440 Davis Court #1602
San Francisco, CA 94111-2496
415 781 5700

Date: Mon, 21 Jul 2003 09:11:05 -0700

03 00050 61 03072201

Mr. Jerry J. Nord
CSG Systems Inc.
2525 117th Avenue
Omaha, NE 68138
Subject:   Preparing for SDS Launch at CSG

Dear Jerry,

Confirming our telecon on 030718. Here are the highlights...
  1. We will implement the plan on 030708 for a two phase project, with phase 1 guided by a non-disclosure agreement shown in the record on 030708, including Appendix A, which I have just about completed. Perhaps you could generate the base document in Word for signature, and get Ken and others to review it, if you feel that is appropriate. I will send a draft of Appendix A today. We will want to do some editing on my initial draft of Trade Secrets; I understand that Morris and Gary will have some comments, and I am sure you will as well, plus Ken and CSG may wish to at least comment.
  2. We will sign the Agreement and you will then incorporate this Agreement into your IP agreement with CSG, as planned on 030708.
    This step launches phase 1 where I prepare an SDS program set for you, and you then have six (6) months to learn and use SDS for the purpose of evaluating business viability. The phase 1 period will be used to formulate a Phase 2 product development, marketing and business plan, including important licensing issues raised by CSG counsel on 030716. The Phase 2 business plan may include CSG, if CSG and the other parties, i.e., you and me, agree. Phase 1 can end at any time, depending on your results. This means you can abandon the effort in a week, and no harm no foul under terms of the Agreement. However, our aim is to work together on getting you first up to speed using SDS over a 2 month period, then getting you using SDS on the job at CSG, and then developing a Phase 2 Agreement.
  3. As we discussed on Friday, support for improvement in any organization is always fragile and so requires ingenuity and persistence, as Don Rumsfeld noted in remarks to the War College last year.
    Another ingredient for enabling fragile opportunity to take root and grow is strong leadership. Your leadership is excellent on working with Ken and others at CSG to introduce SDS work product via email so they have a mental framework to grasp objectives, as we discussed on Friday.
    If this requires printing some of POIMS and providing conventional highlights to aid discussion, than naturally that should be done.
Again, will get the 1st draft of SDS trade secrets to you later today.


Rod Welch