Exhibit 10.1

 

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To: The Directors of

Evolving Systems, Inc. (incorporated in Delaware with registration number
02580274)

Evolving Systems Holdings Limited (company registration number 05272751)

Evolving Systems BLS Limited (company registration number 10723209)

Evolving Systems Limited (company registration number 02325854)

Evolving Systems Lumata Limited (previously known as Lumata UK Limited) (company
registration number 03962393)

 

Date:  July 1, 2020

 

Dear Sirs/Madams

 

EVOLVING SYSTEMS HOLDINGS LIMITED AND OTHERS - AMENDMENT AND WAIVER LETTER

 

1.BACKGROUND

 

(a)We refer to a facilities agreement dated 16 August 2017 and made between (1) 
Evolving Systems, Inc. as Parent, (2) Evolving Systems Holdings Limited as
Company and Original Borrower, (3) the companies listed in schedule 1 to it as
Original Borrowers, (4) the companies listed in schedule 1 to it as Original
Guarantors, and (5) East West Bank as Lender as amended from time to time (the
“Facilities Agreement”).

 

(a)This Letter is supplemental to and amends the Facilities Agreement.

 

(b)The Obligors have requested that the Lender agree certain amendments to and
waivers in respect of the Facilities Agreement. The Lender has consented to the
amendments to and waivers in respect of the Facilities Agreement contemplated by
this Letter.

 

2.DEFINITIONS AND INTERPRETATION

 

2.1Definitions

 

In this Letter terms defined in, or construed for the purposes of, the
Facilities Agreement have the same meanings when used in this Letter (unless the
same are otherwise defined in this Letter):

 

(a)“Amended Facilities Agreement” means the Facilities Agreement as amended
pursuant to paragraph 5.1 (Amendments) of this Letter;

 

(b)“Documents” means this Letter and each other agreement referred to in
paragraph 1 of schedule 1 (Conditions precedent); and

 

(c)“Effective Date” means the date on which the Lender gives written notice to
the Parent that it has received each of the documents and other evidence listed
in schedule 1 (Conditions precedent) in a form and substance satisfactory to the
Lender.

  

2350 Mission College Blvd., STE 988 Santa Clara, CA 95054 ● Tel. 408.440.7760 ●
Nasdaq: EWBC

 

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2.2Paragraphs

 

(a)In this Letter, any reference to a “paragraph” or “schedule” is, unless the
context otherwise requires, a reference to a paragraph or schedule of this
Letter.

 

(b)Paragraph and schedule headings are for ease of reference only.

 

2.3Continuing obligations

 

Subject to the provisions of this Letter:

 

(a)the Facilities Agreement and all the other Finance Documents shall remain in
full force and effect;

 

(b)as from the Effective Date, the Facilities Agreement shall be read and
construed as one document with this Letter; and

 

(c)nothing in this Letter shall constitute or be construed as a waiver (save as
specifically and expressly waived under paragraphs 3 (Formal waiver) and 4
(Grant of waiver) of this Letter) or release of any right or remedy of the
Lender under the Finance Documents, nor otherwise prejudice any right or remedy
of the Lender under the Facilities Agreement or any other Finance Document.

 

3.FORMAL WAIVER

 

The Parent has informed the Lender that as at the date of this Letter, the
Parent is in breach of clause 20.2(b) (Financial condition) of the Facilities
Agreement by failing to maintain the minimum EBITDA for the measuring periods
ended 31 March 2020 and 30 April 2020 (the “Breach”).

 

The Breach represents a breach of the specified provision of the Facilities
Agreement and consequently certain Events of Default have occurred and are
continuing.

 

The Parent has requested that the Lender waive the Events of Default which are
continuing as a result of the Breach.

 

4.GRANT OF WAIVER

 

The Lender agrees to formally waive the Events of Default which are continuing
as a result of the Breach.

 

Any waiver granted in accordance with this Letter shall apply only to the
matters specifically referred to in this Letter and is given in reliance upon
any information supplied to the Lender by the Parent being true, complete and
accurate. Such consent shall be without prejudice to any rights which the Lender
may now or hereafter have in relation to any other circumstances or matters
other than as specifically referred to in this Letter (and whether subsisting at
the date hereof or otherwise) or in relation to any such information being other
than true, complete and accurate, which rights shall remain in full force and
effect.

 

Any waiver granted in accordance with this Letter does not constitute an
amendment, deletion or addition to the provisions of the Facilities Agreement,
and it shall not operate as a waiver in respect of any other right or remedy.

 

 

2350 Mission College Blvd., STE 988 Santa Clara, CA 95054 ● Tel. 408.440.7760 ●
Nasdaq: EWBC

 

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5.AMENDMENTS AND FURTHER ASSURANCE

 

5.1Amendments

 

With effect from the Effective Date, the Facilities Agreement shall be amended
in accordance with schedule 2 (Amendments) to this Letter.

 

5.2Further assurance

 

Each Obligor shall (and the Parent shall procure that each Obligor shall), at
the request of the Lender and at its own expense, do all such acts and things
necessary or desirable to give effect to the amendments effected or to be
effected pursuant to this Letter.

 

6.LAPSE

 

(a)If the Effective Date does not occur on or before the date which falls 30
days after the date of this Letter, this Letter shall, subject to paragraph
6(b), terminate and cease to be of any effect.

 

(b)Paragraphs 2.3, 8 (Guarantee and Security Confirmations) and 10 (Fees, Costs
and Expenses) shall continue in full force and effect notwithstanding the
termination of this Letter pursuant to paragraph 6(a).

 

7.REPRESENTATIONS AND RELIANCE

 

7.1Representations

 

(a)Each Obligor represents and warrants that:

 

(i)the board resolutions referred to in paragraph 1 of schedule 1 (Conditions
precedent) were duly and properly passed after compliance with all appropriate
formalities and remain in full force and effect;

 

(ii)it is authorised to execute this Letter and any other Documents to which it
is a party; and

 

(iii)it is authorised to make the representations and warranties as provided in
paragraph 5.1(a)(i) to 5.1(a)(ii).

 

(b)Subject to paragraph 4 of this Letter, each Obligor makes the Repeating
Representations (as defined in the Amended Facilities Agreement) and the
representations set out in paragraph 5.1(a) on the date of this Letter (whether
or not the Effective Date shall have occurred by such date) and on the Effective
Date, by reference to the facts and circumstances existing at such dates.

 

7.2Reliance

 

Each Obligor acknowledges that the Lender has entered into this Letter in full
reliance on the representations and warranties made by it in the terms stated in
this paragraph 7.

 

2350 Mission College Blvd., STE 988 Santa Clara, CA 95054 ● Tel. 408.440.7760 ●
Nasdaq: EWBC

 

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8.GUARANTEE AND SECURITY CONFIRMATIONS

 

Each Obligor reaffirms that (i) the guarantee and indemnity contained in clause
17 (Guarantee and indemnity) of the Facilities Agreement and (ii) the Security
constituted by the Transaction Security Documents shall:

 

(a)continue in full force and effect and extend to, and in the case of the
Security shall continue to secure, the obligations of the Obligors under the
Facilities Agreement and the other Finance Documents, as amended from time to
time including as varied, amended, supplemented or extended by this Letter,
notwithstanding any term or provision of this Letter;

 

(b)not be released, reduced or impaired by (i) the execution, delivery and
performance of this Letter or any other document or agreement entered into
pursuant to or contemplated by this Letter; or (ii) any other Obligor not being
bound by this Letter for any reason or by any Transaction Security provided to
the Lender by any Obligor being avoided or released or not being effective
Security for the variation in the liabilities of the Obligors or any of them
effected by this Letter or such Transaction Security being limited or restricted
in any way; and

 

(c)continue to secure the payment of liabilities and obligations of the Obligors
under the Finance Documents and that the definition of "Finance Documents" in
the Facilities Agreement extends to any amendment, supplementation, extension,
novation, replacement, restatement and/or variation of any of them (however
fundamental) and accordingly that such guarantee and indemnity, and any
Transaction Security granted by it, is intended to apply to and secure any
variation or increase in the liabilities or obligations of the Obligors at any
time as a result (direct or indirect) of the execution, delivery or performance
of this Letter or the Facilities Agreement as amended by this Letter.

 

9.SUBORDINATION AGREEMENT CONFIRMATION

 

Each Obligor as Intra-Group Creditor and Obligor under and as defined in the
Subordination Agreement reaffirms that its and their obligations under the
Subordination Agreement remain valid, legal and binding notwithstanding the
amendments to the Facilities Agreement effected by this Letter.

 

10.FEES, COSTS AND EXPENSES

 

The Parent shall within three Business Days of demand pay the Finance Parties
the amount of all costs and expenses (including legal fees) reasonably incurred
by any of them in connection with the negotiation, preparation, printing and
execution of this Letter and any other documents referred to in this Letter.

 

11.MISCELLANEOUS

 

11.1Counterparts

 

This Letter may be executed in any number of counterparts, and this has the same
effect as if the signatures on the counterparts were on a single copy of this
Letter.

 

2350 Mission College Blvd., STE 988 Santa Clara, CA 95054 ● Tel. 408.440.7760 ●
Nasdaq: EWBC

 

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11.2Third party rights

 

(a)Unless expressly provided to the contrary in a Finance Document, a person
(other than a Finance Party) who is not a party to this Letter has no right
under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the
benefit of any term of this Letter.

 

(b)The consent of any person who is not a party to this Letter is not required
to rescind or vary this Letter at any time.

 

11.3Finance Document

 

The Lender and the Parent agree that this Letter is a Finance Document.

 

11.4Governing law

 

This Letter and any non-contractual obligations arising out of or in connection
with it shall be governed by English law.

 

Please confirm your agreement to the above by signing and returning the enclosed
copy of this Letter.

 

Yours faithfully

 

/s/ BILL ALLEN   For and on behalf of EAST WEST BANK as Lender

 

2350 Mission College Blvd., STE 988 Santa Clara, CA 95054 ● Tel. 408.440.7760 ●
Nasdaq: EWBC

 

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SCHEDULE 1: CONDITIONS PRECEDENT

 

1.OBLIGORS

 

A copy of a resolution of the board of directors of each Obligor:

 

(a)approving the terms of, and the transactions contemplated by, this Letter and
resolving that it execute this Letter;

 

(b)authorising a specified person or persons to execute this Letter on its
behalf; and

 

(c)authorising a specified person or persons, on its behalf, to sign and/or
despatch all documents and notices to be signed and/or despatched by it under or
in connection with this Letter.

 

2.FINANCE DOCUMENTS

 

This Letter duly executed by the Parent and each of the other Obligors.

 

3.OTHER DOCUMENTS AND EVIDENCE

 

(a)Evidence that the fees, costs and expenses referred to in paragraph 10 (Fees,
Costs and Expenses) have been paid.

 

(b)A copy of any other authorisation or other document, opinion or assurance
which the Lender considers to be necessary or desirable in connection with the
entry into and performance of the transactions contemplated by this Letter or
for the validity and enforceability of this Letter.

 

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SCHEDULE 2: AMENDMENTS

 

1.AMENDMENTS

 

The Facilities Agreement will be amended as follows:

 

(a)the definition of “Termination Date” in clause 1.1 shall be deleted and
replaced with the following:

 

“Termination Date means 31 December 2020.”

 

(b)clause 6.1.1 shall be deleted and replaced with the following:

 

“6.1.1 The Company shall repay the Loans by paying to the Lender on each date
set out in Column 1 below (each a Repayment Date) an amount equal to the
relevant amount (each a Repayment instalment) which is set out in Column 2 below
opposite that date.

 

Column 1  Column 2  Payment Date  Capital Payment  30 June 2020  $142,484.10  31
July 2020  $142,484.10  31 August 2020  $142,484.10  30 September 2020 
$142,484.10  31 October 2020  $142,484.10  30 November 2020  $142,484.10  The
Termination Date
(31 December 2020)  $142,484.10”

  

(c)clause 8.1 shall be amended to read as follows:

 

“8.1 Calculation of interest

 

The rate of interest on each Loan for each Interest Period is five percentage
points (5%) per annum.”

 

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(d)a new clause 19.8 (Global Cash Report) shall be inserted after clause 19.7
(and subsequent clause numbers (and references thereto) shall be re-numbered
accordingly) as follows:

 

“19.8 Global Cash Report

 

The Parent shall, no later than Friday of each week, provide a report of
Parent’s global cash, current as of the date of submission, in a form acceptable
to the Lender.”

 

(e)The definition of “EBITDA” in clause 20.1 (Financial Covenants) shall be
deleted and replaced with the following:

 

““EBITDA” means with respect to any Relevant Period, an amount equal to the sum
of consolidated earnings, plus to the extent deducted in the calculation of
earnings, (a) interest expense, (b) income tax expense, (c) depreciation and
amortization expense, (d) stock based compensation, (e) other income expenses,
(f) restructuring costs, (g) goodwill impairment, (h) acquisition costs, and (i)
currency adjustments.”

 

(f)clause 20.2 (a) shall be amended to read as follows:

 

“Minimum Cash: the Parent shall maintain at all times, tested as of the last day
of each month, unrestricted consolidated cash in demand deposit and/or money
market accounts, in an amount equal to at least One Million Five Hundred
Thousand Dollars ($1,500,000).”

 

(g)clause 20.2 (b) shall be deleted and replaced with the following:

 

“Minimum EBITDA: the Parent shall maintain at all times, tested as of the last
day of each Quarter Date, EBITDA, measured on a trailing three (3) month basis,
of at least the following amounts for the respective measuring periods set forth
below:

 

Measuring period ending  Minimum EBITDA  30 June 2020  $200,000  30 September
2020  $300,000  31 December 2020  $250,000” 

 

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[ON COPY]

 

To:        EAST WEST BANK as Lender

 

We acknowledge, agree and accept the above terms:

 

THE OBLIGORS   /s/ MATTHEW STECKER   /s/ MARK P. SZYNKOWSKI   For and on behalf
of EVOLVING SYSTEMS, INC. By: Matthew Stecker; Mark P. Szynkowski   /s/ MATTHEW
STECKER   For and on behalf of EVOLVING SYSTEMS HOLDINGS LIMITED By: Matthew
Stecker   /s/ MATTHEW STECKER   For and on behalf of EVOLVING SYSTEMS LIMITED
By: Matthew Stecker   /s/ MATTHEW STECKER   For and on behalf of EVOLVING
SYSTEMS BLS LIMITED By: Matthew Stecker   /s/ MATTHEW STECKER   For and on
behalf of EVOLVING SYSTEMS LUMATA LIMITED (PREVIOUSLY KNOWN AS LUMATA UK
LIMITED) By: Matthew Stecker

 

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