** ** **** ** *********  *** ***** ****** (**) **** **** *** ********* ***** *** ******** *** ********** ** ******* * ****** ** ********** **** *** ********** *** ***** ***** *** *** *** ***** **** ****** ****** **** (*) ******** ***** **** ****** ***** ******* *** ** *** ******* *** ***** ** ************ (*)(**) ******  ******** ** ** ***** ***** *** ** ******* ** *** ********* ******* *** ******** ******** ****** * *********** ****** ***** ****** *** ***** ** ************ (*)(**) ***** *** ** * ******* ** ******* * ***** ****** ** ********** **** **** ************ (*)(**).    

 

******** ******* ****** **** ** ***** ***** *** ****** ** ************ **** * ****** ******** ******** ******* **** ******* (***) ****** * ******* (**) ****** ****** *** ** ********’* *** ** ****** ******** ***/** ******* *** *** ****** *** ****** ** ************ ** **** ******* (***) ** **** ************ ****** * ******* (**) ****** *******  **** ********’* ******** *** ***** ******* ********** ********** **** ******* *** ****** ** ************ *** ** ****** ******** ***/** ****** ****** *** *********** ** *** ******** **** ****** **** ******* (**) ****** *******

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

(iii) *** ****** ****** ********  *** *** ******* ****** **** ** ******* ** *:****(***) ** *** **** ******** *** ** ***** ************ ******* (***) ** *** ***** ******** ** * ******* ****** *** *** *** ******* ****** ***** *** ** **** *** **** **** ****** (**) ******* ** ********** **** *** **** ***** ****** ******** ** * ******* ******* ******  ** ********* ** ** ***** ***** *** *** ****** ****** ** **** *** **** **** ***** (**) ******* ****** *** ****** **** (**) **** ****** *** ** ******* ********** **** *** ****** ****** ********    *** ********* ******** ***** *** ***** ** **** ** ***** *** ******** *** ******* ******** ** *** ** *** ********* ** *** **** *** ****** ** *********  

 

 

(iv) *** ***** ********* ***** ** ***** *********** *** ********* *** ******** *** ** *** ****** ***** ** **** **** *********** *** ***** ******** ******* (******) ** *** ***** ******** ** * ******* ****** ********* ******** *** *********** *** ** ** **** (*) ***** *** **** ** ***** ****** ***’* ********* ******** ** ************ ** ******** ** ***** ***** (**) **** ** ********  ** *** ***** ******** ******** ** *********** ********* ********* *** **** *** ************ ********** ******* ** *********** ********’* ********  ******** ****** ******** ****** ** ** **** ******** ** ** ***** ***** ***** *** ******* ******* ** ******** ****** **** (*) ***** *** *****    *** ******** ** **** ********** (*) (**), ***** *********** **** **** **** *** ****** **** ****** *** ************ ******* *** ** *** ********** ********** ** *** ************* *** ******  *** ***** ********* *********** ******** *** ***** ** **** ************ (**) ***** *** ***** ****** ******* ** ***** ******** ** ********** ** ****** ** *** *** **** ********** ***** *** ***** ******** ** **** ****** ***** ** ******* ********* ** ******** ** “*****” ******* ******** “*** ******** *********” ******* *** “*** *********/********* *** ************ *** ***** ********** *****” (*** “************ ****”).  **** *** *********** ** ******** ** ********** ** ** ***** *** ************ ***** *** *********** ******** **** *******  ** ******** **** *** ******** **** ** ********* ** ******** * ** ******* ******** ** *** **** ********* *** **** ********** ****** **** *** **** ********** ***** ***** ****** *** “************ ****” *********.  

  

*** *** ******** ******** ***** ** ******* ****** ****** (**) **** ** ********** *************** *** ***’* ********* *** ****** ******* ******** **** ** ***** *** *** *** ** ************ ******** **** ***** (**) ****** ********* *** *** *** *** ***** ************  *** *** ******* ***** ** ******** ********* *** ***** **** *** *** (**) **** *********** ************ ** ******* *** **** ****** *** **** ** *** **********  ****** **** ****** (**) *** ********** *** *** *** ***** *********** **** ******* ******** ***** *** *** *** ** ************ **** *** ****** **** *** ******* ***** ************  *** ******** ****** **** ***’* ***** ** ******** *** ** ********* ******** ** **** ********

 

(v) ******* ********** ********   ******* ******** ******** ** *** ** ***** **** *:** ** (**) **** ** ********* ** **** *****'* ***** *** ****** ** **** **********'* ******* ** ** ****** *** ********* **** ** ***** *********** *** ***** ******** ******* (******) ** *** ***** ******** ** * ******* ******  ***** ******** ***** *:** ** (**) **** ** ********* ** *** **** *****'* ***** ***** *** ****** ** **** **********'* ******* ** ** ****** *** ********* **** *** ******* ******* (****) ** *** *****  *** ***** *** ** ****** *** *** ******* ** **** *** *********** ******** *** ***** ** **** ******* *** ** *** ******* ** *** ********'* ****** ** **** *** *** ******** *** **** *************

 

(vi)

*** ***** ********* **** ***** ************   *** ***** ********* **** ****** **** ** ********* *** ***** ** *:**** *** ** ****** ******* ******** *** *:** *** ** ******.  

 

 

(vii) **** *******  

1)

*** **** ******* ******* ***** ** ***** *********** *** ********* *** ******** *** ** *** ****** ***** ****** **** *** *** ******* ******* (******) ** *** ***** ** * ******* ****** ********* ******** *** *********** ********* ******** *** *********** *** ** ** **** (*) ***** *** **** ** ***** ****** ***’* ********* ******** *** **** ******* ***** ***** ** ********* ** **** **** ****** (**) **** ** ********  ** *** ***** ***’* ********* ******** *** *********** ** ******** ** ****** **** (*) ***** ** * ********** ***** *** ***** ******* ******** **** ******** (**) **** ***** *******  ******** ****** ******** ****** ** ** ****


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

******** ** ** ***** ***** ***** *** ******* ******* ** ******** ****** **** (*) ***** *** *****    *** ******** ** **** ************ (*)(***), ******** **** *** ******* ******* ************ ****** *** *** ***** ** ************  *** *** ***** ** *********** ** ******* ** *** **** ******* *********** ******* *** ************* ********* *** *** ***** ********* ********* *** **** ******* *** *** ******** ******* ** ***’* ********; ********* ******** **** ** ***** *** ******* *** ** *** ********* ********* *** *** ******* ** ***’* *********  

 

2)

**** **********’* **** ***** ** ******** *** *** **** ******* ****** ****** ***** (*) ******** **** ********* *** *** ** *** ********* ********* ***** *** ********** ****** ******** ******** *** ** * **** ** ***** *** ********

 

 

(viii)

********* ***********  ********* ********** **** ** ********* *** ******** ** *** ****** ***** *********** *** ***** ******** ******* (******) ** *** ***** ******** ** * ******* ****** ********* ******** *** *********** ********* ******** *** *********** *** ** ** **** (*) ***** *** **** ** ***** ****** ***’* ********* ******** *** ********* ********** ***** ***** ** ********* ** **** **** ****** (**) **** ** ********   *** **** **** ** ************** *** *** ******* ** **** *** *********** ******** *** ***** ** **** ********* (****) ****** ** *** ************* ** ******* ******** ******** ** ******** ** *** ***** ***** ******** *** ***** ** ******** ** ***.

 

(ix)

********  ******* **** ** ********* *** ******** ** *** ****** ***** *********** *** ***** ******** ******* (******) ** *** ***** ******** ** * ******* ****** ********* ******** *** *********** *** ** ** **** (*) ***** *** **** ** ***** ****** ***’* ********* ******** *** ******* ***** ***** ** ********* ** **** **** ****** (**) **** ** ********   *** **** **** ** ************** *** *** ******* ** **** *** *********** ******** *** ***** ** **** ********* (**) ****** ** *** ************* ** ******* ******** ******** ** ******** ** *** ***** ***** ******** *** ***** ** ******** ** ***.

 

(x)

*********** ***** *********  *********** ***** ******** **** ** ********* *** ******** ** *** ****** ***** *********** *** ***** ******** ******* (******) ** *** ***** ******** ** * ******* ****** ********* ******** *** *********** *** ** ** **** (*) ***** *** **** ** ***** ****** ***’* ********* ******** *** *********** ***** ******** ***** ***** ** ********* ** **** **** ****** (**) **** ** ********   *** **** **** ** ************** *** *** ******* ** **** *** *********** ******** *** ***** ** **** ********* (*) ****** ** *** ************* ** ******* ******** ******** ** ******** ** *** ***** ***** ******** *** ***** ** ******** ** ****    

 

(xi)

(a) ********  ******* **** ** ********* *** ******** ** *** ****** ***** *********** *** * ******* ******* (******) ** *** ***** ******** ** * ******* ****** ********* ******* ******* *** ********* ********* *********   ** ********* *********** ******* (***) ** ***** ******* **** ** ********* ** *:** ***. (***) ******** ** * ******* ****** ********* ******** *** *********** ** ** **** (*) ***** *** **** *** ** ** ***** (*) ***** **** *** ******** ******** ** ***** ****** ***’* ********* ******** *** ******* ***** ***** ** ********* ** **** **** ****** (**) **** ** ********  *** **** **** ** ************** *** *** ******* ** **** *** *********** ******** *** ***** ** **** ********* (**) ****** ** *** ************* ** ******* ******** ******** ** ******** ** *** ***** ***** ******** *** ***** ** ******** ** ****  *** *** ******** ***** **** *** ******** ***** ******** ***** ** ******* ** *** **** ********* *** ******** ** ******* ** *** ***** ** *** **********  ******** ******** *** *** ***** **** ******** ***** **** ** ******** *** ****** ** *** ***** **** ** *********** ******** ** ****** ** **** ******** ** * ****** ** *** **** ******** ********** ** *** ****** ** ***** ******* ******** ** *************

 

(b)  ******* ********* **** (****)*   **** **** ** ********* *** ********* *********** *** * ******* ******* (******) ** *** ***** ******** ** * ******* ****** **** ******* (**) *********** **** ******* ******** ********** *** **** ********* ******* ******* ***


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

********* ********* ******** ****  ******** ***** ******* ********** **** ***** ********* ******** ******* *** ********** *** **** **** ** ************** *** *** ******* ** **** *** *********** ******** *** ***** ** **** ********* (**) (*) ****** ** *** ************* ** ******* ******** ******** ** ******** ** *** ***** ***** ******** *** ***** ** ******** ** ****

 

(xii) ********* *******   

(1)

********** ********* ******** (** ******* ** ******* ***), ***** ** ********* *** ****** *** ******* ******* ** *** **** ****** ***** (*) ******** **** ********* ***** *********** ******** ** * ******* ******  *** *** ******** ** **** ******** * ******** *** ** ****** ******* ******** ********* ******** *********  *** ******** ** **** *********** *** **** “******** ********” ***** *******: *** ****’** ******** **** ************ **** ***** **** ************ (******** *** ******), *** **********  ** *** ***** * ******* ***** ** * ********* **** ******* ** ********** ** *** ***** ****** *** ** * ******* ***** ** * ******* ** ** ********** ** *** ********* ******.  

(2)

*** ***** ******* ** ********** ********* ********* *** *** *** ****** ********* ********* ** ********* ******** **** ********* *** ******** ** ***’* ********* ********** ****** **** (*) ******** **** ****** *** ***** ***** ******** ** *** **** ******* *** *** ******** ** ****** ********* ** *** ** *** ********* ********* *

(3)

*** ********* **** ** ********* **** *** **** ******** ** *** **** (****** ****** ****** *******) ********* ******** **** ******* **** *** ********* ******* **** *** ****** *** ********* **** *** ********* ** **** ******* *************

 

(xiii)  ******* ********* **** *** ******* ********* ********** *** ******** ** **** ******** * ***** **** *** ********** *** *** ********* ***** *** ******* ****** ******* *** ************* *** *** ***** *** ******** ******* ******* *** **************    *** ******* ********* ********** ***** ** ***** *********** *** ********* *** ******** *** ** *** ****** ***** ** **** **** *********** *** *** ******* ******* (******) ** *** ***** ******** ** * ******* ****** ********* ******** *** *********** *** ** ** **** (*) ***** *** **** ** ***** ****** ***’* ********* ******** ** ************ ** ******** ** ***** ***** (**) **** ** ********  ** *** ***** ******** ******** ** *********** ********* ********* *** **** *** ************ ********** ******* ** *********** ********’* ********  ******** ****** ******** ****** ** ** **** ******** ** ** ***** ***** ***** *** ******* ******* ** ******** ****** **** (*) ***** *** *****    *** ******** ** **** ********** (*) (****), ***** *********** **** **** **** *** ****** **** ****** *** ************ ******* *** ** *** ********** ********** ** *** ************* *** *** *** (********* *****).  

 

 

b. Monthly Report   

****** *** (**) ******** **** ** **** ******** ***** *** (“****** ****”), *** ***** ******* ******** **** * ******* ****** ******* ***** **** ** *** *********** ********* ********* ** **** ******** * *** *** *********** ****** *** **** ********* ******** ***** ******** ** **** *********** *********  *** ********** ** ******** **** ** **** *** *** **** ******** ********* *** ******** *********** ********* ** *** **** *** ****** ** *********  **** ******* **** **** ******* *** ****** *** ** ******* ***** ** ******** *** ****** ******** ********** ** *** ******** ******* *******  *** ******** ** **** ******** ** * ******* ** **** * *********** ******** ***** ** ********** * “****** ********”*  *** ***** ****** *** *********** ********* *** ***** ** **** ******** **** ******** ** * ******* ****** ** **** ********** ** ********* ** *********  ***’* ******* ** ******* *** ******* ****** ** ********** **** *** ********** *** ***** ***** **** ****** ** * ****** ******** **** ******* ** *** ** *** *********** ********* ** ************* (*)(*) ******* (*)(***) ****** ******  ***** *** ******** * ****** *** **** *** ****** ** *** *** *********** ********** **** ******* **** ****** ** * ****** ******** **** ******* **


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

*** ******* *********** ********(*).  *** ********** ** * ******* ****** **** ********* ** ************ *********** **** ****** ** * ****** ******** **** ****** ** *** ********(*) ********** *** ********** ** ************ ************  ******** ** ****** ******** ***** ***** ** *** ******** *** ****** ** ***** *** ********* ****** ****** **** (*) ******** **** ** *** ****** *****  *** ***** ** ******** ** **** **** (*) *** **** ****** *** ***** ** *** ********* ******** ** **** **** *** **** ****** *** ******** ********  ** *** ***** ** ******* * ****** ** ******** * ********* ****** ****** *** ***** ****** (**) **** ** *** ********* ***** *** ***** *** ************ ********** ******* ** ******* * ****** ** **** **** ****** ** **** ** ********* *** **** ****** **** *** ****** ** * ****** *********

.

 

c. ***** ***** ********** ** ************

 

** *** ***** **** ******** **** *** ***** **** *** *********** ** ********* ** *** ** *** *********** ********* *** ******** ** *** ******* ******* *** ****** ** ******* ******** **** *** **** ** **** *** ************ **** ** *** *********** ** *** *******  ******** ***** *** ************ ********** ******* ** ******* **** **** ** **** ** ******** ***** *** ******** ** ********* *** ** ****** **** ****** (**) **** ***** *** ******* ** *** ****** ******** ** *** *********  ** *** ***** ******** ******** **** ***** *** ***** ** ********* ** ****** *** ******** **** *** ****** (**) **** **** **** ****** ******* ********  *** ****** *** (**) ******** **** ** *** ******* ******** ******** ******** *** ** ******* **** ** ******** *** ***** *** ***** ****** *** **** *** * ***** ** ***** **** (**) **** **** *** **** ****** ******* ********  ** ******** ***** **** **** **** ** ********** *** *********** ** *** *********** ********* ** **** *** ***** **** *** ************** ** *********** ** *** ************* **** ******** **** ******* * ****** ****** ** *** ********** *** ********** ** ***** ************* ** ************  **** ******* ** *** ******* *** ***** ******** ******** * ******* **** ******** ** ****** *** ******* *** *******  *** ****** ****** (**) **** ** **** ******* ******** *** ******* **** *** ******** *** ******* *** ******* ***** ***** **** * ********* *********** ***** ***** **:

 

(a) ********* ** *** *********** **** ** ***** ********* ********* *** ********* ** ********** **** ******** ******** ******** ********* *** ** * ****** **** ** **** *** ********* ** **** *** *** ********; ***

(b) ** ********** ****** ***’* *********** ***/** ********* ***********.  

 

*** **** *** *** *********** ***** ***** ****** **** ** ********’* **** ************** ****** *** ***** ***** ****** ********** **** ***** *** * ******** ********* ********** **** ***** **** ******** ** * ****** ******** ** ********** ** ***** **** *** **** ** *********** *** *** ***** ********** **** *** ***** ***** *******

 

d. Remedy for Failed Standards  

 

(i) ****** ************ *  ** ****** *** **** ** **** ********** ***’* ****** ************ **** *** **** *** ******** *** ***** ** ************ (*)(*), **** *** ***** ** ******* *** ******* ** $***** ********** ** *** ****** ** ********’* ********* *********** ******** ** *** ****** ******** *** ********** ** *** *** ****** ** *** ***** ** ***** *** ****** ******** *********  ** *** ***** * ****** ******** ***** **** ************ (*) ********* ****** *** *********** ****** ***** ******* *** ****** ******* ** *** **** ******* ** *** ***** ** **** ************ ***** ** ********** ** *** ****** ** ***** *** ****** ******** *** *********** ****** *** *********** ****** ***** *******  *** ******** ** *** ****** ******** ** **** ************ (*) ****** *** * ***** **** ** *** *********** ****** ***** ******  *** ***** ** ******* *** ******* ** $****** ********** ** *** ****** ** ********’* ********* *********** ******** ** *** ****** ******** *** ********** ** *** *** ******* ********** ** ***** (*). *** ****** *** ***** ** *** ********* ******** ***** ** ******** ** * ****** ** ********’* **** ******* ********  ** ******** ** *** ********** ** ***’* ******* ******* **** *** **** *** ******** ** ***** ********* *** **** **** ***** ******* (***) ********** ******* ** * ******** ****** ********* ******** ******* ******* *** ********* ********* ******** ** ******** ** ************ (*)(*), **** *** **** ****** ** ****** ** ***** ******* (***) ******* ****** *** ***** **: *) *:** **** (*** / ***) ** *:** **** (*** / ***) (“*********”), *** ***** ** ******* $***** ********** ** *** ****** ** ******* ********** ** *** ****** ** ******** *********


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

***********; ** *) ******* *** ***** **  **:** **** (*** / ***) ** *:** **** (*** / ***) (“*************”), *** ***** ** ******* $****** ********** ** *** ****** ** ******* ********** ** *** ****** ** ******** ********* ************  *** ******* ** ****** ** ***** ******* ******* ***** ** *********** ******* ********* *** ************** ** *********** *** ********* ****** ***** ** ******* ** *** ****** ** **** ******* ******* (*************) *** **** ** **** ******* (**) ** ***** ****** ****** *** **** *** ********* ******** **** ********* **** ******* ******* (***** *******).  

 

 

(ii) ******** *** *********** ********* ** (*)(**) ******* (*)(*), (*)(***) ******* (*)(*) *** (*) (***) .  ** ****** *** **** ** **** ********** *** **** *** **** *** ** **** ** *** **** (*) *********** ********* *** ***** ** ************* (*)(**) ******* (*)(*), (*)(***) ******* (*)(*) *** (*)(***) , **** *** **** ****** ********* *** ***** ** ******* $***** (****** *** ****** ******** (*) (**) ***** ***** ** ******* $*****) ********** ** *** ****** ** ********’* ********* *********** ******** ** *** ****** ******** *** ********** ** *** *** ****** ** *** ***** ** ***** *** ****** ******** *********  ** *** ***** * ****** ******** ***** *************   (*)(**) ******* (*)(*), (*)(***) ******* (*)(*) *** (***) ********* ****** *** *********** ****** ***** ******* *** ****** ******* ** *** **** ******* ** *** ***** ** **** ************ ***** ** ********** ** *** ****** ** ***** *** ****** ********  *** *********** ** *** *********** ****** ***** *******  *** ******** ** *** ****** ******** ****** *** * ***** **** ** *** *********** ****** ***** ******* *** ***** ** ******* *** ******* ** $****** (****** *** ****** ******** (*) (**) ***** ***** ** ******* $*****) ********** ** *** ****** ** ********’* ********* *********** ******** ** *** ****** ******** *** ********** ** *** *** ****** ** *** ***** ** ***** *** ****** ******** ********* ********** ** ***** (*).  *** ****** *** ***** ** *** ********* ******** ***** ** ******** ** * ****** ** ********’* **** ******* ********

 

(iii) ****** *** *********** ******** ** (*)(**) .  ** ****** *** **** ** **** ********** *** **** *** **** *** *********** ******** *** ***** ** ************ (*)(**), **** *** **** ****** ********* *** ***** ********** **** (** ******* *******) *** ********* ** **** *** *********** ********* *** ***** ******* * ****** ** ***** ******** ******* (*********) ** ********’* **** ******* ********  *** ******** ** * ***** ********* **** ***** ** *** **** ********* ** ******** *** ***** ** *:**** *** *** **** ***** ********* **** ***** ******* *********** ***** *:** ** **** *** ***** ******* * ****** ** *** ****** ** ****** ******** ******* (**********).

 

 

(iv)

****** *** *********** ******** ** (*)(**) *** (*)(****).  ** ****** *** **** ** **** ********** *** **** *** **** *** *********** ******** *** ***** ** ************ (*)(**) ** (*) (****), **** *** **** ****** ********* *** ***** ******* * ****** ** **** ******** ******* (*********) ** ********’* **** ******* ********

 

(v)

**** **** ****** ** *** *** (*) *********** ********* *** ***** ** ************* (*)(*) – (*)(**), ** *** ***** ** **** *** **** ******** **** (*) ***** ****** *** *********** ****** ***** ******* **** ******** ** *** ********* **** ********** * ******** ****** ** *** ********* ** ****  **** ********’* ********* ** *** ****** ****** ** ****** *********** ******** *** ***** ****** ********* ** *** ********* *** ****** ****** (**) **** ** ******* ** **** ********** ********* **** ********* ** ********** ******* ****** ** *** ** ***** ***** (**) **** ***** ** *** ********* **** ** **** ************  *** ************ *** ****** **** **** ******* ** ****** ** **** ******** ******* *** ***** **** ** ***** ** **** ******** ** ******** ***(*) ** *****

 

(i)

*** ******* ***** **** ** *** ***** *** ***** *** ** ************* *** ** *** ***** ** ******* ** ** ***** *** ******* ** ** ********* ****** *** ***** *** ***** ** *** *********** **** ****** ** *** *********** ******** (***), ** *** ***** ** **** *** **** *********** ******** ** (***) *** (*) ****** ****** *** *********** ****** ***** ******* **** ****** (**) **** ***** ******* ******* ******** *** ********* *** *********** ***** ******* *** ******** “********* ******” *** ***** ** ****** ** ******** ** **** *** ***** *** **** *********** ************ ******** ** ******* ****  *** ****** (**)


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

**** ***** ******* ****** **** ** ******** ** *** ****** ***** (**) **** **** **** *** ******** *** ****** ******** ** ******* **(**) ***** *** ** ******* ****** ** *** ****** ****** ** ******** *** *** ***** (***) ********** ** ********’* ****** ****** ***** ** *******  *** ******** ** **** ******* (**), * “*****” ***** **** * ****** ********* ***** ** * ****** ***** **** ******* **** **** *** *********** ********* ******

 

(ii)

***** ***** *** **** ***********.  

 

(a)

*** ***** ** *********** *** *) ************ ** ****** ******* *** ******** **** *** ******** ******** **** ********’* ******* **********; **) ************ **** ********* “** *****” *** ******** ******* *** ******** **** *** ********’* ******* **********; *** ***) ********* ********** *** ******** ******* *********** *** ********* *********** (*), **) *** ***) ** **** ********** (****), ************* “******* **********”); ********* ***** *** ***** *** ** *********** *** ********** ** ********* *********** ******** ** ******** *** ********* **** ******* ***********   ** *** ******** *** *********** **** ******* ** *** *********** ** ******* ********** (*** ******** ** **** ********** * “******* *********”), **** *** ****** ** (*) ******** *** ******* *** ********* ********** ********* ********** ******* ********** ** ** ********** **** ** ******** *** (*) ********* ******** *** *** ********** *** ** ****** ******** ******** ** ****** **** ******* ********* (* “******* ********* *************”). ***’* ******* ********* *************  ***** **** ********** (*) ***** ** ******* ** * ****** ** ******** *** ********** *** ********* ******** ***** ***** *** ****** $**** ********** ** *** ****** ** ******** ******* ********** ** *** ***** ** ***** *** ******* ********* ******** (*** ********* ****** ** **** ************** *** ** ****** *********** ******** ******* (*******) *** ******* *********).  *** ****** *** ***** ** **** ********** ***** ** ******** ** * ****** ** ********’* **** ******* ******** *** ************* ********* *** ******* ********* ******* **** * ****** ***** ***** **** ** ******* **** *** ******** ** *********** *** ****** ** *********** *** ******** ** *** ************ ** ********** (*) *** (*) ******* *** ******** ** **** ******* * “****** *****” ***** **** *** ***** ******* **** *** **** **** ***** **** ********* *** ** *** *** *** **** ***** ***** (*) **** ** ***** * ******* ***** ******* *************** *** ********** ******** ************ *** ****** **** ** **** ** *********** *** *** ************** *** *********** ** ******* ************ ********** *********** ******* ********* ********* ******** ** ***** ** ******** *** ******** ** ********** ********* ********** ***** *** **** *** ******* ** *** **** ** ******** ******* **** ********** *** ** * ************ ****** ** ***** ** *** ******* ********** ************ ** **** ****** *** ******* ***** ***** ** **** ***** * ************ ********* (** **********) ** *** ************* ********* *** **** *** ******** ** **** ********

 

(b)

** *** ***** ** *** ********** ** ****** (**) ** **** ******* ********** ****** *** *********** ****** (**) ***** ****** *** **** ******* ********** ****** ** ***** *** ******* (*********) ********* *********** ** *** ********** **** **** ****** (**) **** ***** ******* ******* ******** *** ********* *** *********** ***** ******* *** ******** “********* ******” *** ***** ** ****** ** ******** ** **** *** ***** *** **** *********** ************ ******** ** ******* ****  *** ****** (**) **** ***** ******* ****** **** ** ******** ** *** ****** ***** (**) **** **** ****


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

**** ***** ******** ******* ***** ** *** ******* ********** *** ***** ** **** ********** (*).  

 

 

e. ********* ***** **********.

(i)

***’* *********** *************  ********’* ******** ********* ******** ****** ***** ******* *** ******* ******* ********* ** *** ************ ** *** *** ************ *** ******** *** ** *** ****** ****** ******* ***** ******* ** ******* ****** ************ ******** ** *********** *** ********** ********** ******* (******), ********* ********* ******** *** ******** *** *********** *** ***** ** ******** ****** *** ************* *********  ************ ***** ** ******** **** ********* ** ********’* ********* ****** *** ******** * (********), * (****) *** * (******) ********* ** ********* ** *** ***** *** “************* ******* **** ******** ******” ***** (************ “********** *********”) ***** ******** *** ********** *** *** *** ******** (*)  *** *** *********** ** ********* (**) *** *** *********** ** *** ********* *** ********’* *** ** (***)  ************ ** **** ******* *** *** *********** ********* ** ******** *** ** ***’* *******

(ii)

**** **** ** ****** (“****”).  ***’* **** ***** *** ****** ***** (**) ******* *** ********** ********* ******** *** ******* *** ******** ** * ******* ***** *  ***** ** ********** ** *** **** “**** ** *****” *** *** ********** ******(*) *** *********** ********* ********* ****** *** *********** ******* ***** “**** ** *****” ***** ** ******** ** *** ********** ******* *** ****  * ****** ** ****** *** *** **** *** ******* *** **** ******  *** ********* ****** ******** ******** ********* **** * ******* ***** ******* ******** **** ******** ****** *** *** *** **** ******* *** ******** ****** *** *** ********** **** ** *** *** ******* **** ** ******** ** *** **** ************ **** ***** ** ******** ***** ********’* ******** ********* ******** *******  

(iii)  ****** ********* *********** ********** ********** ** ******* ***** ***** ** **** **** ***** *** ***** ******** ** * ****** ******  **** ***** ** ******** ***** ********’* ******** ********* ******** ******.

(iv)

**** **** ******* ********* (“****”).  ***’* **** ***** *** ** **** **** *** ***** ******** ** * ****** ****** *** ********** ***** * ******* ****** **** ******* **** ** ********** ** *** ****** ** ***** ** ****** ***** (*****), ******* ** *** ****** ** *********** ********* (********** ** ******) **** ******** ****** **** **** *******     **** ***** ** ******** ***** ********’* ******** ********* ******** *******  *** ******** ** ***** *** * ********** ********* ** *** ********* ** ***** ** * ******* ****** *** **** *** *** **** ** *** ******

(v)

   ** *** ***** **** *** ***** ** *** **** *** *********** ********* ********* ** ************* (*) ******* (**) ** **** ********* [(*)] ** **** ****** ****** *** *********** ****** ***** ******* ***’* *** *** ********’* *** ** ********** ********* ****** ****** *** ******** **** ** ***’* ******* ** * ******* ******* **** ********* **** ** ******* *** ***** *** *** **** *****(*).   *** ***** ******* * ********** ******** *** ************ ********** ******** ******** ** ** ********** ** *** ** ******* *** ****** ********** ******** ***** **** **** *** ******** **** ** ****** (*) ****** ***'* ******** ** (*) ******* *** *** ********* ********* *** ******* ***** *** ************ ********** ******* ** ***** **** * ******** ****** *****   *** ***** ********* **** ******** ******** ****** ****** **** ********* ********* ****** ********* ** **** **** (** **** ****** ****** ** *** ** ****** ** ******** ** *******). *** *********** ** *** ***** **** ********* (*) ***** ** ** ******** *** *** *** ** **** *** *** ***** *********** ** *** *** ***** ** **** ********** ******* *** **** ******* ** *** ** **** *** *********** ********* *** ***** ** ********** (*) ******* (**) ***** *** **** **** ** *** ******** ******** ** *** **********


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

***** ** ** ************* ******* **** ******** ******* *** ******** ** ********* ********* ***** ********** ** ********** ** ****.

************* ******* **** ******** ******

 

*********/**********

* ******** ******* ** * ***** ********** ****** ***** ******* * ******** ****** ** ******* ******** ******** **********

****** *********** *********** ** * **** ********** ****** **** ********** *** ********* ******* * ********'* ******** *** ***********

***********/*****

******* **** ** ******** ****** **************  *** ********’* ****** *** ** ********* *** *** ********** ** ********

********/*******

******* **** ** ************ ****** **************

 

********’* ********** ******** ********** *** *** ************* *********

*****/*********

* ******  ***** **** ** ***** ** ******** ** ****** ********* ** ***** *************  ** ********’* ********** ********  **********

********

*** ***** ** ********* *** ***** ** ******* ******** **** ** *********

******** (**)

******** ************* **** *************

**** ************** **** ******* ******

**** (**)

******** ************* **** ******** *****

**** ******** ****** ***** ********* *****

****** (**)

******** ******* ***** * ***** ************

**** ******** ****** ******************

*** (**)

******** ******* ***** * ***** *************

**** ******** ****** ******************

****

*** ***** ** ********* * ***** ********** ** **** ***** ** ******* ******** **** ** *********

**** (**)

******** ************* **** ******** *****

**** ******** ****** ***** ********* *****

**** (**)

******** ************* **** ******** *****

**** ******** ****** ***** ********* *****

****** (**)

******** ******* ***** * ***** ************

**** ******** ****** ******************

*** (**)

******** ******* ***** * ***** *************

**** ******** ****** ******************

******

*** ***** ** ********* * ******* ****** ** ***** ** ******* ******** **** ** ********** **********

****** (**)

******** ******* ***** * ***** ************

**** ******** ****** ******************

****** (**)

******** ******* ***** * ***** ************

**** ******** ****** ******************

****** (**)

******** ******* ***** * ***** ************

**** ******** ****** ******************

*** (**)

******** ******* ***** * ***** *************

**** ******** ****** ******************

***

*** ***** ** ********* * ****** **** ** ******* ******** **** ** ****

****** (**)

******** ******* ***** * ***** ************

**** ******** ****** ******************

*** (**)

******** ******* ***** * ***** *************

**** ******** ****** ******************

*** (**)

******** ******* ***** * ***** *************

**** ******** ****** ******************

*** (**)

******** ******* ***** * ***** *************

**** ******** ****** ******************

 



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

f.*************

 

(i) *** *********** *** ****** **** *** *********** ********* (*) ******* (****) ********** ** ********* ** **** ** ******** *********** ** **** ***** *** ***** ****** *** ********* ********** *** ****** ********* ********* **** ***’* ******* ****** *************** ** ** ******** ** **** ******** ****** ********* ****** *** ****** ********** ** ******* **** ****** ********* ****** **** * ****** *********** ********** ** ******** *************  *** ******* ****** **** *** ********* ******** ******** ****** *** ****** ********* *** ** ** ********** **** ******** ****** ********* ***** ** *** ***** *** **** *** ******** *** **** ***** *** *********** ** *** ******** *** ****** ********* ********* ** * ******** *******  

 

(ii) ******** *** *** *********** **** ** ** *********** *** ********* ********* ** ********* *** ****** ******* ** **** ******** **** *** *********** ****** **** ***’* ******* ** ******* ******* *********** ***** **** **********  ************ *** *** ******* ******** *** ***** **** ******** * ** ******* ** ***’* ****** ** *** *********** ********* ********* *** (*) ********** ******** *** *** * ******** (*) ********** *** *** **************** ** *** ******** ******* ** ******** **** * ******* ** *** ** ****** **** *** ********** *********** ********* *** ***** ** **** ******** ** *** (*) ********’* **** *** ********* ****** ***** **** ******** *; ********* *************** *** ********** (*) ** ******** ** ********’* ***** ** ********* ***** ********** (*)(*) ****** ******** **** ******** ** ******* ***(*), ****** ** ******* ****** ** *** ***** ******** **** ** ********* ***** *** ********* (****** *** ***** ************ *** ***** ** **** ******** *), *** (**) ******* ********* ** **** ********** ***** ***** *** ** ********’* ****** ** ******** ** *** ****** **** ***’* ******* ** ******* *** *********** ******* ** * ***** ** ********* ******* ** * ******* ** ****** **** **** **** ** ********** ********** ** ***’* *********** ***** **** **********  

 



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Schedule R-1

 

Common Stock Purchase Warrant

 

(See Attached)

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

THE SECURITIES EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OFFERED FOR SALE, OR OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OR (B) IN A TRANSACTION THAT QUALIFIES AS AN EXEMPT TRANSACTION UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

Issue Date: July 24, 2014 (the “ Issue Date ”)

 

 

 

CSG SYSTEMS INTERNATIONAL, INC.

Common Stock Purchase Warrant

CSG Systems International, Inc., a Delaware corporation (the “ Company ”), for value received, hereby certifies and agrees that Comcast Alpha Holdings, LLC, a Delaware limited liability company, or its registered assigns (the “ Holder ”), is entitled, subject to the vesting milestones set forth in Section 3(a) and the other terms and conditions set forth below, to purchase from the Company, at any time during the Exercise Period (as defined below), 2,851,419 shares (the “ Warrant Shares ”) of the Company’s common stock, par value $0.01 per share (the “ Common Stock ”), at an initial purchase price per Warrant Share equal to $26.68 (the “ Exercise Price ”).  This Warrant is being issued on the terms hereof in partial consideration for the Holder’s entry into an amendment to the Master Agreement (as defined below), and in order to provide an inducement to the Holder to achieve the successful completion of the Migration SOW (as defined below) promptly in accordance with the terms thereof.  The Exercise Price and the number of Warrant Shares to be purchased upon exercise of this Warrant are subject to adjustment as hereinafter provided.

1. Defined Terms .

(a) In this Warrant, the following terms shall have the following meanings:

Additional Subscriber ” has the meaning ascribed to such term in the Master Agreement.

Affiliate ” means, with respect to any Person as of any applicable date of determination, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first-mentioned Person as of that date.  For purposes of this definition, “control” (including the correlative terms “controlled by” and “under common control with”) means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of stock, as trustee or executor, by contract, or otherwise.

Alternate Consideration ” has the meaning ascribed to such term in Section 7(c).

 

Appraiser ” has the meaning ascribed to such term in the definition of “Fair Market Value”.

 

Attempted Exercise ” has the meaning ascribed to such term in Section 3(e)(ii).

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

Board ” means the Board of Directors of the Company.

Business Day ” means any day except Saturday, Sunday and any day on which banking institutions in the State of New York generally are authorized or required by law or other governmental actions to close.

Capital Stock ” means, with respect to any Person, (i) any capital stock of such Person, (ii) any security convertible, with or without consideration, into any capital stock of such Person, (iii) any other shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) the capital stock of such Person, or (iv) any other equity interest in, or right to vote generally in elections of directors or the comparable governing body of, such Person.

Change of Control ” means the acquisition by any Person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act of beneficial ownership (determined in accordance with Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions, of shares of the Capital Stock of the Company (i) entitling that person to exercise *** or more (but less than ***) of the total voting power of all shares of the Capital Stock of the Company entitled to vote generally in elections of directors or (ii) comprising *** or more (but less than ***) of the total equity value of the Company, other than any acquisition by the Company, any of its subsidiaries or any of its employee benefit plans.

Change of Control Election Notice ” has the meaning ascribed to such term in Section 3(c)(ii).

Comcast ” means Comcast Cable Communications Management, LLC, a Delaware limited liability company.

Common Stock ” has the meaning ascribed to such term in the Preamble.

Company ” has the meaning ascribed to such term in the Preamble.

Company Financial Statements ” has the meaning ascribed to such term in Section 12(f)(ii).

Connected Subscriber ” has the meaning ascribed to such term in the Master Agreement.

Equivalent Percentage ” means, with respect to any satisfaction of an Unsatisfied Milestone after the occurrence of a *********** ****** (which shall be determined on a ******** ********* basis with respect to ******* *(*)(*)(*)), a fraction (expressed as a percentage), (i) the numerator of which is the total number of Warrant Shares that, absent the occurrence of such Fundamental Change, would have vested and become exercisable in connection with such satisfaction pursuant to Section 3(a)(i) and (ii) the denominator of which is the total number of Warrant Shares for which this Warrant otherwise would be exercisable, assuming the satisfaction in full of all *********** ********** (excluding, in the case of Section *(*)(*)(*), such number of Warrant Shares as shall have already vested and become exercisable hereunder), as of the date of such *********** ******, after giving effect to (x) the provisions of Sections *(*)(*) and *(*)(***) and (y) any adjustments theretofore made pursuant to ******* * (subject to appropriate adjustment to both the numerator and the denominator in the event of any subsequent adjustment to the number of Warrant Shares issuable hereunder pursuant to ******* *).

Escrow Account ” means the account to be created pursuant to the Escrow Agreement in order to secure the Holder’s rights to exercise this Warrant for the Escrowed Proceeds, subject to the vesting milestones set forth in Section 3(a) and the other terms and conditions set forth herein.

Escrow Agent ” has the meaning ascribed to such term in Section 3(b)(iv).

Escrow Agreement ” has the meaning ascribed to such term in Section 3(b)(iv).

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

Escrowed Proceeds ” means, with respect to any *********** ******, an amount of cash equal to (i) the ***** ****** ** ******* ****** *** ***** **** ******* ********* ***** ** ************ ******** *** ************ ** **** ** *** *********** ********** (excluding, in the case of Section *(*)(*)(*), such number of ******* ****** ** ***** **** ******* ****** *** ****** *********** *********)* ** ** *** **** ** **** *********** ******, after giving effect to (x) the provisions of Sections *(*)(*) and *(*)(***) and (y) any adjustments theretofore made pursuant to ******* ** ********** ** (ii) (x) the Fair Market Value of a Warrant Share as of the date of such *********** ****** ***** (y) the ******** ***** immediately prior to such *********** ******.  For the avoidance of doubt, in no event shall the amount of Escrowed Proceeds be less than zero dollars ($0).

Exchange Act ” means Securities Exchange Act of 1934, as amended.

Exercise Date ” has the meaning ascribed to such term in Section 2(a).

Exercise Notice ” has the meaning ascribed to such term in Section 2(a).

Exercise Period ” means the period commencing on the Issue Date and ending on the Expiration Date.

Exercise Price ” has the meaning ascribed to such term in the Preamble.

 

Expiration Date ” has the meaning ascribed to such term in Section 5.

Fair Market Value ”, as of any date, has a meaning determined as follows:

(i) with respect to any equity interest (including a Warrant Share): (x) if the class of such equity interest is traded on a securities exchange or quoted on the NASDAQ Stock Market, then the Fair Market Value thereof shall be deemed to be the average daily volume weighted average price per share of such equity interest for the ten consecutive trading days ending on the trading day immediately prior to such date (as determined by reference to the screen entitled “CSGS <Equity> AQR” as reported by Bloomberg L.P., without regard to pre-open or after hours trading outside of any regular trading sessions for any such scheduled trading day on such trading day); or (y) if clause (x) is not applicable, then the Fair Market Value of such equity interest (including a Warrant Share) shall be the price that would be negotiated in an arm’s-length transaction for cash between a willing seller and a willing and able buyer, both having full knowledge of the relevant facts and neither of which is under any compulsion to complete the transaction, without regard for control premiums or minority or illiquidity discounts, as such price is determined in good faith by the Board; provided that (A) the Company shall give the Holder prompt written notice of any such determination, together with reasonable data and documentation to support such determination, and (B) if the Holder disputes the Board’s determination, it shall promptly notify the Company of such dispute, whereupon the Company shall engage a nationally recognized investment bank or other independent valuation firm reasonably acceptable to the Holder (an “ Appraiser ”) to determine such Fair Market Value, the cost of which Appraiser shall be borne by the Company and the determination of such Appraiser shall be final and binding on the Company and the Holder; and

(ii) with respect to any asset other than an equity interest, the Fair Market Value thereof shall be deemed to be the price (after taking into account any liabilities relating to such assets) that would be negotiated in an arm’s-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction, as such price is determined in good faith by the Board; provided that (A) the Company shall give the Holder prompt written notice of any such determination, together with reasonable data and documentation to support such determination), and (B) if the Holder disputes the Board’s determination, it shall promptly notify the Company of such dispute, whereupon the Company shall engage an Appraiser to determine such Fair Market Value, the cost of which Appraiser shall be borne by the Company and the determination of such Appraiser shall be final and binding on the Company and the Holder;

provided , however , that, in the case of a Fundamental Change, the Fair Market Value of a Warrant Share as of the date of such Fundamental Change shall be equal to the sum of (A) the amount of the cash consideration, if any, that the Holder of one issued and outstanding Warrant Share would have received in exchange therefor pursuant to such

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

Fundamental Change plus (B) the Fair Market Value (determined pursuant to clauses (i) and (ii) of this definition, as applicable) of all forms of consideration other than cash, if any, that the Holder of one issued and outstanding Warrant Share would have received in exchange therefor pursuant to such Fundamental Change.

Final Additional Subscriber Amount ” means, as of the Final Additional Subscriber Date, 475,237 (subject to appropriate adjustment in the event of any adjustment to the number of Warrant Shares issuable hereunder pursuant to Section 7) multiplied by the lesser of (x) 1.0 and (y) a fraction, (i) the numerator of which is (A) the aggregate number of Additional Subscribers added as of such date (inclusive of the number of Additional Subscribers described in Sections 3(a)(i)(2) and (3)) minus (B) 5,500,000, and (ii) the denominator of which is 5,700,000.  For the avoidance of doubt, the Final Additional Subscriber Amount shall not be less than zero.

Final Additional Subscriber Date ” means the earlier of (i) the date on which Comcast provides written notice to the Company that it has completed the Migration SOW (as determined in Comcast’s sole discretion) or (ii) such date on which a total of 11,200,000 Additional Subscribers shall have been added as contemplated by the Migration SOW.

Fundamental Change ” means the occurrence of either of the following events:

 

(i) *** *********** ** *** ******* ********* *** ********* ** ***** ****** ** ** * “******” ***** ******* **(*)(*) ** *** ******** *** ** ********** ********* (********** ** ********** **** ***** ***** *** ***** ***** *** ******** ***)* ******** ** *********** ******* * ********* ****** ** ***** *********** *********** ** ****** ** ********** ******* ** ***** *********** ************* ** ****** ** *** ******* ***** ** *** ******* (*) ********* **** ****** ** ******** *** ** **** ** *** ***** ****** ***** ** *** ****** ** *** ******* ***** ** *** ******* ******** ** **** ********* ** ********* ** ********* ** (**) ********** *** ** **** ** *** ***** ****** ***** ** *** ******** ***** **** *** *********** ** *** ******** *** ** *** ************ ** *** ** *** ******** ******* *****;

(ii) *** ************* ** ****** ** *** ******* **** ** **** *** ***** ******* *** ****** ** ******* ****** **** *** ******** ** *** *********** ********* ***** ***** ** ***** *********** ** *** ** ************* *** ** *** *******’* ********** *** ****** ** ******* ******* ***** **** *** *********** ******** ** ***** *** ******* ** *** *******’* ******* ***** ******** ** **** ********* ** ********* ** ********* *********** ***** ** **** *********** **** *** *********** ** ********* ******** ** *********** *** ** **** ** *** ***** ****** ***** ** *** ****** ** *** ******* ***** ******** ** **** ********* ** ********* ** ********* ** *** ********** ** ********* ****** *********** ***** ****** ****** ** **** *********** ** ************* *** **** *********** ** *** ******* ** **** ******* ** *** *******’* ******* ***** **** *********** ****** ****** ****** ** **** ***********; **

(iii) a Change of Control that the Holder elects to have treated as a Fundamental Change pursuant to Section 3(c).

Fundamental Change Exercise Notice ” has the meaning ascribed to such term in Section 3(b)(ii).

Fundamental Change Warrant Shares ” has the meaning ascribed to such term in Section 3(b)(i).

Holder ” has the meaning ascribed to such term in the Preamble.

Issue Date ” has the meaning ascribed to such term above the Preamble.

Joint Escrow Notice ” has the meaning ascribed to such term in Section 3(b)(vi).

 

Master Agreement ” means the CSG Master Subscriber Management System Agreement, with an effective date of March 1, 2013, between the Company and Comcast, as amended.

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

Material Adverse Effect ” means a material adverse effect on the business, assets, liabilities, financial condition, property or results of operations of the Company and its subsidiaries taken as a whole; provided , however , that none of the following, in and of itself or themselves, shall constitute a Material Adverse Effect:

 

(i) changes in the economy or financial markets generally in the United States or other countries in which the Company or its subsidiaries conduct operations, except to the extent the Company and its subsidiaries taken as a whole are materially and disproportionally affected thereby;

(ii) changes in U.S. generally accepted accounting principles or in any law applicable to the Company or its subsidiaries or the enforcement or interpretation thereof, except to the extent the Company and its subsidiaries taken as a whole are materially and disproportionally affected thereby;

(iii) any regulatory, legislative or political conditions or securities, credit, financial or other capital markets conditions, in each case in the United States or any other countries in which the Company or its subsidiaries conduct operations, except to the extent the Company and its subsidiaries taken as a whole are materially and disproportionally affected thereby;

(iv) any geopolitical conditions, the outbreak, continuation or escalation of hostilities, any acts of war (whether or not declared), sabotage, terrorism or military actions, or any large scale public health epidemics, weather conditions or other force majeure events, except to the extent the Company and its subsidiaries taken as a whole are materially and disproportionally affected thereby;

(v) changes that are the result of factors generally affecting the  industry or industries in which the Company and its subsidiaries operate, except to the extent the Company and its subsidiaries taken as a whole are materially and disproportionally affected thereby;

(vi) any failure by the Company to meet any estimates, projections or expectations of revenues, earnings or other financial performance or results of operations for any period, or any failure by the Company to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, provided that the exception in this clause (vi) shall not prevent or otherwise affect a determination that any change, effect, circumstance or development underlying such failure that is not otherwise excluded pursuant to this definition has resulted in, or contributed to, a Material Adverse Effect;

(vii) a decline in the price or trading volume of the Warrant Shares on the NASDAQ Stock Market, provided that the exception in this clause (vii) shall not prevent or otherwise affect a determination that any change, effect, circumstance or development underlying such failure that is not otherwise excluded pursuant to this definition has resulted in, or contributed to, a Material Adverse Effect; or

(viii) any reduction in the credit rating of the Company or any of its subsidiaries; provided that the exception in this clause (viii) shall not prevent or otherwise affect a determination that any change, effect, circumstance or development underlying such failure that is not otherwise excluded pursuant to this definition has resulted in, or contributed to, a Material Adverse Effect.

 

Maximum Aggregate Ownership Amount ” has the meaning ascribed to such term in Section 3(e)(ii).

Maximum Aggregate Voting Amount ” has the meaning ascribed to such term in Section 3(e)(ii).

 

Migration SOW ” means the Migration SOW attached to the Master Agreement, as the same may be amended, modified, supplemented or extended in accordance with the Master Agreement.

Net Cash Settlement ” has the meaning ascribed to such term in Section 2(d).

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

Net Cash Settlement Election ” has the meaning ascribed to such term in Section 3(e)(ii).

Net Cash Settlement Election Notice ” has the meaning ascribed to such term in Section 3(e)(ii).

Net Share Settlement ” has the meaning ascribed to such term in Section 2(c).

New Subscriber ” means a “New Subscriber” (as such term is defined in the Master Agreement); provided , in each case, that such New Subscriber (i) as of the Issue Date, was receiving billing and account services from any Person other than the Company and (ii) after the Issue Date, was migrated to the Company’s ACP billing platform.

Person ” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof.

Physical Delivery ” has the meaning ascribed to such term in Section 2(b).

Registration Rights Agreement ” has the meaning ascribed to such term in Section 11(f).

SEC ” means the Securities and Exchange Commission.

SEC Documents ” has the meaning ascribed to such term in Section 12(f)(i).

Securities Act ” has the meaning ascribed to such term in Section 11(a).

Specified Dividend ” means any cash dividend by the Company to all holders of shares of its Common Stock (or such other class of the Company’s Capital Stock as is then issuable upon exercise of this Warrant) with respect to which the average daily volume weighted average price per share of the Common Stock (or such other class of the Company’s Capital Stock) for the last trading day preceding the first date on which the Common Stock (or such other class of the Company’s Capital Stock) trades regular way on the principal national securities exchange or quotation system on which the Common Stock (or such other class of the Company’s Capital Stock) is listed or admitted to trading without the right to receive such dividend is at least ten percent (10%) greater than the average daily volume weighted average price per share of the Common Stock (or such other class of the Company’s Capital Stock) for the first trading day on which the Common Stock (or such other class of the Company’s Capital Stock) trades regular way on the principal national securities exchange or quotation system on which the Common Stock (or such other class of the Company’s Capital Stock) is listed or admitted to trading without the right to receive such dividend.

Stockholder Approval ” has the meaning ascribed to such term in Section 3(e)(ii).

Total New Subscriber Amount ” ****** **** ******* ** *** ***** * ****** ***** ** (*) *******(******* ** *********** ********** ** *** ***** ** *** ********** ** *** ****** ** ******* ****** ******** ********* ******** ** ******* *) ********** ** *** ****** ** (*) *** *** (*) * ********* (*) *** ********* ** ***** ** *** ********* ****** ** *** *********** ******** ** ** **** ***** *** (*) *** *********** ** ***** ** ********** ***** (**) *** ********* ****** ** ******* ******* ** **** **** ***** **** ******* ****** *** ****** *********** ***** ** **** **** ******** ** ******* *(*)(*)(*)*  *** *** ********* ** ****** *** ***** *** ********** ****** ***** *** ** **** **** ****.

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

Unsatisfied Milestone ” ****** ** *** ***** ** *** *********** ******* *** ******* ********* ** ******* *(*)(*) ***** *********** ***** ** **** *********** ******* ******** *********** ********* (** ***); ******** * ******* * ***** ** *** **** ** ******* *(*)(*)(*)* (*) **** ******* ********* ***** ** ****** ** ** ** *********** ********* ********* ******* ***** ** **** *********** ******* ******* (******* ** *********** ********** ** *** ***** ** *** ********** ** *** ****** ** ******* ****** ******** ********* ******** ** ******* *) ******* ****** ***** **** ******* ****** *** ****** *********** *********** *** (*) *** ********** ** *** ********** ** “********** **********” *** ** ******** *(*)(*) *** (**) ** *** “************” ** ** *********** ********* ***** ** ****** ** ******* *** ************ ** ***** ******* ******* ****** **** *********** ******* ********* ***** **** ****** *** ****** *********** ******** ** ******* *(*)(*)(*).

Warrant ” means this Warrant and all other warrants issued upon transfer, division or combination of, or in substitution for, this Warrant or such other warrants in accordance with the terms and conditions hereof.

Warrant Shares ” has the meaning ascribed to such term in the Preamble.

 

(b) Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Master Agreement.  For the avoidance of doubt, in the event of any inconsistency between the definitions set forth herein and the definitions set forth in the Master Agreement, the definitions set forth herein shall govern for purposes of this Warrant.

2. Method of Exercise .

(a) Exercise Notice .  Subject to the terms and conditions set forth herein, including the vesting milestones set forth in Section 3(a), this Warrant may be exercised by the Holder at any time and from time to time during the Exercise Period for all or any portion of the number of Warrant Shares purchasable hereunder; it being understood and agreed that this Warrant shall be void and all rights represented hereby shall cease unless vested and exercised on or before the Expiration Date.  In order to exercise this Warrant, in whole or in part, the Holder shall deliver this Warrant, together with a duly executed copy of the form of notice of exercise attached hereto as Exhibit A (together, the “ Exercise Notice ”), to the Company at its principal offices, which Exercise Notice shall specify the number of Warrant Shares subject to such Exercise Notice (subject to the last sentence of Section 3(b)(ii), the date on which such delivery shall have taken place being referred to as the “ Exercise Date ”).  Each exercise of this Warrant shall be settled through Physical Delivery or Net Share Settlement, as elected by the Holder in its sole discretion and set forth in the Exercise Notice, which may also include, at the Holder’s sole discretion, a request for a settlement of such exercise through Net Cash Settlement.  Notwithstanding anything herein to the contrary, including this Section 2, from and after the occurrence of a Fundamental Change, the exercise of this Warrant shall be governed by Section 3(b).

(b) Physical Delivery .  Subject to Section 2(d) (if the Exercise Notice included a request for Net Cash Settlement) and Section 3(e), if the Holder has elected to settle the exercise of this Warrant through physical delivery of Warrant Shares upon cash payment of the Exercise Price by the Holder (“ Physical Delivery ”) in accordance with Section 2(a), then, within three (3) Business Days following the Exercise Date, the Holder shall deliver to the Company the aggregate Exercise Price for the Warrant Shares specified in the applicable Exercise Notice by wire transfer of immediately available funds to an account or accounts designated by the Company.  The Warrant Shares to be issued and delivered to the Holder upon Physical Delivery shall be issued and delivered as provided in Section 2(e).

(c) Net Share Settlement .  Subject to Section 2(d) (if the Exercise Notice included a request for Net Cash Settlement) and Section 3(e), if the Holder has elected to settle the exercise of this Warrant through a net, or “cashless”, exercise by using certain Warrant Shares that the Holder otherwise would have received upon such settlement as payment of the Exercise Price (“ Net Share Settlement ”), then the Company shall issue and deliver to the Holder, as provided in Section 2(e), a number of Warrant Shares computed using the following formula:

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

 

X=

Y * (A-B)

 

A

Where:

X =

the number of Warrant Shares to be issued to the Holder.

Y =

the number of Warrant Shares subject to the applicable Exercise Notice.

A =

the Fair Market Value as of the Exercise Date.

B =

the Exercise Price as of the Exercise Date.

* =

multiplied by.

(d) Net Cash Settlement .  If (i) the Holder has requested to settle the exercise of this Warrant through payment of cash by the Company to the Holder, net of the Exercise Price, in lieu of issuing any Warrant Shares (“ Net Cash Settlement ”) in accordance with Section 2(a) and the Company agrees, in its sole discretion, to effect such Net Cash Settlement in lieu of the settlement election made by the Holder in the Exercise Notice (in which case the Company shall so notify the Holder in writing within two (2) Business Days following the Exercise Date) or (ii) the Holder makes a Net Cash Settlement Election pursuant to Section 3(e)(ii)), then the Company shall issue and deliver to the Holder an amount of cash computed using the following formula:

X = Y * (A-B)

 

Where:

X =

the Net Cash Settlement amount.

Y =

the number of Warrant Shares subject to the applicable Exercise Notice.

A =

the Fair Market Value as of the Exercise Date.

B =

the Exercise Price as of the Exercise Date.

* =

multiplied by.

The Company shall make any payment of such Net Cash Settlement amount to the Holder by wire transfer of immediately available funds to an account or accounts designated by the Holder in the Exercise Notice within five (5) Business Days following the Exercise Date (or, in the case of a Net Cash Settlement Election, within five (5) Business Days following delivery of the Net Cash Settlement Election Notice).

 

(e) Delivery of Warrant Shares .  Subject to Section 3(e), if the Holder has elected to settle the relevant exercise of this Warrant through Physical Delivery or Net Share Settlement (and has not requested or the Company has not agreed to settle such exercise through Net Cash Settlement), then, as soon as practicable after each exercise of this Warrant, and in any event within three (3) Business Days thereafter (but, if the Holder has elected to settle the exercise of this Warrant through Physical Delivery, subject to the Holder’s payment of the aggregate Exercise Price as contemplated in Section 2(b)), the Company shall execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the aggregate number of Warrant Shares issuable and issued upon such exercise (which, upon the Holder’s request, will be issued in book entry form in lieu of physical certificates) and its calculation pursuant to Section 2(c) of the number of Warrant Shares so issued, if applicable.  If a physical stock certificate or certificates are so delivered, such certificate(s) shall be, to the extent possible, in such

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

denomination or denominations as the exercising Holder shall reasonably request in the Exercise Notice or otherwise and shall be registered in the name of the Holder or, subject to Section 11, such permitted transferees as shall have been designated in the Exercise Notice.  This Warrant shall be deemed to have been exercised, and such stock certificate or certificates shall be deemed to have been issued (or book entry made), and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares, for all purposes, as of the Exercise Date.

(f) No Fractional Shares .  No fractional shares of any security will be issued in connection with any exercise hereunder.  Rather, in the event that any number of shares that would otherwise be issuable hereunder includes a fractional share, such total number shall be rounded up to the nearest whole share.

(g) Delivery of New Warrant .  If this Warrant shall have been exercised in part, the Company shall, not later than the time of delivery of the certificate or certificates  representing (or the book entry of) the Warrant Shares being issued pursuant to such exercise (in the case of an exercise by Physical Delivery or Net Share Settlement) or the cash settlement amount (in the case of an exercise by Net Cash Settlement), deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexercised Warrant Shares subject to this Warrant.  Such new Warrant shall in all other respects be identical to this Warrant, including with respect to the vesting milestones set forth in Section 3(a), taking into account the issuance of Warrant Shares pursuant to such exercise.

(h) Certain Expenses .  The Company shall pay all of its expenses in connection with, and all issuance, transfer, stamp and other similar incidental taxes imposed by any taxing authority in the United States with respect to, the exercise of this Warrant or the issue or delivery of Warrant Shares or the payment of any cash settlement amount hereunder; provided , however , that the Company shall not be required to pay any tax (including any applicable withholding tax) or governmental charge that may be imposed with respect to the issuance or delivery of the Warrant Shares or cash, as applicable, to any Person other than the Holder, and no such issuance or delivery shall be made unless and until such other Person has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid; provided , further , that the Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares or cash upon exercise hereof.

3. Vesting; Fundamental Change; Limitations .

(a) Vesting .

(i) Subject to Sections 3(b), 3(c) and 3(d), this Warrant and the Holder’s rights hereunder shall vest and become exercisable in accordance with the following vesting schedule:

(1) a number of Warrant Shares equal to  475,237 (subject to appropriate adjustment in the event of any adjustment to the number of Warrant Shares issuable hereunder pursuant to Section 7) shall vest and become exercisable on January 24, 2015;

(2) a number of Warrant Shares equal to 475,237 (subject to appropriate adjustment in the event of any adjustment to the number of Warrant Shares issuable hereunder pursuant to Section 7) shall vest and become exercisable as and when a total of 500,000 Additional Subscribers shall have been added as contemplated by the Migration SOW;

(3) a number of Warrant Shares equal to 475,237 (subject to appropriate adjustment in the event of any adjustment to the number of Warrant Shares issuable hereunder pursuant to Section 7) shall vest and become exercisable as and when a total of 5,500,000 Additional Subscribers (inclusive of the number of Additional Subscribers described in Section 3(a)(i)(2)) shall have been added as contemplated by the Migration SOW;

(4) a number of Warrant Shares equal to the Final Additional Subscriber Amount shall vest and become exercisable on the Final Additional Subscriber Date; and

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

(5) a number of Warrant Shares equal to the Total New Subscriber Amount shall vest and become exercisable on the first Business Day of each calendar quarter from and after the date on which the total number of New Subscribers added in accordance with the Master Agreement equals or exceeds 500,000.

(ii) All determinations and calculations with respect to the satisfaction of the conditions to the vesting of any of the Warrant Shares pursuant to Section 3(a)(i)(2)-(5) shall be made in a manner consistent with the reporting of Connected Subscribers (in the case of Section 3(a)(i)(2)-(4)) or New Subscribers (in the case of Section 3(a)(i)(5)) in accordance with the terms of the Master Agreement.

(b) Fundamental Change .  Notwithstanding anything herein to the contrary:

(i) Upon the occurrence of a Fundamental Change: (A) **** ******* *** *** ******’* ****** ********* ***** *********** **** *** ****** *********** **** ******* ** * ****** ** ******* ****** (*** “ *********** ****** ******* ****** ”) ***** ** (*) *** ********** ** (*) *** ********* ****** ** ******* ****** (** ***) ** ****** *********** ***** ** **** *********** ******* ****** ******** *********; *** (*) *** ****** ** ******* ****** *** ***** ** **** *********** ********* (*** ** *** **** ** ******** *(*)(*)(*) *** (*)* *** ****** ** ******* ****** *** ***** ** *** *********** ** “***** ********** ********** ******” *** “***** *** ********** ******”* ************) ***** ** *************** ********* ** *** ** ******* *** ******* ******* ******* ******** ** ****** (*).

(ii) Prior to a Fundamental Change, the Company shall send written notice thereof to the Holder as contemplated by Section 6.  Subject to Section 3(b)(iii), from and after the Company’s delivery of such notice, the ****** ***** ** ********* ** ******* ** ******** ****** (* “ *********** ****** ******** ****** ”) **** ******* ** *** *********** ****** ******* ****** ******* ** * ****** ** **** *********** ****** ******** ** ******* *(*)(*) (** ******** ** *** ******* ****** **** **** ******* ******); ******** * ******* * **** *** ******’* ******** ** **** ******* ******** ** **** *********** ****** ******** ****** ***** ** *********** ***** *** ***** ** ****** ** ***** *********** ***** *** ************ ** *** ******** *********** *******  *** ****** *** ******** *** *********** ****** ******** ****** ** *** **** ***** ** *** ********** ** *** ********** *********** *******  *** *** ******** ********** *** “******** ****” ** *** ******** ******** ** * *********** ****** ******** ****** ***** ** ****** ** ** *** **** ** *** *********** ******.  

(iii) Upon the occurrence of a Fundamental Change, any vested portion of this Warrant (including with respect to any Fundamental Change Warrant Shares) that has not, prior to or concurrently with such Fundamental Change, **** ********* ** *** ****** ***** ********* ** ****** ******* ********* *** ***** ** ****** ** *********** ** ***********.

(iv) If, immediately prior to the occurrence of a Fundamental Change, there are any Unsatisfied Milestones, then upon or prior to such Fundamental Change, the ******* *** *** ****** ***** ***** **** ** ****** ********** ** **** *** ********* ********** ************ ** *** ******* *** *** ****** (*** “ ****** ********* ”)* **** * ********** ********** **** ******** ** *** ****** (******* ** *** ********** ******** ** *** *******) ** ****** ***** ********** (*** “ ****** ***** ”)* ******** ** ****** ***** ***** ******* ********* **** *********** ******* *** ****** ***** **** **** *** ******** ********* ******* ** *** ***** ** **** ******* *** *** ****** **********  **** *** ********** ** **** *********** ******* (*) *** ******* ***** ***** *** ******** ******** ** ** ********* **** *** ****** ******** ******** ** *** ***** ** **** ******* *** *** ****** ********** *** (*) *** ****** ***** ***** ****** *** ******* ** *** ******** ******** **** *** ****** ******* *** ***** ********** *** ****** ******* ***** *** ******* ** (*) *** ******* ** *** ******** ******** ** *** ****** ** ********** **** *** ***** ** **** ******* *** *** ****** ********* *** (**) *** ********** *****  *** ******* ***** ** *********** *** *** **** *** ***** ******* ** *** ****** ***** ***** *** ****** *********.

(v) If, immediately prior to the occurrence of a Fundamental Change, there are any Unsatisfied Milestones, **** **** *** ***** **** *********** ******* **** *** ********** ************ (** ***) ** **** **** *********** ********* ** ********** **** ******* *(*) (***** ***** ** ********** ** *

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

******** ********* ***** **** ******* ** ******* *(*)(*)(*))* **** ******* ***** ***** *** *** ****** ***** ****** ******** ** ******* (*** *** ****** ***** ***** *** ** *** ******)* * ********** ** *** ******* ******** ******** ***** ** *** ********** **********.

(vi) From and after the occurrence of a Fundamental Change, promptly following the satisfaction of *** *********** ********* ** ********** **** ******* *(*) (***** ***** ** ********** ** * ******** ********* ***** **** ******* ** ******* *(*)(*)(*))* *** ** *** ***** ** ** ***** ** *** ********** ***** *** ******* *** *** ****** ***** **** *** ****** ***** ***** ******* ****** (**** **** ******* * “ ***** ****** ****** ”) ** ******* **** ******* ** *** ******** ******** ** ***** *** ****** ** ******** ******** ** ******* *(*)(*) *** *** ***** ***** ** **** ******* (********* *** ******* ****** ** *** ******** ******* ** **** *******) ** ********** ** **** ********* *** **** ***** ****** ****** ***** ******* ************ **** *** ****** ** ** *** ******** ** **** ******* ** *** ******** *********  ** ***** **** ***** (*) ******** **** ***** *** ********** ***** *** ****** ***** ***** ******* *** ********** ** *** ******* *** ******** ******** (********* *** ******** ******* *******) *** ********** ******** *** *********** ** *** *******  *** *** ********* ** ****** *** ****** ***** **** ** ********** ** ******* *** ******** ***** ** ******** *** *** ******* ** *** ******** ******** ** ***** ** ** ******** *********.

(vii) In no event shall the Company be obligated to cause Escrowed Proceeds to be deposited into the Escrow Account more than once. For the avoidance of doubt, if, after the occurrence of a Fundamental Change, there occurs one or more additional Fundamental Changes, no additional obligations of the Company shall arise under this Section 3(b) as a result of such subsequent Fundamental Changes, but this Warrant and the Holder’s right to receive the Escrowed Proceeds shall continue to vest in accordance with Section 3(b)(v).

(viii) The Holder acknowledges and agrees that it shall not, by virtue hereof or otherwise, have or exercise any rights to veto, prevent, hinder or delay any Fundamental Change (other than by virtue of its rights as a stockholder of the Company, if applicable, under applicable law, the Certificate of Incorporation of the Company, and the Bylaws of the Company).

(c)

Change of Control .  Notwithstanding anything herein to the contrary:

(i) Upon the occurrence of a Change of Control, the Holder shall have the option, exercisable in its sole discretion, (A) to have this Warrant continue to remain outstanding and vest in accordance with Section 3(a) or (B) to treat such Change of Control as a *********** ****** *** ********** *** ******* ** **** ******* (******* ** *** ********** **********) ** ********** **** ******* *(*).

(ii) Prior to a Change of Control, the Company shall send written notice thereof to the Holder as contemplated by Section 6.  Following the Company’s delivery of such notice, the Holder shall deliver notice to the Company electing how to treat this Warrant pursuant to Section 3(c)(i) (a “ Change of Control Election Notice ”); provided that if the Holder fails to deliver a Change of Control Election Notice on or before the date of the Change of Control it shall be deemed to have elected to have this Warrant continue to remain outstanding and vest in accordance with Section 3(a).  The Holder may withdraw and/or amend its Change of Control Election Notice at any time prior to the occurrence of the applicable Change of Control.

(iii) For the avoidance of doubt, if the Holder elects (or is deemed to elect) to have this Warrant continue to remain outstanding and vest in accordance with Section 3(a) in connection with any Change of Control, then the Holder’s rights under the Section 3(c) shall continue to apply to any future Change of Control.

(iv) The Holder acknowledges and agrees that it shall not, by virtue hereof or otherwise, have or exercise any rights to veto, prevent, hinder or delay any Change of Control (other than by virtue of its rights as a stockholder of the Company, if applicable, under applicable law, the Certificate of Incorporation of the Company, and the Bylaws of the Company).

(d) Company Failure to Perform .  Notwithstanding anything herein to the contrary, if either (or both) vesting milestone(s) set forth in clause (1) or (2) of Section 3(a)(i) is not achieved as a result, directly or

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

indirectly, of the Company’s failure to perform any of its obligations under, and in accordance with, the Master Agreement (which failure remains uncured following any applicable cure period provided in the Master Agreement), **** **** ******* *********(*) ***** ** ****** ** **** **** ********* *** *** ******** ********* *** **** ******* *** *** ******’* ****** ********* ***** *********** **** *** ****** *********** **** ******* ** **** ** *** ******* ****** *** ***** ** **** ******* *********(*).

(e) Limitations .

(i) Notwithstanding anything herein to the contrary, if any exercise of all or any portion of this Warrant pursuant to Section 2, or any transfer of all or any portion of this Warrant pursuant to Section 11, requires the consent, approval, order, waiver, exemption or authorization of, registration, declaration, filing or qualification with, certification, notice, application or report to, or expiration of any waiting period (including under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) applicable to, any governmental authority, self-regulatory organization (including the NASDAQ Stock Market or any other applicable national securities exchange) or any other third party as a condition to the lawful and valid exercise or transfer, as the case may be, of this Warrant, then, in each case: (x) the Company shall not issue to the Holder any Warrant Shares upon such attempted exercise of this Warrant, or such attempted transfer of this Warrant shall not be deemed effective, as applicable, unless and until any such consent, approval, order, waiver, exemption or authorization has been obtained, any such registration, declaration, filing or qualification has been made, any such certification, notice, application or report has been given or any such waiting period has expired, and then only to the extent permitted thereunder; (y) each of the time periods provided in Section 2, Section 3 or Section 11, as applicable, for the consummation of such exercise or transfer, as applicable, shall be suspended for the period of time during which any such consent, approval, order, waiver, exemption, authorization, registration, declaration, filing, qualification, certification, notice, application, report or waiting period expiration is being pursued; and (z) if and to the extent that any such suspension causes the consummation thereof to occur after the Expiration Date, then such Expiration Date shall be extended to (A) in the event of an exercise, the date of consummation thereof, and (B) in the event of a transfer, ten (10) days following the date of consummation thereof.  The Company agrees to use its commercially reasonable efforts to obtain, make or file (as applicable), or to assist the affected Person in obtaining, making or filing (as applicable), any such consent, approval, order, waiver, exemption, authorization, registration, declaration, filing, qualification, certification, notice, application, report or waiting period expiration and shall cooperate and use its commercially reasonable efforts to respond as promptly as practicable to all inquiries received by it or by the affected Person from any governmental authority for initial or additional information or documentation in connection therewith.  Each of the Company and the Holder shall bear its own costs and expenses in connection with this Section 3(e)(i).

(ii) Without limiting the generality of Section 3(e)(i), and notwithstanding anything herein to the contrary, the Company shall not issue to the Holder any Warrant Shares upon any attempted exercise of this Warrant, if and to the extent that, after giving effect to such issuance, such Holder (together with such Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of ****** of the number of shares of Common Stock outstanding immediately after giving effect to such issuance (the “ Maximum Aggregate Ownership Amount ”) or (ii) control in excess of ****** of the total voting power of the Company’s securities outstanding immediately after giving effect to such issuance that are entitled to vote on a matter being voted on by holders of the Common Stock (the “ Maximum Aggregate Voting Amount ”), unless and until the Company obtains stockholder approval permitting such issuance in accordance with applicable rules of the NASDAQ Stock Market (or any other applicable national securities exchange) (“ Stockholder Approval ”); provided , however , that this Section 3(e)(i) shall not apply to any exercise of this Warrant for which the Holder requests, and the Company agrees to, Net Cash Settlement. For purposes of this Section 3(e)(ii), beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated by the SEC thereunder.  Within three (3) Business Days of any written request of the Holder, the Company shall confirm in writing to the Holder the number of shares of Common Stock then outstanding. If on any attempted exercise of this Warrant the resulting issuance of Warrant Shares would result in the Holder exceeding the Maximum Aggregate Ownership Amount or the Maximum Aggregate Voting Amount (each, an “ Attempted Exercise ”) and the Company shall not have previously obtained Stockholder Approval, then the Company shall only issue to the Holder such number of Warrant Shares as may be issued below the Maximum Aggregate Ownership Amount or Maximum Aggregate Voting Amount, as the case may be, and the Company shall, at its expense, use its commercially reasonable efforts to obtain Stockholder Approval; provided , however , that, if such Stockholder Approval has not been obtained

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

within ****** (**) days after the Exercise Date with respect to the Attempted Exercise, then at any time thereafter prior to such Stockholder Approval being obtained the Holder shall be permitted to (x) deliver to the Company a notice (a “ Net Cash Settlement Election Notice ”), pursuant to which the Holder may elect that the Attempted Exercise be settled through Net Cash Settlement pursuant to Section 2(d) (a “ Net Cash Settlement Election ”) or (y) withdraw its Exercise Notice with respect to such Attempted Exercise.  In the event of any Attempted Exercise, notwithstanding any delay in settling such exercise, if and when such exercise is settled (including as a result of a Net Cash Settlement Election), the Fair Market Value for purposes of calculating the number of Warrant Shares issuable (in the case of a Net Share Settlement) or the amount of cash payable (in the case of a Net Cash Settlement) shall be determined as of the original Exercise Date and not any subsequent date based upon such delayed settlement.

(iii) The Holder shall cooperate with and take such actions as may be reasonably requested by the Company in order carry out the provisions of this Section 3(e).  If and when the Holder (or any subsequent transferee thereof) elects to sell any of the Warrant Shares issued pursuant to this Warrant in a manner that complies with an exemption from registration under the Securities Act, and the Company is requested to issue to the Company’s transfer agent an opinion of counsel permitting removal of any restrictive legend thereon, then, as and to the extent reasonably requested by the Company in support of such opinion, the Holder shall deliver or cause to be delivered to the Company (A) an opinion of counsel, in form and substance reasonably satisfactory to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act, together with a duly executed officer’s certificate containing reasonably requested certifications and representations related thereto, or (B) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed transaction may be effected without registration under the Securities Act; provided , however , that (x) no such legal opinion will be required for any transaction effected in compliance with Rule 144 under the Securities Act and (y) no such legal opinion or other evidence will be required for any transaction in which the Holder sells or otherwise transfers this Warrant or any Warrant Shares to Comcast Corporation (or any successor publicly-held parent company of the Holder) or any subsidiary thereof in a transaction in which this Warrant or any Warrant Shares (as applicable) remain restricted legended securities subject to the provisions of this Section 3(e)(iii).

4. No Impairment .  The Company will not, by amendment of its Certificate of Incorporation or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (ii) use its commercially reasonable efforts to obtain, make or file (as applicable) any consents, approvals, orders, waivers, exemptions, authorizations, registrations, declarations, filings, qualifications, certifications, notices, applications, reports or waiting period expirations from, to or with any regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant, including obtaining Stockholder Approval if necessary.

5. Expiration .  This Warrant and the right to purchase Warrant Shares upon exercise hereof shall expire at 11:59 p.m., New York City time, on July 24, 2024 (such date, as it may be extended pursuant to Section 3(e)(i), the “ Expiration Date ”).

6. Notices of Record Date, etc .  In case of:

(a) any Change of Control, any Fundamental Change or any other consolidation or merger of the Company, capital reorganization of the Company, or reclassification or recapitalization of the Capital Stock of the Company, in each case, in any one transaction or a series of related transactions, or

(b) the voluntary or involuntary dissolution, liquidation or winding-up of the Company, or

(c) any grant by the Company to the holders of its Common Stock or any other Company security then issuable upon exercise of this Warrant of (or the taking by the Company of a record of such holders for the purpose of determining their entitlement to receive) any dividend or other distribution or any right to subscribe for,

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

purchase, receive or otherwise acquire any shares of Capital Stock of any class or any option, warrant or security convertible into or exercisable or exchangeable therefor, then, and in each such case, or

(d) any reduction in the number of outstanding shares of its Common Stock or any other Company security then issuable upon exercise of this Warrant, whether as a result of repurchases by the Company or otherwise:

the Company will mail or cause to be mailed to the Holder of this Warrant a notice specifying, as the case may be, the estimated effective date on which such Change of Control, Fundamental Change, consolidation, merger, reorganization, reclassification, recapitalization, dissolution, liquidation, winding-up, dividend, distribution, other grant of rights or reduction is to take place, and the time, if any is to be fixed, as of which the holders of record of the Common Stock shall be entitled to exchange their shares for securities or other property deliverable upon such Change of Control, Fundamental Change, consolidation, merger, reorganization, reclassification, recapitalization, dissolution, liquidation or winding-up or to receive (or be entitled to receive) such dividend, distribution or other grant of rights.  Such notice shall be mailed at least ten (10) Business Days prior to the record date or effective date for the event specified in such notice. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action on the Exercise Price and the number and kind or class of shares or other securities or property which shall be deliverable or purchasable upon the occurrence of such action or deliverable upon exercise of this Warrant.

 

7. Adjustment to Warrant Shares and Exercise Price . The number and kind of Warrant Shares (including as set forth in the vesting milestones in Section 3(a)) and the Exercise Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows (in each case, except with respect to a Fundamental Change, in which event Section 3(b) shall govern); provided that if more than one subsection of this Section 7 is applicable to a single event, then the subsection that produces *** ******* ********** ***** ** *******, and no single event shall cause an adjustment under more than one subsection of this Section 7 to the extent of any resulting duplication:

(a) **** ***** ********* ** ****** .  If, at any time after the Issue Date, *** ****** ** ****** ** ****** ***** (** ***** ***** ** ******* ***** ** *** ******* **** ******** **** ******** ** **** *******) *********** ** ********* ** * ***** ******** ******* ** ****** ** ****** ***** (** **** ***** ***** ** ******* *****) ** ** * *********** ** ******** ** ****** ** ****** ***** (** **** ***** ***** ** ******* *****)* ***** ********* ** ** *** ****** **** *** *** ************* ** ******* ** ****** ***** (** **** ***** ***** ** ******* *****) ******** ** ******* **** ***** ********* ** ****** ** ** ******** ** **** *********** ** ********* *** ******** ***** ***** ** ********* ** *********** *** ******** ***** **** ** ****** ** * ********* (*) *** ********* ** ***** ***** ** *** ****** ** ****** ** ****** ***** (** **** ***** ***** ** ******* *****) *********** *********** ***** ** **** ***** ********* *********** ** ********* *** (**) *** *********** ** ***** ***** ** *** ****** ** ****** ** ****** ***** (** **** ***** ***** ** ******* *****) *********** *********** ***** **** ***** ********* *********** ** ********* *** *** ******* ** ******** ***** ********** ** *** ******** *****.

(b) **** ************* *************** *** *  If, at any time after the Issue Date, *** ****** ** ****** ** ****** ***** (** ***** ***** ** ******* ***** ** *** ******* **** ******** **** ******** ** **** *******) *********** ** ********* ** * *********** ** * ************* ** *** *********** ****** ** ****** ***** (** **** ***** ***** ** ******* *****) **** * ******* ****** ** ****** ** ****** ***** (** **** ***** ***** ** ******* *****)* ***** ********* ** ** *** ****** **** *** *** ************* ** ****** ** ** ******** ** **** *********** ** ************** *** ******** ***** ***** ** ********* ** *********** *** ******** ***** **** ** ****** ** * ********* (*) *** ********* ** ***** ***** ** *** ****** ** ****** ** ****** ***** (** **** ***** ***** ** ******* *****) *********** *********** ***** ** **** *********** ** ************** *** (**) *** *********** ** ***** ***** ** *** ****** ** ****** ** ****** ***** (** **** ***** ***** ** ******* *****) *********** *********** ***** **** *********** ** ************** *** *** ******* ** ******** ***** ********** ** *** ******** *****.

(c) Upon Reclassifications, Reorganizations, Consolidations or Mergers .  In the event of (i) any capital reorganization of the Company, (ii) any reclassification or recapitalization of the stock of the Company (other

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

than (x) a change in par value or from par value to no par value or from no par value to par value or (y) as a result of a stock dividend or subdivision or split-up of shares as to which Section 7(a) shall apply or a combination or consolidation of shares as to which Section 7(b) shall apply), or (iii) any consolidation or merger of the Company with or into another corporation (where the Company is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock or any other class of Capital Stock then issuable upon exercise of this Warrant), this Warrant shall, after such reorganization, reclassification, recapitalization, consolidation or merger, be exercisable for the kind and number of shares of stock or other securities or property (“ Alternate Consideration ”) of the Company or of the successor corporation resulting from such consolidation or surviving such merger, if any, to which the holder of the number of Warrant Shares underlying this Warrant (at the time of such reorganization, reclassification, recapitalization, consolidation or merger, but assuming the satisfaction of all vesting milestones set forth in Section 3(a)) would have been entitled upon such reorganization, reclassification, recapitalization, consolidation or merger.  In such event, the aggregate Exercise Price otherwise payable for the shares of Common Stock (or such other class of Capital Stock) issuable upon exercise of this Warrant shall be allocated among the Alternative Consideration receivable as a result of such reorganization, reclassification, recapitalization, consolidation, or merger in proportion to the respective Fair Market Values of such Alternate Consideration.  If and to the extent that the holders of Common Stock (or such other class of Capital Stock) have the right to elect the kind or amount of consideration receivable upon consummation of such reorganization, reclassification, recapitalization, consolidation or merger, then the consideration that the Holder shall be entitled to receive upon exercise shall be specified by the Holder, which specification shall be made by the Holder by the later of (A) ten (10) Business Days after the Holder is provided with a final version of all material information concerning such choice as is provided to the holders of Common Stock (or such other class of Capital Stock), and (B) the last time at which the holders of Common Stock (or such other class of Capital Stock) are permitted to make their specifications known to the Company; provided , however , that if the Holder fails to make any specification within such time period, the Holder’s choice shall be deemed to be whatever choice is made by a plurality of all holders of Common Stock (or such other class of Capital Stock) that are not affiliated with the Company (or, in the case of a consolidation or merger, any other party thereto) and affirmatively make an election (or of all such holders if none of them makes an election).  From and after any such reorganization, reclassification, recapitalization, consolidation or merger, all references to “Warrant Shares” herein (including with respect to the calculation of the amount of cash payable upon a Net Cash Settlement or required to be deposited as Escrowed Proceeds upon a Fundamental Change) shall be deemed to refer to the Alternate Consideration to which the Holder is entitled pursuant to this Section 7(c).  The provisions of this clause shall similarly apply to successive reorganizations, reclassifications, recapitalizations, consolidations, or mergers.  

(d) Other Distributions .  In case the Company shall fix a record date for the making of a distribution (or, if no record date is set, the date of any distribution) to all holders of shares of its Common Stock (or other class of Capital Stock of the Company then issuable upon exercise of this Warrant) of securities, evidences of indebtedness, assets, cash, rights, warrants or other property (excluding (x) any cash dividends other than Specified Dividends and (y) any other dividends or distributions referred to in Section 7(a), 7(b) or 7(c)), then in each such case the Exercise Price in effect prior to such record date (or, if no record date is set, the date of such distribution) shall be reduced immediately thereafter to the price determined by multiplying the Exercise Price in effect immediately prior to the reduction by a fraction, (i) the numerator of which is (A) the average daily volume weighted average price per share of the Common Stock (or such other Company security as is then issuable upon exercise of this Warrant) for the last trading day preceding the first date on which the Common Stock (or such other Company security as is then issuable upon exercise of this Warrant) trades regular way on the principal national securities exchange or quotation system on which the Common Stock (or such other Company security) is listed or admitted to trading without the right to receive such distribution (or if the Common Stock or such other Company securities do not trade on a national securities exchange or quotation system, the Fair Market Value thereof as of the record date with respect to such distribution) minus (B) the amount of cash and/or the Fair Market Value of the securities, evidences of indebtedness, assets, rights, warrants or other property to be so distributed in respect of one share of Common Stock (or such other Company security) and (ii) the denominator of which is such average daily volume weighted average price per share (or, if applicable, Fair Market Value) specified in the preceding clause (i)(A).  The adjustment described in this clause shall be made successively whenever such a record date is fixed or distribution is made.

(e) Adjustment of Number of Shares Purchasable .  Upon any adjustment of the Exercise Price as provided in Section 7(a) or 7(b), the Holder shall thereafter be entitled to purchase upon the exercise of this Warrant, at the Exercise Price resulting from such adjustment, the number of Warrant Shares obtained by multiplying the

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

number of Warrant Shares as to which this Warrant is exercisable immediately prior to such adjustment by a fraction, the numerator of which is the Exercise Price in effect immediately prior to such adjustment and the denominator of which is the Exercise Price resulting from such adjustment.

(f) Rounding of Calculations; Minimum Adjustments . All calculations under this Section 7 shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest one-hundredth (1/100th) of a share, as the case may be. Any provision of this Section 7 to the contrary notwithstanding, no adjustment in the Exercise Price or the number of Warrant Shares as to which this Warrant is exercisable shall be made if the amount of such adjustment would be less than $0.01 or one-tenth (1/10th) of a share, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate $0.01 or 1/10th of a share, or more.

(g) Notice of Adjustment .  Whenever the terms of this Warrant are adjusted pursuant to this Section 7 or pursuant to any other applicable provision hereof, the Company shall deliver to the Holder in accordance with the notice provisions below a certificate signed by a duly authorized officer of the Company describing, in reasonable detail, the change or event requiring such adjustment and the newly adjusted Exercise Price, number of Warrant Shares and, as applicable, the kind and amount of Alternate Consideration purchasable hereunder after giving effect to such adjustment.

(h) Proceedings Prior to Any Action Requiring Adjustment .  As a condition precedent to the taking of any action that would require an adjustment pursuant to this Section 7, the Company shall take any and all actions that may be necessary, including obtaining regulatory, the NASDAQ Stock Market or other applicable national securities exchange or stockholder approvals or exemptions, in order that Company may thereafter validly and legally issue as fully paid and nonassessable all Warrant Shares and, as applicable, all Alternate Consideration that the Holder is entitled to receive upon exercise of this Warrant.

8. Reservation of Stock .  Unless a Fundamental Change has occurred, the Company will at all times reserve and keep available, solely for the issuance and delivery upon the exercise of this Warrant, such Common Stock and, as applicable, Alternate Consideration as from time to time shall be issuable upon the exercise of this Warrant.  All securities which shall be so issuable, when issued upon exercise of this Warrant in accordance herewith, shall be duly and validly issued and fully paid and nonassessable, and not subject to preemptive rights.

9. Replacement of Warrants .  Upon delivery by the Holder to the Company of (i) notice of the loss, theft, destruction or mutilation of this Warrant, and (ii) in the case of loss, theft or destruction, an indemnity agreement in a form and amount reasonably satisfactory to the Company, or in the case of mutilation, this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor and dated as of the Issue Date.

10. No Rights as Stockholder .  Until the exercise of this Warrant, the Holder of this Warrant shall not have or exercise any rights by virtue hereof as a stockholder of the Company (and then only to the extent of such Holder’s ownership of Capital Stock).

11. Transfer .

(a) Securities Laws .  Neither this Warrant nor the Warrant Shares issuable upon the exercise hereof have been registered under the Securities Act of 1933, as amended (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, including if this Warrant or the Warrant Shares are sold in accordance with Rule 144 promulgated under the Securities Act or any successor rule or regulation hereafter adopted by the SEC.  

(b) Restrictions on Transfer .

(i) The Holder shall not, directly or indirectly, by operation of law or otherwise, pledge, sell, encumber, assign, or otherwise transfer all or any unvested portion of this Warrant without the prior

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

written consent of the Company (which consent shall be in the Company’s sole discretion), other than (A) as part of a transaction in which at least 50% of the cable systems owned and/or operated by Comcast Corporation and its subsidiaries (as measured by number of subscribers) are being transferred or (B) to Comcast Corporation (or any successor publicly-held parent company of the Holder) or any subsidiary thereof ( provided that, in the event of any sale or other change in control of any such subsidiary to which any unvested portion of this Warrant has been transferred, other than as part of a transaction described in clause (A), such subsidiary shall be required to transfer such unvested portion of this Warrant to Comcast Corporation (or any successor publicly-held parent company of the Holder) or another subsidiary thereof).  For the avoidance of doubt, in no event shall any transactions in the securities of Comcast Corporation (or any successor publicly-held parent company of the Holder) constitute a transfer of this Warrant.

(ii) The Holder shall be permitted to pledge, sell, encumber, assign or otherwise transfer all or any vested portion of this Warrant and all or any portion of the Warrant Shares received upon exercise of this Warrant to any Person; provided that any such pledge, sale, encumbrance, assignment or transfer is effected in accordance with applicable law (including the Securities Act).

(c) Transfer Notice .  Promptly following the pledge, sale, encumbrance, assignment or other transfer of all or a portion of this Warrant in accordance herewith, the Holder shall surrender this Warrant to the Company, together with written notice of (i) the name, address, telephone number and facsimile number of the transferee and (ii) the portion of this Warrant so transferred (designated by the number of Warrant Shares underlying such portion of this Warrant).  Promptly following delivery by the Holder of such notice, the Company shall promptly (and in any event within five days thereafter) (A) deliver to the designated transferee a new Warrant evidencing the rights of such transferee to purchase the Warrant Shares in the denominations as set forth in such notice, (B) if applicable, deliver to the Holder a new Warrant evidencing the balance of this Warrant not assigned by the Holder, and (C) register on the books and records of the Company such transfer.  Such new Warrants shall in all other respects be identical to this Warrant (including the vesting milestones set forth in Section 3(a), to the extent applicable).  All or any portion of this Warrant, if properly assigned in compliance with this Section 11, may be exercised by the new Holder for the purchase of Warrant Shares without having a new Warrant issued.

(d) Legends .  Unless and until the Warrant Shares have been registered under the Securities Act or transferred pursuant to Rule 144, it is understood and agreed that any Warrant or certificate representing Warrant Shares shall bear any legend considered necessary or desirable by the Company to comply with the Securities Act or other applicable state securities laws, including substantially the following:

THE SECURITIES EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OFFERED FOR SALE, OR OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OR (B) IN A TRANSACTION THAT QUALIFIES AS AN EXEMPT TRANSACTION UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

(e) Rule 144 Information .  Unless a Fundamental Change has occurred, the Company covenants that it will use its reasonable best efforts to file timely all reports and other documents required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations promulgated by the SEC thereunder (or, if the Company is not required to file such reports, it will, upon the request of the Holder, make publicly available such information as necessary to permit sales pursuant to Rule 144 under the Securities Act), and it will use its reasonable best efforts to take such further action as a Holder may reasonably request, in each case, to the extent required from time to time to enable the Holder to, if permitted by the terms of this Warrant, sell this Warrant and the Warrant Shares without registration under the Securities Act within the limitations of the exemptions provided by (A) Rule 144 under the Securities Act, as such rule may be amended from time to time, or (B) any successor rule or regulation hereafter

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

adopted by the SEC.  Upon the written request of the Holder, the Company will deliver to such Holder a written statement that it has complied with such requirements.

(f) Registration Rights .  The Holder shall be entitled to request registration of the Warrant Shares under the Securities Act in accordance with that certain Registration Rights Agreement dated as of the Issue Date by and between the Company and the Holder (the “ Registration Rights Agreement ”).

(g) Survival .  This Section 11 shall survive any exercise of this Warrant with respect to the Warrant Shares issued upon such exercise.

12. Company Representations and Warranties . The Company hereby represents and warrants to the Holder that, as of the Issue Date, except as set forth in the SEC Documents filed with the SEC on or prior to the Issue Date:

(a) Organization, Good Standing and Corporate Power .  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Colorado.  Except as would not reasonably be expected to have a Material Adverse Effect, each of the Company’s subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.  The Company and each of its subsidiaries has all requisite corporate power and authority to carry on its business as now conducted and as presently proposed to be conducted, except for any failure of any subsidiaries to have such corporate power and authority as would not reasonably be expected to have a Material Adverse Effect. The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under this Warrant and the Registration Rights Agreement.  The Company and each of its subsidiaries is duly qualified to transact business as a foreign corporation and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect.

(b) Authorization .  All corporate action on the part of the Company (including its Board, officers and stockholders) necessary to authorize the execution, delivery and performance of this Warrant and the Registration Rights Agreement by the Company has been taken (except to the extent that Stockholder Approval is required in accordance with Section 3(e)(ii)).  This Warrant and the Registration Rights Agreement constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the indemnification provisions contained in the Registration Rights Agreement may be limited by applicable federal or state securities laws.

(c) Valid Issuance of Shares .  The Warrant Shares have been duly reserved for issuance and, upon issuance in accordance with the terms of this Warrant, will be duly authorized, validly issued, fully paid and nonassessable and issued free and clear of any lien, encumbrance, security interest, pledge, mortgage, hypothecation, charge, adverse claim, title retention agreement of any nature or kind, or other encumbrance (except any applicable securities law restrictions).  The offer, sale and issuance of this Warrant and the issuance of the Warrant Shares upon exercise hereof (i) are not subject to and will not give rise to any preemptive rights or rights of first refusal with respect thereto and (ii) are and will be in compliance with all applicable federal and state securities laws.  

(d) Governmental Consents and Filings . No consent, approval, order, waiver, exemption or authorization of, registration, declaration, filing or qualification with, certification, notice, application or report to, or expiration of any waiting period applicable to, any governmental authority, self-regulatory organization (including the NASDAQ Stock Market or any other applicable national securities exchange) or any other third party is required on the part of the Company in connection with the execution and delivery of this Warrant and the Registration Rights Agreement or the offer, sale and issuance of this Warrant or, except as provided in Sections 3(e)(i) and 3(e)(ii), the issuance of the Warrant Shares upon exercise hereof.


 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

(e) Compliance with Laws and Other Instruments .  

(i) Neither the Company nor any of its subsidiaries is in violation of or default under, and from December 31, 2013 through the Issue Date has not received any notices of violation or default with respect to, (A) any provisions of its certificate of incorporation, bylaws or other organizational documents, (B) any instrument, judgment, order, writ or decree of any court or governmental authority applicable to the Company or any of its subsidiaries, or (C) any note, indenture, mortgage, lease, agreement, instrument or other contract to which it is a party or by which it is bound, except in the case of clauses (B) and (C) for such violations or defaults as would not, individually or in the aggregate, have a Material Adverse Effect.  

(ii) Neither the Company nor any of its subsidiaries is in violation of, and the operation of the Company’s and its subsidiaries’ businesses as now conducted does not violate, any provision of any federal, state, local or foreign law, statute, rule or regulation applicable to the Company or its subsidiaries, except for such violations as would not, individually or in the aggregate, have a Material Adverse Effect.  

(iii) The execution, delivery and, subject to Sections 3(e)(i) and 3(e)(ii), performance of this Warrant and the Registration Rights Agreement by the Company and the offer, sale and issuance of this Warrant and, subject to Sections 3(e)(i) and 3(e)(ii), the issuance of the Warrant Shares upon exercise hereof do not and will not conflict with, result in a violation of or default under (with or without the passage of time and/or the giving of notice), or give rise to a right of termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, (A) any provisions of the Company’s or any of its subsidiaries’ certificate of incorporation, bylaws or other organizational documents, (B) any instrument, judgment, order, writ or decree of any court or governmental authority applicable to the Company or any of its subsidiaries, or (C) any note, indenture, mortgage, lease, agreement, instrument or other contract to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound, except in the case of clauses (B) and (C) for such violations or defaults as would not, individually or in the aggregate, have a Material Adverse Effect.

(f) SEC Documents; Company Stock Exchange Listing .

(i) The Company is current in its obligations to file and furnish all periodic reports with the SEC required to be filed or furnished by it under the Exchange Act and any applicable rules and regulations promulgated thereunder. The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and any other reports, proxy statements and information the Company filed with or furnished to the SEC since December 31, 2012 (the “ SEC Documents ”), at the time of their filing or being furnished, (A) did not contain 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, in light of the circumstances under which they were made, not misleading, and (B) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act and the respective rules and regulations promulgated thereunder.  

(ii) The financial statements of the Company (whether audited or unaudited and including any notes thereto or schedules included therein) included in the SEC Documents (the “ Company Financial Statements ”) (A) at the time of their filing or being furnished, complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, (B) were prepared in accordance with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or as otherwise permitted by Form 10-Q with respect to any Company Financial Statements filed on Form 10-Q), and (C) fairly presented in all material respects the consolidated financial position of the Company as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended.

(iii) The Company is in compliance in all material respects with the applicable listing rules of the NASDAQ Stock Market and has not received any written notice from the NASDAQ Stock Market asserting any material non-compliance with such rules.

(iv) Since the date of the audited financial statements of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, there has not been any event,

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

change, occurrence or circumstance that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.

(g) Capitalization .  As of July 18, 2014, the authorized and outstanding capital stock of the Company consisted solely of (i) 100,000,000 shares of Common Stock, of which 34,091,572 were issued and outstanding, and (ii) 10,000,000 shares of preferred stock, par value $.01, of which none of which were issued and outstanding.  All outstanding shares of the Company’s Capital Stock are duly authorized, validly issued, fully paid and nonassessable.  Except for (x) ********* shares of Common Stock reserved and not granted for issuance to employees under existing benefit plans disclosed in the SEC Documents filed publicly with the SEC prior to the Issue Date, and (y) the Company’s 2010 Convertible Notes due March 1, 2017 as defined and disclosed in the SEC Documents filed publicly with the SEC prior to the Issue Date, there are no (A) securities convertible into or exchangeable or exercisable for shares of the Company’s Capital Stock, (B) subscriptions, options, warrants, calls, rights, convertible securities or other contracts, agreements or commitments of any kind or character obligating the Company to issue, transfer or sell any of its Capital Stock, or (C) any equity equivalents or any agreements, arrangements or understandings granting any Person any rights in the Company similar to Capital Stock.  As of the Issue Date, there are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any of the Company’s Capital Stock.  As of **** *** ****, there were ******* outstanding and unvested restricted stock units granted by the Company.

(h) Litigation .  There is no action, suit, proceeding, arbitration, mediation, complaint, claim, charge or investigation pending or, to the Company’s knowledge, currently threatened before any court, arbitrator, mediator or governmental agency or instrumentality against the Company, any of its subsidiaries or any officer or director of the Company or any of its subsidiaries: (i) that questions the validity of this Warrant or the Registration Rights Agreement or the right of the Company to enter into either of them; or (ii) that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  

13. Miscellaneous .

(a) Notices .  All notices and other communications from the Company to the Holder of this Warrant shall be sufficiently made if sent by nationally recognized overnight courier (with tracking capability) or personal delivery to the mailing address of the Holder appearing on the books of the Company maintained for such purpose (as changed by the Holder from time to time by like notice).  All notices and other communications from the Holder of this Warrant to the Company, including any Exercise Notice, shall be sufficiently made if sent by nationally recognized overnight courier (with tracking capability), personal delivery or by e-mail to the mailing or e-mail address, as applicable, of the Company at its principal offices as shown below or as changed by the Company from time to time by like notice.  Any notice and other communication in accordance with this Section 13(a) shall be deemed to be delivered, given and received for all purposes as of: (i) if sent by a nationally recognized overnight courier (with tracking capability), the Business Day immediately following the date sent, (ii) if delivered personally, the date so delivered, and (iii) if and to the extent permitted to be sent by e-mail, the date sent (unless the sender receives an automatic error message from the server of the intended recipient indicating that the applicable notice or communication has not been received by such intended recipient or delivery thereof is delayed for any reason whatsoever).

(b) Nonwaiver .  No course of dealing or any delay or failure to exercise any right hereunder on the part of the Company or the Holder shall operate as a waiver of such right or otherwise prejudice the rights, powers or remedies of such Person.

(c) Limitation of Liability .  No provision hereof, in the absence of affirmative action by the Holder to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder hereof, shall give rise to any liability of such Holder to pay the Exercise Price for any Warrant Shares other than pursuant to an exercise of this Warrant or give rise to any status of or liability as a stockholder of the Company, whether such status or liability is asserted by the Company or by creditors of the Company.

(d) Saturdays, Sundays, Holidays, etc.   If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding day that is a Business Day.

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

(e) Change or Waiver .  Any term of this Warrant may be changed or waived only by an instrument in writing signed by the party against which enforcement of the change or waiver is sought.

(f) Successors and Assigns .  The rights and obligations of the Company set forth herein may not be assigned or delegated by the Company without the prior written consent of the Holder.  Subject to the restrictions on transferability set forth in Section 11 hereof, the rights and obligations of the Holder set forth herein may be assigned or delegated by the Holder without the prior written consent of the Company.  Subject to the foregoing, this Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the permitted successors and assigns of the Holder hereof.  The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and to the extent applicable, all Holders of Warrant Shares issued upon the exercise hereof (including transferees), and shall be enforceable only by such Holders.

(g) Severability .  The provisions of this Warrant shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision of this Warrant, or the application of such provision to any Person or any circumstance, is invalid or unenforceable, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (ii) the remainder of this Warrant and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application of such provision, in any other jurisdiction.

(h) Construction . Unless the express context otherwise requires:

(i) the words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Warrant, shall refer to this Warrant as a whole and not to any particular provision of this Warrant;

(ii) any singular forms of nouns, pronouns and verbs use herein shall include the plural, and vice versa;

(iii) any references herein to any gender include each other gender;

(iv) any references herein to “$” are to United States Dollars;

(v) any references herein to the Preamble shall refer to the preamble to this Warrant, and any references herein to a specific Section shall refer to such section of this Warrant;

(vi) any references to any Person include references to such Person’s successors and permitted assigns;

(vii) any references to any agreement, document or instrument means such agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof and, if applicable, hereof;

(viii) wherever the words “include,” “includes,” or “including” are used in this Warrant, they shall be deemed to be followed by the words “without limitation”; and

(ix) the headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

(i) Governing Law .  This Warrant shall be governed by and construed in accordance with the laws of the State of New York.

[Signature page follows]


 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

IN WITNESS WHEREOF, the Company has executed this Warrant as of the Issue Date.

 

CSG SYSTEMS INTERNATIONAL, INC.


By: /s/ Randy Wiese

Name: Randy Wiese

Title: EVP / CFP

7/25/14

Principal Office:

9555 Maroon Circle

Englewood, CO  80112

E-mail Address:  ******************
Attention: General Counsel

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

EXHIBIT A

NOTICE OF EXERCISE

CSG Systems International, Inc. (the “Company”)

Attention:   [________]

 

The undersigned Holder of this Warrant exercises this Warrant [in full] [for ______ Warrant Shares], as follows:

q

by Physical Delivery, subject to delivery of the aggregate Exercise Price for the Warrant Shares as to which this Warrant is so exercised, and the undersigned Holder hereby instructs the Company to issue the applicable number of Warrant Shares in the name of ______________, with delivery [of physical certificates for such Warrant Shares in these denominations _________________ to the following address: _____________________] [of such Warrant Shares via book entry with the Company’s transfer agent]

 

q

by Net Share Settlement, and the undersigned Holder hereby instructs the Company to issue certificates for the applicable number of Warrant Shares in the name of and delivered to ______________, whose address is ___________________________

 

[Include if the Holder requests Net Cash Settlement: The undersigned Holder hereby requests that this exercise be settled through Net Cash Settlement, and, if the Company so agrees, the undersigned Holder hereby instructs the Company to remit payment of the Net Cash Settlement to the following account:

 

Bank Name:

ABA#:

Account #:

Swift Code:

Ref: ]

 

[Include if the Warrant is not exercised in full:  Because the undersigned is not exercising this Warrant in full, the undersigned hereby instructs the Company to deliver to the undersigned a new Warrant of like tenor and date for the balance of the Warrant Shares.]

The undersigned Holder hereby represents and warrants to the Company that, as of the date hereof, the Holder and its Affiliates beneficially own ______________ shares of Common Stock (without giving effect to the exercise of this Warrant pursuant to this Notice of Exercise).

___________________________________

(Name of Registered Owner)

 

___________________________________

(Signature of Registered Owner)

___________________________________

(Street Address)

 

___________________________________

(City, State, Zip)

 

___________________________________

(Dated)

 

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

 

Schedule R-2

 

Registration Rights Agreement

 

(See Attached)

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT, dated as of July 24, 2014 (this “ Agreement ”), is being made and entered into by and between CSG SYSTEMS INTERNATIONAL, INC., a Delaware corporation (the “ Company ”), and COMCAST ALPHA HOLDINGS, LLC, a Delaware limited liability company (the “ Holder ”).

WHEREAS, concurrently herewith, the Company is issuing to the Holder that certain Common Stock Purchase Warrant, dated the date hereof (the “ Warrant ”), in accordance with the terms and subject to the conditions of which the Holder may purchase certain shares of the Company’s common stock, par value $0.01 per share (the “ Common Shares ”); and

WHEREAS, in connection with the transactions contemplated by the Warrant, the Company has agreed to grant to the Holder the Registration Rights (as defined in Section 1 hereof).

NOW, THEREFORE, the parties hereto, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth, hereby agree as follows:

Section 1. Registration Rights

 

1.1 Registration Rights .  With respect to any Common Shares issued pursuant to an exercise of the Warrant or issuable pursuant to the exercise of a then-vested portion of the Warrant (such Common Shares, the “Registrable Shares”), unless such Registrable Shares have been disposed of pursuant to a Registration Statement as provided in Section 2 below or have been sold pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), the Holder shall be entitled to the registration rights in accordance with the terms and subject to the conditions set forth in Section 2 below (the “Registration Rights”).

 

1.2 Registrable Shares .  For purposes hereof, “Registrable Shares” shall also be deemed to include any shares of capital stock of the Company issued or issuable with respect to the Common Shares, including, without limitation, (x) as a result of any stock split, stock dividend or other distribution, recapitalization, merger, consolidation, exchange or similar event or otherwise and (y) shares of capital stock of the Company into which the Common Shares are converted or exchanged, and shares of capital stock of a successor entity into which the Common Shares are converted or exchanged (it being understood and agreed that this Agreement shall apply with full force and effect with respect to any of the foregoing).

 

Section 2. Demand Registration Rights

 

2.1 (a) Registration Procedure .  (i) Subject to Sections 2.1(c) and 2.2 hereof, if the Holder desires to exercise Registration Rights with respect to any Registrable Shares, then the Holder shall deliver to the Company a written notice (a “Registration Notice”) informing the Company of such exercise and specifying the number of Registrable Shares to be offered by the Holder.  Such notice may be given with respect to any Common Shares, at any time and from time to time, on or after the date on which the Holder has the right to purchase such Common Shares pursuant to the exercise of a vested portion of the Warrant (including after the purchase thereof).  Upon receipt of any Registration Notice (provided that the Company has not already caused the Registrable Shares to be included as part of an existing, effective shelf registration statement and related prospectus that the Company then has on file with the Commission (a “Shelf Registration Statement”), in which event, notwithstanding anything herein to the contrary, the Company shall be deemed to have satisfied its registration obligation under this Section 2 with respect to such Registrable Shares that have been included on the Shelf Registration Statement, subject to the maintenance of the effectiveness thereof in accordance with clause (ii) below), the Company shall cause to be filed with the Commission as soon as reasonably practicable after receiving the Registration Notice (but in any event within 45 days after the receipt thereof) a registration statement and related prospectus that complies as to form in all material respects with applicable Commission rules providing for the sale by the Holder of the Registrable Shares on a continuous or delayed basis pursuant to Rule 415 of the Securities Act (a “New Registration Statement”), which shall include the Registrable Shares that are the subject of the Registration Notice, and, if the Company is not then eligible to file an automatic shelf registration statement on Form S-3, the Company agrees (subject to Section 2.2 hereof) to use its reasonable best efforts to cause such New Registration Statement to be declared effective by the Commission as soon as reasonably practicable (and in any event within 105 days after the receipt of a Registration Notice with respect

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

thereto).  As used herein, “Registration Statement” and “Prospectus” refer to the Shelf Registration Statement and related prospectus (including any preliminary prospectus) or the New Registration Statement and related prospectus (including any preliminary prospectus), whichever is utilized by the Company to satisfy the Holder’s Registration Rights pursuant to this Section 2, including in each case any documents incorporated therein by reference.

 

(ii) The Holder agrees to provide in writing in a timely manner information regarding the proposed plan of distribution by the Holder of the Registrable Shares and such other information reasonably requested by the Company in connection with the preparation of and for inclusion in the Registration Statement.  The Company agrees (subject to Section 2.2 hereof) to use its reasonable best efforts to keep the Registration Statement effective (including the preparation and filing of any amendments and supplements necessary for that purpose) until the earlier of (x) the date on which the sale of all of the Registrable Shares registered under the Registration Statement is consummated and (y) two years (in the event the Company is then eligible to use Form S-3 (or any successor registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC)) or one year (in the event the Company is not then eligible to use Form S-3 (or any such successor registration form)) after (A) the effective date of the Registration Statement (in the case of a New Registration Statement) or (B) the date on which the Company supplements the Registration Statement for the offering described in the applicable Registration Notice (in the case of a Shelf Registration Statement).

(iii) Notwithstanding the foregoing, the Company may at any time, in its sole discretion and prior to receiving any Registration Notice from the Holder, include all of the Common Shares issuable pursuant to the exercise of the Warrant (whether vested or unvested) or any portion thereof in any Shelf Registration Statement.  In connection with any Registration Statement utilized by the Company to satisfy the Holder’s Registration Rights pursuant to this Section 2, the Holder agrees that it will respond in writing (which may be via email) within 15 calendar days to any reasonable request by the Company to provide or verify information regarding the Holder or the Holder’s Registrable Shares as may be required to be included in such Registration Statement pursuant to the rules and regulations of the Commission.

(b) Underwritten Offerings .  On two (2) occasions, the Holder shall have the right to distribute Registrable Shares by means of an underwriting, provided that the Registrable Shares to be so distributed have an expected aggregate sale price of at least $**********.  If the Holder so intends to distribute Registrable Shares by means of an underwriting, (i) it shall so advise the Company in the Registration Notice; (ii) the Company and the Holder shall jointly select the managing underwriter or underwriters for such offering; (iii) the Company shall enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting, and the Company shall prepare or, if necessary, amend and supplement the Registration Statement for purposes of such underwriting; and (iv) in no event shall the Company permit any other shares of capital stock to be included in such underwriting without the Holder’s written consent.

(c) Limitations on Registration Rights .  Except as otherwise provided in Section 2.1(b) with respect to underwritten offerings (as to which Section 2.1(b) shall apply), each exercise by the Holder of its Registration Rights shall be with respect to a minimum of the lesser of (i) an amount of Common Shares having an expected aggregate sale price of at least $********** or (ii) the total number of Registrable Shares held by the Holder at such time.  The Holder shall not be entitled to deliver (x) more than one Registration Notice during any *** ***** period (whether for an underwritten offering or a non-underwritten offering) or (y) any Registration Notice for a non-underwritten offering if all Registrable Shares are then eligible for sale purchase to Rule 144(b)(1) under the Securities Act.

 

2.2 Suspension .   (a)  Before a Registration Statement for any Registrable Shares has been declared effective, upon any notice by the Company to the Holder that the Company in good faith has concluded that disclosure by the Company in such Registration Statement of Confidential Information (as hereinafter defined) would be required and the nondisclosure of such Confidential Information would reasonably be expected to cause such Registration Statement to fail to comply with applicable disclosure requirements, the Holder agrees that (i) the Company may discontinue its efforts to register such Registrable Shares during the relevant Suspension Period (as hereinafter defined), and (ii) its rights to require the Company to take action to register any Registrable Shares pursuant to a Registration Statement shall be suspended during such Suspension Period.

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

(b) After a Registration Statement for any Registrable Shares has been declared effective, upon notice by the Company to the Holder that the Company has concluded that disclosure by the Company in such Registration Statement of Confidential Information would be required and the nondisclosure of such Confidential Information would reasonably be expected to cause such Registration Statement to fail to comply with applicable disclosure requirements, the Holder agrees that (i) it will immediately discontinue offers and sales of the Registrable Shares under such Registration Statement until the Holder receives copies of a supplemented and amended Prospectus that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective, and (ii) its rights to require the Company to take any action with respect to the registration or sale of any Registrable Shares pursuant to such Registration Statement (or to take any action to amend or supplement such Registration Statement) shall be suspended during such Suspension Period.

 

(c) As used herein, (i) the term “Confidential Information” means any material, non-public information, which, if disclosed, would interfere with, delay or impede (in each case, in any material respect) a significant acquisition, divestiture, merger, amalgamation, scheme of arrangement, tender offer, share exchange, recapitalization, restructuring, consolidation, corporate reorganization, liquidation, dissolution, financing, joint venture, partnership, strategic alliance, licensing arrangement, or other business combination transaction or extraordinary corporate transaction or series of related transactions involving the Company or would result in the premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential, and (ii) the term “Suspension Period” means any period commencing on the date that the Company reasonably concludes that it cannot register Registrable Shares without disclosing Confidential Information and ending on the earlier of (x) the date the Company discloses such Confidential Information, or (y) the date on which the Company concludes that it is not required to disclose such Confidential Information; provided, however, that (i) the period during which a Registration Statement may be suspended shall not exceed *** **** ** *** *** *** period, except that such ******* period may be extended to *** **** if, based on advice of counsel, the Company reasonably concludes that, following such initial ******* period, it still cannot register Registrable Shares without disclosing Confidential Information; and (ii) the Company shall not register any securities for its own account or that of any other stockholder during a Suspension Period (other than a registration relating to the sale of securities to employees of the Company pursuant to a stock option, stock purchase or similar plan on a registration statement on Form S-8).

 

2.3 Qualification .  The Company agrees to use its reasonable best efforts to register or qualify the Registrable Shares by the time the applicable Registration Statement is declared effective by the Commission under all applicable state securities or “blue sky” laws of such jurisdictions as the Holder shall reasonably request in writing, to keep each such registration or qualification effective during the period such Registration Statement is required to be kept effective or during the period offers or sales are being made by the Holder after delivery of a Registration Notice to the Company, and to do any and all other acts and things which may be reasonably necessary or advisable to enable the Holder to consummate the disposition in each such jurisdiction of the Registrable Shares owned by the Holder; provided, however, that the Company shall not be required to (x) qualify generally to do business in any jurisdiction or to register as a broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for this Section 2.3, (y) subject itself to taxation in any such jurisdiction or (z) submit to the general service of process in any such jurisdiction.

 

2.4 Actions by the Company .  Whenever the Company is required to effect the registration of Registrable Shares under the Securities Act pursuant to Section 2.1 of this Agreement (subject to Section 2.2 hereof), the Company shall:

(a) prepare and file with the Commission within the time frames set forth in Section 2.1 the requisite Registration Statement to effect such registration, which Registration Statement shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the Commission to be filed therewith, and the Company shall use its reasonable best efforts to cause such Registration Statement to become effective within the time frames set forth in Section 2.1; provided that, before filing such Registration Statement or any amendments or supplements thereto, the Company shall furnish to the Holder and counsel for the Holder a draft copy of the Registration Statement and shall use its reasonable best efforts to reflect in such Registration Statement, when filed with the Commission, such comments as the Holder or such counsel shall reasonably and timely propose;

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

(b) subject to the proviso in clause (a) above, prepare and file with the Commission such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary (i) to keep such Registration Statement effective and (ii) to comply with the provisions of the Securities Act with respect to the disposition of the Registrable Shares covered by such Registration Statement, in each case for the time period provided in Section 2.1(a)(ii);

(c) furnish, without charge, to the Holder such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits), and the Prospectus included in such Registration Statement, and other documents, as the Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Shares owned by the Holder; and the Company hereby consents (except during the continuance of a Suspension Period) to the use of such Prospectus and each amendment or supplement thereto by the Holder, in connection with any offering and sale of the Registrable Shares covered by such Prospectus or any amendment or supplement thereto in the manner set forth therein;

(d) promptly notify the Holder: (i) when the Registration Statement or post-effective amendment thereto has been filed, when the same has become effective, (ii) of any request by the Commission or any state securities or blue sky authority for amendments to the Registration Statement, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Shares for sale under the securities or blue sky laws of any jurisdiction, (v) of the existence of any fact of which the Company becomes aware or the happening of any event which results in (A) the Registration Statement containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make any statements therein, in the light of the circumstances under which they were made, not misleading or (B) the Prospectus included in such Registration Statement containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make any statements therein, in the light of the circumstances under which they were made, not misleading, and (vi) of the Company’s reasonable determination that a post-effective amendment to the Registration Statement would be appropriate or that there exist circumstances not yet disclosed to the public which make further sales under such Registration Statement inadvisable pending such disclosure and post-effective amendment;

(e) use its reasonable best efforts to cause all such Registrable Shares to be listed (i) on the United States national securities exchange on which the Common Shares are then listed or (ii) if the Common Shares are not at the time listed on any United States national securities exchange (or if the listing of Registrable Shares is not permitted under the rules of such United States national securities exchange on which the Common Shares are then listed), on another United States national securities exchange;

(f) use its reasonable best efforts to take all other steps necessary to expedite or facilitate the registration and disposition of the Registrable Shares contemplated hereby, including (i) obtaining necessary governmental approvals and effecting required filings; (ii) cooperating with the Holder in connection with any filings required by FINRA; (iii) providing appropriate certificates not bearing restrictive legends representing the Registrable Shares; and (iv) providing a CUSIP number and maintaining a transfer agent and registrar for the Registrable Shares;

(g) keep the Holder’s counsel reasonably apprised as to the intention and progress of the Company with respect to any Registration Statement hereunder, including by providing the Holder’s counsel with copies of all written correspondence with the SEC in connection with any Registration Statement or Prospectus filed hereunder; and

 

(h) ensure that (i) at the time of filing, no Registration Statement (including any amendments thereto) shall contain any 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, in the light of the circumstances under which they were made, not misleading, and (ii) at the time of filing, no Prospectus (including any supplements thereto) shall contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case, except for any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact made in reliance on and in

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

conformity with written information furnished to the Company by or on behalf of the Holder specifically for use therein.

 

2.5 Indemnification by the Company.  The Company shall indemnify, defend and hold harmless, to the fullest extent permitted by applicable law, the Holder, its affiliates (within the meaning of Rule 405 under the Securities Act), any underwriter (within the meaning of the Securities Act), each person who controls the Holder or any underwriter (within the meaning of the Securities Act or the Exchange Act), and each of their respective officers and directors against all losses, claims, damages, liabilities and expenses (collectively, “Damages”) arising out of or based upon (a) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto, (b) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (c) any violation or alleged violation by the Company (or any of its affiliates or agents) of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated thereunder, and the Company shall pay to each such Holder, affiliate, underwriter, control person, or other aforementioned person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result; provided, however, that the Company shall not be liable for any Damages to the extent such Damages (i) relate to the Holder and (ii) were caused by the Holder’s failure to deliver to the Holder’s immediate purchaser a copy of the Registration Statement or Prospectus or any amendments or supplements thereto (if the same was required by applicable law to be so delivered) after the Company has furnished the Holder with a sufficient number of copies of the same.

 

2.6 Indemnification by the Holder .  The Holder shall furnish to the Company in writing such information as the Company reasonably requests for use in connection with any Registration Statement or Prospectus and shall indemnify, defend and hold harmless, to the fullest extent permitted by applicable law, the Company, its affiliates (within the meaning of Rule 405 under the Securities Act), any underwriter (within the meaning of the Securities Act), each person who controls the Company or any underwriter (within the meaning of the Securities Act), and each of their respective officers and directors against all Damages arising out of or based upon (a) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or (b) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, but in each case only to the extent such Damages arise out of or are based upon (i) statements or omissions that were made in reliance upon and in conformity with such information relating to the Holder furnished in writing to the Company by the Holder expressly for use therein or (ii) the Holder’s failure to deliver to the Holder’s immediate purchaser a copy of the Registration Statement or Prospectus or any amendments or supplements thereto (if the same was required by applicable law to be so delivered) after the Company has furnished the Holder with a sufficient number of copies of the same.  In no event shall the aggregate amounts payable by the Holder by way of indemnity or contribution under this Section 2.6 or Section 2.8 exceed the proceeds from the offering received by the Holder (net of any brokerage and sales commissions), except in the case of fraud or willful misconduct by the Holder.

 

2. 7 Indemnification Procedures.  Any person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified party and indemnifying party may exist with respect to such claim, permit such indemnifying party to assume the defense of any third-party claim with counsel reasonably satisfactory to the indemnified party.  If such defense is assumed, then the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its prior written consent (so long as such consent is not unreasonably withheld, conditioned or delayed).  An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party that are in addition to or may conflict with those available to another indemnified party with respect to such claim.  Failure to give prompt written notice of a claim shall not release the indemnifying party from its obligations hereunder except to the extent that the indemnifying party is materially prejudiced thereby.

 

2.8 Contribution .  If the indemnification provided for in Section 2.5 or Section 2.6 is due in accordance with the terms hereof but is held by a court to be unavailable or unenforceable in respect of any Damages

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

(except, for purposes of clarity, any exclusions to indemnification expressly provided for in Section 2.5 or Section 2.6), then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Damages in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other, in connection with the statements, omissions or actions that result in such Damages as well as any other relevant equitable considerations.  The relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, and by such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  In no event shall the aggregate amounts payable by the Holder by way of indemnity or contribution under Section 2.6 or this Section 2.8 exceed the proceeds from the offering received by the Holder (net of any brokerage and sales commissions), except in the case of fraud or willful misconduct by the Holder.

 

Section 3. Expenses

 

The Company shall pay all expenses incident to the performance by the Company of the Company’s registration obligations under Section 2, including (i) all stock exchange, Commission and state securities registration, listing and filing fees, (ii) all expenses incurred in connection with the preparation and filing of any Registration Statement and Prospectus, (iii) fees and disbursements of counsel for the Company and of the independent public accountants of the Company, and (iv) the costs of any other consents necessary for the Company in connection with any Registration Statement and Prospectus.  The Holder shall be responsible for the payment of any brokerage and sales commissions, fees and disbursements of the Holder’s counsel, accountants and other advisors and any transfer taxes relating to the sale or disposition of the Registrable Shares by the Holder pursuant to Section 2 or otherwise.

Section 4. Rule 144 Compliance

 

The Company covenants that it will timely file the reports required to be filed by the Company under the Securities Act and the Exchange Act so as to enable the Holder to sell Registrable Shares pursuant to Rule 144 under the Securities Act.  In connection with any sale, transfer or other disposition by the Holder of any Registrable Shares pursuant to Rule 144 under the Securities Act, the Company shall cooperate with the Holder to facilitate the timely preparation and delivery of certificates representing Registrable Shares to be sold (or the book entry of such Registrable Shares) and not bearing any Securities Act legend, and enable certificates for (or the book entry of) such Registrable Shares to be for such number of shares and registered in such names as the Holder may reasonably request at least three business days prior to any sale of Registrable Shares hereunder.

Section 5. Miscellaneous

 

5.1 Notices .  All notices and other communications called for under this Agreement shall be in writing and shall be sufficiently made if sent by nationally recognized overnight courier (with tracking capability), personal delivery, or e-mail transmission; provided that if given by e-mail, such notice or other communication shall be followed up within one business day by personal delivery or overnight courier as described in this Section 5.1.  All such notices and other communications shall be deemed to have been delivered: (i) upon actual receipt, if delivered personally; (ii) on the date sent by email, if sent on a business day in the place of receipt; otherwise on the next business day in the place of receipt (unless, in each case, the sender receives an automatic error message from the server of the intended recipient indicating that the applicable notice or communication has not been received by such intended recipient or delivery thereof is delayed for any reason whatsoever); or (iii) on the next business day after deposit with a recognized overnight courier, if sent by an overnight courier, in each case addressed to the respective parties at their address set forth on Schedule A.  Either party hereto may designate a different address by providing written notice of such new address to the other party hereto as provided above.

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

 

5.2 Nonwaiver .  No course of dealing or any delay or failure to exercise any right hereunder on the part of the Company or the Holder shall operate as a waiver of such right or otherwise prejudice the rights, powers or remedies of such Person.

 

5.3 Saturdays, Sundays, Holidays, etc .  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a business day, then such action may be taken or such right may be exercised on the next succeeding day that is a business day.

 

5.4 Change or Waiver .  Any term of this Agreement may be changed or waived only by an instrument in writing signed by the party against which enforcement of the change or waiver is sought.

 

5.5 Successors and Assigns .  Except for an assignment (i) by operation of law or (ii) by the Holder to a transferee of the Warrant, this Agreement and the rights granted hereunder may not be assigned by either party hereto.  Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and assigns.

 

5.6 Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision of this Agreement, or the application of such provision to any person or any circumstance, is invalid or unenforceable, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision, and (ii) the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application of such provision, in any other jurisdiction.

 

5.7 Construction. Unless the express context otherwise requires:

(a) the words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;

(b) any singular forms of nouns, pronouns and verbs used herein shall include the plural, and vice versa;

(c) any references herein to any gender include each other gender;

(d) any references herein to “$” are to United States Dollars;

(e) any references to any person include references to such person’s successors and permitted assigns;

(f) any references to any agreement, document or instrument means such agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof and, if applicable, hereof;

(h) wherever the words “include,” “includes,” or “including” are used in this Agreement, they shall be deemed to be followed by the words ”without limitation”; and

 

(i) the headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Agreement.

 

5.8 Governing Law and Venue .  This Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and governed by and in accordance with the laws of the State of New York without regard to the conflicts of law principles thereof to the extent that such principles would direct a matter to

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

another jurisdiction.  The parties hereby irrevocably submit to the personal jurisdiction of the courts of the State of New York and the Federal courts of the United States of America located in the County of New York solely in respect of the interpretation and enforcement of the provisions of this Agreement and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts, and the parties irrevocably agree that all claims relating to such action, proceeding or transactions shall be heard and determined in such a New York State or Federal court.  The parties hereby consent to and grant any such court jurisdiction over the person of such parties and, to the extent permitted by law, over the subject matter of such dispute and agree that delivery of process or other papers in connection with any such action or proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof.  EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.

 

5.9 Integration; Amendment . This Agreement (together with the Warrant) constitutes the entire agreement among the parties hereto with respect to the matters set forth herein and supersedes and renders of no force and effect all prior oral or written agreements, commitments and understandings among the parties with respect to the matters set forth herein.  Except as otherwise expressly provided in this Agreement, no amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by the Company and the Holder.

 

5.10 Execution in Counterparts .  This Agreement may be executed by facsimile signatures and in any number of counterparts with the same effect as if all signatory parties had signed the same document.  All counterparts shall be construed together and shall constitute one and the same instrument.

 

[ Signature page follows ]

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.22I

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed on its behalf as of the date first herein above set forth.

CSG SYSTEMS INTERNATIONAL, INC.

 

 

By:

/s/ Randy Wiese                            July 25, 2014

 

Name:

Randy Wiese

 

Title:

CFO /EVP

 

 

COMCAST ALPHA HOLDINGS, LLC

 

 

By:

/s/ Kristin M. Kipp

 

Name:

Kristin M. Kipp

 

Title:

Vice President

 

 

 


 

SCHEDULE A

If to the Company:

CSG Systems International, Inc.
9555 Maroon Circle

Englewood, CO 80112
Attention:  General Counsel

Email:  ******************

with a copy to:

Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004

Attention:  Krishna Veeraraghavan

Email:  ***************************

SC1:3640045.6


If to the Holder:

c/o Comcast Capital Corporation

1201 N. Market Street, Suite 1000
Wilmington, DE  19801
Attention:  President

Email:  **************************

with a copy to:

Comcast Corporation

One Comcast Center
1701 John F. Kennedy Blvd.

Philadelphia, PA 19103
Attention:  General Counsel

Email:  *********************

 


EXHIBIT C-30

 

WFX Scheduling and WFX Resource Allocation Manager

 

 

WFX Scheduling.   WFX Scheduling provides available appointment times and scheduling of Customer's Subscriber-requested service calls through CSG's and any other third party's integrated order management system.

 

WFX Resource Allocation Manager.   WFX Resource Allocation Manager integrates with WFX Scheduling to generate available appointment times based on Customer's field resource scheduling capacity and passes those appointment times to WFX Scheduling.  WFX Resource Allocation Manager has the ability to allocate Customer's field resource scheduling capacity based on Customer's existing technician shift data within CSG Workforce Express® ("WFX") and to facilitate Customer's scheduling adjustments as necessary to meet Customer's field resource operational demands (for example: promotional campaigns, time to install and repair, regulatory) and other business factors.

 

 

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 (***).

Exhibit 10.22J

 

TENTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC

 

 

This TENTH AMENDMENT (the “Amendment”) is made by and between CSG Systems, Inc . (“CSG”) and Comcast Cable Communications Management, LLC (“Customer”). The Effective Date of this Amendment is the date last signed below.  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement (CSG document #2501940) with an effective date of March 1, 2013 (the “Agreement”) and now desire to amend the Agreement in accordance with the terms and conditions set forth in this Amendment. If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control. Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment shall have the meaning set forth in the Agreement. Upon execution of this Amendment by the Parties, any subsequent reference to the Agreement between the Parties shall mean the Agreement as amended by this Amendment. Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

 

CSG and Customer agree to the following:

 

Customer desires to use, and CSG agrees to provide, Configurable Lines of Business Functionality (“C-LOB Functionality”) for the Home Security Line of Business pursuant to the Agreement.  Therefore, Schedule F , Section IV. Ancillary Products and Services, Subsection G. titled “Configurable Lines of Business Functionality (‘C-LOB Functionality’)”, shall be amended to add a new Subsection G.1 entitled “C-LOB Functionality for the Home Security Line of Business” as follows:

 

G.1. C-LOB Functionality for the Home Security Line of Business (“C-LOB for HSN”)

 

Description of Item/Unit of Measure

Frequency

Fee

1.Implementation Services (Note 1)

Per Request

Quote

2.C-LOB for HSN

 

 

a)******* Subscription Fee (per connected C-LOB for HSN subscriber) (Note 2)   (Note 3)

 

 

§ Initial ******* Subscriber fee

*******

$******

§ ******* Subscriber fee beginning ****** (**) ****** following the completion of  all CSG home security subscriber Market migrations to C-LOB for HSN.  Completion of all Market migrations is defined and includes ******** *** ******** *********** ********* ******** ********* **** ***** ******** ******** *********** ******** ************, and ******* *******.

*******

$******

3.Complex Composite Services (per Complex Composite Service) (Note 4) (Note 5)

*******

$******

Note 1: The specific terms of the implementation services shall be set forth in a mutually agreed upon Statement of Work.

Note 2: CSG will provide C-LOB for HSN, at ** ****** ** ********, for up to ******* ********** ****** of processing.  This **** processing must be used within the first ****** (**) ****** after the first subscriber is activated on the system.  Any remaining **** ********** ***** not used after ***** ****** (**) in association with C-LOB for HSN will be ********* and CSG will begin billing per Section 2.a) above, at which time such subscribers will be counted as Connected Subscribers.  To clarify, upon expiration of the ******* ********** ****** of **** processing, CSG will invoice and Customer will be responsible for payment of either the ****** Subscriber fee (in the event completion of all Market migration to C-LOB for HSN as identified above has occurred) or the ******* ******* Subscriber fee.  In addition to the fees provided above, the existing BSC for Non-Rated Video and Non-Rated High-Speed Data and Residential Voice Services listed in Section I.A of Schedule F of the Agreement will apply to the accounts associated with C-LOB for HSN.

Note 3 : For clarification purposes, the ******* Subscription Fee, as set forth in Section 2.a) above, shall include processing for up to one (1) Complex Composite Service per connected C-LOB for HSN subscriber, per ***** for ** ********** ****.

Note 4 : Complex Composite Services shall mean a primary service that is stored on CSG’s Provisioning Data Base (PDB).  A primary service shall mean a parent service that may or may not have children services.

Note 5 : The fee listed above shall be charged for *** (*) or more Complex Composite Service per connected C-LOB for HSN subscriber, *** *****.

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Note:   CSG shall not be required to process C-LOB for HSN subscribers until the Customer configured line of business is approved by CSG for processing and the Parties enter into a mutually agreed upon Statement of Work for implementation and analysis of the configured line of business.

 

As a point of clarification, the C-LOB for HSN cannot be used for Video, High-Speed Data, Residential Voice Services, ACP Commercial or ACP Wireless.

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed by their duly authorized representatives.

 

COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC (“CUSTOMER”)

 

CSG SYSTEMS, INC. (“CSG”)

 

By:  /s/ Peter Kiriacoulacos

 

By:  /s/ Peter E Kalan

 

Name: Peter Kiriacoulacos

 

Name:  Peter E. Kalan

 

Title:  Chief Procurement Officer

 

Title:  President & CEO

 

Date:  3-23-14

 

Date:  September 20, 2014

 

 

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 (***).

Exhibit 10.23AH

 

FORTY-SECOND AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

DISH NETWORK L.L.C.

 

This FORTY-SECOND AMENDMENT (this “ Amendment ”) is made by and between CSG Systems, Inc. , a Delaware corporation (“ CSG ”), and DISH Network L.L.C. , a Colorado limited liability company (“ Customer ”).  This Amendment shall be effective as of the date last signed below (the “ Effective Date ”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement (Document #2301656) effective as of January 1, 2010 (the “ Agreement ”), and now desire to further amend the Agreement in accordance with the terms and conditions set forth in this Amendment.  If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control.  Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment shall have the meaning set forth in the Agreement.  Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment.  Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

 

CSG and Customer agree as follows as of the Effective Date:

 

1.

Customer is licensed to use CSG’s Interactivate product (“ Interactivate ”) through September 23, 2014. Customer has requested and CSG has agreed to further license Interactivate to Customer on a month to month basis for the fees provided in Schedule F.  

 

2.

Schedule F , “FEES”, CSG Licensed Products, of the Agreement is hereby amended to delete Note 2 of Section III. entitled “CSG’s Interactivate,” in its entirety and replace it with the following:

 

Note 2: Initial Managed Services Support Fees.  The ***-**** and ***** ******* recurring Initial Managed Services Support Fees were invoiced to Customer upon Phase I Enterprise Release Date, as such date was identified in the Statement of Work, CSG document no. 2310384, between CSG and Customer (the “ SOW ”).  Fee includes the following for up to ******* ************ per ***** in CSG’s managed services environment:

·

Interactivate software, maintenance and support, including, without limitation, a license to use Interactivate in CSG’s managed services environment during the Term and any Additional Interactivate Commitment Term that Customer may elect at its option.

·

Environment maintenance and support (includes changes/updates required for QT04, QT05 and QT07).

·

Maintenance and support for *** (*) CCS downstream interface, *** (*) CCS upstream interface, *** (*) Customer identified partner downstream interfaces, *** (*) Customer identified partner upstream interfaces. Customer-identified partner interfaces were provided pursuant to a separately negotiated mutually agreed upon statement of work and were subject to fees based upon **** *** ********* for their development.  

·

The parties agree to a ******-*** (**) ***** commitment for Interactivate to be paid in ***** ******* ************ of no less than $****** over the ******-*** (**) ***** term expiring on September 23, 2014 (for purposes of this Amendment and the SOW the “ Term ”), subject to annual price adjustment as provided in Section 4 of the Agreement.  In the event Customer terminates its use of Interactivate prior to the end of the Term, for reasons other than those set forth in to Section 19 (a), 19 (c) or 19 (g) Customer agrees that in addition to all other amounts due and owing to CSG under the Agreement, Customer shall pay the minimum transaction amount of $****** multiplied by the ********* ****** of the ******-*** (**) month commitment.  In addition to the foregoing, Customer may, at its sole option, upon notice to CSG, extend  the Term on a month to month basis upon the same terms provided herein for the fees provided in Schedule F, subject to annual adjustment.  

 

 

3 .  Customer requests and CSG agrees that the Initial Managed Services Support Fee of $******* and the Incremental Managed Services Support Fees for Partner and Non-Partner Transaction Fees for Interactivate, shall be decremented against the $********* ****** provided by CSG to Customer under the Tenth Amendment to the Agreement (CSG document no. 2307267) until extinguished.

 

 



***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed by their duly authorized representatives.

 

DISH NETWORK L.L.C.

CSG SYSTEMS, INC.

 

By:  /s/ John W Swieringa

 

By:  /s/ Joseph T Ruble

 

Name: John W. Swieringa

 

Name:  Joseph T. Ruble

 

Title:  Senior Vice President and Chief Information

           Officer

 

Title:  EVP, CAO & General Counsel

 

Date:  August 18, 2014

 

Date:  25 August 2014

 

 

 

 

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 (***).

Exhibit 10.23AI

 

FORTY-THIRD AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

DISH NETWORK L.L.C.

 

This FORTY-THIRD AMENDMENT (this “ Amendment ”) is made by and between CSG Systems, Inc. , a Delaware corporation (“ CSG ”), and DISH Network L.L.C. , a Colorado limited liability company (“ Customer ”).  This Amendment shall be effective as of the date last signed below (the “ Effective Date ”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement (Document #2301656) effective as of January 1, 2010 (the “ Agreement ”), and now desire to further amend the Agreement in accordance with the terms and conditions set forth in this Amendment.  If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control.  Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment shall have the meaning set forth in the Agreement.  Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment.  Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

 

CSG and Customer agree as follows as of the Effective Date:

 

1 .

Pursuant to the Forty-first Amendment to the Agreement dated March 4, 2014 (CSG document number 2504666), Financial Forecaster Light in CSG Vantage® was added to the Agreement.   Schedule F , “FEES,” CSG SERVICES, was amended to add Section XIII. entitled “Financial Forecaster in CSG Vantage®,” to include fees for Financial Forecaster Light in CSG Vantage for the delivery of CPSM-318 daily snapshot reports in Vantage Plus.  Customer desires to receive, and CSG agrees to provide, CPSM-308 daily snapshot reports in Vantage Plus in addition to CPSM-318 daily snapshot reports.  As a result, Schedule F , “FEES,” CSG SERVICES, Section XIII. entitled “Financial Forecaster in CSG Vantage®,” shall be deleted in it’s entirely and replaced with the following:

 

CSG SERVICES

XIII.  Financial Forecaster in CSG Vantage ®

 

Description of Item/Unit of Measure

Frequency

Fee

A.  Financial Forecaster Light in CSG Vantage ®

 

 

    1.  Financial Forecaster Light Report Fee (*** ******) (Note 1) (Note 3)

*******

$********

    2.  ***-**** implementation fee for CPSM-318 and CPSM-308 daily snapshot reports into DSH schema (Note 2)

********

$*********

Note 1: Includes only the delivery of the CPSM-318 and the CPSM-308 daily snapshot reports in Vantage Plus and their associated tables in CSG Vantage® .  

Note 2: CSG and Customer shall use commercially reasonable efforts to enter into a mutually agreeable Statement of Work covering the implementation of the Services.

Note 3:   CSG and Customer agree that the Financial Forecaster in CSG Vantage is exempt from the ******* *********** ********* *** ******** as set forth in Schedule * of the Agreement as these tables are populated from an *** ** *** ********** *********** *******.

 

 


 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed by their duly authorized representatives.

 

 

DISH NETWORK L.L.C.

CSG SYSTEMS, INC.

 

By:  /s/ John W Swieringa

 

By:  /s/ Joseph T Ruble

 

Name: John W. Swieringa

 

Name:  Joseph T. Ruble

 

Title:  Senior Vice President and Chief Information

           Officer

 

Title:  EVP,CAO & General Counsel

 

Date:  August 29, 2014

 

Date:  2 Sept 2014

 

 

 

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 (***).

Exhibit 10.23AJ

 

 

 

FORTY-FOURTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

DISH NETWORK L.L.C.

 

 

This FORTY-FOURTH AMENDMENT (this “ Amendment ”) is made by and between CSG Systems, Inc. , a Delaware corporation (“ CSG ”), and DISH Network L.L.C. , a Colorado limited liability company (“ Customer ”).  This Amendment shall be effective as of the date last signed below (the “ Effective Date ”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement (Document #2301656) effective as of January 1, 2010 (the “ Agreement ”), and now desire to further amend the Agreement in accordance with the terms and conditions set forth in this Amendment.  If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control.  Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment shall have the meaning set forth in the Agreement.  Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment.  Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

 

CSG and Customer agree as follows as of the Effective Date:

 

1.

Customer desires to use and CSG agrees to provide Customer with the Event Processing System (“ EPS ”) and Event Reporting System (“ ERS ”) .  Therefore, SCHEDULE A , “Services” of the Agreement is hereby AMENDED by adding “ Event Processing System/Event Reporting System ” to the list of Additional Services and by adding the following description to EXHIBIT A-5 to the section entitled “ Additional Services ” as follows:

 

CSG’s Event Processing System (EPS)/Event Reporting System (ERS) .  EPS/ERS are mediation and rating systems for Customer usage processing within the CSG service bureau.  EPS provides usage mediation, validation, processing, aggregation, augmentation, guiding, multiple output files, and/or rating for event records that can include usage and adjustments to apply to billing or external usage storage applications as needed by Customer.  ERS provides storage, reporting, event logs, validation, and statistics for up to *** (*) ****** of processed usage.  ERS provides reports in multiple formats and works only in conjunction with EPS usage processing.

 

2 .

As a result, SCHEDULE F , “FEES,” CSG SERVICES, of the Agreement is hereby AMENDED to add a new Section XIV entitled “Event Processing System/Event Reporting System” as follows:

 

CSG SERVICES

XIV.  Event Processing System/Event Reporting System (Note 1)

 

Description of Item/Unit of Measure

Frequency

Fee

1. Usage Interface – initial startup, implementation, and configuration (per *********, ** ** * **** ************ and * ********** ***********) (Note 2) (Note 3)(Note 4)

*** *******

$**********

2. Rating, Gating, and Filtering

 

 

a.Processing of required Records (per record rated, gated, or filtered)

 

 

§ MINIMUM ********* Records (all records rated, gated, or filtered)

*******

$********

§ ********* to ********** Records (per record rated, gated, or filtered)

*******

$******

§ ********** to ********** Records (per record rated, gated, or filtered)

*******

$******

§ ********** and ******* Records (per record rated, gated, or filtered)

*******

$******


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

3. Implement non-PDB components for Reporting and A/R Segmentation (in support of Customer’s need to distinguish regulated and non-regulated services) (Note 6)

*** *******

$*********

4. ******* subscription fee per subscriber (Note 5)

 

 

a.Up to ****** subscribers

*******

$****

b.Greater than ****** subscribers

*******

$****

Note 1: Pricing is limited to pre-rated Call Detail Records

Note 2:   Additional configuration of EPS/ERS beyond initial implementation will require a SOW at an hourly rate of $*******.

Note 3: ACP configuration for voice service code set up will be billable as *** and is not included in the implementation fee.

Note 4 : Any changes to the customer statement shall be handled via a separate SOW and is not contemplated in the above fees.

Note 5 :   Fees apply only to the reporting and A/R segmentation.  In addition to the fees provided above, the existing Active Subscriber fees as outlined in Schedule F “Fees” will continue to apply.

Note 6 :  Fees apply only to reporting and A/R segmentation.  Should additional functionality be required (i.e. Provisioning Data Base), an additional SOW shall be required.

 

3.

Once Customer has been invoiced for the Usage Interface implementation fee in Section XIV Item 1 above, CSG shall make available to Customer a ****** ** *** ******* *******-**** ******** ******* ($**********) to be applied against a **** ********** ******* ******** **************.  The ****** will not be available for the ******* ** ******* ******** *** **** ********* *** ******** ** ** ****** ***** and shall not be ********** ** ********.

 

4.

SCHEDULE *,   “*********** ********* *** ********” of the Agreement is hereby AMENDED to *** “***** ********** ******/***** ********* ******” as ******* ****, which ******* **** was designated as “********” in the Fortieth Amendment to the Agreement (CSG document number 2501944), as follows:

 

****   ***** ********** ******/***** ********* ****** (“ ***/*** ”) .

 

*** ***** ******* **** ** *** **** ****** ******* ****** ******-**** (**) ***** ** ******* *** *** ****** **** ******** ************ *** **************  ***** ******** ***** *:** ** ******** **** **** ** ********* *** **** ******** ***.

 

5.

EXHIBIT *-* , “*********** ********” ******* * entitled “******* ***** ******* *** ***** *********** *********” of the Agreement is hereby AMENDED to add the following:

 

***********/******

**** ** ***********

*******

***/***

*****

$****** *** *** ****** *********** ********

 

6.

SCHEDULE *, “*** ******** **** ******** ********** / ******** ******** ****” of the Agreement is hereby AMENDED to add Event Processing System/Event Reporting System to the list of **** * ********.

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed by their duly authorized representatives.

 

DISH NETWORK L.L.C.

CSG SYSTEMS, INC.

 

By:  /s/ John W Swieringa

 

By:  /s/ Joseph T Ruble

 

Name: John W. Swieringa

 

Name:  Joseph T. Ruble

 

Title:  Senior Vice President and Chief Information

           Officer

 

Title:  EVP,CAO & General Counsel

 

Date:  August 29, 2014

 

Date:  2 Sept 2014

 

 

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 (***).

Exhibit 10.23AK

 

FORTY-FIFTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

DISH NETWORK L.L.C.

 

This FORTY-FIFTH AMENDMENT (this “ Amendment ”) is made by and between CSG Systems, Inc. , a Delaware corporation (“ CSG ”), and DISH Network L.L.C. , a Colorado limited liability company (“ Customer ”).  This Amendment shall be effective as of the date last signed below (the “ Effective Date ”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement (Document #2301656) effective as of January 1, 2010 (the “ Agreement ”), and now desire to further amend the Agreement in accordance with the terms and conditions set forth in this Amendment.  If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control.  Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment shall have the meaning set forth in the Agreement.  Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment.  Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

 

CSG and Customer agree as follows as of the Effective Date:

 

1.

CSG at Customer’s request implemented a new system principal in Customer system **** ** *** ****** ******* ** **** (for purposes of this Amendment “ New Prin ”).  In addition to other functionality, this New Prin permitted Customer’s subscribers to initiate EFT payments as provided in Exhibit A-4(a) of the Agreement.  

 

2 .

Customer and CSG agree the ********* *** ******** ************* *** *** ******* ******* ********’* *** *********** *** *** ********* ** ******* ** *** ********** ******** ******* * ***** ** ***** ********* ********.  CSG and Customer agree the configuration has been completed as of the Effective Date, *** * ******* *** ****** ******* *** *** ******** ********* **************** ******* ** *** *** **** (for purposes of this Amendment “ *** ******* ”).

 

3 .

CSG and Customer wish to ****** *** *** ******* (for purposes of this Amendment “ *** ********** ”) and agree as follows:

 

a)

** ******* *** *** *******, CSG agrees to ******* ******** **** ** ******* ****** ** *** ****** ** *** ******* ******-**** ******** ******* ($**********), to be provided by CSG ** **** ***** ************ ** ******-*** ******** *** ******* ***** ******* ($*********), commencing with ********’* **** ******* ******* following execution of this Amendment.

b)

Customer agrees CSG shall not ** *********** *** *** ************ ** ******* ****** ** ********’* *** *********** ** * ****** ** **** **** ** ******** ** ********’* *** *********** ******* ** *** *** ******* and therefore shall **** *** ******** **** *** **** ******.

c)

The Parties agree to ******* **** ***** **** *** ****** ********* **** *** *** ******* ** provided in Section 4 of this Amendment.

 

4.

The Parties agree that the *** ********** ***** *** ********* ** ********* ** ***** ** ********** ** ****** ***** ********* *** ******* ********** ** ******** * ******* * ** **** *********.  Therefore, in exchange for the consideration and mutual covenants provided in this Amendment, each Party agrees to ******* ******* *** ***** *****’* **** *** ******* ********** ******* ************* ********* ********** ************* ** **** ***** ********* ********** *** ******** ****** ********** ************** *** ******** **** *** ******* *** *** *** ****** ****** ** *******


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

******* ************ *** ******* ********** ** ********* *** ** ** ******* ***** ** *** *** ** ** ***** ** *** ********* ****** ******** ** ******* ** *** **** ******* ** **** ** ***** ********* ***** ** *** ********* **** **** ***** *** ** *** *** ********  *** ********* ******** ***** *** ***** ** *** ******* ** **** ********** ** ******** ** ****** ************ ********** ** *** *** **********.  

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed by their duly authorized representatives.

 

 

DISH NETWORK L.L.C.

CSG SYSTEMS, INC.

 

By:  /s/ John W Swieringa

 

By:  /s/ Joseph T Ruble

 

Name: John W. Swieringa

 

Name:  Joseph T Ruble

 

Title:  Senior Vice President and Chief Information

           Officer

 

Title:  EVP,CAO & General Counsel

 

Date:  August 29, 2014

 

Date:  2 Sept 2014

 

 

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 (***).

Exhibit 10.23AL

 

FORTY-SIXTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

DISH NETWORK L.L.C.

 

 

This FORTY-SIXTH AMENDMENT (this “ Amendment ”) is made by and between CSG Systems, Inc. , a Delaware corporation (“ CSG ”), and DISH Network L.L.C. , a Colorado limited liability company (“ Customer ”).  Following execution by the parties, this Amendment shall be effective as of January 1, 2015 (the “ Effective Date ”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement (Document #2301656) effective as of January 1, 2010 (the “ Agreement ”), and now desire to further amend the Agreement in accordance with the terms and conditions set forth in this Amendment.  If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control.  Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment shall have the meaning set forth in the Agreement.  Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment.  Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

 

CSG and Customer agree as follows as of the Effective Date:

 

In connection with Customer’s migration to CSG’s Advanced Convergent Platform (“ ACP ”), CSG provides Customer with a ********* *********** which consists of the ****** **** **** more particularly described in the ****** ******* as provided in the Agreement and shall not include any additional CSG Products and Services not identified in the Agreement (“ ***** * ”).    Customer desires to receive, and CSG agrees to provide, the ****** *** ******** ** ***** ********** ** *** **** *** ******** ** ***** *** ********** consistent with Customer’s business priorities.

 

1.

The parties agree that Customer's use of ***** * is based upon and subject to the following assumptions and conditions:

 

(a)

Shared third party products and vendor services, including but not limited to ****** **** *********** ********* ************* ********** ***** ******** (“ *** ”), ****** ***** *********** ** ****** ****** ****** ******** (for purposes of this Amendment, “ Third Party Vendor Products and Services ”), will be handled in ***** * as they were in ***** *.  In addition, Third Party Vendor Products and Services will require ******** ********* ********** ** ************* ** *********** ****, and as ********* ********* in, the ***** *** *******.

 

(b)

The fees agreed to in this Amendment for ***** ** **** ******** *** ********’* ********** ********** ******* (“ *** ”) ************ (**************) and ***** * production environments are based upon the Products and Services provided by CSG as of the Effective Date of this Amendment.

 

2.

The parties agree that Customer shall have the ***** ** ***** **** ******** ****, subject to the following conditions:

 

(a)

Customer shall provide ******* ****** ** *** ****** ** ******** *** ***** *** * ******* ***** **** ** **** **** ************ (**) **** ***** ** *** ***** *** ********** *******.  Customer shall ******* ********* ***** *** *** ********* ******** ****** ****** *** ****** *** *** *** ************ ** **** ** *** ***** * ********** ***********. Upon Customer ********* ****** ** ********* ** **** **********, the parties shall ******** ***** ** * *********


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

******** ******* **** ****** *** ************ (**) **** ***** ** *** ***** *** ********** *******.  “******** ******” means the ********* **** *** ***** ******** ** *** ******* **** ** *** ************ ***** ******** ***** *** ******* **** **** **********.  

 

(b)

CSG reserves the right to ****** *** ******* ***** * ******* *** *********** ****** ******* *** **** ***** ** ********** ****** *** ******** ******.  Depending on the **** ***, CSG may **** ** ***** *** *** ** *** ******* ********** ******* **** ******** *** *** ** ******* ** ********* *** *** ** *** ***** ******* **** ******** ** ******* ** **********. In the event that CSG **** *** ******* *** ******* ** ***** *** *** ** *** ******* **** ******** ** ******* ** **********, CSG and Customer agree ** ****** *** ********** ******* ******** ** ******* **, entitled “**********” of the Agreement, to resolve the matter.

 

(c)

Customer shall ********* *** ******* ******* ** *** ********** **** **** *** *** ************ ****** *** (*) ***** of the **** ******* ** ***** *** ********** **** ***** ******** **** ***** *.

 

(d)

Customer shall ********* *** ******* ******* ** ***** *** ********** **** **** *** ***** * ********** *********** ****** ***** (**) **** of the *** ******* ********** ****.

 

(e)

******** **** *** ******* ** * ******** ****** (each a “ ******** ******* ”) in accordance with this Amendment shall *** ** *********** ** ***** * ********** *********** ****** **** *** (**) **** ***** *** ********* ******* ********** **** *** ***** ***.

 

(f)

The ***** * ********** *********** ***** *** ** **** **** *** (*) ******* ****** *** ***** *** **** ****.

 

(g)

***************** * ** ***** ********** ****** **** *** ** ********* ****** *** ******** ****** ** ***** * *** *** ************* ********** ****** ******** ****** *** ******** ****** **** ** ******* ** ***** *** **** ** ** *********** **** ***** * ****** ******* **** ***********  ***************** * ** * ********** ****** ***** ** ***** * ****** *** ********** ******** ****** **** ******* **** ******* **** ** ********* ** ** ***** ** ***** ***** *** ************** ** ***** **  ******* ******* **** ****** ********** *** **** *********** ** *** *** ******* ***** *** **** **** **** ** ******* ** ********’* ********** *** ************ ***** ** ******* *** ***** **** ** ********* ** ********** **** *** ****** ******* *** **** *********** ** ***** *.

 

(h)

******** ****** (“ ** ”) ******* ********** *** ******** ****** **** ** ******** *** ******* ** ** ********** **** *** ********* ***** *** *** ******** **** ** ****** ******* *****.  *** **** **** ********* ** ******** * **** ** ***** ******* *** *** ********** ********* *** ********* *** ******.

 

(i)

*** *** ******** ***** **** ******** **** ******** *** ******* ********** ****** ******* ****** ***** *** ****** ***** ***** *** ******* ********  ******** *** ******* ****** ** ****** ******* ***** ******* ** ********** *** ***** ****** ** ********.

 

(j)

The CSG ******** ************** *** ********** ******* *** **** ******* ******** **** ** ********* ****** *** ***** * **************.

 

(k)

Customer agrees to ******* *** **** ******* ****** ** *** ***************** * ******, as such are defined in the Agreement, ********** ** *** ***** * ********** ******* ***** ** ******* ** **********.  In the event that Customer and CSG agree **** * ***************** * ***** ****** ***** ** ******* ** *** ***** * ********** ***********, CSG agrees *** ** ********* *** **** **** ********** ***** *** ******** * ***** ** ******** ** ******* ** * ******** * ** * *****.  In the event that Customer and CSG ** *** ******** ***** ** ** *** ******** ***** ** ********** ** *** *****, CSG and Customer agree ** ******* *** ****** ** ********* *** ******* ********

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

** ******* **, entitled “**********” in the Agreement. The obligations provided herein shall not be exclusive to any other provisions relating to the parties for ***************** ****** **********.

 

3.

SCHEDULE * , entitled “*** ******** **** ******** ******************* ******** ****” will only apply to *** ********** ******* ******* ** *** ********** *** ********** **** ********** ** ******** ** *** **** ** ******** ** ******** ********.

 

4.

CSG and Customer agree to amend SCHEDULE F , FEES, CSG SERVICES, Section I.E.4, entitled “Database Maintenance and Programming Request,” as follows:

 

Description of Item/Unit of Measure

Frequency

Fee

3) ******** **** ***** * ******** (****** (**)  ******* ******** ** ****)

******* **** ****

$*********

 

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed by their duly authorized representatives.

 

DISH NETWORK L.L.C.

 

CSG SYSTEMS, INC.

 

 

 

By:  /s/ John W Swieringa

 

By:  /s/ Peter E Kalan

 

Name: John W. Swieringa

 

Name:  Peter E. Kalan

 

Title:  Senior Vice President and Chief Information

           Officer

 

Title:  President & CEO

 

Date:  Sept 9, 2014

 

Date:  9/15/14

 

 

 

 

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 (***).

 

Exhibit 10.24AI

 

EIGHTY-SEVENTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

TIME WARNER CABLE INC.

 

 

This Eighty-seventh Amendment (the “Amendment”) is made by and between CSG Systems, Inc. , a Delaware corporation (“CSG”), and Time Warner Cable Inc. (“TWC”).  CSG and TWC entered into a certain CSG Master Subscriber Management System Agreement executed March 13, 2003 (CSG document no. 1926320), and effective as of April 1, 2003, as amended (the “Agreement”), and now desire to further amend the Agreement in accordance with the terms and conditions set forth in this Amendment.  If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control.  Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment, shall have the meaning set forth in the Agreement.  Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment.  Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

 

WHEREAS , CSG currently provides Customers with certain Products and Services pursuant to various Participating Affiliate Addendums, the Agreement and Statements of Work; and

 

WHEREAS , TWC desires to have the “*********” (as identified in Schedule F of the Agreement, a Statement of Work, or Participating Affiliate Addendum fee tables) of invoicing of the fees applicable to such Products and Services, as agreed in such Participating Affiliate Addendums, the Agreement and Statements of Work, ******* **** * ******* ** ** ****** *****, each as more specifically set forth below; and

 

WHEREAS , in instances where certain fees are invoiced to Participating Affiliates, TWC desires to change the party to which invoices for the identified Products and Services fees will be directed to TWC, as more specifically set forth below; and

 

NOW, THEREFORE , in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, CSG and TWC agree as follows:

 

1.

TWC and CSG agree that the “*********” (as identified in Schedule F of the Agreement, a Statement of Work, or Participating Affiliate Addendum fee tables) of invoicing for the fees for the following Products and Services identified in Schedule F of the Agreement, a Statement of Work, or a Participating Affiliate Addendum, as applicable, will, as of the Effective Date herein (defined below), ** ******* **** ********* ** * ******* ** ** ****** *****:

 

Product/Service Description*

Notes**

1. SLBOS Fees ***** ** *** – Processing Level (********** ** ** *** ******* ***** (***) ***)

SLBOS Fees based on Additional, per *** (per incremental ***) shall remain on a ******* *********, as provided in Schedule F of the Agreement.

2. Database Services Re Customer’s Electronic Trackable Appointments Application

 

A. Virtual Server Application Fee (*** (*) ******)

 

B. Database Server Fee (*** (*) ********* ********)

 

3. ACP Commercial Upgrade Service, Additional Capacity Fees and Second Additional Capacity

 

4. Vertex Tax Access Support

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Product/Service Description*

Notes**

5. Price Lock Guarantee Contract Management System – ******* Hardware Hosting and Software Maintenance

 

6. OAAT

 

A. OAAT Production Support Fee

 

B. Hosting Server Fees

In the event of an OAAT ****** *********** ******** *******, the then-current ****** ******* ****** *** ***** ** ******* ** ****** (**) for purposes of determining the ********** ******* ******* ****** Fee to be ******** ** *** ** ***, as provided in Schedule F of the Agreement

7. Financial Forecaster – CPRM-006 Detail File ***** Delivery to FTP Directory

 

8. Identity Management System - Gateway Hardware Hosting

 

9. TWC Verizon Wireless Interface – Interface Support Services

 

10. Intelligent AR

 

A. Intelligent AR Support Service for Connected Subscribers

Additional Capacity Fee for Connected Subscribers shall ****** ** * ******* ********* as provided in Schedule F of the Agreement

B. Intelligent AR Support Service for Non ACP Subscribers

Additional Capacity Fee for Non-ACP Subscribers shall ****** ** * ******* ********* as provided in Schedule F of the Agreement.

11. IntelligentHome Order Entry Enhancement – Support Services

 

12. Fleet Management Interface (FMS) Support, Monthly Operations Support

 

13. IBR - InfoCast

 

A. InfoCast Web Reports - User License (per Named User)

Only User License (per ***** ****) fees for licenses issued as of the Effective Date shall ****** ** ** ****** *********; any additional User Licenses issued after the Effective Date shall ****** ** * ******* ********* ** provided in Schedule F of the Agreement

B. InfoCast Web Reports - Report Maintenance

- Basic Reports (per Report/per Vantage schema)

- Advanced Reports (per Report/per Vantage schema)

 

C. InfoCast Files (no minimums) – File Maintenance Fee (per File/per Vantage schema)

 

14. Front Counter Support

 

15. CBI Application and Server Environment - Technical and Operational Support Fee for CBI Test Lab

Pursuant to that certain Statement of Work, CSG document no. 1958314

16. Direct Connect Support

 

17. ITV Query Process for Identification of Subscriber Active Rows

 

A. ITV Query Process - Support

 

B. ITV Query Process – File Maintenance Corporate Fee

 

18. Interface Test Lab System – Technical and Operational Support

 

 

*

For avoidance of doubt, the ******* fee amount applicable to the above identified Product and/or Service will be ********** by ****** (**) to arrive at the applicable ********** fee amount (except for purposes of calculating the ***** ****** ******, defined below, which is based on a ******* (**) ***** ******).

 

**In any case where the ******* fee is for support hours and the governing document limits the support hours to a certain number of support hours, notwithstanding that the ********* ** *** **** ** ****** ******* ** ** ****** *****, such restriction remains in effect on a ******* basis.  Support hours in excess of such ******* ********** ** *** ***** *****, if any, shall be subject to a mutually agreed upon Statement of Work.

 

If a Customer terminates any Product and/or Service identified in Section 1 above, pursuant to the terms of the Agreement, a Participating Affiliate Addendum or a Statement of Work, as applicable, *** ***** ******** ****** ** *** *** ******* **** ** *** ********* ** ******* **** ******* ** ******* ********* *** *** ** *** ******** ***** ****** ***** *** **** *********** ** *********.

 

2.

As of the Effective Date, the ***** ****** ****** *** ******** ** ********* **** ** ** ****** ***** for Products and Services identified herein shall be ******* ** ****, through ***** *** **** (“***** ****** ******”).  Promptly following the Effective Date, CSG will invoice TWC for Products and Services fees identified herein for the first ****** ****** **** *** ******* ********** ******** by CSG or paid by Customer(s) applicable to such period.  Thereafter, provided such Product(s) and/or Service(s) identified herein have not been terminated by Customer(s), the Parties agree that CSG will invoice TWC on ** ****** *****, in

 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

advance, for the Products and Services fees identified herein commencing on ***** ** ****.  CSG agrees that, commencing as of ***** ** **** during the ***** ****** ******, increases to the fees for Products and Services identified herein **** ******* ******** ** *** ***** ** *** *********, and such fees shall *** ** ******* ** ******* ******** ***** ***** ** ****.    

 

In the event of a discrepancy between CSG’s invoice for the ***** ****** ****** and TWC’s calculation of such fees, the Parties will work together in good faith to promptly reconcile the discrepancy.

 

3.

Notwithstanding anything in the Agreement, Participating Affiliate Addendum or Statement of Work, as applicable, to the contrary and subject to Section 2 above, with respect to the ***** ****** ****** and **** ****** ****** **********, CSG will invoice TWC rather than any Participating Affiliate for the Products and Services fees identified herein to the extent any such Participating Affiliate is currently invoiced pursuant to the terms of the Agreement or an effective Participating Affiliate Addendum and/or a Statement of Work, as applicable:

 

a.

Third Party Communications Software for Voice

b.

Order Workflow

c.

ACP Commercial Upgrade Service

d.

Vantage Maintenance

e.

OAAT

f.

Financial Forecaster

g.

AOI

h.

Fleet Management Interface (FMS)

i.

Front Counter Support

j.

Common Billing Interface (CBI) Test Lab Support

k.

Precision Payment Kiosks

 

THIS AMENDMENT is executed as of the day and year last signed below (the Effective Date").

 

TIME WARNER CABLE INC. (“TWC”)

CSG SYSTEMS, INC. (“CSG”)

 

 

By:  /s/ Cesar Beltran

 

By:  /s/ Joseph T. Ruble

 

Name: Cesar Beltran

 

Name:  Joseph T. Ruble

 

Title:  Vice President

 

Title:  EVP, CAO & General Counsel

 

Date:  August 8, 2014

 

Date:  25 August 2014

 

 

 

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 (***).

 

Exhibit 10.24AJ

 

 

EIGHTY-EIGHTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

TIME WARNER CABLE INC.

 

This Eighty-eighth Amendment (the “Amendment”) is made by and between CSG Systems, Inc. , a Delaware corporation (“CSG”), and Time Warner Cable Inc. (“TWC”).  CSG and TWC entered into a certain CSG Master Subscriber Management System Agreement executed March 13, 2003 (CSG document no. 1926320), and effective as of April 1, 2003, as amended (the “Agreement”), and now desire to further amend the Agreement in accordance with the terms and conditions set forth in this Amendment.  If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control.  Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment, shall have the meaning set forth in the Agreement.  Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment.  Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

 

1.

Customer is currently utilizing CSG’s Recurring Credit Card Authorization Services and now desires to utilize CSG’s Card Account Update ("CAU") recurring services.  As a result, upon execution of this Amendment, "Card Account Update" is amended as follows in the Agreement:

 

a.

The following "Services Description" of Schedule C is deleted in its entirety:

 

" Card Account Update (sponsored by **** in Partnership with ******) .    The basic Card Account Update will track and report replacement **** cardholder account numbers and expiration dates and automatically update them during the month a Customer's Subscriber's credit card expires for Customers that use ***** ******** ******** for recurring credit card processing."

 

and replaced as follows:

 

" Card Account Update ("CAU") .    The Card Account Update will track and report replacement **** and ********** cardholder account numbers and expiration dates and will automatically update them for Customers that use ***** ********** for recurring credit and/or debit card processing."

 

b.

Exhibit C-3, "Card Account Update (***********)," to Schedule C to the Agreement is deleted in its entirety and replaced with "Exhibit C-3, Card Account Update," attached to this Amendment as Attachment 1 and incorporated herein by reference.

 

c.

TWC acknowledges that the provision of Card Account Update is contingent upon TWC having an agreement in place with ***** ********** (or having appropriate rights to participate under an agreement between an Affiliate and ***** **********).

2.

As a result, upon execution of this Amendment and pursuant to the terms and conditions of the Agreement, which include Exhibit C-3, "Card Account Update ("CAU")." Schedule F , "Fees," of the Agreement, shall be amended by deleting the following:



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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

 

       D. Credit Card (One Time and Recurring)

Description of Item/Unit of Measure

Frequency

Fee

Other:

 

 

3. Auto Update Recurring Credit Card Expiration Date (per updated items) ( Note 2)

*******

$******

Note 2 : Only clients with ***** as their merchant bank.  **** is the only credit card type offering the service of tracking and reporting replacement credit card numbers and expiration dates.

and replacing, as follows:

 

"CSG SERVICES

III. Payment Procurement

D. Card Account Update (One Time and Recurring)

Description of Item/Unit of Measure

Frequency

Fee

Other:

 

 

3. Card Account Update Transaction Fees ( Note 2) (Note 3) (Note 4) (Note 5) (Note 6)

 

 

· Up to ****** transactions (*** ******) (Note 7)

*******

$******

· ****** to ******* transactions (*** ******) (Note 7)

*******

$******

· Greater than ******* transactions (*** ******) (Note 7)

*******

$******

Note 2: Customer must have a separate agreement with ***** ********** as its merchant processor.  

Note 3: Customer may incur additional fees under its agreement with ***** **********

Note 4: **** and ********** branded credit and debit cards are the only card brands currently supported.

Note 5:   ** ***** *** ************** **** ******* Customer and CSG are associated with Card Account Update.

Note 6: Card Account Update Transaction Fees are subject to increase pursuant to Section 5.4 of the Agreement, commencing in 2015.

Note 7: For purposes of clarification, "*** ******" in each case in the table above is based on each update received by CSG from the ***** ********** updater service which will include both the card number and the card expiration date.

 

3.

References to "(***********)" in  (i) Section 3.4, "Financial Services," (ii) "Additional Services - Exhibit C-3" in Schedule C , and (iii) "Exhibit C-3" of the Agreement are, upon the Effective Date herein, deleted.

 

4 .

For avoidance of doubt, Participating Affiliates may use and receive Card Account Update without incurring any separate, additional fees hereunder other than those specified above, without any requirement that such Card Account Update be set forth in any such Participating Affiliate's Affiliate Addendum.  In addition to TWC's termination rights set for in Article 6 of the Agreement, TWC shall also have the right to terminate any Participating Affiliate's use of Card Account Update, if applicable, for convenience, without notice to CSG.

 

 

THIS AMENDMENT is executed as of the day and year last signed below (the Effective Date").

 

TIME WARNER CABLE INC. (“TWC”)

CSG SYSTEMS, INC. (“CSG”)

 

 

By:  /s/ David Wiehagen

 

By:  /s/ Joseph T. Ruble

 

Name: David Wiehagen

 

Name:  Joseph T. Ruble

 

Title:  Vice President

 

Title:  EVP,CAO & General Counsel

 

Date:  July 22, 2014

 

Date:  25 July 2014

 

 


 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Attachment 1

to

Exhibit C-3

Card Account Update ("CAU")

1.

Card Account Update ("CAU").   CSG will submit a file on a monthly basis, on the ***** (***) day of each month, of Customer's Subscribers' accounts that have recurring credit and debit cards on file to ***** **********.  ***** ********** will update and return the updated card accounts file not more than **** (*) business days later which will automatically be entered into ACP.  Updates to such Customer's Subscribers' card accounts file shall include, but not limited to, card expiration dates, association changes, and information related to lost or stolen cards.  Fees assessed by ***** ********** for file updates will be billed directly to Customer, per a separate merchant agreement between Customer and ***** **********.

2.

Requirements.   Customer must use ***** ********** for credit card processing in order to utilize Card Account Update .  Customer acknowledges that Customer and ***** ********** must execute an agreement to use Card Account Update .  Customer also acknowledges that Card Account Update must be used with either CSG’s CCS® or ACSR® systems.  In addition, ***** ********** will register Customer with and be responsible for the applicable card association(s) for Card Account Update .

3.

Use of Card Information. Customer agrees that it shall keep all information and data accessed through Card Account Update in accordance with applicable card association rules.

4.

Intellectual Property.

(a)

No License.   Except for the right to use the service as set forth herein, Customer will not acquire any patent rights, copyright interest, or other right, claim, or interest in the computer programs, forms, schedules, manuals, or other proprietary items utilized or provided by CSG in connection with Card Account Update .

(b)

Restrictions on Use.   Customer will not use or permit its respective employees, agents and subcontractors to use the trademarks, service marks, logos, names, or any other proprietary designations of ****, ***** **********, **********, or their respective affiliates, whether registered or unregistered, without the prior written consent of the applicable party.

5.

Data Accuracy.   Customer acknowledges that Card Account Update is only accurate to the extent a card issuer participates in the Service and that many card issuers do not participate in the Service.  Furthermore, Customer acknowledges that CSG is only responsible for the accurate transmission of the data provided to and from ***** **********, and is not responsible in any way for the accuracy or the completeness of data provided to or from ***** ********** by Customer or ***** **********.  which may be accessed as part of the Service.  At this time, Card Account Update only supports updates provided by **** and **********.

5.

Termination.   **** and/or ********** may terminate Customer’s participation in Card Account Update or terminate the Service in its entirety, at any time.  ***** **********’* bankcard processing relationship with Customer, and, thus, Card Account Update , may be terminated at any time pursuant to the terms and conditions set forth in the agreement entered into between Customer and ***** **********.  CSG assumes no liability of any kind that arises out of the termination of Customer’s participation in Card Account Update by ****, ********** or ***** ********** unless such termination is the result of actions taken or not taken by CSG.

 

6.

TWC Authorization.   By its execution of the Amendment, TWC acknowledges that it authorizes CSG to provide ***** ********** with a monthly file of TWC's Connected Subscribers' accounts with recurring credit and/or debit cards on file ("Subscriber Data"), subject to the terms of this Amendment. CSG is not responsible for ***** **********'* use of such Subscriber Data under the terms of the Agreement.  Notwithstanding the foregoing, CSG shall discontinue sending such Subscriber Data to ***** ********** upon TWC's written request (email is sufficient).

 

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 (***).

 

Exhibit 10.24AK

 

 

EIGHTY-NINTH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

TIME WARNER CABLE INC.

 

 

This Eighty-ninth Amendment (the “Amendment”) is made by and between CSG Systems, Inc. , a Delaware corporation (“CSG”), and Time Warner Cable Inc. (“TWC”).  CSG and TWC entered into a certain CSG Master Subscriber Management System Agreement executed March 13, 2003, and effective as of April 1, 2003, as amended (the “Agreement”), and now desire to further amend the Agreement in accordance with the terms and conditions set forth in this Amendment.  If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control.  Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment, shall have the meaning set forth in the Agreement.  Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment.  Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

 

WHEREAS , pursuant to the Fifty-seventh Amendment executed by TWC and CSG effective as of December 21, 2011 (CSG document no. 2309497), CSG provides TWC with production support for OAAT Services in the amount of up to *** ******* ***** (***) ***** per ***** for a mutually agreed fee;

 

WHEREAS , TWC requests and CSG agrees to increase the number of ******* production support ***** for OAAT Services from *** ******* ***** (***) ***** to *** ******* ****** (***) ***** for the fee set forth below, commencing as of July 1, 2014;

 

WHEREAS, pursuant to the Eighty-Seventh Amendment (CSG document no. 2506640) (the “87th Amendment”), the Parties agreed that certain fees, including production support fees for OAAT Services, will be invoiced on an ****** basis, for the period commencing as of the ***** ****** ****** (as defined in the 87th Amendment); and

 

WHEREAS , the Parties desire to amend the Agreement as provided herein.

 

NOW, THEREFORE , in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficient of which is hereby acknowledged, CSG and TWC agree as follows:

 

1.

As of the Effective Date, Schedule F of the Agreement is hereby amended as follows:

The OAAT Production Support Fees line item within the Recurring Monthly Fees for OAAT and related Note 2 in Schedule F of the Agreement shall be deleted and replaced with the following::

 

Description of Item/Unit of Measure

Frequency

Fee

§ OAAT Production Support Fee (Note 2) (Note 3)

*******

$*********

Note 2: Commencing as July 1, 2014, production support will be limited to *** ******* ****** (***) ***** per *****.  CSG will notify TWC when Customers have exhausted ****** ******* (**%) of the support ***** in any given *****.  Additional fees will be charged for ***** exceeding this ******* limit and will be set forth in a separate mutually agreed upon Statement of Work.

 

2.

Following the Execution Date (as defined below), CSG may invoice TWC for the OAAT Production Support Fee reflected above for the ***** ****** ****** (as defined in the 87th Amendment), calculated in accordance with the 87th Amendment; provided, however, that to the extent CSG has previously invoiced TWC for OAAT Production Support Fees applicable to the ***** ****** ******, such amount shall be decreased by any OAAT Production Support Fee amounts previously invoiced by CSG and/or

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

paid by Customer(s) applicable to such period.  Thereafter and provided the OAAT Services have not been terminated by TWC, CSG may invoice TWC for the OAAT Production Support Fees set forth above, ********, commencing as of ***** ** **** and in accordance with the 87th Amendment..

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed by their duly authorized representatives, effective as of the day and year last signed below (“Execution Date”).  The Parties acknowledge and agree that the Agreement, as amended hereby, shall retroactively govern each party’s performance in connection with the subject matter hereof commencing as of the Effective Date.  Notwithstanding the foregoing, if any invoices have been issued under this Amendment prior to the Execution Date, the payment date for such invoices shall be *****-**** (**) **** after the Execution Date.

 

TIME WARNER CABLE INC. (“TWC”)

CSG SYSTEMS, INC. (“CSG”)

 

 

 

By:   /s/ Cesar Beltran

 

By:  /s/ Joseph T. Ruble

 

Name: Cesar Beltran

 

Name:  Joseph T. Ruble

 

Title:  Vice President

 

Title:  EVP, CAO & General Counsel

 

Date: September 18, 2014

 

Date: 25 Sept 2014

 

 

 

               

 

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 (***).

 

Exhibit 10.24AL

 

 

NINETIETH AMENDMENT

TO THE

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

TIME WARNER CABLE INC.

 

 

 

This Ninetieth Amendment (the “Amendment”) is made by and between CSG Systems, Inc. , a Delaware corporation (“CSG”), and Time Warner Cable Inc. (“TWC”).  Upon execution of this Amendment by TWC and CSG, the effective date of this Amendment is August 1, 2014 (the "Effective Date"). CSG and TWC entered into a certain CSG Master Subscriber Management System Agreement executed March 13, 2003, and effective as of April 1, 2003, as amended (the “Agreement”), and now desire to further amend the Agreement in accordance with the terms and conditions set forth in this Amendment.  If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control.  Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment, shall have the meaning set forth in the Agreement.  Upon execution of this Amendment by the parties, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment.  Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

 

 

CSG and TWC agree to the following as of the Effective Date:

 

1.

Pursuant to the terms and conditions of the Agreement, which includes Exhibit C-4 to the Agreement and the Seventy-fifth Amendment (CSG document number 2503407) to the Agreement executed effective as of August 1, 2013 (“75th Amendment”), TWC agrees to purchase *** (*) Video View Block of ******* Video Views.

 

2.

Following execution of this Amendment by the Parties, CSG shall invoice TWC the amount of $********** for the Video View Block referenced in Section 1 above.  The Video Views within such Video View Block shall expire if not consumed by Customers within the Consumption Period. For avoidance of doubt, the Consumption Period for such Video View Block commences upon the Effective Date.

 

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed by their duly authorized representatives as of the date indicated below.

 

TIME WARNER CABLE INC. (“TWC”)

CSG SYSTEMS, INC. (“CSG”)

 

 

By:   /s/ Jason Barbrow

 

By:  /s/ Joesph T. Ruble

 

Name: Jason Barbrow

 

Name:  Joseph T. Ruble

 

Title:  Vice President

 

Title:  EVP,CAO & General Counsel

 

Date: August 18, 2014

 

Date: 25 August 2014

 

             

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 (***).

EXHIBIT 10.24AM

 

NINETY-FIRST AMENDMENT

TO

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN

CSG SYSTEMS, INC.

AND

TIME WARNER CABLE INC.

 

This Ninety-First Amendment (this “CD Addendum”) is made by and between CSG Systems, Inc . (“ CSG ”), and Time Warner Cable Inc. (“TWC”).  This CD Addendum is made and entered into as of the date last signed below and is effective as of September 17, 2013 (the “CD Addendum Effective Date”).  CSG and Customer entered into a certain CSG Master Subscriber Management System Agreement executed March 13, 2003, and effective as of April 1, 2003, as amended (the “Agreement”), and now desire to describe the terms and conditions under which CSG will make available certain specialized products and related services to Customers, as further set forth in this CD Addendum and Order Documents (as defined below) executed hereunder.  Any terms in initial capital letters or all capital letters used as a defined term but not defined in this CD Addendum shall have the meaning set forth in the Agreement.  Upon execution of this CD Addendum by the Parties, any subsequent reference to the Agreement between the Parties shall mean the Agreement as amended by this CD Addendum.  Except as amended by this CD Addendum, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.  

 

WHEREAS, CSG provides via CSG’s affiliate, CSG Media, LLC (“Media”), certain proprietary content monetization and management software known as the “Content Direct System,” which software is made available as a Software as a Service (commonly known as “SaaS”);

 

WHEREAS, TWC has requested that CSG make available to Customers under the Agreement the Content Direct System and certain services related to the Content Direct System (as more specifically defined as “CD Services” in Section 1(b) of Attachment A hereto); and

 

WHEREAS, the Parties are entering into this CD Addendum to prescribe the terms and conditions by which CSG shall make available to Customers the Content Direct System and CD Services pursuant to one or more CD Service Orders (as defined below) and/or Statements of Work.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, CSG and TWC agree to the following as of the CD Addendum Effective Date:

 

Content Direct System Specific Terms:

 

1.

Attachment A; Scope and Conflict .  This CD Addendum, including but not limited to, the terms of Attachment A hereto and its attached Schedules and Exhibits (collectively, “ Attachment A ”) specifically applies to CSG’s performance and/or provision, and a Customer’s use and receipt of, Content Direct Services.  The Content Direct System and Content Direct Services shall be deemed an Additional Product and Additional Service under Schedule B and Schedule C, respectively, of the Agreement.  Unless otherwise expressly provided in this CD Addendum, in no event will any terms, conditions or fees set forth in this CD Addendum apply to CSG’s, TWC’s, or any Customer’s obligations under the Agreement other than with respect to Content Direct Services, or to CSG’s provision and/or performance of Basic Products or Basic Services or any Additional Products and/or

 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Additional Services under the Agreement, and TWC’s and/or any Customer’s (as defined in the Agreement) receipt and use thereof, that are not Content Direct Services.  Similarly, in no event will any terms or conditions set forth in this CD Addendum alter or modify the rights or remedies of TWC, Customers and/or CSG under the Agreement in the event of termination of the Agreement in its entirety or a particular Product, Deliverable or Service with respect to any Products or Services that are not the Content Direct System and/or Content Direct Services.  Except as provided in this CD Addendum, all other terms of the Agreement which are not in conflict with this CD Addendum shall be given full force and effect with respect to each party’s performance under this CD Addendum.  In the event of a conflict between the terms of the Agreement and the terms of this CD Addendum, the terms of this CD Addendum shall control and take precedence with respect to CSG’s provision of Content Direct Services. In the event of conflict between the terms of an Order Document (as defined below) and the terms of the Agreement and/or this CD Addendum, the terms of the Order Document shall control and take precedence with respect to CSG’s provision of CD Services.  

 

2.

Customer Defined and Rights of Access .  Notwithstanding the terms of the Agreement and subject to the terms of this CD Addendum, including Attachment A , a “Customer” entitled to access and utilize the Content Direct System and Content Direct Services under this CD Addendum means only TWC, a CD Participating Affiliate (as defined in Section 1(b) of Attachment A ), a Permitted TWC Affiliate (as defined in Section 1(b) of Attachment A ) and subject to Section 2(b) of Attachment A , BHN.  Further, with respect to any Customer that is a CD Participating Affiliate, such Customer may use and receive Content Direct Services without any requirement that Content Direct Services be set forth in such Participating Affiliate’s Affiliate Addendum.  Use and receipt of Content Direct Services by a Customer is optional.  However, in order to access and utilize the Content Direct System and Content Direct Services a Customer must execute with CSG a CD Service Order and, if a Customer’s access to the Content Direct System or use of Content Direct Services requires CSG to perform any CD Technical Services (as defined in Section 1(b) of Attachment A ), a Statement of Work. TWC acknowledges and agrees that TWC shall be responsible for the breach of Customers’ (other than BHN) obligations hereunder (including any Order Document) or under the Agreement as they apply to Customers’ (other than BHN) and/or their employees and Outsourcing Vendors’ use and receipt of the Content Direct Services pursuant to this CD Addendum.  No Customer shall be jointly or severally liability for any obligation of any other Customer or of TWC under this CD Addendum and any Order Document executed hereunder.  Further, notwithstanding any provision of the Agreement, use by a Permitted TWC Affiliate of Content Direct Services is not tied to use of any of CSG’s other Products and/or Services available under the Agreement and, therefore, a Permitted TWC Affiliate that elects to use Content Direct Services is not obligated to use any other Products and/or Services of CSG.

 

3.

Fees .  Notwithstanding anything in the Agreement to the contrary, the fees and/or pricing applicable to CD Services will be reflected in Attachment A to this CD Addendum and/or the applicable Order Documents (as the case may be ) , and the fees and/or pricing set forth on Schedule F are not applicable to the Content Direct Services.  Without limiting the foregoing, if the Content Direct System or Content Direct Services are integrated with any other Products or Services that are not the Content Direct System or Content Direct Services but are otherwise to be provided by CSG to a Customer under an Order Document, the fees applicable to such other Products or Services shall be explicitly identified in such Order Document.

 

4.

Use of the Term “Subscriber” .  As provided in Section 1(a)(i) of Attachment A , for purposes of applying the general terms and conditions of the Agreement to this CD Addendum and any Order Document executed hereunder, each reference in the Agreement to a Subscriber shall be deemed to include a reference to a Consumer.  Notwithstanding the foregoing, except as specifically provided in a CD Service Order, a Consumer accessing the Content Direct System or using or receiving Content Direct Services shall not be deemed a Subscriber, Connected Subscriber or similar term for purposes of determining under the Agreement or any SOW executed under the Agreement (a) applicable fees for any Products or

 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Services other than the Content Direct System or Content Direct Services and/or (b) Customer’s compliance with any minimum fee purchases or Subscriber commitments with respect to any Products or Services other than the Content Direct System or Content Direct Services.

 

5.

CD Order Term .  The Parties agree that upon expiration of the Agreement, CSG’s provision, and Customers’ use and receipt, of the Content Direct Services will terminate following any applicable CD Transition Assistance Period as provided in Attachment A except, if upon expiration of the Agreement, a CD Order Term of any CD Service Order(s) then in effect extends past the expiration date of the Agreement, the Agreement, as amended by this CD Addendum, and as the Agreement may be further amended from time to time by mutual agreement of the Parties, shall continue in effect for the remainder of the CD Order Term under the applicable CD Service Order(s) and any applicable CD Transition Period, as well as any Statement(s) of Work relating thereto, provided the Content Direct Services provided under the applicable CD Service Order(s) are not integrated with or dependent on any other Products or Services that are not the Content Direct System or Content Direct Services.  In such case, the Parties will use good faith efforts to negotiate a substitute agreement containing terms and conditions applicable to the provision of Content Direct Services to Customers, substantially similar to the terms and conditions applicable to the Content Direct Services under the applicable CD Service Orders, this CD Addendum and the Agreement.  If Content Direct Services provided under the applicable CD Service Order(s) that extends past the expiration date of the Agreement are integrated with or dependent on any other Products or Services that are not the Content Direct System or Content Direct Services, the CD Order Term under the applicable CD Service Order(s) shall be deemed automatically amended (without regard to any auto-renewal contained therein) to expire consistent with the expiration of the Agreement, subject to any applicable CD Transition Period.  The Parties acknowledge that if the Agreement continues in effect after its expiration date as provided in this Section 5, the terms of the Agreement will continue in effect solely to apply to the applicable CD Service Order(s) and Statement(s) of Work (and, for avoidance of doubt, any other Products and Services as mutually agreed in writing by the Parties, as applicable) and after such expiration date no Customer may enter into a new CD Service Order that incorporates the terms of the Agreement.

 

6.

********** ***** Not Applicable .  Customer and CSG acknowledge that ********** ***** shall not apply to and may be not be used by Customer to ******** ** *** for any CD Services.

 

7.

Media as Provider of CD Services . Certain of the CD Services performed under this CD Addendum and any Order Document executed under this CD Addendum shall be performed by Media, on behalf of CSG.  For avoidance of doubt, Media shall constitute a Permitted Subcontractor under the Agreement.  CSG acknowledges and agrees that it is responsible for Media’s compliance with the terms and conditions of the Agreement (including, but not limited to, this CD Addendum, Attachment A and any Order Document executed hereunder).  Accordingly, CSG shall be liable to Customers for the acts and omissions of Media to the same extent that liability to Customers would accrue under the Agreement (as supplemented or modified by this CD Addendum) as if such acts or omissions had been performed or made by CSG.

 

8.

Miscellaneous .  This CD Addendum shall be governed by the laws of the State of Colorado, without reference to (a) conflict of laws principles or the choice of law doctrine, (b) the UN Convention for Contracts for the International Sale of Goods, (c) the Uniform Commercial Code, as currently or as may be enacted, codified or amended in any jurisdiction, and (d) the Uniform Computer Information Transactions Act (prepared by the National Conference of Commissioners on Uniform State Laws) as currently or as may be enacted, codified or amended in any jurisdiction.  Customer and CSG agree that any dispute and/or action at law or in equity arising out of or relating to this CD Addendum shall be subject to Article 11 of the Agreement.  This CD Addendum may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute a single instrument.

 


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Attachment A – General Terms and Conditions – CD Services

CD Schedule A – Form of CD Service Order

CD Schedule B – Content Direct Services

CD Schedule C – CD Hosting, CD Support Services, Performance Standards and Remedies

Exhibit A – Form of Escrow Agreement

Exhibit B – CD Service Order No. 1

Exhibit C - Statement of Work No. 1 to CD Service Order No. 1

 

IN WITNESS WHEREOF the parties hereto have caused this CD Addendum to be executed by their duly authorized representatives.

 

TIME WARNER CABLE INC.

CSG SYSTEMS, INC.

 

By:  /s/ Michael Hayashi

 

By:  /s/ Joseph T Ruble

 

Name: Michael Hayashi

 

Name:  Joseph T. Ruble

 

Title:  Executive Vice President

 

 

Title:  EVP, CAO & General Counsel

 

Date:  September 12, 2014

 

Date:  September 18, 2014


 


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ATTACHMENT A

 

General Terms and Conditions - CD Services

 

1.

Definitions.  

(a) For purposes of applying the general terms and conditions of the Agreement to the CD Services prescribed in this CD Addendum and any Order Document executed hereunder, and after giving effect to the amendments and clarification of terms of the Agreement that apply to the CD Services as set forth in this CD Addendum, the following definitional principles under the Agreement shall be revised as follows with respect to the CD Services:

 

(i) each reference in the Agreement to a Subscriber shall be deemed to include a reference to a Consumer (as defined in Section 1(b) below);  

 

(ii) the Content Direct System shall be deemed an Additional Product under the Agreement;

 

(iii) each reference to Termination Assistance Period shall be deemed a reference to CD Transition Period (as defined in Section 14 below);

 

(iv) each reference to Support Services shall be deemed a reference to “CD Support Services (as defined in Section 8 below);

 

(vi) each reference to Discontinuance Fee shall be deemed a reference to CD Discontinuance Fee (as defined in Section 13 below);

 

(vi) each reference to Customer shall be deemed a reference to a Customer entitled to access and use the Content Direct System and Content Direct Systems pursuant to the CD Addendum (as defined in Section 2 of the CD Addendum);

 

(vii) each reference to Participating Affiliate shall be deemed to include a reference to a CD Participating Affiliate (as defined in Section 1(b) below);

 

(viii) each reference to Updates shall be deemed a reference to CD Updates (as defined in Section 8(a) below); and

 

(ix) each reference to Third Party System shall be deemed to include a reference to a TWC System.

 

(b) The following defined terms shall apply specifically to the CD Services:

 

“ACP® System” means the Advanced Convergent Platform and related systems owned by CSG Systems, Inc. and its successors and assigns.

 

“Admin User” shall mean those persons designated by TWC as administrative users of the Content Direct System in order to perform certain administrative functions and utilize the Back Office Applications as described in the CD Documentation.

 

“Admin User Information” shall mean any account, Personal Information and usage information of Admin Users.

 

 


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“Back Office Applications” means web-based applications of the Content Direct System that enable authorized users of Customer, using security identifiers, to administratively operate and configure the Content Direct System.

 

“CD Documentation” means all manuals, handbooks, FAQs, technical information, design documentation, CD Specifications, and any other written related materials which are furnished or made available by CSG to Customer in any form in connection with the CD Services and Content Direct System, including all updates, modifications, and changes thereto furnished or made available by CSG to Customer from time to time.  Any references to Documentation in the Agreement shall be deemed to include CD Documentation.

 

“CD Hourly Rate” means the applicable hourly rate for the person performing the applicable CD Technical Service.  The CD Hourly Rate as of the CD Addendum Effective Date is $******.  Notwithstanding anything in the Agreement to the contrary, the CD Hourly Rate shall *** ** ******* ** ********** pursuant to Section 5.4 of the Agreement ***** ****.

 

“CD Order Term” means the term of a CD Service Order as defined in such CD Service Order.

 

“CD Participating Affiliate” means a Participating Affiliate that as of the CD Addendum Effective Date has an effective Affiliate Addendum under which such Participating Affiliate is licensing any Products from CSG other than the Content Direct System or receiving any Services from CSG not related to the Content Direct Services, in each case pursuant to the Agreement.

 

“CD Service Order” means the fees, terms and conditions of Customer’s rights to use, and CSG’s obligation to provide, the Content Direct System and/or Content Direct Services, executed by CSG and Customer and sequentially numbered orders to the CD Addendum (i.e., CD Service Order No. 1, CD Service Order No. 2, etc.).

 

CD Services means the Content Direct Services, CD Technical Services, CD Hosting Services, CD Managed Services, and CD Support Services.

 

“CD Software” means software code and computer programs, including the Content Direct System and any Embedded Third Party Software underlying the Content Direct Services provided by CSG to Customer pursuant to an executed Order Document (excluding any TWC Systems), including all CD Updates thereto.  Any references in the Agreement to Software shall be deemed to include CD Software.

 

“CD Specifications” means, collectively, the functional, component performance, system performance, interface, compatibility, design characteristics, features, specifications, operational and technical criteria or other requirements of the CD Services and CD Software as set forth in (a) the CD Documentation, and (b) any Statement of Work and/or any documentation developed pursuant to and referenced in such Statement of Work.  Any references to Specifications in the Agreement shall be deemed to include CD Specifications.

“CD Technical Services” means any consulting, conversion, implementation, encoding, encryption, training or other services, including CD Managed Services, performed by CSG pursuant to a Statement of Work but does not include the Content Direct Services.  Any references to Technical Services in the Agreement shall be deemed to include CD Technical Services.

 

Compatible Interfaces ” means the industry standard browsers and protocols (as applicable) by which (a) Customer’s users can access the Content Direct System Back Office Applications, (b) a Consumer

 


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can access Consumer Experiences, (c) TWC Systems may access the Content Direct Web Services, as more specifically described in CD Schedule B .

 

Consumer ” means the former, current or potential end user clients, customers, employees and independent contractors of Customers who access and/or use the Content Direct Services for other than administrative or operational purposes. For the avoidance of doubt, the term “Consumer” excludes any Affiliates.  Subject to Section 4 of the CD Addendum, any reference to Subscriber in the Agreement shall be deemed to include Consumers.

 

“Consumer Experience” means a Consumer – facing implementation of the Content Direct System.  The specific Consumer Experiences that CSG will make available to Customer hereunder shall be identified in a mutually agreed CD Service Order(s) executed by the Parties.

 

Consumer Information ” means any and all information and/or data of Consumers that is provided or made available to CSG by or on behalf of Customers and/or by Consumers, and accessed, received, controlled, stored, processed, transmitted, maintained, or possessed by CSG and/or any Permitted Subcontractor, in connection with the provision of Content Direct Services under the CD Addendum, including, without limitation, Personal Information (as defined in the Agreement) and Consumer Usage Data.

 

“Consumer Usage Data” means statistics and data relating to a Consumer’s account activity, including the browsing or accessing via downloading or streaming to or through devices, of Customer Content, Customer Services and/or any other information collected from or about or otherwise regarding Consumers, including any purchase activity, whether in individual or aggregate form.  Consumer Usage Data shall not be deemed to include any Content Direct System Data.

 

Content Direct Services ” means those services performed by or on behalf of CSG under a CD Service Order in connection with or relating to the Content Direct System, excluding any CD Technical Services.  For the avoidance of doubt, Content Direct Services include the provision of a service using Embedded Third Party Software but except as otherwise specifically provided in an Order Document exclude any service using third party software that is not Embedded Third Party Software.  Any references in the Agreement to Services shall be deemed to include Content Direct Services.

 

Content Direct System ” means the specific configuration of Content Direct Application Server Modules, Content Direct Web Services, Content Direct User Applications, Embedded Third Party Software and, unless expressly agreed to in an Order Document otherwise, any integrations provided by CSG to Customer as described in an Order Document executed under this CD Addendum and the related and implementing CD Software, servers, hardware and technologies used by CSG to make the foregoing available via the Internet, as further specified in the CD Documentation.  The Content Direct System includes two environments:  (a) the Production Environment, and (b) the Sandbox Environment.  The Content Direct System shall not include *** ****************** *********** ** *** **** *** ********* *** ********** *********** ******** ****(*)* *** ******** *** ***** ***** ******** **** ** *** ******** ***** ***** ******** *** ******** ************.  CSG will specify the specific Content Direct System provided to Customer in each CD Service Order executed under this CD Addendum for the applicable Content Direct Services.

 

“Content Direct System Data” means non-personally identifiable performance data and usage statistics concerning the Content Direct System collected or compiled by CSG in connection with system-wide, aggregated use of the Content Direct System. For the avoidance of doubt, Content Direct System Data shall exclude information that constitutes Consumer Information, Consumer Usage Data and any data from which identifying information about a Customer or any Consumer can be discerned.

 


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“Content Direct User Application” means a Consumer Experience and/or Back Office Application of the Content Direct System.  The Content Direct User Applications provided by CSG to Customer will be specifically described in an executed CD Service Order.

 

“Content Direct Web Services” means the application programming interfaces (APIs) by which the functional capabilities of the Content Direct Application Server Modules (as described in a CD Service Order) may be accessed.

 

“Customer Application” means a TWC System (i.e., not a Consumer Experience) that either accesses the features and functions of the Content Direct System through the Content Direct Web Services or otherwise integrates with the Content Direct System.

 

Customer Content ” means that data, proprietary content and content owned or licensed by Customer that is published on or displayed through the Content Direct Services by or on behalf of Customer.  To the extent identified in an Order Document, Customer Content will also include Digital Entertainment Content owned by Customer or licensed by Customer from a third party.  For the avoidance of doubt, Customer Content does not include any Consumer Information, Consumer Usage Data or any trade names, trademarks, or service marks of Customer.

 

“Customer Integration” means any integration between (a) a TWC System or Third Party System and (b) the Content Direct System, created and/or developed by or on behalf of Customer by a party other than by CSG.

 

Customer Services ” means any goods, products or services (digital or physical), including, if and as prescribed by an Order Document, Digital Entertainment Content, promoted or made available for trial, rental, purchase and/or fulfillment by or through Customer through the use of any feature(s) or function(s) of the Content Direct System and/or Content Direct Services.

 

Customer Site means any Customer issued device (including a set-top box (“STB”)), website, application, software, product or service on which the Content Direct System is embedded and/or made available to Consumers by or on behalf of Customer, specifically excluding all elements of the Content Direct System, including without limitation all Content Direct User Applications (including Consumer Experiences).   

 

“Digital Entertainment Content” means digital versions of audiovisual works, sound recordings, literary works, and/or pictorial works as those terms are defined in 17 U.S.C. § 101, commercially distributed to the public as entertainment, together with any (a) associated and information input into the Content Direct System and (b) other data or information published with such works.  Non-exclusive examples of Digital Entertainment Content include movies, television titles, sporting events and original programming.

 

“End User Information” means Consumer Information, Consumer Usage Data and Admin User Information.  For avoidance of doubt, End User Information shall be deemed to be Confidential Information of Customers and subject to the terms and conditions of Article 10 of the Agreement.

Exception ” means any (a) problem, defect, or failure of any portion of the Content Direct System to conform, in all material respects, with the CD Specifications, or (b) problem with the CD Hosting Environment that causes the Content Direct System (or any portion thereof) to go down or become unavailable or non-functional in any material respect, in each case that is not caused by or resulting

 


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from Customer’s failure to comply with its obligations or responsibilities as set forth in CD Addendum, the CD Documentation or the Agreement.

 

Go-Live Date ” means with respect to a given deployment of the Content Direct System under a CD Service Order, the first to occur of: (a) the date on which the Content Direct System and Content Direct Services, as applicable, under the applicable CD Service Order is made available by CSG to Customer for use consistent with the terms of the applicable CD Service Order, (b) the date on which Customer utilizes the Content Direct Services made available under the applicable CD Service Order with a Consumer in the Production Environment, and (c) the date that is ******* (**) days after the “Targeted Go-Live Date” as prescribed in the applicable CD Service Order (provided CSG has complied with its obligations under such Order Document and/or otherwise not delayed such Targeted Go-Live Date).

 

“Order Document” means a CD Service Order or Statement of Work related to CSG’s provision of the CD Services.

 

“Performance Testing Environment” means an optional, dedicated and secured environment of the Content Direct System separate and distinct from the Sandbox Environment and Production Environment whereby Customer can execute performance testing (i.e., stress testing or high volume transaction tests) against the Content Direct Web Services.  Performance Testing is defined in Section 9(b) below.

 

“Permitted TWC Affiliates” means (a) any Affiliate as of the CD Addendum Effective Date that (i) is a multiple-system operator and (ii) derives not less than eighty percent (80%) of its annual revenues from its provision to Subscribers of video, high speed data and/or voice services via coaxial or fiber optic cables (i.e., not via over the top content), (b) Sterling Entertainment Enterprises, LLC d/b/a SportsNet New York, (c) Time Warner Cable Sports Inc., (d) Time Warner Cable News and Local Programming Inc. and (e) any other Affiliate (including a Participating Affiliate that is not a CD Participating Affiliate) to which CSG consents in writing to be treated as a Permitted TWC Affiliate under the CD Addendum, which consent CSG may withhold in its sole discretion.

 

“Production Environment” means the shared, live production environment on which the Customer may utilize the Content Direct System with Consumers.  

 

“Sandbox BU” means a secured and partitioned instance (referred to as a business unit or “BU” ) of the Sandbox Environment of the Content Direct System.  

“Sandbox Environment” means a shared non-production environment made available by CSG to allow Customer to develop and/or test pre-production deployments of the Content Direct System, including any CD Updates thereto, or as mutually agreed by the Parties, any other required configurations, integrations or designs.  The Sandbox Environment, at the discretion of CSG, may maintain a smaller hardware foot-print, or be virtualized within a CSG datacenter, but will at a minimum make available the then-current release of the Content Direct System available on the Production Environment.  

 

Storefront ” means a Consumer Experience that supports (as configured pursuant to an Order Document) retailer enrollment and authentication, management of Consumer Information, creation and management of payment instruments, commerce and digital locker views.  A CD Service Order will, if and as applicable, specify the Storefront solution(s) included in the Content Direct Services made available under such CD Service Order.

 

 


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“TWC Successor” means any (a) successor-in-interest to the assets of Time Warner Cable Inc., or (b) any entity that directly or indirectly owns or controls at least fifty percent (50%) of the voting power to elect directors of Time Warner Cable Inc.

 

“TWC Systems” means any computers or communications systems (hardware or software components) owned or licensed by Customer or otherwise provided for and on behalf of Customer by an Outsourcing Vendor or Affiliate (excluding any hardware or software licensed by or through CSG and/or any of its affiliates), including Customer Equipment, and Customer Applications.

 

2.

Customer; CD Service Order; BHN and CSG CD Customer.

 

Section 1.1 of the Agreement is hereby amended to include the terms of this Section 2.  Without limiting Section 1 of the CD Addendum, in the event of any conflict between the terms of this Section 2 and the terms of Section 1.1 of the Agreement, the terms of this Section 2 shall control.

 

(a) This CD Addendum and the applicable terms of the Agreement prescribe the general terms and conditions of CSG’s performance and provision of the CD Services to Customers.  A Customer’s right to access and utilize the Content Direct System and Content Direct Services requires Customer to execute with CSG a CD Service Order under this CD Addendum. Each CD Service Order shall specify a “CD Order Term” (as defined in such CD Service Order) and will continue in full force and effect, unless such CD Service Order expires in accordance with its terms or is terminated earlier pursuant to Sections 11 or 12 of this Attachment A .  Each CD Service Order shall be in the form mutually agreed by the Parties, but shall follow, substantially in the form attached hereto as CD Schedule A , and at a minimum include the following provisions:  (i) the specific terms and conditions of Customer’s rights to use, and CSG’s obligation to provide, the Content Direct System and/or Content Direct Services under such CD Service Order, (ii) the Content Direct System modules and applications that may be utilized by Customer for a given deployment, (iii) the fees applicable to CSG’s provision of the Content Direct Services, and the Content Direct System required to provide the applicable Content Direct Services (which fees, for the avoidance of doubt, may be increased during any CD Order Term and CD Transition Period as provided in Section 5.4 of the Agreement), and (iv) the CD Order Term.  CD Service Order No. 1 and Statement of Work No. 1 to CD Service Order No. 1 are attached hereto as Exhibit B and Exhibit C , respectively , and shall each become effective upon execution of this CD Addendum without the need for the Parties to separately execute such Order Documents .

 

(b) BHN will have the right at any time during the Term (to be exercised in its sole discretion) to purchase CD Services under the CD Addendum, subject to the following terms:

 

(i)  BHN will be required to execute with CSG a mutually agreed CD Service Order that describes the Content Direct Services that BHN elects to receive and that CSG will provide to BHN hereunder, which Content Direct Services may be (x) similar to the Content Direct Services that are then currently being provided by CSG to TWC or a Customer under an effective CD Service Order (“TWC Current CD Services ) or new/different Content Direct Services to those then or previously provided by CSG to TWC or a Customer under this CD Addendum; provided that if BHN elects to receive TWC Current CD Services, such CD Service Order will describe Content Direct Services (1) that are identical (or as similar as possible given any required change based on differences between TWC or a Customer and BHN) to the TWC Current CD Services and (2) unless  BHN and CSG mutually agree otherwise, at the same fees TWC pays for such TWC Current CD Services; provided, further if CSG is required to provide BHN with additional elements, modules or application of the Content Direct System (e.g., a Storefront) in order to make such TWC Current CD Services available to BHN, such CD Service Order shall include the applicable fees for CSG to make available such additional elements, modules or application of the Content Direct System.  For

 


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avoidance of doubt, in no event will CSG provide or permit BHN to access and/or use the Content Direct Services deployed to TWC and any Customer (other than BHN) hereunder.

 

(ii)  If the Content Direct Services (whether TWC Current CD Services or other Content Direct Services) requested by BHN require CSG to perform any CD Technical Services to deploy such Content Direct Services, BHN and CSG shall execute a mutually agreeable Statement of Work to prescribe such CD Technical Services, which CD Technical Services shall be performed consistent with the Agreement and the applicable Statement of Work.

 

(iii)  On and after the date BHN executes, as applicable, the BHN Addendum and an Order Document, as between CSG and BHN, any references in the Agreement to “Customer” (and, as applicable, “Party”) shall be deemed to reference BHN, as applicable.

 

(iv) Neither TWC nor any Affiliate (other than BHN) shall be responsible for BHN’s compliance with the Agreement, any BHN separately executed Order Document, or for the acts or omissions of BHN’s Outsourcing Vendors.  Instead, CSG shall look only to BHN for payment of all amounts owed to CSG (including a CD Discontinuance Fee, if applicable) and performance of any other obligations hereunder as they relate to BHN and neither TWC nor any Affiliate (other than BHN) shall have any liability to CSG for the actions or omissions of BHN and/or any of BHN’s Outsourcing Vendors.

 

(d) Notwithstanding anything to the contrary contained in the Agreement, the Parties acknowledge that if any Affiliate (including BHN) or any TWC Successor (hereafter referred to as a “CSG CD Customer” to the extent such entity has a CSG CD Agreement) has entered into a separate, effective agreement with CSG or any of its affiliates for the purchase of Content Direct Services (a “CSG CD Agreement”), such CSG CD Customer may not purchase or receive any CD Services under the Agreement.

 

3.

Content Direct System - Rights of Use.

 

This Section 3 shall (x) apply to the CD Services in lieu of Sections 2.3 and 2.4 of the Agreement and (y) amend the Agreement to include the following terms and restrictions relative to the rights of use grant with respect to the Content Direct System and Content Direct Services.  Without limiting Section 1 of the Addendum, in the event of any conflict between the terms of this Section 3 and the terms of Sections 2.1 or 2.2 of the Agreement, the terms of this Section 3 shall control.

 

(a) CSG hereby grants to Customers (subject to Section 2(c) of this Attachment A with respect to BHN) a non-exclusive, non-transferable (subject to Section 12.7 of the Agreement), worldwide, non-sublicenseable (except to the extent expressly set out in the Agreement), grant of rights at all times during the applicable CD Order Term and CD Transition Period to (i) access and use the Content Direct System (as described in and pursuant to each applicable CD Service Order) for Customer’s business purposes and operations, which includes access and use of Consumer Experiences (as described in and pursuant to each applicable CD Service Order) by Consumers; (ii) copy, use, and distribute internally the CD Documentation as required to support its use of the Content Direct System; (iii) modify the CD Documentation in connection with the development of end user guides and/or training materials for Outsourcing Vendors (collectively, “TWC Guides”) and to distribute or have distributed any derivative work of the CD Documentation, as incorporated in any TWC Guides, to Outsourcing Vendors; and (iv) access and use the Content Direct System applications specified in Section 21 below and CD Documentation and TWC User Guides as provided in (ii) and (iii) above in the Export Approved Countries by Customers and their Outsourcing Vendors for Customer’s business purposes and operations.  

 

 


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(b) CSG agrees that the rights granted to Customer pursuant to Section 2(a) of this Attachment A permits Customer to permit their Outsourcing Vendors to take actions, on behalf of Customer in furtherance of Customer’s business purposes, subject to the following terms and restrictions: (i) Customer’s compliance with Section 10 of the Agreement, (ii) prior to providing any Outsourcing Vendor access to CSG’s Invision Content Studio Portal, Customer agrees to provide CSG not less than ***** (*) business days prior written notice (e-mail is acceptable) of such access and include in such notice the (x) name of such Outsourcing Vendor, and (y) the type of services such Outsourcing Vendor will provide Customer in connection with its access to the Invision Content Studio Portal, in each case on a one-time basis with respect to each such Outsourcing Vendor and (iii) TWC agrees to be responsible for any breach of the Agreement by a Customer (excluding BHN) and the Outsourcing Vendors of each Customer (excluding BHN).

 

4.

Compatible Interfaces; Content Direct Web Services and Customer Equipment.

 

This Section 4 shall apply to the Content Direct Services in lieu of Sections 2.4 and 5.6 of the Agreement.

 

(a) Access and use of the Content Direct System will be via a Compatible Interface.  CSG may update the Compatible Interfaces from time to time in its reasonable discretion, consistent with good industry practices, by providing Customer advance written notice specifically identifying the applicable update; provided, however, notwithstanding anything in the Content Direct Web Services Standards to the contrary, CSG shall not cease supporting any Compatible Interface without providing at least *****–**** (**) **** prior written notice to Customer

 

(b) Customer acknowledges that its right to access the Content Direct Services via the Content Direct Web Services is subject to Customer’s compliance with the Content Direct Web Services Standards, both as a condition of Customer’s right to “go-live” and a continuing condition of Customer’s right to access and use the Content Direct Services as provided in this CD Addendum and each executed CD Service Order.  As used herein, “Content Direct Web Services Standards” mean those rules, CD Specifications and standards that relate to Customer’s use of the Content Direct Web Services to integrate with the Content Direct System, as referenced in the CD Documentation, provided, however, in the event of a conflict between the Content Direct Web Services Standards and this CD Addendum and/or any Order Documents, this CD Addendum and the applicable Order Documents will control.

 

(c) Customer is responsible for (including, but not limited to, the costs of procuring, installing, operating and maintaining) its own Internet access and all necessary computer hardware, software, peripherals and communications equipment that are necessary for Customer to access and use the Content Direct System and utilize the Content Direct Services (“Customer Equipment”).  At Customer’s request and subject to the fees, terms and conditions of a mutually agreed Statement of Work, CSG will provide CD Technical Services with respect to Customer Equipment relating to access and use of the Content Direct System and Content Direct Services.

 

5.

Content Direct Services and CD Technical Services.

 

During the CD Order Term of any CD Service Order and any CD Transition Period, as applicable:

 

(a) CSG shall provide Customer with the Content Direct Services as described in and subject to the fees, terms and conditions set forth in any CD Service Order(s) executed by the Parties from time-to-time (unless terminated or expired pursuant to its terms), in each case, subject to the terms and conditions of this CD Addendum and the Agreement.

 

 


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(b) CSG shall provide Customer with appropriate administrator rights to enable Customer to provide, and revoke at any time, unique and confidential access codes permitting remote access to those Content Direct Application Service Modules, Back Office Applications and Content Direct Applications of the Content Direct System as made available under a CD Service Order.  Customer shall be responsible for the improper use or disclosure of any unique access codes issued by Customer (other than BHN); provided CSG, not Customer, shall be responsible for any improper use or disclosure, including but not limited to any third party access, resulting from the acts or omissions of CSG, CSG’s subcontractors or another CSG client.  

 

(c) CSG agrees that the Content Direct System will not accept or process any given payment instrument type (e.g., credit card, debit card, PayPal, third party billing processor account, gift card, stored value card, loyalty points, redemption code or other type) unless such payment instrument type is identified in an executed Order Document as being configured and accepted by the Content Direct System deployed under such Order Document.

 

(d) During each applicable CD Order Term (including any CD Transition Period), (i) CSG will comply with all applicable laws in connection with the operation, design, support and maintenance of the Content Direct System, CD Services and any Deliverables provided hereunder and (ii) Customer will comply with all applicable laws in connection with its (x) provision of Customer Services, (y) use of any TWC Systems to provide the Customer Services and (z) access and use of the Content Direct System and CD Services and any Deliverables provided by CSG under the CD Addendum.

 

6.

CD Hosting Services.

 

From and after the first Go-Live Date of a CD Service Order executed under this CD Addendum, CSG shall host the CD Software (excluding any third party software that is not Embedded Third Party Software and any Consumer Experiences deployed by Customer), store the End User Information, and perform those services and functions and provide the CD Hosting Environment (as defined below) to host and make operational the Content Direct Services as prescribed by this CD Addendum and each CD Service Order during the applicable CD Order Term(s) and any CD Transition Period (“CD Hosting Services”).  During the applicable CD Order Term(s) and any CD Transition Period, CSG shall provide the CD Hosting Services from a professional, hardened, and climate controlled environment at a data center that is located in the continental United States.  As of the first Go-Live Date, the CD Hosting Services shall be provided from *** (*) data centers ******** ** ******* ************ ******** ** in the following *** (*) locations ****** *** ****** ******: ******** ******* *** *********** *******.  CSG shall not relocate or otherwise migrate the CD Hosting Services from the foregoing data centers without providing Customer at least ****** (**) **** advance written notice of the new location(s); provided that in no event shall CSG, nor any of its Permitted Subcontractors, migrate the storage, processing or transmission of any End User Information outside of the United States without Customer’s prior written consent, which consent Customer may withhold in its sole discretion. As part of the CD Hosting Services, CSG shall provide, implement, operate, maintain and support (directly or indirectly), if and to the extent applicable to CSG’s provision of the Content Direct Services, all:  servers; firewalls; routers; other equipment comprising the computing platforms, and security and network infrastructure; operating system software; network security; load balancing; monitoring systems; connectivity and bandwidth; facilities; and any other services, systems, equipment, software and/or other items necessary for the operation of the Content Direct System and Content Direct Services in accordance with the Specifications, the Availability SLA set forth in CD Schedule C , and the data security requirements described in Section 10.5 of the Agreement (collectively, the “CD Hosting Environment”).  

 


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7.

CD Services Performance Standards and Remedies.

 

The terms of CD Schedule C attached hereto shall apply to the Content Direct Services in lieu of Schedule K of the Agreement.

 

8.

CD Support Services; Restrictions.

 

This Section 8 shall constitute CSG’s CD Support Services obligations with respect to the Content Direct Services, provided, however, to the extent Content Direct Services are provided for use in conjunction with the ACP System, CSG’s Support Services obligations under Schedule H of the Agreement shall also apply to those Products, Services or elements of the ACP System.  Once a problem is identified and determined by CSG to be an Exception unrelated to the ACP System, only the CD Support Services shall apply.

 

(a) Subject to the foregoing, during the CD Order Term of any CD Service Order and any CD Transition Period, CSG shall provide maintenance and support for the Content Direct System and Content Direct Services in accordance with the terms set forth in this Section 8, CD Schedule C and Sections 4.2 through 4.5 of the Agreement (“CD Support Services”).  CD Support Services include provision of any fixes, updates, upgrades, improvements, work-arounds, enhancements, replacements, modifications, maintenance releases or derivative works to the Content Direct System made by (or for) CSG during any applicable CD Order Term and any CD Transition Period with respect to the Content Direct System made available to Customer pursuant to a CD Service Order hereunder (“CD Updates”).  In addition, CD Support Services shall include any support and maintenance obligations as Customer and CSG may mutually agree to from time to time in an Order Document(s) with respect to Deliverables provided by CSG and/or any Customer Integrations.

 

(b)  Without limiting the foregoing, and notwithstanding anything to the contrary in the CD Documentation or the Content Direct Web Services Standards but subject to Section 4.5 of the Agreement, CSG shall support and maintain during any applicable CD Order Term and any CD Transition Period the CD Software and Content Direct Web Services, maintaining backwards compatibility to ***** (*) prior releases of such CD Software or Content Direct Web Services, as applicable.

 

(c) CD Support Services do not include management of Customer’s day-to-day operational issues, including but not limited to (i) use and/or configuration of the Content Direct System as generally described in Section 9(a) below, and (ii) monitoring and maintaining any TWC Systems that access the Content Direct System.  In addition, CSG shall not be obligated to fix any Exception with the Content Direct Service or be responsible for a Service Interruption (as defined in Section 1 of CD Schedule C ) if such Service Interruption is caused by the following circumstances:

 

(1) Customer has used the Content Direct Service other than in accordance with the permitted use set forth in Section 3 of this Attachment A and/or the CD Documentation;

 

(2) Customer has incorporated the Content Direct Service into other software in a manner not identified in an Order Document or otherwise approved in writing (email is acceptable) by CSG;

 

(3) To the extent any source or executable code is delivered by CSG to Customer with respect to a given deployment of the Content Direct System under a Service Order, Customer has altered, damaged or modified such code in a manner not identified in an Order Document or otherwise approved by in writing (email is acceptable) by CSG;  

 


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(4) The Exception is caused by a TWC System or a Third Party System (including, if applicable and by way of example only, a Customer Application, but excluding any software or equipment of CSG’s Permitted Subcontractors) and provided the Exception is not caused by CSG’s failure to comply with its obligations under Section 4.5 of the Agreement;

 

(5) The Exception is caused by Customer’s accessing of the Content Direct System or Content Direct Services other than through a Compatible Interface; and/or

 

(6) The Exception is attributable to the failure to comply with the Content Direct Web Services Standards.  

 

9.

Operation of the Content Direct System and Performance Testing.

 

(a) After the Go-Live Date of each Content Direct Services deployment pursuant to a CD Service Order, Customer is principally responsible to manage the day-to-day administrative operations of such deployment in connection with its marketing, merchandising and sale of Customer Services, including, by way of example only, configuring storefront changes, refreshing or adding new Customer Content and configuring Customer Service bundles and pricing plans.  Customer may discharge such responsibility itself, through Outsourcing Vendors, or by requesting CSG to provide such support (“CD Managed Services”), which CSG will provide pursuant to a mutually agreed Statement of Work or amendment to the applicable CD Service Order entered into by the Parties that describes the specific CD Managed Services.  Unless the Parties mutually agree otherwise, CSG shall provide the CD Managed Services ** * **** *** ********* ***** ** *** ** ****** ****.  For the avoidance of doubt, Customer’s day-to-day administrative operations relating to any Content Direct System deployment in no event will include any requirement by Customer to undertake or discharge any CD Hosting Services or any other obligation or responsibility that is identified in this CD Addendum or an Order Document as CSG’s obligation or responsibility.

 

(b) Customer acknowledges that neither the Production Environment nor the Sandbox E nvironment are intended or engineered to perform high volume “stress” or performance testing against the Content Direct System and absent CSG’s prior written approval Customer shall not, nor authorize or permit any third party to perform Performance Testing.  “Performance Testing” in the Sandbox E nvironment or the Production Environment shall mean greater than *********** (**) ********** ************ *** ******** **** (******** **** ***** * ******* *** *********** ******** ****** *** ********** ***********).  In addition, Customer may request that CSG make available a dedicated environment for Performance Testing (a “Performance Testing Environment”), which environment (i) shall replicate the architectural tiers and performance characteristics (excluding capacity) of the Production Environment (ii) shall be made available for ****** (**) *** increments at a fee of ******** ******** ****** ****** ******* ($******) per ****** (**) *** period (use for less than ****** (**) days shall not result in any proration of fees) and (iii) shall be delivered pursuant to the dates, terms and conditions set forth in a Statement of Work executed by Customer and CSG. Customer acknowledges that any conduct of Performance Testing within the Production Environment or Sandbox Environment is a breach of this CD Addendum, but shall not constitute a breach under the Agreement giving rise to CSG’s right to terminate the Agreement, and can adversely affect the Content Direct System, which may also affect third parties.  If Customer conducts Performance Testing in violation of this Section 9(b), or otherwise exceeds the scope of Performance Testing authorized by CSG in writing, Customer agrees (A) that CSG shall have the right, with notice to Customer (either prior to or promptly following suspension), to temporarily suspend Customer’s access to the environment in which such Performance Testing was conducted until such violation is cured and (B) to indemnify, defend (including without limitation by making

 


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any interim payment necessary for appeal) and hold CSG Systems Inc. and its Related Parties harmless, at Customer’s expense, and pay the damages and costs finally awarded against CSG or its Related Parties in any action or any settlement amount approved by Customer, arising out of, resulting from, or in connection with any Claim of a third party caused by, relating to, or arising out of Customer’s Performance Testing in violation of the first two sentences of this Section 9(b). ******* ** *** *********** ** ********* ** ******* **, nothing in this Section 9(b) shall be deemed to limit CSG’s right to assert a Claim against Customer for any damages CSG or its Related Parties incur with respect to Customer’s Performance Testing in violation of the first two sentences of this Section 9(b).

 

If CSG discovers unauthorized Performance Testing conducted by Customer or any third party using Customer’s business unit(s), CSG agrees to (x) use its commercially reasonable best efforts to promptly mitigate any adverse consequences on the Content Direct System and any damages (to CSG, Media or any third party using the Content Direct System) as a result of such Performance Testing, and (y) promptly notify Customer of such Performance Testing and explain CSG’s efforts to mitigate the consequences and damages resulting therefrom.

 

10.

Customer’s Rights in Customer Services and Customer Content.   

 

(a) Customer is responsible to obtain from any applicable third parties all necessary rights for Customer to host, distribute and fulfill (as applicable) Customer Services and display Customer Content on and through the Content Direct System and Content Direct Services, as applicable.  

 

(b) Customer provides to CSG a limited, non-exclusive, non-transferable (except in the case of a permitted assignment of the Agreement by CSG), revocable, non-sublicensable, royalty-free right and license to use the Customer Content (excluding Digital Entertainment Content) that is designated by Customer, in accordance with instructions provided by Customer from time to time in writing, for the sole purpose of configuring and storing the Customer Content within the Hosting Environment, and transmitting the Customer Content to Consumers on and through the Content Direct System and Content Direct Services, respectively, and as necessary to design, configure, deploy, publish and operate the Content Direct Services as contemplated under the applicable CD Service Order.  Customer represents and warrants that it owns or has licensed all Customer Content displayed on or through the Content Direct System and has full power and authority to grant CSG the license set forth herein and that CSG’s use of such Customer Content in connection with the Content Direct Services prescribed by an executed CD Service Order will not constitute a misuse or infringement of the rights of any third party.  Customer will immediately advise CSG of the loss of such Customer’s right to use any such Customer Content (excluding Digital Entertainment Content), of all copyright and other notices that must be used in connection with such Customer Content, and of any restrictions on use of such Customer Content relevant to CSG’s activities hereunder.  The limited grant of license set forth in this Section 10(b) shall terminate upon the later of (i) the expiration or termination of an applicable Order Document, and (ii) the last date on which CSG provides Customer any CD Transition Services under the applicable Order Document.

11.

Termination of a CD Service Order for Convenience.

 

(a ) In addition to the termination rights set forth in Section 12 below, Customer shall have the right to terminate a CD Service Order for its convenience at any time by providing *** (*) ***** prior written notice to CSG.  Upon such termination, CSG may invoice Customer (and Customer shall pay in accordance with the terms set forth in Article 5 of the Agreement) the following fees as set forth in this Section 11(a):

 


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(i)

to the extent not previously invoiced by CSG, CSG may invoice Customer for (A) the ******* of any ** ******* *** ******** (** ***) only if expressly stated as such in the applicable CD Service Order(s), (B) the amount of any ********* ** *** ***** ** *** **** ***** ** ******** ** ************* *** ********’* ********* ** * ******* ** ***** ***** ** **** ***** ******** must be expressly stated in an applicable CD Service Order as a condition to such amounts being included as part of fees invoiced and payable under this Section 11(a), and (C) *** ******** ****** ** *** applicable right to use fees applicable to the CD Order Term prior to the effective termination date,

(ii )

in the case of a CD Service Order under which Content Direct Services fees are accrued on a transaction basis, CSG may invoice Customer for transactions, not previously invoiced, that occurred prior to the effective date of termination in accordance with the terms of the applicable CD Service Order, and

(iii) in either (i) or (ii) above, less any ******* ************ ******* *** ****** **** ****** *** ******* applicable to the CD Service Order accrued prior to the termination effective date *** ***** ******** *** *** *** ******** ******.

For the avoidance of doubt, nothing in this Section 11(a) shall limit CSG’s right to invoice Customer or Customer’s obligation to pay CSG for any (x) fees for Content Direct Services ordered under an executed CD Service Order and actually delivered by CSG prior to the termination effective date and (y) Reimbursable Expenses that have accrued, in each case prior to Customer’s termination of such CD Service Order for convenience.

Section 11(b) below shall apply to the Content Direct Services in lieu of Section 6.4(b) of the Agreement.

(b) Upon expiration or termination of a Service Order and conclusion of the CD Transition Period, if applicable, **** ** *** **** **** *** *******, shall promptly take all steps necessary to deactivate or remove any integrations provided by CSG between the Content Direct System platform and (i) the ACP System, and (ii) any TWC System (provided no CD Service Order hereunder remains in effect under which Content Direct Services are provided thereunder which are dependent on such interface) without disruption to the underlying services (e.g., billing services provided via the ACP System or ICOMS).

12.

Termination of Content Direct System and Content Direct Services.

 

In addition to any termination rights of either Party with respect to the Agreement in its entirety pursuant to the terms of the Agreement, a Customer’s right to access and receive the Content Direct System and Content Direct Services may be terminated only in accordance with Section 11 above and the following terms:

(a) If TWC, a Customer (excluding BHN) or any of their respective employees or Outsourcing Vendors breach any material term or condition of this CD Addendum, an Order Document, or the Agreement involving any right to use or license restrictions relating to the Content Direct System or Content Direct Services and fails to substantially cure such breach within *** (**) **** after receiving written notice pursuant to Section 12.9 of the Agreement specifying the breach, CSG may, at CSG’s option, terminate (i) this CD Addendum in its entirety and each Order Document executed and then in effect hereunder or (ii) the specific Order Document(s) giving rise to the breach.  If CSG elects to terminate only the specific Order Document(s) giving rise to the breach, such termination shall in no way terminate the right to use the Content Direct System and Content Direct Services by,

 


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or limit the rights of, any Customer to a non-terminated Order Document or under this CD Addendum.

(b) If, after ****** (**) **** of receiving written notice of breach thereof, TWC or a Customer (excluding BHN) fails to pay when due any fees owed hereunder with respect to the Content Direct System and Content Direct Services (in accordance with the applicable Order Document(s), this CD Addendum and the Agreement), CSG may, at CSG’s option, terminate the affected Order Document(s).  

(c) If either (i) TWC, a Customer (excluding BHN) or their respective employees or Outsourcing Vendors, on the one hand, or (ii) CSG, its employees, or Permitted Subcontractors, on the other hand, breaches any material term or condition of this CD Addendum, an Order Document or the Agreement as it applies to the Content Direct System and Content Direct Services, other than those identified in Section 12(a) and 12(b) above, and fails either to substantially cure such breach within ****** (**) **** after receiving written notice specifying the breach or, for those breaches which cannot reasonably be cured within ****** (**) ****, promptly commence curing such breach and thereafter proceed with all due diligence to substantially cure such breach, then the Party not in breach may, by giving written notice to the breaching Party, terminate (A) this CD Addendum in its entirety and each Order Document executed by Customer (other than BHN) and then in effect hereunder or (B) the specific Order Document(s) giving rise to the breach, in either case as of a date specified in such notice of termination. If either Party elects to terminate only the specific Order Document(s) giving rise to the breach, such termination shall in no way terminate the right to use the Content Direct System and Content Direct Services by, or limit the rights of, any Customer to a non-terminated Order Document or  under this CD Addendum.  

(d) If BHN or any of its respective employees or Outsourcing Vendors breach any material term or condition of this CD Addendum, an Order Document, or the Agreement involving any right to use or license restrictions relating to the Content Direct System or Content Direct Services and fails to substantially cure such breach within *** (**) **** after receiving written notice pursuant to Section 12.9 of the Agreement specifying the breach, CSG may, at CSG’s at its option, terminate (i) BHN’s rights under this CD Addendum in its entirety and each Order Document executed by BHN and then in effect hereunder or (ii) the specific Order Document(s) giving rise to the breach.  

 

(e) If, after ****** (**) **** of receiving written notice of breach thereof, BHN fails to pay when due any fees owed hereunder with respect to the Content Direct System and Content Direct Services (in accordance with the applicable Order Document(s), this CD Addendum and the Agreement), CSG may, at CSG’s option, terminate (i) each Order Document executed by BHN and then in effect hereunder or (ii) the specific Order Document(s) executed by BHN giving rise to the breach.  

 

(f) If either (i) BHN, its employees, or Outsourcing Vendors, on the one hand, or (ii) CSG, its employees, or Permitted Subcontractors, on the other hand, breaches any material term or condition of this CD Addendum, an Order Document or the Agreement as it applies to the Content Direct System and Content Direct Services, other than those identified in Section 12(d) and 12(e) above, and fails either to substantially cure such breach within ****** (**) **** after receiving written notice specifying the breach or, for those breaches which cannot reasonably be cured within ****** (**) ****, promptly commence curing such breach and thereafter proceed with all due diligence to substantially cure such breach, then the Party not in breach (i.e., CSG or BHN) may, by giving written notice to the breaching Party, terminate (A) each Order Document executed by BHN and then in effect hereunder or (B) the specific Order Document(s) executed by BHN giving rise to the breach, in either case as of a date specified in such notice of termination.

 

 


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Notwithstanding anything in the Agreement to the contrary, Customers’ (including BHN) rights to access and use the Content Direct System and Content Direct Services as set forth in this CD Addendum, an Order Document and the Agreement as it relates to the Content Direct Services may not be terminated by CSG on account of any breach by TWC or any other Customer (including BHN and any other “Customer” as defined in the Agreement) of any obligations of TWC or any other Customer (including BHN and any other “Customer” as defined in the Agreement) relating to any Product or Service other than the Content Direct System and/or Content Direct Services. Similarly, TWC may not terminate Customers’ (including BHN) right to access and use the Content Direct System and Content Direct Services for cause on account of any breach by CSG of any obligations of CSG relating to any Product or Service other than the Content Direct System and/or Content Direct Services.

Furthermore, Customers’ (including any other “Customer” as defined in the Agreement) licenses to any Products other than the Content Direct System and their respective right to receive any Services from CSG not related to the Content Direct Services , and the Agreement as it relates to any Product or Service other than the Content Direct System and/or Content Direct Services , may not be terminated by CSG on account of any breach by TWC or any other Customer (including BHN) of any obligations of TWC or any other Customer relating to the Content Direct System and Content Direct Services.   Similarly, neither TWC nor any other Customer (including BHN and any other “Customer” as defined in the Agreement) may terminate their respective licenses to any Products other than the Content Direct System and/or Content Direct Services and or their purchase of any Services from CSG not related to the Content Direct System and/or Content Direct Services, and the Agreement as it relates to any Product or Service other than the Content Direct System and/or Content Direct Services, for cause on account of any breach by CSG of any obligations of CSG relating to the Content Direct System and/or Content Direct Services.

 


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13.

CD Discontinuance Fee; Termination of a CD Service Order; Minimum Fees.

 

This Section 13 shall apply to the Content Direct Services in lieu of Section 6.3 of the Agreement.

Upon termination of (a) the Agreement in its entirety by CSG pursuant to Section 6.1(b), (c) or (d) of the Agreement or (b) a specific CD Service Order for reasons other than by TWC (or, as applicable, a Customer) pursuant to Section 12 of this Attachment A , TWC (or BHN, in the case of a CD Service Order executed by BHN) shall pay the discontinuance fee, if any, described in each affected CD Service Order or the specific CD Service Order, as applicable (each, a “CD Discontinuance Fee”).  No CD Discontinuance Fees shall be owed by TWC (or BHN, as applicable) on account of any termination where the Agreement is terminated in its entirety by TWC pursuant to Section 6.1(c) or 6.1(d) of the Agreement or a CD Service Order is terminated in its entirety by TWC (or, as applicable, a Customer) pursuant to Section 11 or Section 12 of this Attachment A . The CD Discontinuance Fees, if any, payable pursuant to this Section 13 shall be CSG’s sole and exclusive remedy with respect to Content Direct Services upon any termination of an affected CD Service Order or the Agreement in its entirety by CSG, except that CSG also (i) shall have the right to indemnification by Customer under Section 7 or 3.9 of the Agreement or Section 9(b) of this Attachment A ; or (ii) shall have the right to claim damages in the event of a breach or alleged breach by Customer of (1) its confidentiality obligations in Section 10 of the Agreement; or (2) any right to use provisions, or license restrictions, relating to the Content Direct System or Content Direct Services, in each case, subject to the limitation of liability in Section 15 below, if and as applicable; and (iii) shall have the right to any fees owed by Customer (or BHN, as applicable) under the specific CD Service Order or each affected CD Service Order, as applicable subject to Section 5.2 of the Agreement.

 

14.

CD Termination Services and CD Transition Services .  

 

This Section 14 shall apply to the Content Direct Services in lieu of Section 6.2 of the Agreement.

 

The Parties will comply with the following transition provisions following the termination or expiration of the Agreement or a CD Service Order in order to allow Customer to transition from CSG’s provision of the Content Direct Services to a third-party or an internal Customer solution.  Unless Customer requests in writing otherwise, (a) if the Agreement or a CD Service Order expires as per its stated term, or (b) if the Agreement or a CD Service Order, either in its entirety or only pertaining to a particular Content Direct Service, is terminated pursuant to Section 11 or Section 12 of this Attachment A , CSG shall (i) continue to provide, and Customer shall continue to have the right to use, the applicable the Content Direct Services, underlying Content Direct System, and third party software that is not Embedded Third Party Software, if any, during the CD Transition Period pursuant to the fees, terms and conditions of the applicable CD Service Order, this CD Addendum and the Agreement, and (ii) provide reasonable assistance and cooperation to Customer with respect to an expired or terminated Content Direct Service, so as to allow Customer to effect an orderly transition to a third party for the provision of similar service(s) or product(s) or an internal Customer solution (collectively, “CD Termination Services”) for a transition period not to exceed ****** (**) ****** following the effective date of expiration or termination date (the “CD Transition Period”). Such transition will occur in accordance with a transition schedule that is reasonably requested by Customer.  In no event may CSG delay Customer’s transition but the Parties’ also acknowledge nothing in this Section shall require CSG to allocate resources to fulfill such transition schedule in excess of those resources historically implemented by CSG under the affected CD Service Order(s).  Except for CD Services provided during the CD Transition Period as contemplated in clause (b) above (which CD Services shall be provided at the fees set forth in the applicable CD Service Order(s)), CD Termination Services shall be provided ** ** **** ** ******** and shall specifically include (A) CSG’s obligations under Section 11(b) of this Attachment A and (B) the transfer and transition to Customer (or Customer’s designee) of all Customer

 


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data stored and/or maintained by CSG and/or its Permitted Subcontractors hereunder including, but not limited to, any Customer Content, Consumer Information, Consumer Usage Data, Customer Confidential Information and any Customer Intellectual Property in the possession of CSG and/or any Permitted Subcontractor of CSG.  CSG shall provide the foregoing information to Customer (or its designee) in the same form as stored by CSG, which shall be an industry standard format (e.g., xml) or, with respect to Customer Content, in the same form as provided to CSG by or on behalf of Customer.  If Customer requests CSG to perform any other services in addition to the CD Termination Services in connection with Customer’s transition to a third party or an internal Customer solution, such as consulting services, data configuration or reformatting or similar services (the “CD Transition Services”), Customer acknowledges that such CD Transition Services may be provided by CSG at its discretion, at *** ** ****** ***** pursuant to a mutually agreed Statement of Work or other agreement to document the specific CD Transition Services to be provided and the applicable fees.  In addition, if CSG terminates the Agreement or an Order Document for cause (as provided in Section 12 of this Attachment A ) and Customer requests CSG to provide CD Transition Services, then CSG shall provide Customer a good faith estimate of the fees and, if applicable, actual out-of-pocket expenses to be incurred by CSG to perform the CD Transition Services, and Customer shall pay CSG in advance an amount that covers such fees and, if applicable, expenses.  Promptly following provision of the CD Transition Services, CSG shall ******** ****** to Customer any ********* ****** ************* ******** **** ** ******* by Customer ** ****** ** *** ****** ************* ******* ****** ******** ** ***.  If the Agreement or an Order Document expires in accordance with its terms, or Customer terminates the Agreement or an Order Document for cause, then Customer **** *** ******* *** ********* ********, and CSG shall perform any CD Transition Services and CSG will invoice Customer and Customer shall pay for such CD Transition Services and reimburse CSG for any actual out-of-pocket expenses, subject to and in accordance with Article 5 of the Agreement.

 

15.

No Consequential Damages/Limitation of Liability.   The terms provided in this Section 15 are exclusive to the provision of CD Services under the Agreement and each Order Document, and the terms of Section 9.2 of the Agreement are not applicable to the provision of CD Services under this CD Addendum, including any act or omission by CSG, its affiliates, or Permitted Subcontractors and Customer, its Affiliates or Outsourcing Vendors.

 

A. EXCEPT FOR ANY CD DISCONTINUANCE FEE(S) OWED PURSUANT TO SECTION 13 OF THIS CD ADDENDUM , DAMAGES INCURRED BY CSG WITH RESPECT TO A CUSTOMER’S PERFORMANCE TESTING IN VIOLATION OF THE FIRST TWO SENTENCES OF SECTION 9(b), AND ********** ******** ******* ************ ******* ****** ****** **** ****** *** ******* **** ** *** ******** ** ** ******** * OR IN CONNECTION WITH ANY OTHER ******* ****** OR *********** ******* SET FORTH IN A CD SERVICE ORDER ***** ******* * *********** *** *********** * ******** ******, UNDER NO CIRCUMSTANCES WILL CSG AND ITS RELATED PARTIES, ITS LICENSORS OR ITS VENDORS ON ONE HAND, OR CUSTOMERS OR THEIR RELATED PARTIES ON THE OTHER HAND BE LIABLE TO THE OTHER UNDER THE AGREEMENT OR THIS CD ADDENDUM FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON EITHER PARTY’S CLAIMS OR THOSE OF THEIR CUSTOMERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA, GOODWILL, USE OF MONEY OR USE OF THE PRODUCTS, OR THIRD PARTY SOFTWARE, RESULTING REPORTS, THEIR ACCURACY OR THEIR INTERPRETATION, INTERRUPTION IN USE OR AVAILABILITY OF DATA, STOPPAGE OF THE 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. THE FOREGOING SENTENCE SHALL NOT BE CONSTRUED TO LIMIT IN ANY WAY EITHER

 


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PARTY’S *************** *********** ***** ******* ***(*) ** ***** ******* * ** ******* ** OF THE AGREEMENT, OR ********’* *************** ********** *** ***** ** ******* *(*) OF THIS ATTACHMENT A .  THE FOREGOING EXCLUSION OF CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES SHALL BE INDEPENDENT OF, AND SHALL SURVIVE, ANY FAILURE OF THE ESSENTIAL PURPOSE OF ANY WARRANTY OR LIMITED REMEDY STATED HEREIN, AND SHALL APPLY EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.  

 

B. EXCEPT FOR (I) ANY LIABILITY OF TWC OR A CUSTOMER UNDER THE AGREEMENT FOR THE CD DISCONTINUANCE FEE PURSUANT TO SECTION 13 OF THIS CD ADDENDUM, (II) **** *****’* *************** *********** UNDER THE AGREEMENT AND/OR UNDER THIS CD ADDENDUM, (III) ANY FEES OR CHARGES FOR CD SERVICES PROVIDED TO ANY CUSTOMER THAT HAVE ACCRUED PRIOR TO ANY TERMINATION OF THE AGREEMENT PURSUANT TO SECTION 5.2 OF THE AGREEMENT, (IV) ****** ******* ****** BY A *****’* ****** ** *** *************** *********** SET FORTH IN ******* ** OF THE AGREEMENT, OR (E) ***’* ********* *** ********** ******** ******* ************ ******* ****** ****** **** ****** *** ******* ***** ** ******** * OR IN CONNECTION WITH ANY OTHER ******* ****** OR *********** ******* SET FORTH IN A CD SERVICE ORDER WHICH PROVIDE * *********** *** *********** * ******** ******, IN NO EVENT WILL THE AGGREGATE LIABILITY INCURRED BY CSG AND ITS RELATED PARTIES, ITS LICENSORS OR ITS VENDORS, ON THE ONE HAND, OR CUSTOMER AND THEIR RELATED PARTIES, ON THE OTHER HAND, UNDER THIS AGREEMENT EXCEED AN AMOUNT EQUAL TO *** ****** ******** **** ** ********* ** *** *** ** ******** ****** *** ****** (**) ***** ****** ********* *** ******  

 

C. THIS SECTION 15 WILL NOT APPLY TO THE EXTENT THAT APPLICABLE LAW SPECIFICALLY REQUIRES LIABILITY.  FOR PURPOSES OF THIS SECTION 15, “VENDORS” AND “LICENSORS” SHALL NOT INCLUDE ANY DIRECT VENDORS OR DIRECT LICENSORS OF CUSTOMER.

 

16.

Use and Destruction/Return of Information.

 

(a) For the avoidance of doubt, nothing in the Agreement shall be construed to preclude or limit any right CSG may have to access and use of personally identifiable information of an individual or entity that is an end user client, customer or subscriber of one or more of CSG’s third party customers (excluding Customer and any Affiliate) to the extent such personally identifiable information is also processed by CSG in connection with its provision of services to such third party customer (excluding Customer and any Affiliate), provided such access and/or use is without any reference to or reliance on any End User Information.

 

(b) The Parties acknowledge that CSG may comply with Section 10.5(j) of the Agreement with respect to Consumer Information and Consumer Usage Data if such data is permanently (i) purged (i.e., permanent deletion using random data overwrite) or (ii) anonymized (i.e., within CSG’s structured data construct, to delete or obfuscate the particular fields containing Consumer Information and Consumer Usage Data so as to render them unidentifiable, while preserving the record of the audiovisual materials (including the title, description or subject matter of such materials) acquired by a Consumer), using industry standard practices, thereby permanently preventing anyone (including CSG, its Permitted Subcontractors and any third party) from accessing any Consumer Information from, and/or reconstructing so as to render identifiable, such information retained in the systems of CSG and its Permitted Subcontractors which audiovisual materials were acquired by a Consumer through such systems.

 


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17.

********** *******.

 

*** ******* *********** **** ** ** *********** *** ********* ********* ** ********* *** ****** ******* ** **** ******** **** *** *********** ****** **** ***’* ******* ** ******* ******* *********** ***** *** ********* *** *** ******** ** ******* ******  ************ *** ********** ******* ******* ******* *** ** ** ** ******** *** *** ** ******** ***** * ** ******* *****: (*) *** ************ ** *** *** ** ** * *******; (*) *** ********** *** *** **************** ** *** ******** ******* ** ******** **** * ******* ** *** ** ****** **** *** ********** ********** ** *** ********** ** ******* ***** *** *** *********; *** (*) ***** ** *** **** *** ********* ****** **** ******* ** *** ****** ** *** *** ***** **** ******* *** ******** ****** **** ******** ***** ****** *** ****** ** ********* *** ******** ** ******* ***** ** ********* ***** **** ** ********* *** *** ***** ** **** ******* ******* ** ********** **** *** ********* *********** ********** ** *** ****** ********* ***** **** ** *********  *** ******* ************ ******* *** ****** **** ****** *** ******* ******* ** *** ***** * ** ******* ***** ** ********** ******* *** ** **** ** ******** ****** *** ******* ** *** **** ***** ** ***** ******** ****** *** ********** ** ***** **** *** *** ** ********** *******  **** *** *********** ** ********** ** *** ********* ***** ********* ** *** ********* ** *** ********* *** ****** ******* ************ ******* ** ***** ** ******** ***** ** **** ** ******** ** *** ** ***** ** ****** ** ** **** ******** ** ***** **** ****** (**) **** ***** **** ********** ** ************

 

18.

Content Direct System Roadmap.

 

This Section 17 shall apply to the Content Direct System in lieu of Section 12.11 of the Agreement.

 

On and after the first Go-Live Date under a CD Service Order, CSG agrees to meet with Customer, at Customer’s request, **** *** ******** ******* to review CSG’s product roadmap for the Content Direct System. CSG agrees that it shall take into consideration at such meeting Customer’s future business needs with respect to CSG’s  provision of future Content Direct System features, functionality and services.

 

19.

Source Code Escrow

 

This Section 18 shall apply to the CD Software and Content Direct System in lieu of Section 12.12 of the Agreement.

 

Within ****** (**) **** of the first Go-Live Date under a CD Service Order, CSG will place all source and object code and all documentation applicable to the CD Software of the Content Direct System then deployed by Customer (“Escrow Materials”) in an escrow with ****** *********** *** ("Escrow Agent") in accordance with the form of Media’s agreement with the Escrow Agent, the form of which is attached hereto as Exhibit A (the “Escrow Agreement”).  For so long as Customer has an effective CD Service Order (including any applicable CD Transition Period) CSG will provide updates to the Escrow Materials within ******* (**) **** of the ***** and ***** ****** of each calendar year during the Term ** ***’* **** **** *** *******.  CSG agrees to register, and maintain as registered (subject to Customer’s timely payment of the applicable fees) Customer as a party that may have access to all such Escrow Materials pursuant to the terms and conditions of this CD Addendum, the Agreement and the Escrow Agreement.  Customer shall be responsible to pay all fees applicable to the opening of a deposit account under the Escrow Agreement and the registration and continued maintenance of Customer as a beneficiary of the Escrow Agreement.  *** shall be responsible to **** *** **** ** make all deposits of Escrow Materials required by this Section 19 and the Escrow Agreement.  The Escrow Agent shall deliver to Customer the Escrow Materials upon Customer’s written request if any of the following events occur ( " Release Event " ):  

 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

(a) CSG 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 purposes of discontinuing its business, (b) CSG ceases to provide the CD Support Services; or (c) CSG ceases to conduct its operations pertaining to the Content Direct Services.  Upon any release, Customer shall solely use the Escrow Materials for its own internal business purposes in connection with its provision of maintenance and support for the CD Software, subject to the fees, terms and conditions of this CD Addendum, the Agreement and the applicable CD Service Order(s), and until such time that CSG (or its successor-in-interest) reasonably demonstrates to Customer’s satisfaction that CSG has recommenced performance of CD Support Services as required by the applicable CD Service Order(s), the CD Addendum and the Agreement. If and to the extent BHN executes a CD Service Order under this CD Addendum, CSG agrees to register, and maintain as registered (subject to BHN’s timely payment of the applicable fees) BHN as a party to the Escrow Agreement that may have access to the Escrow Materials that pertain to BHN’s Content Direct System deployment, in accordance with the same terms and conditions as set forth above with respect to TWC. BHN shall be responsible to pay all fees applicable to the opening of a deposit account under the Escrow Agreement and the registration and continued maintenance of BHN as a beneficiary of the Escrow Agreement.

 

20.

Business Continuity/Disaster Recovery Plan

 

The CSG Systems, Inc. Business Continuity/Disaster Recovery Plan set forth in Schedule L of the Agreement is hereby amended to add the Content Direct Services to the list of **** * services.  

 

21.

Export Approved Products and Export Approved Countries.

 

The ******** **** ****** and ********* ****** (each as described in the CD Documentation) are deemed an Export Approved Product on Schedule P of the Agreement, and subject to the terms and conditions of the Agreement and any applicable CD Service Order, may be accessed and used by Customers and their Outsourcing Vendors in the Export Approved Countries identified on Schedule P of the Agreement.  


 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

CD Schedule A

 

Form of CD Service Order

 

CD Service Order No. __

 

[Insert CD Service Order Title]

 

This CD Service Order No. __ (this “CD Order”) is entered into effective as of [Insert Date] (the “CD Order Effective Date”) and shall be governed by the terms and conditions of the CSG Master Subscriber Management System Agreement by and between CSG Systems, Inc. (“CSG”) and Time Warner Cable Inc. (“TWC”) executed March 13, 2003 and effective as of April 1, 2003, as amended (the “Agreement”).  This CD Order is a “CD Service Order” subject to the terms of the CD Addendum to the Agreement, and is entered into by CSG and [Insert Customer] (“Customer”).  CSG and Customer are sometimes individually referred to herein as a “Party” and collectively as the “Parties”. All capitalized terms used but not defined in this CD Order shall have the meaning assigned to such terms in the Agreement.

 

***

 

The following documents are attached to this Order and made a part hereof:

·

Schedule 1 – Content Direct System and Content Direct Services Description

·

Schedule 5 –Fees

 

1.0

Content Direct System and Content Direct Services[; Permitted TWC Affiliates].   

 

(a) Subject to the fees, terms, conditions and restrictions of the Agreement and this CD Order, Customer shall have the right to use, and CSG agrees to provide Customer, the Content Direct System and Content Direct Services [and third party software that is not Embedded Third Party Software] prescribed on Schedule 1 hereto.  If Customer wishes to utilize additional (or less) Content Direct Services [and/or third party software that is not Embedded Third Party Software] during the CD Order Term (as defined in Section 2.0 below), the Parties shall enter into an amendment or Change Order to this CD Order to reflect such change and to clarify the fees applicable thereto.  

 

[(b) The following Permitted TWC Affiliates, in addition to Customer, are authorized to utilize the Content Direct System, Content Direct Services [and third party software that is not Embedded Third Party Software] prescribed by this CD Order:  

 

[insert entities]]

 

 

2.0

CD Order Term.   The initial term of this CD Order shall commence on the CD Order Effective Date and expire __ (___) year(s) from the Go-Live Date (or, solely for purposes of the notice requirement in the next sentence, the Targeted Go-Live Date (as defined in SOW No. __) as defined in Section 3.0 below) of the Content Direct Services prescribed under this CD Order (the “Initial CD Order Term”).  Upon expiration of the Initial CD Order Term, this CD Order shall automatically renew for successive *** (*) **** periods on identical terms and conditions (each a “Renewal CD Order Term”; the Initial CD Order Term and any applicable Renewal CD Order Term(s) are collectively referred to as the “CD Order Term”), unless either of CSG or Customer notifies the other Party in writing of its intent to not renew such CD Order Term no less than ***** (**) **** prior to the expiration of the then-current CD Order Term.  

 

 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

3.0

Initial Statement of Work(s).   In connection with Customer’s initial configuration of the Content Direct System, CSG shall perform the configuration, setup, application training and other services as identified in Statement(s) of Work No(s). __ with a project title(s) of “____________” (CSG Document No(s)._____) (“SOW No(s). _”).  

 

4.0

Projected Project Start Date and Targeted Go-Live Date.    The Parties estimate that the project will commence as of [insert date] and the Targeted Go-Live Date is [insert date].  

 

5.0

Fees; Payments.   Subject to [Customer’s Acceptance (as defined in SOW No. __) of the Deliverables and Technical Services related to the Content Direct System and Content Direct Services prescribed on Schedule 1.0 and SOW No. __and] Section 5.2 of the Agreement, Customer agrees to pay CSG the fees prescribed by this CD Order as set forth in Schedule 5 hereto in accordance with Section 5.2 of the Agreement.

 

6.0

Qualified Revenue Stream . [Qualified Revenue Stream to be stated for the specific deployment].

 

7.0

Customer Contact Information; Notices .  Section 12.10 of the Agreement is hereby supplemented by providing the following contact person for Customer:

 

Customer Project Manager: [Name]

[Telephone]

[Email]

 

IN WITNESS WHEREOF, the Parties have executed this CD Order by their duly authorized representatives, effective as of the CD Order Effective Date.

 

CSG SYSTEMS, INC.

[CUSTOMER]

By : [SAMPLE—DO NOT EXECUTE] ______

By: [SAMPLE—DO NOT EXECUTE] ______

Name:

Name:

Title:

Title:

Date:

Date:


 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Schedule 1 to CD Service Order No. __

 

 

Content Direct System and Content Direct Services

 

CSG will provide the Content Direct Services, and Content Direct System [and third party software that is not Embedded Third Party Software] required to provide such Content Direct Services, described in this Schedule 1 .  

 

[Insert Description of Content Direct Services and Content Direct System [and third party software that is not Embedded Third Party Software] provided under this CD Order.]

 

 

(End of Schedule 1 )


 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Schedule 5 to CD Service Order No. __

 

Fees

 

Fees for CSG’s provision of the Content Direct Services, and the Content Direct System required to provide the applicable Content Direct Services [and third party software that is not Embedded Third Party Software] are as follows:

 

[Insert applicable Fees.]

 

( End of Schedule 5 )

 

*****End of CD Schedule A *****


 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

CD Schedule B

 

Content Direct Services

The Content Direct System is packaged as a set of server application modules (as identified in an applicable CD Service Order, the “Content Direct Application Server Modules”) that provide their capabilities through a set of Content Direct Web Services to Content Direct User Applications.  The Content Direct System is more specifically defined in the CD Documentation, and the below general descriptions are qualified in their entirety by reference to the CD Documentation.  The specific Content Direct System configuration made available by CSG to Customer shall be as set forth in the applicable CD Service Order executed by CSG and Customer.

 

CSG shall provide the Content Direct System and Content Direct Services to Customer in English (U.S.).  If Customer requests the Content Direct System or Content Direct Services to be provided in a language other than English (U.S.), such provision shall be subject to ********** ****** ****, and the applicable Order Document(s) will specify the fees, terms and conditions of such implementation(s).

 

The Content Direct Application Server Modules deployed for a given Content Direct System deployment shall be described in the applicable CD Service Order.

 

The Content Direct Web Services made available for a given Content Direct System deployment shall be described in the applicable CD Service Order.

 

The Content Direct Back-Office User Applications made available for a given Content Direct System deployment shall be described in the applicable CD Service Order.

 

The Consumer Experiences made available for a given Content Direct System deployment shall be described in the applicable CD Service Order.

 

Embedded Third Party Software

 

Taxing .  The Content Direct Services are integrated with taxing software from ********* ***. (“********”). Customer will not be charged for the use of the standard U.S. and International Sales and Use Module from ********.  If Customer needs taxing capabilities other than the standard U.S. and International Sales and Use Module, or Customer requests to utilize taxing software from a provider other than ********* the Parties will negotiate the fees, terms and conditions applicable to such additional taxing software and configuration.

 

Compatible Interfaces

The Back Office Applications of the Content Direct System can be accessed through the public Internet via a PC/Mac on all standard browsers (properly configured) that support the *********** ******* ********

Content Direct Web Services are accessed through ***** **** ** *** ******** running over **********.

It is assumed that all Customer-initiated connectivity to the Production Environment and Sandbox Environment will be coming through a ****** enabled broadband connection.

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

CSG supports the below browsers on **** ** *** **** through which Consumers can, with any applicable browser plug-in (e.g., *********** ** *****) based on the Consumer Experience, access the CSG Consumer Experiences:

******* * ** ******

·

******** ******** ****

·

******* *****; ***

·

****** ****

*** *** ******

·

******* *****; ***

·

****** ****

 

*****End of CD Schedule B *****

 


 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

CD Schedule C

CD Hosting, CD Support Services, Performance Standards and Remedies

1. Definitions  

“Availability SLA” means the Production Availability SLA (as defined in Section 3 below) and the Sandbox Availability SLA (as defined in Section 5 of this CD Schedule C).

“Excluded Problems” means any interruptions, degradation or problems with the Content Direct System that are the result of (a) negligent acts or omissions of or made by Customer, its Permitted Third Parties or a TWC Vendor; (b) failure or malfunction of a Customer Integration, Customer Application, TWC System or other services or systems not supplied, owned, controlled or maintained by CSG, its suppliers or third party service providers contracted by CSG in connection with the Content Direct System provided the problem is not caused by CSG’s failure to comply with its obligations under Section 4.5 of the Agreement; (c) Scheduled Maintenance; (d) the failure of power or equipment at the premises of the Customer; (e) Force Majeure, (f) as provided in Section 8(b) of Attachment A to this CD Addendum or (g) an Excluded System (as defined in Section 4 below).

“Interrupted Service Time” means the number of minutes in a calendar month during which the Customer experiences a Service Interruption.  The number of minutes of a Service Interruption shall be measured (a) beginning on the earlier of the date and time that a Service Interruption is reported on a Service Ticket to the International Service Desk or detected by the Monitoring Software and (b) ending upon the date and time (as confirmed by Customer or verified through the Monitoring Software) when (i) the Service Interruption has been resolved (through full resolution or a work-around) or (ii) with respect to a Service Interruption caused by a ******** ***** * – ******** or ******** ***** * – ****  problem, the problem reported on the Service Ticket has been downgraded to a ******** ***** ** *******  

“Interruption Time Percentage” is equal to (a) the Interrupted Service Time for a given calendar month less the Permissible Interrupted Minutes for such calendar month, divided by (b) the System Availability, as expressed in number of minutes for that calendar month.

“Monitoring Software” means internal software and/or third party service that simulate and/or measure transactions for purpose of determining the Availability SLA.

“Qualified Revenue Stream” means, unless mutually agreed otherwise by the parties in a CD Service Order, the aggregate amount of transaction fees identified as the “Qualified Revenue Stream” in an executed CD Service Order billed to Customer in the calendar month affected by a Service Interruption.

“Permissible Interrupted Minutes” means with respect to each Availability SLA, the number of minutes for a given calendar month the Content Direct System may experience a Service Interruption before a Service Interruption Credit is due for such Availability SLA.  The Permissible Interrupted Minutes is equal to the (a) Total Available Minutes available in a calendar month less (b) the product of Total Available Minutes times the applicable Availability SLA (i.e., ***** *** *** ********** ************ *** *** *** *** *** ******* ************ ***).

 

“Sandbox Availability” means the time during a given calendar month the Sandbox Environment is available to Customer, excluding interruptions caused by Excluded Problems.

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

“Scheduled Maintenance” means the qualifying (in accordance with the second sentence of this “Scheduled Maintenance” definition) time the Content Direct System is not available to Consumers during which CSG will provide maintenance on such system.  To qualify as Scheduled Maintenance, (a) CSG must have provided Customer notice (email acceptable) of such downtime not less than *********** (**) ***** prior to the commencement thereof, (b) such maintenance time must occur during *********** ******* ********; (c) such maintenance must not exceed ***** (*) ***** in the aggregate during a ********** ******** ******* and (d) such maintenance will generally occur on ********* ******** between *:** ** ******* and *:** ** *******.  In the event that CSG exceeds ***** (*) ***** of Scheduled Maintenance during a ********** ******** *******, each minute in excess of ***** (*) ***** shall be deemed Interrupted Service Time for the specific calendar month in which such threshold was exceeded.

“Service Interruption” means with respect to an Availability SLA, the occurrence of a ******** ***** * – ******** or ******** ***** * – **** problem, excluding an occurrence or failure resulting from an Excluded Problem.

“Service Interruption Credit” means with respect to (a) the Production Availability SLA in a given calendar month the product of the (i) Qualified Revenue Stream of an affected CD Service Order received by CSG during such calendar month and (ii) Interruption Time Percentage for such Production Availability SLA and (b) the Sandbox Availability SLA, as defined in Section 5 below.  

“Severity Level” shall refer to the level of severity of a problem in respect of the Content Direct Services, as defined in Section 3 below.

“Service Ticket” means (a) a documented service request marked with the date and time the request was reported to or otherwise discovered by the ISD and with the date and time that the applicable problem was resolved; or (b) a report of Service Interruption or other issue by Customer via telephone (telephone notice is required for ******** ***** * – ******** or ******** ***** * – **** ******), email, CSG’s web accessible ticket tracking system or other mutually acceptable means.

“System Availability” means the Total Available Minutes in a given calendar month less any minutes attributable to an Excluded Problem (which, for the avoidance of doubt, includes Scheduled Maintenance).  

“Total Available Minutes” means the total minutes available in a given calendar month (i.e., number of days in calendar month times sixty (60) times twenty-four (24)).

 

2.

Hosting and Support Services

 

CSG shall provide technical support and operational maintenance for the Production Environment of the Content Direct System as part of the Content Direct Services.  These CD Hosting Services and CD Support Services are provided in a manner to maximize Service Availability and minimize any Service Interruption of the Production Environment.

 

Technical Support/Operations

 

Customer may submit support incidents or queries to CSG’s support center (“International Support Desk” or “ISD”) via telephone (************), or CSG’s web accessible ticket tracking system (accessed at *************************) and other mutually agreed means; provided, that Customer must notify CSG of ******** ***** * ******** *** ******** ***** * **** issues via telephone to the ISD.  

 

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

CSG shall provide support on a ******** for issues with a ******** ***** of “********” and “****” and during *:** ** – *:** ** ******* for issues with a ******** ***** of “******” and “***”.

 

Should CSG discover a performance or operations issue impacting the Production Environment, CSG shall notify the Customer Project Manager identified in an affected CD Service Order (or such other representative Customer has identified to CSG in writing (email acceptable) to receive such notice) of such issue, as well as CSG’s initial assessment of issue severity, no later than (i) ****** (**)  ******* from the time of discovery of a ******** ***** * ******** *** ******** ***** * **** issue and (ii) *** (*) ******** *** for a ******** ***** * ****** ******

 

Support Levels

CSG shall escalate support issues as follows:

Ø

Level 1 Support (ISD) :  CSG provides initial support through CSG’s ISD, which shall provide for the initial triage of an issue.  The ISD may be contacted via telephone (******** *** ******** ***** * ******** *** ******** ***** * **** ******), email or web (through CSG’s extranet at *************************) and will work with the Customer to collect pertinent information, understand the issue and attempt to replicate and resolve.  If, after the ISD’s investigatory resources are exhausted, the ISD is still unable to resolve the issue, it will escalate to Level 2 Support.

Ø

Level 2 Support (Operations ):  Once the ISD escalates the issue to Operations, Operations begins troubleshooting and analyzing the issue.  Operations has additional security rights permitting it to dig deeper into the issue through database queries, server reviews and monitoring.  If, after the Operations’ investigatory resources are exhausted the issue remains unresolved, the issue will be escalated to Level 3 Support.  

Ø

Level 3 Support (Development, QA, etc.) :  If necessary, the Level 3 Support Team will be engaged to attempt to determine root cause for the reported and unresolved issue.  The Level 3 Support team may include developers, Quality Assurance analysts, and/or implementation analysts with additional access permissions to review code or provide additional technical insight into expected versus actual behavior of the Content Direct System.

 

CSG Contact and Escalation List

 

The table below identifies the contact information for all levels of CD Support Services.  All critical issues requiring escalation are managed through the ISD who will contact the appropriate on-call personnel:

 

Support Level

Contact Name/Title

Contact Information

Operating Hours/Staffing Levels

Level 1

International Support Desk (ISD)

Phone:   ************ (************)

Web:   *************************

********

Level 1 Escalation

Manager of the ISD

Escalation from ISD analyst

********

Level 2

Operations

Escalation from ISD

******** *****:  ********

************ ******:  ****** ******** ***** (*** ***)

Level 2 Escalation

On-Call Analyst

Escalation from ISD

******** *****:  ********

************ ******:  ****** ******** ***** (*** ***)


 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Level 3

SME ( e.g. , Development, QA, PS, etc.)

Escalation from Level 2 (Operations)

******** *****:  ********

************ ******:  ****** ******** ***** (******)

Level 3 Escalation

On-Call SME

Escalation from Level 2 (Operations)

******** *****:  ********

************ ******:  ****** ******** ***** (*** ***)

Management Escalation

Operations Manager

Escalation from Level 2 (Operations) on-call

******** *****:  ********

************ ******:  ****** ******** ***** (*** ***)

Senior Management Escalation

Operations Director

Escalation from MS Manager

******** *****:  ********

************ ******:  ****** ******** ***** (*** ***)

 

3.

Priority Definitions and Service Level Metrics for Support Services

 

CSG uses the following priority definitions and target response times for issues reported by the Customer to CSG.  From the time that an issue is reported to or discovered by CSG until the issue is resolved as prescribed below, CSG shall also use commercially reasonable efforts to provide Customer acknowledgements and subsequent updates in accordance with the applicable times set forth in the table below.  In addition, at any time during the pendency of an Exception that affects Customer’s operations in the Production Environment or the Sandbox Environment, Customer may contact its Account Manager to discuss such Exception.  In addition, to the extent a ******** ***** * ******** and ******** ***** * **** issue lasts greater than ***** (**) *******, Customer may contact *****’* ** ****** ******** to discuss such issue.

 

Severity Level Priority

Description

Acknowledgement/

Updates

Targeted

Workaround

0-Critical

*** ******* ****** ****** ** * ***** ** * ***** ********* ** *** ******* ****** ****** (***** ******** ** ************) ** *** ***********

 

********* *** ****** ** ****** *** ******** ** *** ********** **** ********* ** ** ********** ** ******* *****.

 

Ack:  Within ** ******* after (a) issue has been reported by Customer or (b) as soon as commercially practicable after CSG’s discovery and notice (including automated notice) provided by the Monitoring Software.

 

Upd:  Written notices (email acceptable) or telephonic notices ***** **** until issue is no longer Critical, whether resolved or downgraded to a lower severity, in which case acknowledgments and updates will be provided based on the then-current severity level.

* *****

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Severity Level Priority

Description

Acknowledgement/

Updates

Targeted

Workaround

1-High

******** ****** *** ********* ***** *******’ ********** *****

****** ****** ** *** ******** ******** ** *** ******* ****** ****** *** ** ********** ********** ** **********

Ack:  Within * **** after issue has been reported by Customer or discovered by CSG.

 

Upd:  Written notices (email acceptable) or telephonic notices every * ***** until issue is no longer High.

12 hours

2-Medium

******** ****** *** ********* ***** *******’ ********** ***** ****** ****** ** *** ************ ******** ** *** ******* ****** *******

Ack:  Within * ***** after issue has been reported by Customer or discovered by CSG.

 

Upd:  Written notices (email acceptable) daily during normal business hours until issue is no longer Medium.

CSG will use commercially reasonable efforts to include an Update in the next patch or release to the Content Direct System, or thereafter as may be commercially reasonable given the nature of the issue and the impact upon the Content Direct System.

3-Low

Non-functional, non-impacting issue, usually cosmetic in nature

Ack:  Within * ******** ***** after issue has been reported by Customer or discovered by CSG.

 

Upd:  Written notices (email acceptable) upon Customer’s reasonable request.

CSG may include an Update into the Content Direct System.

 

4.

Availability of Production Environment and Service Credits – Production Availability SLA

 

On and after the first Go-Live Date under the Agreement, CSG shall provide System Availability of ***** for the Production Environment of the Content Direct System for each calendar month during the applicable CD Order Term(s) (as measured over a calendar month, the “Production Availability SLA” ).  

 

For any calendar month in which a Service Interruption has occurred, the Parties shall determine whether the Production Availability SLA for the calendar month has been achieved.  If CSG fails to achieve the Production Availability SLA for any given calendar month during a given CD Order Term, CSG shall apply the applicable Service Interruption Credit for such calendar month.

 

CSG shall, subject to Customer’s review and audit rights, calculate the Service Interruption Credit and apply this credit to the following calendar month’s fees or, if such Service Interruption Credit accrues in the final calendar month of a CD Order Term, offset the current calendar month’s fees or provide a refund to Customer.

 

** *** ***** ** ******* *** ********** ************ *** **** (*) ***** ****** *** *********** ****** (**) ***** ****** (* “******* ******* ******” ), *** **** ******* ******* ****** *** *** ****** **** * ******* ************ ****** ** ** ******** ****** (** ******* *****), **** ******** ***** **** *** ***** ** ********* ** ******** ** ******* ***** ********** **** **** **********  **** ********’* ********* ** * ******* ******* *******

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

********* ** *** ********* *** ****** ****** (**) **** ** ******* ** **** ********** ********* *** ******** ** ******* *****(*) ** ********** ******* ****** (* “******* ******* ****** *********** ******” ) ** **** **** *********** ** ** ********* ****** ****** (**) ** *** ******* ****** (***) **** ***** ***’* ******* ** *** ******* ******* ****** *********** *******  *** ************ *** ****** **** **** ******* ** * ******* ******* ****** *********** ******* *** ***** **** ** ***** ** *****  ** ******** ***** ** ******* *** **** * ****** ******* ******* ****** *********** ******* ******** ***** ** ****** ** **** ****** *** ***** ** ********* *** ******** ** ******* *****(*) ***** ** **** ******* ******* ****** *********** *******  As used in this CD Schedule C , an “Excluded System” means (i) any third party software that is not Embedded Third Party Software, (ii) any Third Party System and (iii) any system, software, services or product that is specifically identified as an Excluded System in a CD Service Order.   ******* ** **** ********* ***** ** ****** ** ***** ***’* ********* *** * ******* ************ ****** ******* ** * ******* ** ****** **** *** ********** ************ ****

 

In addition, if in Customer’s good faith belief a ******** ***** * – ****** Exception results in a material adverse Customer or Consumer experience, the Parties agree to collaborate on the mutually agreeable timeframe for CSG to implement an Update to such Exception and, if applicable, any credits if CSG fails to timely implement such Update.

 

CSG shall also provide Customer access to reports and/or tools that enable Customer to determine System Availability.

 

5.

Availability of Sandbox Environment and Service Credits – Sandbox Availability SLA

 

CSG shall provide Sandbox Availability of *** (as measured over a calendar month) (the “Sandbox Availability SLA” ).

 

For any calendar month in which a Service Interruption has occurred, the Parties shall determine whether the Sandbox Availability SLA for the calendar month in question has been achieved.  If (i) CSG fails to achieve the Sandbox Availability SLA for any given calendar month during an applicable CD Order Term and (ii) Customer is paying CSG an express fee under a given CD Service Order to access the Sandbox Environment, Customer shall be entitled to submit a claim for a Sandbox Service Interruption Credit (as defined below) based on the Service Interruption.

 

If Customer makes a valid claim for a Sandbox Service Interruption Credit, CSG shall, subject to Customer’s review and audit rights, calculate the Sandbox Service Interruption Credit and ***** **** ****** ** *** ********* ******** *****’* **** *** ** **** ******* ************ ****** ******* ** *** ***** ******** ***** ** * ** ***** ***** ****** *** ******* ******** *****’* **** ** ******* * ****** ** *********

 

As used in this Section 5, “Sandbox Service Interruption Credit” means with respect to a given calendar month the product of the (i) fees paid by Customer to access the Sandbox Environment(s) during such calendar month and (ii) Interruption Time Percentage.

 

CSG shall provide Customer access to reports and/or tools that enable Customer to determine the availability of the Sandbox Environment.

 


 


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6.

****** ********** *** *******

 

** *** ***** ** **** *** ****** ********** **** ********** ** ******* * ***** *** * ******** ***** * ******** ** ******** ***** * **** ***** (*** “********** ***” ), **** *** **** ******** *** ***** ******* ** ******** * ****** ** **** ******** ****** ****** ******* ($********) ** ********’* **** ******* ********

 

**** End of CD Schedule C *****


 


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Exhibit A

 

Form of Escrow Agreement

 

 

See attached.

 


 


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Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

MASTER PREFERRED ESCROW AGREEMENT

 

Master Number:

 

This Master Preferred Escrow Agreement (“Agreement”) is effective December 20, 2012 (the “Effective Date”) among ****** *********** *** (“****** **********”), CSG Media, LLC (“Depositor”) and any additional party signing the Acceptance Form attached to this Agreement (“Preferred Beneficiary”), who collectively may be referred to in this Agreement as “the parties.”

 

A. Depositor and Preferred Beneficiary have entered or will enter into a services agreement, development agreement, and/or other agreement regarding certain proprietary technology of Depositor (referred to in this Agreement as “the license agreement”).

 

B. Depositor desires to avoid disclosure of its proprietary technology except under certain limited circumstances.

 

C. The availability of the proprietary technology of Depositor is critical to Preferred Beneficiary in the conduct of its business and, therefore, Preferred Beneficiary needs access to the proprietary technology under certain limited circumstances.

 

D. Depositor and Preferred Beneficiary desire to establish an escrow with ****** ********** to provide for the retention, administration and controlled access of certain proprietary technology materials of Depositor.

 

E. The parties desire this Agreement to be supplementary to the license agreement pursuant to 11 United States Bankruptcy Code, Section 365 (n).

 

ARTICLE 1 – DEPOSITS

 

1.1

Obligation to Make Deposit .  Upon the signing of this Agreement by the parties, including the signing of the Acceptance Form, Depositor shall deliver to ****** ********** the proprietary information and other materials (“deposit materials”) required to be deposited by the license agreement or, if the license agreement does not identify the materials to be deposited with ****** **********, then such materials will be identified on an Exhibit A.  If Exhibit A is applicable it is to be prepared and signed by Depositor and Preferred Beneficiary.  ****** ********** shall have no obligation with respect to the preparation, signing or delivery of Exhibit A.

 

1.2

Identification of Tangible Media.   Prior to the delivery of the deposit materials to ****** **********, Depositor shall conspicuously label for identification each document, magnetic tape, disk, or other tangible media upon which the deposit materials are written or stored.  Additionally, Depositor shall complete Exhibit B to the Agreement by listing each such tangible media by the item label description, the type of media and the quantity.  The Exhibit B must be signed by Depositor and delivered to ****** ********** with the deposit materials.  Unless and until Depositor makes the initial deposit with ****** **********, ****** ********** shall have no obligation with respect to this Agreement, except the obligation to notify the parties regarding the status of the deposit account as required in Section 2.2 below.

 

1.3

Deposit Inspection.   When ****** ********** receives the deposit materials and the Exhibit B, ****** ********** will conduct a deposit inspection by visually matching the labeling of the tangible media containing the deposit materials to the item descriptions and quantity listed on the Exhibit B. In addition to the deposit inspection, Preferred Beneficiary may elect to cause a verification of the deposit materials in accordance with Section 1.6 below.

 

 


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1.4

Acceptance of Deposit.   At completion of the deposit inspection, if ****** ********** determines that the labeling of the tangible media matches the item descriptions and quantity on Exhibit B, ****** ********** will date and sign the Exhibit B and mail a copy thereof to Depositor and Preferred Beneficiary.  If ****** ********** determines that the labeling does not match the item descriptions or quantity on the Exhibit B, ****** ********** will (a) note the discrepancies in writing on the Exhibit B; (b) date and sign the Exhibit B with the exceptions noted; and (c) provide a copy of the Exhibit B to Depositor and Preferred Beneficiary.  ****** **********’ acceptance of the deposit occurs upon the signing of the Exhibit B by ****** ***********  Delivery of the signed Exhibit B to Preferred Beneficiary is Preferred Beneficiary’s notice that the deposit materials have been received and accepted by ****** ***********

 

1.5

Depositor’s Representations.   Depositor represents as follows:

 

a.

Depositor lawfully possesses all of the deposit materials deposited with ****** **********;

b.

With respect to all of the deposit materials, Depositor has the right and authority to grant to ****** ********** and Preferred Beneficiary the rights as provided in this Agreement;

c.

The deposit materials are not subject to any lien or other encumbrance;

d.

The deposit materials consist of the proprietary information and other materials identified either in the license agreement or Exhibit A, as the case may be; and

e.

The deposit materials are readable and useable in their current form or, if the deposit materials are encrypted, the decryption tools and decryption keys have also been deposited.

 

1.6

Verification.   Preferred Beneficiary shall have the right, at Preferred Beneficiary’s expense, to cause a verification of any deposit materials.  A verification determines, in different levels or detail, the accuracy, completeness, sufficiency and quality of the deposit materials.  If a verification is elected after the deposit materials have been delivered to ****** **********, then only ****** **********, or at ****** **********’ election an independent person or company selected and supervised by ****** **********, may perform the verification.  

 

1.7

Deposit Updates .  Unless otherwise provided by the license agreement, Depositor shall update the deposit materials within 60 days of each release of a new version of the product which is subject to the license agreement.  Such updates will be added to the existing deposit.  All deposit updates shall be listed on a new Exhibit B and the new Exhibit B shall be signed by Depositor.  Each Exhibit B will be held and maintained separately within the escrow account.  An independent record will be created which will document the activity for each Exhibit B. The processing of all deposit updates shall be in accordance with Sections 1.2 through 1.6 above. All references in this Agreement to the deposit materials shall include the initial deposit materials and any updates.  

 

1.8

Removal of Deposit Materials.   The deposit materials may be removed and/or exchanged only on written instructions signed by Depositor and Preferred Beneficiary, or as otherwise provided in this Agreement.

 

1.9

Beneficiary(s); Separate Deposit Accounts. From time to time, Depositor may, at its sole discretion, add beneficiary(s) to this Agreement and/or create additional deposit accounts under this Agreement that may hold separate and distinct deposit materials for a given Preferred Beneficiary.  In each case the Depositor wishes to add a Preferred Beneficiary and/or deposit account to this Agreement, Depositor shall utilize Exhibit C and/or

 


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Rider C, in the form attached hereto, as modified by the mutual agreement of Depositor, ****** ********** and, if applicable, a Preferred Beneficiary.

 

ARTICLE 2 – CONFIDENTIALITY AND RECORD KEEPING

 

2.1 Confidentiality.

 

a. ****** ********** shall store all deposit materials held under this Agreement in a media vault facility designed specifically for the storage and protection of magnetic media.    Without limiting the foregoing, during the term of this Agreement, ****** ********** shall have and maintain industry standard security measures to protect and maintain the deposit materials in a secure and safe manner, including, without limitation, appropriate technical, administrative and organizational safeguards against accidental or unlawful destruction, loss, alteration, or unauthorized disclosure of or access to the deposit materials.  ****** ********** shall have the obligation to reasonably protect the confidentiality of the deposit materials and any other confidential and proprietary information (“Information”) disclosed to ****** ********** in connection with this Agreement.  ****** ********** will take all reasonable precautions necessary to safeguard the confidentiality of the Depositor’s Information, including (i) those required under this Section 2.1, (ii) those taken by ****** ********** to protect its own confidential information and (iii) those which the Depositor may reasonably request from time to time and for which the Depositor has agreed to pay ****** **********’ quoted fees for such requested precaution.  

 

b. Except as provided in this Agreement, ****** ********** shall not disclose, transfer, make available, or use the Information.  ****** ********** shall not disclose the content of this Agreement to any third party.  If ****** ********** receives a subpoena or other order of a court or other judicial tribunal pertaining to the disclosure or release of the deposit materials, ****** ********** will immediately notify the parties to this Agreement.  It shall be the responsibility of Depositor and/or Preferred Beneficiary to challenge any such order; provided, however, that ****** ********** does not waive its rights to present its position with respect to any such order. ****** ********** will not be required to disobey any court or other judicial tribunal order.  (See Section 7.5 below for notices of requested orders.)

 

c. The parties acknowledge that Depositor will be irreparably harmed if ****** **********’ obligations under this Section 2.1 are not specifically enforced and that Depositor would not have an adequate at law in the event of an actual or threatened violation by ****** ********** of its obligations.  Therefore, ****** ********** agrees that Depositor shall be entitled to an injunction or any appropriate decree of specific performance for any actual or threatened violations or breaches by ****** **********, its employees or agents, without the necessity of Depositor showing actual damages or that monetary damages would not afford an adequate remedy.  

 

2.2 Status Reports.   ****** ********** will issue to Depositor and Preferred Beneficiary a report profiling the account history at least semi-annually.  ****** ********** may provide copies of the account history pertaining to this Agreement upon the request of any party to this Agreement.  

 

2.3 Audit Rights.   During the term of this Agreement, Depositor and Preferred Beneficiary shall each have the right to inspect the written records of ****** ********** pertaining to this Agreement.  Any inspection shall be held during normal business hours and following reasonable prior notice.  

 

ARTICLE 3 – GRANT OF RIGHTS TO ****** **********

 

3.1 Title to Media.   Depositor hereby transfers to ****** ********** the title to the media upon which the proprietary information and materials are written or stored.  However, this transfer does not include the ownership of the proprietary information and materials contained on the media such as any copyright, trade secret, patent or other intellectual property rights.  

 

3.2 Right to Make Copies.   ****** ********** shall have the right to make copies of the deposit materials as reasonably necessary to perform this Agreement.  ****** ********** shall copy all copyright, nondisclosure, and other proprietary notices and titles contained on the deposit materials onto any copies made by ****** ***********  With all deposit materials submitted to ****** **********, Depositor shall provide any and all

 


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instructions as may be necessary to duplicate the deposit materials including but not limited to the hardware and/or software needed.

 

3.3 Right to Transfer Upon Release.   Depositor hereby grants to ****** ********** the right to transfer deposit materials to Preferred Beneficiary upon any release of the deposit materials for use by Preferred Beneficiary in accordance with Section 4.5.  Except upon such a release or as otherwise provided in this Agreement, ****** ********** shall not transfer the deposit materials.

 

ARTICLE 4 – RELEASE OF DEPOSIT

 

4.1 Release Conditions.   As used in this Agreement, “Release Conditions” shall mean any condition set forth in the license agreement.  

 

4.2 Filing For Release.   If Preferred Beneficiary believes in good faith that a Release Condition has occurred, Preferred Beneficiary may provide to ****** ********** written notice of the occurrence of the Release Condition and a request for the release of the deposit materials.  Upon receipt of such notice, ****** ********** shall within **** (*) ******** **** provide a copy of the notice to Depositor, by certified mail, return receipt requested, or by commercial express mail.  

 

4.3 Contrary Instructions.   From the date ****** ********** mails the notice requesting release of the deposit materials, Depositor shall have *** ******** **** to deliver to ****** ********** Contrary Instructions.  “Contrary Instructions” shall mean the written representation by Depositor that a Release Condition has not occurred or has been cured.  Upon receipt of Contrary Instructions, ****** ********** shall send a copy to Preferred Beneficiary by certified mail, return receipt requested, or by commercial express mail.  Additionally, ****** ********** shall notify both Depositor and Preferred Beneficiary that there is a dispute to be resolved pursuant to the Dispute Resolution section of this Agreement (Section 7.3).  Subject to Section 5.2, ****** ********** will continue to store the deposit materials without release pending (a) joint instructions from Depositor and Preferred Beneficiary; (b) resolution pursuant to the Dispute Resolution provisions; or (c) order of a court.

 

4.4 Release of Deposit.   If ****** ********** does not receive Contrary Instructions from the Depositor, ****** ********** is authorized to release the deposit materials to the Preferred Beneficiary or, if more than one beneficiary is registered to the deposit, to release a copy of the deposit materials to the Preferred Beneficiary.  However, ****** ********** is entitled to receive any fees due ****** ********** before making the release.  This Agreement will terminate upon the release of all deposit materials held by ****** **********.

 

4.5 Right to Use Following Release. Unless otherwise provided in the license agreement, upon release of the deposit materials in accordance with this Article 4, Preferred Beneficiary shall have the right to use the deposit materials for the sole purpose of continuing the benefits afforded to Preferred Beneficiary by the license agreement.  Preferred Beneficiary shall be obligated to maintain the confidentiality of the released deposit materials in accordance with its confidentiality obligations under the license agreement.  

 

ARTICLE 5 – TERM AND TERMINATION

 

5.1 Term of Agreement.   The initial term of this Agreement is for a period of *** ****.  Thereafter, this Agreement shall automatically renew **** ************ unless (a) Depositor and Preferred Beneficiary jointly instruct ****** ********** in writing that the Agreement is terminated; or (b) the Agreement is terminated by ****** ********** for nonpayment in accordance with Section 5.2. If the Acceptance Form has been signed at a date later than this Agreement, the initial term of the Acceptance Form will be for *** **** with subsequent terms to be adjusted to ***** *** *********** **** ** **** *********.  If the deposit materials are subject to another escrow agreement with ****** *********** ****** ********** reserves the right, after the initial *** **** ****, to adjust the anniversary date of this Agreement to match the then prevailing anniversary date of such other escrow arrangements.  

 

5.2 Termination for Nonpayment.   In the event of the nonpayment of fees owed to ****** *********** ****** ********** shall provide written notice of delinquency to the parties to this Agreement affected by such delinquency.  Any such party shall have the right to make the payment to ****** ********** to cure the default.  If

 


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the past due payment is not received in full by ****** ********** within *** ***** of the date of such notice then at any time thereafter ****** ********** shall have the right to terminate this Agreement to the extent it relates to the delinquent party by sending written notice of termination to such affected parties.  ****** ********** shall have no obligation to take any action under this Agreement so long as any payment due to ****** ********** remains unpaid.  

 

5.3 Disposition of Deposit Materials Upon Termination.   Upon termination of this Agreement by joint instruction of Depositor and each Preferred Beneficiary, ****** ********** shall destroy, return, or otherwise deliver the deposit materials in accordance with such instructions. Upon termination for nonpayment, ****** ********** may, at its sole discretion, destroy the deposit materials or return them to Depositor.  ****** ********** shall have no obligation to return or destroy the deposit materials if the deposit materials are subject to another escrow agreement with ****** ***********  

 

5.4 Survival of Terms Following Termination.   Upon termination of this Agreement, the following provisions of this Agreement shall survive:

 

a.Depositor’s representations (Section 1.5);

 

b. ****** **********’ confidentiality obligations (Section 2.1);

 

c.The rights granted in the sections entitled Right to Transfer Upon Release (Section 3.3) and Right to Use Following Release (Section 4.5), if a release of the deposit materials has occurred prior to termination;

 

d.The obligation to pay ****** ********** any fees and expenses due;

 

e.The provisions of Article 7; and

 

f. Any provisions in this Agreement which specifically state they survive the termination or expiration of this Agreement.

 

ARTICLE 6 – ****** **********’ FEES

 

6.1

Fee Schedule.   ****** ********** is entitled to be paid its standard fees and expenses applicable to the services provided. ****** ********** shall notify the party responsible for payment of ****** **********’ fees at least ** **** prior to any increase in fees.  For any service not listed on ****** **********’ standard fee schedule, ****** ********** will provide a quote prior to rendering the service, if requested.  ****** **********’ standard fee schedule as of the Effective Date is set forth on Schedule 6.1.

 

6.2

Payment Terms.   ****** ********** shall not be required to perform any service unless the payment for such service an any outstanding balances owed to ****** ********** are paid in full.  All other fees are due within ** **** of the date of invoice.  If invoiced fees are not paid, ****** ********** may terminate this Agreement in accordance with Section 5.2. Late fees on past due amounts shall accrue at the rate of one and one-half percent per month (18% per annum) ** **** from the date of the invoice.  

 

ARTICLE 7 – LIABILITY, DISPUTES AND LIMITATION OF LIABILITY

7.1

Right to Rely on Instructions.   ****** ********** may act in reliance upon any instruction, instrument, or signature reasonably believed by ****** ********** to be genuine.  ****** ********** may assume that any employee of a party to this Agreement who gives any written notice, request, or instruction has the authority to do so.  ****** ********** shall not be responsible for failure to act as a result of causes beyond the reasonable control of ****** **********.  

 

7.2

Indemnification.   ****** ********** shall be responsible to perform its obligations under this Agreement and to act in a reasonable and prudent manner with regard to this escrow arrangement.  Provided ****** ********** has acted in the manner stated in the preceding sentence, Depositor and Preferred Beneficiary

 


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each agree to indemnify, defend and hold harmless ****** ********** from any and all claims, actions, damages, arbitration fees and expenses, costs, attorney’s fees and other liabilities incurred by ****** ********** relating in any way to this escrow arrangement.  

 

7.3

Dispute Resolution.   Any dispute relating to or arising from this Agreement shall be resolved by arbitration under the Commercial Rules of the American Arbitration Association.  Unless otherwise agreed by Depositor and Preferred Beneficiary, arbitration will take place in ****** ********* ***.  Any court having jurisdiction over the matter may enter judgment on the award of the arbitrator(s).  Service of a petition to confirm the arbitration award may be made by First Class mail or by commercial express mail, to the attorney for the party or, if unrepresented, to the party at the last known business address.  

 

7.4

Controlling Law.   This Agreement is to be governed and construed in accordance with the laws of the State of Nebraska, without regard to its conflict of law provisions.  

 

7.5

Notice of Requested Order.   If any party intends to obtain an order from the arbitrator or any court of competent jurisdiction which may direct ****** ********** to take, or refrain from taking any action, that party shall:

 

a.Give ****** ********** at least *** ******** days prior notice of the hearing;

 

b.Include in any such order that, as a precondition to ****** **********’ obligation, ****** ********** ** **** ** **** *** *** **** *** **** *** ** **** *** *** ********** ***** ** *** ******** ** ** ******** ******** ** **** *****; and

 

c.Ensure that ****** ********** not be required to deliver the original (as opposed to a copy) of the deposit materials if ****** ********** may need to retain the original in its possession to fulfill any of its other escrow duties.

 

7.6

Limitation of Liability .  ****** *** ******* ********** ** ***** ********** ** *** **** ** ****** *********** ***** ** ************ ***** ****** ********** ** ****** *** *** ******** *********** ** ************* ******* (********* **** *******) ******* *** ** **** ********* **** ** ****** ********** *** **** ******** ** *** *********** ** **** *******.  In performing any of its duties hereunder, ****** ********** shall not incur any liability with respect to any action taken or omitted in reliance upon any written notice, request, waiver, consent, receipt or other document which ****** ********** in reasonably good faith believes to be genuine.

 

ARTICLE 8 – GENERAL PROVISIONS

 

8.1

Entire Agreement.   This Agreement which includes the Acceptance Form and the Exhibits described herein, embodies the entire understanding between all of the parties with respect to its subject matter and supersedes all previous communications, representations or understandings, either oral or written.  No amendment or modification of this Agreement shall be valid or binding unless signed by all the parties hereto, except that Exhibit A need not be signed by ****** **********, Exhibit B need not be signed by Preferred Beneficiary and the Acceptance Form need only be signed by the parties identified therein.  

 

8.2

Notices.   All notices, invoices, payments, deposits and other documents and communications shall be given to the parties at the addresses specified in the attached Exhibit D and Acceptance Form.  It shall be the responsibility of the parties to notify each other as provided in this Section in the event of a change of address.  The parties shall have the right to rely on the last known documents and communications may be delivered by First Class mail.  

 

8.3

Severability.   In the event any provision of this Agreement is found to be invalid, voidable or unenforceable, the parties agree that unless it materially affects the entire intent and purpose of this Agreement, such invalidity, voidability or unenforceability shall affect neither the validity of this Agreement nor the remaining provisions herein, and the provision in question shall be deemed to be

 


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replaced with a  valid and enforceable provision most closely reflecting the intent and purpose of the original provision.  

 

8.4

Successors.   This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties.  However, ****** ********** shall have no obligation in performing this Agreement to recognize any successor or assign of Depositor or Preferred Beneficiary unless ****** ********** receives clear, authoritative and conclusive written evidence of the change of parties.  

 

IN WITNESS WHEREOF, the parties have executed this Agreement by and through their duly authorized agents as of the Effective Date.

CSG Media, LLC

(“Depositor”)

****** *********** ***

(“****** **********”)

 

 

By:  /s/ Kent A. Steffen

By: /s/ Richard Sheffield

Name: Kent A. Steffen

Name: Richard Sheffield

Title: President & GM

Title: Managing Director

Date: December 20, 2012

Date: 12-21-12

 


 


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EXHIBIT A

MATERIALS TO BE DEPOSITED

Account Number:

Depositor represents to Preferred Beneficiary that deposit materials delivered to ****** ********** shall consist of the following:

 

 

CSG Media, LLC

(“Depositor”)

 

****** *********** ***

(“****** **********”)

 

 

 

By:  

 

By:

Name:

 

Name:

Title:

 

Title:

Date:

 

Date:


 


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Exhibit B

Deposit Materials

Please complete this Exhibit B form and enclose a copy with the deposit materials or contact us for details on electronic depositing.  

****: ***** *******

****** *********** ***

**** ******** ****** ***** ***

******** **  *****   ***

*************************

**************

 

Company Name:

****** ********** Account Number:

Product Name & Version:

  Two-Party Agreement Update to existing Deposit Account

Please list specific Beneficiaries under the Agreement associated with this product/ update or check here to apply to all Beneficiaries:  

 

Media Description:

Quantity Type Description / Label

DVD/CDR

DAT/DDS Tape

Documentation

Other

Deposit Encryption (Please check either “Yes” or “No” below and complete as appropriate)

Is the media or are any of the files encrypted?   Yes or No

If yes, please include any passwords and decryption tools description below.  Please also deposit all necessary encryption software with this deposit.

Encryption tool name____________________________________ Version

Hardware required

Software required

Other required information_____________________________________________________________________

 

Deposit Prepared by :

Deposit Accepted by (****** **********):

Signed:

Signed:

E-mail:

Name:

Date:

Date:

 

 


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Exhibit C

Preferred Beneficiary Addition Form

 

 

Depositor Name / Account Number ______________________________________

 

 

Preferred Beneficiary #1

 

Company Name: _____________________________________________________

 

Contact: ____________________________________________________________

 

Address: ____________________________________________________________

 

City, State, Zip: _______________________________________________________

 

Telephone: __________________________Fax: _____________________________

 

E-mail: ______________________________________________________________

 

Applicable Product(s): __________________________________________________

 

 

 

Preferred Beneficiary #2

 

Company Name: ______________________________________________________

 

Contact: _____________________________________________________________

 

Address: ____________________________________________________________

 

City, State, Zip: _______________________________________________________

 

Telephone: __________________________Fax: _____________________________

 

E-mail: ______________________________________________________________

 

Applicable Product(s): __________________________________________________


 


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Rider C

Registered Preferred Beneficiary / New Deposit Account Addition Form

[Include/Exclude Applicable Provisions]

 

Whereas, CSG Media, LLC (“Depositor”) and ****** *********** *** (“****** **********”) have entered into an escrow agreement dated December 20, 2012 (the “Agreement”);

 

[Whereas, pursuant to the Agreement Depositor may add additional beneficiaries to the Agreement and Depositor wishes to add ______ (the “Preferred Beneficiary” ) as a named Preferred Beneficiary to the Agreement;]

 

[Whereas, pursuant to the Agreement Depositor may create additional deposit accounts (an “ Additional Deposit Account ”) for the purpose of holding additional deposit materials in a separate account which ****** ********** will maintain separately from other deposit accounts and deposit materials under this Agreement. The new account will be referenced by the following name:   _____________________________________ (the “ Deposit Account ”) and _____(the “Preferred Beneficiary” ) is the named Preferred Beneficiary of such Deposit Account and the Agreement .]

 

Whereas, Depositor, Preferred Beneficiary and ****** ********** wish to modify the terms of the Agreement as set forth herein.

 

NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Depositor, Preferred Beneficiary and ****** ********** agree as follows:

 

 

1.

[Insert modification(s) to Agreement]

 

2.

Notices and communications to Preferred Beneficiary should be addressed to:

 

[Insert Contact and Address]

 

3.

[The deposit account established under the Agreement in favor of Preferred Beneficiary is known as __________.]

 

4.

Each of Depositor, Preferred Beneficiary and ****** ********** each agree to be bound by all provisions of the Agreement, as specifically modified herein with respect to Preferred Beneficiary’s rights under the Agreement and Depositor’s obligation to Preferred Beneficiary and ****** ********** (and to no other party or account) under such Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Registered Preferred Beneficiary Addition Form effective as of the last date identified below.

 

CSG Media, LLC (“Depositor”)

****** *********** ***

Signature: ____________________________

Signature: _____________________________

Name: _______________________________

Name: ________________________________

Title: _________________________________

Title: _________________________________

Date: _________________________________

Date: _________________________________

 

 

 


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_____________________ (“Preferred Beneficiary”)

 

Signature: ______________________________

 

Name: _________________________________

 

Title: __________________________________

 

Date: _________________________________

 


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EXHIBIT D

DESIGNATED CONTACT

Notices and communications

Should be addressed to:

 

Invoices should be addressed to 1 :

*** ****** ***

** ** ****** ******* ***** ***

******** ** *****

*** ****** ***

** ** ****** ******* ***** ***

******** ** *****

Designated Contact:

Designated Contact:

********* **** * **** **

***** *******

*********:  (***) ********

*********:  (***) ********

******** ******* **** * **** **

***** *****

*********:  (***) ********

*********:  (***) ********

Requests to change the Designated Contact should be given in writing by the Designated Contact or an authorized employee

Contracts, notices and invoice inquiries

To ****** ********** should be addressed to:

Deposit Materials inquiries should be addressed

to

 

****: ********* **************

****** *********** ***

**** ******** ****** ***** ***

******** **  *****   ***

*********: ************

***:  ************

*****:   *************************

****: ***** *******

****** *********** ***

**** ******** ****** ***** ***

******** **  *****   ***

*********: ************

***:  ************

*****:  *************************

 

 


 

1  

Unless otherwise provided in a Registered Beneficiary Form.

 


***

Confidential Treatment Requested and the Redacted Material has been separately filed with the Commission.

 

Schedule 6.1

 

****** **********’ Standard Fees

(as of Effective Date)

 

********* *********

 

******* ****** ***:

$*****

******* ****:

$*****

******* ****:

$*****

 

 

****** *** ********:

 

·

******** ****** * ********* ******** **********

·

************* * ****** ** *********

·

****** ******* ** ****** ******* ********

·

*** ********** ********

·

****** ******* **********

·

************* ** *** *******

·

*** (*) ******* ******* (* *** ***) ** ***** ***** *******

 

 

*********** ********** *******____________________________________________

 

· ******** *********** ***

$ ***

 

****** *** ******** ******* ******* ******* ************* *** *********

**************   ******** *********** ******** *** ******* * *****  

 

**

 

· ********** *********** ***

$ ***

 

****** *** *** *********** ********* * *********** **** ****** ******

***** ** *** ******** ****** *********.

 

      

****** ******* ******* *** ********* *** ********

*********** ***********

**** * *****

 

********** ******* ********

****** **** ********; ** ******** *** *********** ****** *******

****** * *** (*) *** *** ***** ***** ******* *********.

 

$***

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

Exhibit B

 

CD Service Order No. 1

 

** **** **** *******

 

**** ** ******* ***** *** * (**** “** ******* *****”) ** ******* **** ** *** *** *** (“********”) ** ** *** ** ******** ********* **** (** **** **** ** ******* ** *** ** ********) ******** ** *** ** ********** **** *** ********** ********* *** ** ******** (*** ******** *** *******) ** ***** **** ** ******* ***** ** *********  *** *********** ***** **** *** *** ******* ** **** ** ******* ***** ***** **** *** ******* ******** ** **** ***** ** *** ** ******** ** *** ********** ** **** ****** ** ***********

 

***

 

*** ********* ********* *** ******** ** **** ** ******* ***** *** **** * **** ******:

·

******** * – ******* ****** ****** *** ******* ****** ******** ***********

·

******** * – ****

 

1.0

******* ****** ****** *** ******* ****** *********   (*) ******* ** *** ***** ****** ********** *** ************ ** *** ********* *** **** ** ******* ****** ******** ***** **** *** ***** ** **** *** *** ****** ** ******* ********* *** ******* ****** ****** *** ******* ****** ******** ********** ** ******** * *******  *** **** ** ********** *** ******* ****** ****** *** ******* ****** ******** ********** *** ******** *** ******** ***** **** ** ******* ***** *** ******** ** ** *** ************* ***** ** ****** (“****”) ******** ****** ******* ********** (“** **** **** *******”).  

 

(b) *** ******* *********** **** *** ** **** **** ******* ** ******** ** ** ** *** ** *** ******** *** ********* ******* **** ** ** *** ****** ********** **** (** ******* ** ******* *** *****) **** ** **** **** ******* **** ** ********** *** *** ** ******** *** ********’* (*) *** *********** *** ***** ******** ******** **** ********** *** *** *** ® ****** *** (**) ******* *********** *** ***** ******** ******** **** ********** *** ******** ***** ** ***** (“******* (*****) ***********”).  ** ********** **** **** *********** *** ******* *********** **** *** (*) ************** ********** ** **** *** ************* *** (*) *** *** *********** (******* ***** ** *** *** *) *** *** (*) *** ******* (*****) *********** (“*** *** *”).  *** ** *** ** **** **** ******* ** ********** **** *** ***** ******* *********** ** ******** **** ******* ********** *********(*) ** ***** ** *** ******* ******** ******

 

2.0

** ***** *****   *** ******* **** ** **** ** ******* ***** ***** ******** ** *** ** ******** ********* **** *** ****** *** (*) ***** **** *** ****** ********** **** ** *** ******* ****** ******** ********** ***** **** ** ******* ***** (*** “******* ** ***** ****”).  **** ********** ** *** ******* ** ***** ***** **** ** ******* ***** ***** ************* ***** *** ********** *** (*) **** ******* ********** **** *** ***** *** ********** ** **** ** ******* ***** (**** * “******* ** ***** ****”; *** ******* ** ***** **** *** *** ********** ******* ** ***** ****(*) *** ************ ******** ** ** *** “** ***** ****”), ****** ****** ** *** ** ******** ******** ***

 

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

***** ***** ** ******* **** ** ****** ** *** ***** **** ** ***** **** ** **** **** ***** (**) **** ***** ** *** ********** ** *** ************ ** ***** *****  

 

3.0

******* ********** ** *****   ** ********** **** ******* ************* ** *** ******* ****** ****** *** *** ** **** **** ******* *** ********’* *** **** *** ************ *** ***** ******* *** ************** ****** *********** ******** *** ***** ******** ** ********** ** **** ******* ********* ** **** *** * **** * ******* ***** ** “********* ********’* ** **** **** ******* *** *** ® ******” (*** ******** *** *******) (“*** *** *”), ******** ** *** ** ******** ** ******* **  ******** ********* ***’* ******** ** *** *** ************* ************ (** ******* ** *** *** *), *** ***** ******* ******** **** * ******** **** ** *** *** * ************* ******* ************* ** *** ******* ****** ****** *** *** ** **** **** ******* *** ********’* *** **** ******* (*****) ************ ***** ***** *** ***** ******* *** ************** ****** *********** ******** *** *** ***** ******** ** ******** ****** **** ** *** ********

 

4.0

******* ***** **** *** ******* ************ *****   *** ******* *********** *** ******* ********* ** *** *** * ********* ** ********* *** *****  *** **** ** ***** *** ** **** **** ******* ** ********* ** *** ******* *********** *** ********’* *** ** ********** ******** ** *** *** * ** ******** ** ** *** “******* ************ ****”*  ** *** ***** *** **** **** *** ** **** **** ******* ** ********* *** *** ** ******** **** *** *********** ** *** ********** *********** * *** *** **** *** ** **** **** ******* ** ********** ** ******** ** *** *** * *** ******* (*****) *********** *** ********* *** *** ** ******** **** ******* (*****) *********** ** *** ********** ************ ******** *** ************ ****** *** ** **** **** ******* ** *** ********** *********** ** **** **** ** ******** ****** ** *** ******* (*** “****** ********** ****”).  

 

5.0

****; *********   ******* ** *** ***** ** **** ** ******* ***** *** ******* *** ** *** ********** ********* *** ******* ************ ***** *** *** ******* ******** *** ******** ****** ** *** *** *** **** ********** ** **** ** ******* ****** ** *********** *** ***** ** ******** * ******* ** ********** **** ******* *** ** *** *********.

 

6.0

********* ******* ****** *  *** ******** ** *********** *** ********** ******* ************ ****** ** ********** ** ** ******** * ** *** ** ********* *** ********* ******* ****** ** **** ** ******* ***** *** * ***** ******* ****** **** ***** *** ********** ****** *** (** ******* ** ******* ** ** ******** * ** **** ** ******* *****) *** *** ** **** **** ******* ******* ** ****** (**).  ** ******** *** ********* ******* ****** ***** ** (*) $****** *** ***** *** *** ******* ** ***** **** *** (*) ********** ** ******** *** ****** *** *** **** ******* ** ***** ***** ** *********** ** ****** (**).  ******* ************ ******* **** *** ** ********** ***** *** ****** ********** *****

 

7.0

******** ** ******** *********** *  ******* ** *** ********** ** *** ********** ********** ******* ********** ******* **** ** *** ********** *** *** ******** ******** *********** ** ***** ****** ** ******** *** ******** ** ********** ** ** **** ************ *** ******* **** *********** ************ ******** ** **** ** ******* *****.

 

 

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

8.0

*** ** *** **** “**********” *  *** *** *********** ** *** ******** **** ** ******* ***** **** *** **** “**********” ** **** ** *** **** “********”* ********** **** ******* * ** *** ** ********* *********** (**** *** *** *******) **** *** *** ** **** **** ******* ***** **** ** ******* ***** ***** *** ** ****** * *********** ********* ********** ** ******* **** *** ******** ** *********** ***** *** ********* ** *** *** ******** ***** *** ********* (*) ********** **** *** *** ******** ** ******** ***** **** *** ** **** **** ******* ******** ***** **** ** ******* ***** ****** (*) ********’* ********** **** *** ******* *** ********* ** ********** *********** **** ******* ** *** ******** ** ******** ***** *** **********  ** ********* ***** **** ***** *** *** **** (***** *** ********* ** **** * ** ******** * ** **** ** ******* *****)* *** ************ *** ****** **** ** ***** ******** ** *** *** ****** ***** ** **** *** ************ ** *** ** **** **** ******* ***** **** ** ******* ***** ****** ******** ****** **** ** ******* ** ******* ** *** ******* ** ** ********* ** **** ** ******* *****.

 

9.0

******** ******* *********** *  ******* **** ** *** ********* ** ****** ************ ** ********* *** ********* ********** ******* ******* *** ********:

 

******** ******* *******: ******* ******

(***) ********

*************************

 


 

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

Schedule 1 to CD Service Order No. 1

 

 

******* ****** ****** *** ******* ****** ********

 

*** **** ******* *** ******* ****** ********* *** ******* ****** ****** ******** ** ******* **** ******* ****** ********* ********* ** **** ******** * .

 

*** ******* ****** ********* ************* *** “** **** **** *******”* **** ****** ******** ** ****** *********** (**** *** *********** *** ******* ***********) ** **** **** ********* ***** *** ** **** **** ******** *** ** ******** **** ******** *********** **** ******* ** ********* **** ** *********** *** ********’* ***** ***** **** ******* *** ** **** ************ *** ***** ** *** ***** **** ***** *** *** ** *** *** * *** *** ***** **** ******** ***** **** ** ******* ******

 

*** ** *********** *** ******** **** *** ** ** **** ************ ***** ** ****** ** *** ********** *** *********** *** *** *** ****** ** ********** **** *** *********.

 

*** *** ********* ** ****** *** ********** ******** *** ******** ** *** ** **** **** ******* ***** ** ******** ** *** ***** **** ***** *** *** ** *** *** * *** *** ***** **** ******** ***** **** ** ******* ***** *** ** ********** **** *** ******* ********* ****** **** ***** *****

 

(*** ** ******** * )


 

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

Schedule 6 to CD Service Order No. 1

 

****

 

I.  ********** ***********

 

“*** *******” ***** *** ********** ******* ** ** *** ********** ***** *** *** *******

 

“*** **********” ***** ********’* ********* *********** (** ******* ** *** *********).

 

“** ** **** ***********” ***** * **** ******** ********* *** ********* ** * ********** ******* *** *** ** *** ** **** **** ******** ************ ******* *** ******* ****** *** ********  

 

******* **** *********** *********** ” ***** * **** ******** ********* *** ********* ** * ********** ******* ********’* ***** ***** **** ****** (***** ******* * ******* ***) *** **** ********* ******* *** ** *** ** **** **** ******** ***** ** ***************** ** *** **********’* *********** ** **** **** *********

 

II.  **** *** ********* **** ***** ** *** ** **** **** *******:

 

 

*********** ** ********* ** *******

*********

****

(**** *)

1.*** ** *** ************** **** (**** *)

 

 

· *** ***********

*** *******

*****

· ******* ***********

*** *******

*****

2.  ****** **** (“****** ***” *** *** ********** ******* ************ ****) (***** ***)

 

 

· ******* ** ***** **** – ******* ******* ************

********

$*******

· **** ******* ** ***** **** – ******* ******* ************

******

$*******

3.  ******* ** ** **** ************ (**** *)

 

 

· * ** ********* ******* ** ** **** ************ *** ********** ******

*** ******* ** ** **** ***********

$****

· ******* **** ********* ******* ** ** **** ************ *** ********** ******

*** ******* ** ** **** ***********

$****

4.  ***** *** *** ************ (**** *)

***

***

5.  ******* ** (**** *)

 

 

· ***** ******* **

*******

******** ********** *** ** ***** ****

· **** ********** ******* **

*******

$*****

6.  ******* **** *********** *********** ******* ***

· *** ******* ***** (**** *)

*******

$******

 

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

Note 1: *** ** *** * ************* ** ** **** **** ******* *** *** *********** **** *** ****** ******** ** ******** ** *** *** *; *** *** *********** *** ************** ** ******* (*****) *********** **** ** ** ********** **** * ******** ****** *** *** * ** ** ******** ** *** ********

Note 2: *** ******* ** ***** **** ******** ** ** ******* ********** ****** ******** *********** ** * ****** ****** ********** ****** (********* *** “******* ******* ************”).  **** ******* ** ***** **** ******** ** * ****** ****** ********** ****** (* “******* ******* ************”; * ******* ******* ************ *** ** ******* ******* ************ ********* ******** ** ** * “******* ************ ****”).  ** **** ******* (*) “******* ********** ******” ***** *** ****** **** ********* ** *** ******* ************ **** *** ******* ** *** **** *** ** *** ******** ***** **** ** *** **** **** ****** (**) ****** ***** *** ****** ********** **** (*** “******* ****”) *** (*) “****** ********** ******” ***** *** ****** **** ********* ** *** ***** *** ***** *** **** ******* **** (*** **** *********** *******) *** ******* ** *** **** *** ** *** ******* ******** ***** *********** ** ******* ********** ****** *** ****** ********** ****** *** **** ********* ******** ** ** * “********** ******”*  *** ****** *** *** *** ******* ** ***** **** ***** ** ******** ** ** *** ******* ************ *****  *** ****** *** *** **** ******* ** ***** ***** ** *********** ***** ** ******** ** ** *** ***** *** ** **** ******* ** ***** *****  

Note 3: ** ************* ** *** ****** *** ** ** **** ** ******** *** *** ** **** **** ******* ******** ** *** ***** ** **** ******* ****** ********** ** ** *** ****** ********** **** ******** **** ******* *** ******* ***** ******** (*******) ** ** **** ************ *** ******** ***** ****** *** ********** ********** ******* ********** ** *** ********** ******* ************ *****  ** ******** *** *** ****** ********** **** ** ** * *** ***** **** *** ***** *** ** * ******** ****** ******** **** ******* *** **** *** ******* ***** ******** (*******) ** ** **** ************ *** **** ******* ******

Note 4: ** **** **** *** ******* ***** ******** (*******) ** ** **** ************ *** ********* *** ******** ** * ******** ****** **** ****** ** ** **** ************ (** “******* ** ** **** ***********”) ***** ** ******* ** ** ******* *** (*** “** ** **** ******* ***”).  *** ***** *** ******* **** ******* ******** (*********) ******* ** ** **** ************ ********* ** * ***** ********** ****** *** ******* ** * ** ** **** ******* *** ** $**** *** ******* ** ** **** ************ *** **** ******* ** ** **** *********** ** ****** ** *** ******* **** ******* ******** (*********) ********* ** * ***** ********** ****** ** ******* ** ** ******* ** ** **** *** ** $**** *** ******* ** ** **** ************  *** ****** ** ******* ** ** **** ************ **** ** ******** *** **** ********** ******* **** *** ****** ** ******* ** ** **** *********** “**********” ** **** (*) ** ** *** ******* **** *** **** *********** ********  ** ********** *** ********** ** ** * ***** ******** ***** ***** ******* ******** (*******) ** ** **** ************ *** ********* *** ********* ******** **** ** ******** ** ********* ** ** **** ******* *** ** $***** (******* ***** $****).  ****** ** *** **** ***** ** * ***** ********** ****** **** **** ******* ******** (*******) ** ** **** ************ *** ********* *** ******** *** **** *** *** ******* ***** ******** (*******) ******* ** ** **** ************ ******* ** ********** ** ********* ** *** ******* *** ******* ******** (*********) ******* ** ** **** ************ *** ******** ** **** ********** *******  ********* **** **** ******** ***** ** *** ********** ********** ******* ******** **** ** ******** ** ********* ** ** **** ******* *** ** $***** (******* ***** $**** **** ******* ***** $****).  ** ** *** **** ******** ***** (***** *** ***** ******** ***** ** *** **** ********** ******) *** ******* ***** ******** (*******) ** ** **** ************ *** ********* *** ********* ******** **** ** ******** ** ********* ** ** **** ******* *** ** $***** (******* ***** $****), ** ********’* *********** ** *** ******* **** ******* ******** (*********) ******* ** ** **** ************ ** * ***** ********** ****** “**********” ** **** (*) ** ** *** ******* ****.

Note 5:   ** ******* ** ** **** ************ *** *** *********** *** ******* **** *********** ************ ******** ** **** ** ******* ****** *** *** ******* ******** ** *** *** ****** ********** ** *** “*** *********® *** ***” *** “*** ***** ************ ***”* ***** **** *** ******** ** *** ******** ** *** **********  ** ********** **** *** ********** ** ** ** **** ************ *** ******* **** *********** ************ *** *** *********** ***** **** ** ******* ****** *** ****** **** *** ***** *** ****** ******** *** ***** **** *** ********** ** **** ** ** **** ************* ********* ***** ** ************ *** ****** (***) ********** ** **** ** ** **** ************* **** ***** ********* ***** ***** *** ********** *** **** **** ** ** **** ************ ***** ** ******** **** ***’* ******* *********** ***** *** ********* ** (*) ********’* *** ** ***** ************ *** (*) *** ********** ******** ** ***** ************ ********* (***) *************  ** ** ***** **** *** ******** ** *** *** ****** ** **** *** ** **

 

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

**** ************ *** ******* *********** *** ** * ******* *** ********* ********* ** ************ *** ****** ** ******* ********** **** ** *** ********** ** ******* ************  

Note 6: *** ***** **** ********* ** ******** *** ******* ******* ** ** *** ******* *********** ** ** ********** *** ********** *** ** ***** *****  ******** *** ******* **** *** **** ********* ** ******** *** ** **** ********** ******* **** ***** ********** ******* *** ***** ** **** ********* ** * *** ** $***** *** ******** ***** ******* ****** *** (***** ** “********** ******* ** ****** ***”), ******* ** * ******** ****** ***** ******** (*** ******* ** ** ********* ** **** ** ******* *****). ** ********** *** ******* ** * ******** ****** ***** ******** (*** ******* ** ** ********* ** **** ** ******* *****) ***** ************ ****** *** ********** **** ** ********** ******* ** ****** *** ***** ** ******** ** ******** ********* ** ** *** ***** *** ******** ******** ****** ** **** ********** ******* *** **** *** ***** *****’* *** ***** ********* ** *** ** *********** ***** ** **** ***** *** ** *******

Note 7: ****** *** ******* ** ***** ***** *** **** *** ***** ** **** ** ******* ***** **** *** ** ******* ** ******** ** ******** ** *** ****** ******** ** *** ******* *** ** *** ********* (********** ** ****).  ****** **** ******* ** ***** ** *********** *** **** *** ***** ** **** ** ******* ***** *** ******* ** ******** ** ******** ** *** ****** ******** ** ******* *** ** *** ********* (********** ** ****).

Note 8: ********** ** ** *** ****** ********** ***** * ******* **** *********** *********** ******* *** ** $****** *** **** ***** (**** ** *******) ** **** ******* (*********) ******* **** *********** ************ ********* ** *** *** ******** ** * ******** ***** (* “******* *****”) **** ******  ** ********** *** ********** ** *** ******* ******* **** *********** ************ *** ********* ** *** *** ******** ** * ***** ****** *** **** ******* ******** ** *** ********* ******** ***** *** *** (*) ******* ***** ($******).  ** *** ******* ******* **** *********** ************ *** ********* ** *** *** ******** ** * ***** ****** *** **** ******* ******** ** *** ********* ******** ***** *** *** (*) ******* ****** ($******).  ** *** ****** ********** **** ** ** * *** ***** **** *** ***** *** ** * ******** ****** ******** **** ***** ******* *** **** **** ******* (*********) ******* **** *********** ************ *** **** ******* ***** *** *** **** ******* ******** ***** ** *** ****** ** ******* **** *********** ************ ********* ** *** *** ******** ** **** ***** ** ********** **** *** **********

 

 

( *** ** ******** * )

 

 


 

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

 

 

Product Code: 490

Oracle Project #:     

PRO # / Passer #:     

Billing SPA#:     

Template #: 1925281

 

 

 

 

 

 

 

Exhibit C

 

STATEMENT OF WORK NO. 1 TO

 

CD SERVICE ORDER NO. 1

 

This Statement of Work *** * (“***”) ** ******* **** ** *** ******** **** (“***”) *** **** ****** ***** **** (“********” ** “***”) ** ** *** ** ******** ********* **** (** **** **** ** ******* ** *** ** ********), ******** ** *** ** ********** **** (*) *** *** ****** ********** ********** ******* ********* **** *** *** ******** ******** ***** *** **** *** ********* ** ** ***** ** ***** ** ******* (*** “*********”), (**) *** ** ******** (*** ******** *** *******) ** ***** **** *** ** ********* *** (***) ** ******* ***** *** * (*** ******** *** *******) (*** “** ******* *****”), ** ***** **** *** ***** ** ******** *****  *** ***** ** ******* ******* ******* ** *** ******* ******* **** ** * ******* **** *** *** ******* ** **** *** ***** **** *** ******* *** ***** ** *** ** ******* ****** ** ******** ** *** ********** ** **** ****** ** ***********

 

***** :   ********* ********’* ** **** **** ******* *** *** ® ******

 

********** :   ** ********* *** ** **** **** ******* **** (*) ******* *** *********** ** ******** ** **** **** ********* ******* *** ** **** **** ********* (**) ******* **** *********** ** *** *** **********’* *** ******* ** *** *** ****** *** ***** **** **** ********* ** **** *** **********’* *** ******* *** (***) ***** ********** **** ******** *********** **** ******* ** ********* **** ** *** *********** *** ********’* ***** ***** **** ****** *   

 

  

*** **************** :

Ø

******* * ******** ** ****** *** ******* *** *** ** * ******* ***** ** ******* *** ********

Ø

******* ******* ******* *********** ****** ********** *** ***** **********

Ø

****** ******* ********

Ø

******* ******** ** ******** ******* ****** ************** *** ************** ***********

Ø

******* ** ******* **** **** ******** ** ******** **** ********* *** *** ********* ******* **** *** ****** ************* ******** *** ****** *** ********** ** ********

Ø

******* * ******** ********* ******* (*** “********* *******”) **** *** ********** ******** *************** ** ****** ********** ***** ** *** ******** ** **** **** ******** ********’* ******** ************* ******* *** ***** *** ******** ********* **** ********* **** *** ******* ****** ********* ******

Ø

** * ****** ** *** ********* ******* *** ***** ** *** *** ***** ********** ** ********** * ** **** **** ******* ** ******** ** ***** **** *** **** (*) ******** ************ ********* ********** ** *** *** ************ ******* ***** (***** * "***** ***")

Ø

****** *** ***** **** **** ******** *** *********** **** ******** ** ******* ******* ***** **** ********** **** *** ******* ** *** ********** *** ***** ** **** **W

 

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

Ø

****** ***** *** ******** **** ******** *** ****** ******* ***** **** ** ******** **** ******** ******* ****** *** (**) ******** **** (********* *** ********)

Ø

******* *** ******* ** ******** *** ** **** **** ******* ********** ******** (** ******* *****) *** ****** *** ******** ** ****** ******** (**** ******** ** ******* ** ******** (****** ** **********) *** “***** ** **** **** ******* ********** ********”)

Ø

******* *** ******* ** ******** * ******** ***** **** ** **** ***** *** (**** ******** ** ******* ** ******** (****** ** **********), **** * “***** ***” **** ******* ** **** ******** ***) ********** **** *** ******* ** *** ********** *** ***** ** **** ***

Ø

******* * ******* **** **** *** ********** *** ************

Ø

******* * **************** ***** ******** (“****”)-***** **** ****** ****** ******** (“****”) *** (*** “**** ***”) ** ****** ************* *** ******** ** **** ********

Ø

******* ******** **** ****** ** *** ******* ******* ** (** ********** ** **** * ** ******** * ** *** ** ******* *****) ** ***** ******** ** ******* ****** **** ******* *** ** **** **** *******  

Ø

** *** ****** *** ********** ** * ***** **** ******* ******** **** ********** ******* ****** ** *** ******** ************ ******** ** **** *** *** ************** ********* ************ ******

Ø

******* ************ *** *** ****** *******

Ø

******** ********’* *********** ********** ************ ** *** ***** ****

Ø

******* *** (*) “*****************” ******** ******* *** **** ******* *** ******** ********** ********* ********** *** **** ********* ** ********** *** ******* ** ********'* ******** ******** ********* *** **** ** **** ** *** ********** ******* ** *** ********* ****** ** *** ** **** **** *******

Ø

******* ********* ******* **** ***’* ******* ************** **** *** ** ** **** (*) ******** **** (********* *** ********) ********* *** **** ******** ******* *** **** *** *********** ********** ** **** ***

Ø

**** **** ******* **************** **** *** *** ******* ************** **** ** ********* **** *********** *** ************* ******* **** (“***”) *****

Ø

**** **** ******** ** ******* ********’* ******** ************ *** **** ******* ******** **** ************** *** ************* (********* *** “******* ********** ************ ******** ********”) **** ********** *** ** ****** *** ******** *** ********* ** *** ** **** **** ******* *** *** ** ******** **** ******* *****************

Ø

** ********* ******** ** *** ** *** ** **** **** ******* ********** ************** ********* ******** ******** *** **** **** *********** ***** ** ******* **** *** ***** ***** *** **** ******* *** **** ******** *** ********* **** *********** ** ******** ****** ******* (**) ******** **** ( ********* *** ********)

Ø

******* * ************* *** *** *********** *** ****** ***** ******* *** **** **** ******* *** *** ***** ******* ****** ** ******* ******* ***************** (“***** ********** ************* ********”).  ***’* **** ****** ** ******** *** ***** ********** ************* ******** ** ******* ** ***** ******* (***) ***** (**** ***** ******** ** ******** ****** ** ****) *** **** ******* ******** ** ******* *** **** ****** ** ***** *** ************* *** ******* ****** ** ***** ******* ****** ******* ** ******** ***** ************ *** **** ******* * ****** ****** ****** ** *** ***** ********** ************* ******** ** ******** *** **** ********* **** ***** (**) **** ********* **** ** ******** **** *** ********* ***** ******* (***) **** *****.

 

******** **************** :

Ø

****** * ******** ******** ** ****** *** ******* *** *** ** * ******* ***** ** ******* *** ***

Ø

**** **** ***'* ******* ******* ** ********** ********'* ********** ******* ** **** ***

Ø

****** ******* ****** ******** *** ******* ******* **** ***** **********

Ø

****** *** ********* *******

Ø

******* ************ *** *** ***** **** *** ******* ****** ******** ** *** ***** **** (***** ** ******* **** *** (**) ******* ******* **** ***** ********’* *******) *** **

 

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

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1. ********* ** *** ************* ************   

 

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3. *********  **** *********** ****** ******* ** **** *** ***** ******* *** *********** ****** ********** ** **** ********* ** **** *** *** *********.

 

******* **** :

 

 

 

 


FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

·

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·

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

·

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

CSG SYSTEM INTERNATIONAL, INC.

Exhibit 10.24AM

 

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EXHIBIT 31.01

CERTIFICATIONS PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Peter E. Kalan, certify that:

1.

I have reviewed this report on Form 10-Q of CSG Systems International, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 6, 2014

 

/s/ Peter E. Kalan 

 

 

Peter E. Kalan

 

 

President and Chief Executive Officer

 

EXHIBIT 31.02

CERTIFICATIONS PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Randy R. Wiese, certify that:

1.

I have reviewed this report on Form 10-Q of CSG Systems International, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 6, 2014

 

/s/ Randy R. Wiese

 

 

Randy R. Wiese

 

 

Executive Vice President and Chief Financial Officer

 

 

EXHIBIT 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The certification set forth below is being submitted in connection with the Quarterly Report on Form 10-Q (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Peter E. Kalan, the Chief Executive Officer and Randy R. Wiese, the Chief Financial Officer of CSG Systems International Inc., each certifies that, to the best of his knowledge:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of CSG Systems International, Inc.

November 6, 2014

/s/ Peter E. Kalan

Peter E. Kalan

President and Chief Executive Officer

November 6, 2014

/s/ Randy R. Wiese

Randy R. Wiese

Executive Vice President and Chief Financial Officer