**Exhibit 4.5**

 

**SECOND AMENDMENTTORIGHTS AGREEMENT**

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THIS SECOND AMENDMENT TO RIGHTS AGREEMENT (the “Amendment”)is entered into as of April 20, 2010, between EVOLVING SYSTEMS, INC., aDelaware corporation (the “Company”), and AMERICAN STOCK TRANSFER &TRUST COMPANY LLC (the “Rights Agent”).

 

WHEREAS, the Company and the Rights Agent have enteredinto that certain Rights Agreement dated as of March 4, 2009, as amendedby that certain First Amendment to Rights Agreement dated as of December 10,2010 (as amended, the “Rights Agreement”); and

 

WHEREAS, the Company and the Rights Agent wish toamend the Rights Agreement in order to increase the percentage of shares of theCommon Shares that a Person may become the Beneficial Owner of without beingdeemed to be an Acquiring Person.

 

NOW, THEREFORE, in consideration of the premises andthe mutual agreements herein set forth, the parties hereby agree as follows:

 

1.     Section 1(a) ofthe Rights Agreement is hereby amended and restated in its entirety to read asfollows:

 

(a)           “AcquiringPerson” shall mean any Person (as such term is hereinafter defined) who orwhich, together with all Affiliates and Associates (as such terms arehereinafter defined) of such Person, shall be the Beneficial Owner (as suchterm is hereinafter defined) of 29.0% or more of the Common Shares thenoutstanding.  Notwithstanding theforegoing, (i) the term Acquiring Person shall not include (A) theCompany, (B) any Subsidiary (as such term is hereinafter defined) of theCompany, (C) any employee benefit or compensation plan of the Company orany Subsidiary of the Company, (D) any Person holding Common Shares for orpursuant to the terms of any such employee benefit or compensation plan, and (ii) noPerson shall become an “Acquiring Person”: (A) as the result of anacquisition of Common Shares by the Company which, by reducing the number ofshares outstanding, increases the proportionate number of shares beneficiallyowned by such Person to 29.0% or more of the Common Shares then outstanding;provided, however, that if a Person shall become the Beneficial Owner of 29.0%or more of the Common Shares then outstanding by reason of share purchases bythe Company and shall, following written notice from, or public disclosure bythe Company of such share purchases by the Company, become the Beneficial Ownerof any additional Common Shares without the prior consent of the Company andshall then Beneficially Own more than 29.0% of the Common Shares thenoutstanding, then such Person shall be deemed to be an “Acquiring Person,” (B) aPerson who would otherwise be an “Acquiring Person,” as defined pursuant to theforegoing provisions of this Section 1(a), has become such as a result ofthe acquisition of Common Shares directly from the Company or pursuant to the exerciseof options pursuant to the option plan of the Company; provided, however, thatif such Person shall purchase additional Common Shares after becoming theBeneficial Owner of 29.0% or more of the Common Shares then outstanding, suchPerson shall be deemed an “Acquiring Person,” subject to the exceptions setforth in this Section 1(a), or (C) if the Board of Directorsdetermines in good faith that a Person who would otherwise be an “AcquiringPerson,” as defined pursuant to the foregoing provisions of this Section 1(a),has become such inadvertently, and such Person divests, as promptly aspracticable (as determined in good faith by the Board of Directors), but in anyevent within five Business Days, following receipt of written notice from theCompany of such event, of Beneficial Ownership of a sufficient number of CommonShares so that such Person would no longer be an Acquiring Person, as definedpursuant to the foregoing provisions of this Section 1(a), then suchPerson shall no longer be deemed to be an “Acquiring Person” for purposes ofthis Agreement; provided, however, that if such Person shall again become theBeneficial Owner of 29.0% or more of the Common Shares then outstanding, suchPerson shall be deemed an “Acquiring Person,” subject to the exceptions setforth in this Section 1(a).

 

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2.     Section 23(b)(ii) ofthe Rights Agreement is hereby amended and restated in its entirety to read asfollows:

 

(ii)           Inaddition, the Board of Directors of the Company may, at its option, at any timeafter the time a Person becomes an Acquiring Person and the expiration of anyperiod during which the holder of Rights may exercise the rights under Section 11(a)(ii) hereofbut prior to any event described in clause (i), (ii) or (iii) of Section 13(a) hereof,redeem all but not less than all of the then outstanding Rights at theRedemption Price (x) in connection with any merger, consolidation or saleor other transfer (in one transaction or in a series of related transactions)of stock, assets or earning power aggregating 50% or more of the stock, assetsor earning power of the Company and its subsidiaries (taken as a whole) inwhich all holders of Common Shares are treated alike and not involving (otherthan as a holder of Common Shares being treated like all other such holders) anInterested Stockholder or a Transaction Person or (y)(A) if and for solong as the Acquiring Person is not thereafter the Beneficial Owner of 29.0% ormore of the then outstanding Common Shares, and (B) at the time ofredemption no other Persons are Acquiring Persons.

 

3.     Exhibit Cof the Rights Agreement is hereby amended and restated in its entirety to readas provided in Exhibit C hereto.

 

4.     The RightsAgreement, as amended hereby, shall be and remain in full force and effect inaccordance with its terms and is ratified and confirmed hereby in all respects.

 

5.     ThisAmendment may be executed in any number of counterparts and each of suchcounterparts shall for all purposes be deemed to be an original, and all suchcounterparts shall together constitute but one and the same instrument.

 

6.     ThisAmendment shall be deemed to be a contract made under the laws of the State ofDelaware and for all purposes shall be governed by and construed in accordancewith the laws of such State applicable to contracts to be made and performedentirely within such State.

 

7.     ThisAmendment and the other documents delivered pursuant hereto constitute the fulland entire understanding and agreement between the parties with regard to thesubjects hereof.

 

8.     If anyterm, provision, covenant or restriction of this Amendment is held by a courtof competent jurisdiction or other authority to be invalid, void orunenforceable, the remainder of the terms, provisions, covenants andrestrictions of this Agreement shall remain in full force and effect and shallin no way be affected, impaired or invalidated.

 

[REMAINDER OF PAGEINTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have causedthis Amendment to be duly executed, all as of the day and year first abovewritten.

 
|   | Attest: EVOLVING  SYSTEMS, INC.       |
|--------|---------------------------------------|
|   |                                  |
|   |                                  |
|   | /s/ THADDEUS DUPPER                   |
|   | Thaddeus Dupper                       |
|   | Chairman and Chief  Executive Officer |
|   |                                  |
|   |                                  |
|   | /s/  ANITA T. MOSELEY                 |
|   | Anita T.Moseley                       |
|   | Secretary                             |

 

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|   | Attest: AMERICAN STOCK  TRANSFER &  TRUST COMPANY LLC |
|--------|----------------------------------------------------------------|
|   |                                                           |
|   |                                                           |
|   | By:                                                            | /s/ HERBERT J. LEMMER |
|   | Print Name:                                                    | Herbert J. Lemmer |

 

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EXHIBIT C TO RIGHTS AGREEMENT

 

FORM OF SUMMARY OF RIGHTS TO PURCHASE PREFERREDSHARES

 

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EVOLVING SYSTEMS, INC.

 

SUMMARY OF RIGHTS TO PURCHASEPREFERRED SHARES

 

On March 4,2009, the Board of Directors of Evolving Systems, Inc. (the “Company”)declared a dividend of one preferred share purchase right (a “Right”) for eachoutstanding share of common stock, par value $0.001 per share (the “CommonShares”), of the Company.  The dividendis effective as of March 16, 2009 (the “Record Date”) with respect to thestockholders of record on that date.  TheRights will also attach to new Common Shares issued after the Record Date.  Each Right entitles the registered holder topurchase from the Company one one-hundredth of a share of Series C JuniorParticipating Preferred Stock, par value $0.001 per share (the “PreferredShares”), of the Company at a price of $8.00 per one one-hundredth of aPreferred Share (the “Purchase Price”), subject to adjustment.  Each Preferred Share is designed to be theeconomic equivalent of 100 Common Shares. The description and terms of the Rights are set forth in a RightsAgreement dated as of March 4, 2009 between the Company and American StockTransfer & Trust Company LLC (the “Rights Agent”), as amended by theFirst Amendment to Rights Agreement dated as of December 10, 2009, betweenthe Company and the Rights Agent and the Second Amendment to Rights Agreementdated as of April 20, 2010, between the Company and the Rights Agent (asamended, the “Rights Agreement”).

 

DETACHMENTAND TRANSFER OF RIGHTS

 

Initially,the Rights will be evidenced by the stock certificates representing CommonShares then outstanding, and no separate Right Certificates will bedistributed.  Until the earlier to occurof (i) a public announcement that a person or group of affiliated orassociated persons, has become an “Acquiring Person” (as such term is definedin the Rights Agreement) or (ii) 10 business days (or such later date asthe Board may determine) following the commencement of, or announcement of anintention to make, a tender offer or exchange offer which would result in thebeneficial ownership by an Acquiring Person of 29.0% or more of the outstandingCommon Shares (the earlier of such dates being called the “Distribution Date”),the Rights will be evidenced, with respect to any of the Common Sharecertificates outstanding as of the Record Date, by such Common Sharecertificate.  In general, an “AcquiringPerson” is a person, the affiliates or associates of such person, or a group,which has acquired beneficial ownership of 29.0% or more of the outstandingCommon Shares.

 

TheRights Agreement provides that, until the Distribution Date (or earlierredemption or expiration of the Rights), the Rights will be transferable withand only with the Common Shares.  Untilthe Distribution Date (or earlier redemption or expiration of the Rights), newCommon Share certificates issued after the Record Date upon transfer or newissuance of Common Shares will contain a notation incorporating the RightsAgreement by reference.  Until theDistribution Date (or earlier redemption or expiration of the Rights) thesurrender or transfer of any certificates for Common Shares outstanding as ofthe Record Date, even without such notation or a copy of this Summary of Rightsbeing attached thereto, will also constitute the transfer of the Rightsassociated with the Common Shares represented by such certificate.  As soon as practicable following theDistribution Date, separate certificates evidencing the Rights (“RightCertificates”) will be mailed to holders of record of the Common Shares as ofthe close of business on the Distribution Date and such separate RightCertificates alone will evidence the Rights.

 

EXERCISABILITYOF RIGHTS

 

TheRights are not exercisable until the Distribution Date.  The Rights will expire on March 4, 2019(the “Final Expiration Date”), unless the Final Expiration Date is extended orunless the Rights are earlier redeemed or exchanged by the Company, in eachcase as described below.  Until a Rightis exercised, the holder thereof, as such, will have no rights as a stockholderof the Company, including, without limitation, the right to vote or to receivedividends.

 

ThePurchase Price payable, and the number of Preferred Shares or other securitiesor property issuable or payable, upon exercise of the Rights are subject toadjustment from time to time to prevent dilution.  The number of outstanding Rights and thenumber of one one-hundredths of a Preferred Share issuable upon exercise ofeach Right are also subject to adjustment in the event of a stock split of theCommon Shares or a stock dividend on the Common Shares payable in CommonShares, or subdivisions, consolidations or combinations of the Common Sharesoccurring, in any such case, prior to the Distribution Date.  With certain exceptions, no adjustment in thePurchase Price will be required until cumulative adjustments require anadjustment of at least 1% in such Purchase Price.  No fractional Preferred Shares will be issued(other than fractions which are integral multiples of one one-hundredth of aPreferred Share, which may, at the election of the Company, be evidenced bydepositary receipts) and in lieu thereof, an adjustment in cash will be madebased on the market price of the Preferred Shares on the last trading day priorto the date of exercise.

 

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TERMSOF PREFERRED SHARES

 

PreferredShares purchasable upon exercise of the Rights will not be redeemable.  Each Preferred Share will be entitled to aminimum preferential quarterly dividend payment of $l per share but will beentitled to an aggregate dividend of 100 times the dividend declared per CommonShare.  In the event of liquidation, theholders of the Preferred Shares will be entitled to a minimum preferentialliquidation payment of $100 per share but will be entitled to an aggregatepayment of 100 times the payment made per Common Share.  Each Preferred Share will have 100 votes,voting together with the Common Shares. Finally, in the event of any merger, consolidation or other transactionin which Common Shares are exchanged, each Preferred Share will be entitled toreceive 100 times the amount received per Common Share.  These rights are protected by customaryanti-dilution provisions.  Because of thenature of the Preferred Shares’ dividend, liquidation and voting rights, thevalue of the one one-hundredth interest in a Preferred Share purchasable uponexercise of each Right should approximate the value of one Common Share.  The Preferred Shares would rank junior to anyother series of the Company’s preferred stock.

 

TRIGGEROF FLIP-IN AND FLIP-OVER RIGHTS

 

In theevent that any person or group of affiliated or associated persons becomes anAcquiring Person, proper provision shall be made so that each holder of aRight, other than Rights beneficially owned by the Acquiring Person or anyaffiliate or associate thereof (which will thereafter be void), will thereafterhave the right to receive upon exercise that number of Common Shares having amarket value of two times the exercise price of the Right.  This right will commence on the date ofpublic announcement that a person has become an Acquiring Person (or theeffective date of a registration statement relating to distribution of therights, if later) and terminate 60 days later (subject to adjustment in theevent exercise of the rights is enjoined).

 

In theevent that the Company is acquired in a merger or other business combinationtransaction or 50% or more of its stock, consolidated assets or earning powerare sold to an Acquiring Person, its affiliates or associates or certain otherpersons in which such persons have an interest, proper provision will be madeso that each such holder of a Right will thereafter have the right to receive,upon the exercise thereof at the then current exercise price of the Right, thatnumber of shares of common stock of the acquiring company which at the time ofsuch transaction will have a market value of two times the exercise price ofthe Right.

 

REDEMPTIONAND EXCHANGE OF RIGHTS

 

At anytime prior to the earliest of (i) the close of business on the day of thefirst public announcement that a person has become an Acquiring Person, or (ii) theFinal Expiration Date, the Board of Directors of the Company may redeem theRights in whole, but not in part, at a price of $0.001 per Right (the “RedemptionPrice”).  In general, the redemption ofthe Rights may be made effective at such time on such basis with suchconditions as the Board of Directors in its sole discretion may establish.  Immediately upon any redemption of theRights, the right to exercise the Rights will terminate and the only right of theholders of Rights will be to receive the Redemption Price.

 

At anytime after any Person becomes an Acquiring Person and prior to the acquisitionby such person or group of 50% or more of the outstanding Common Shares, theBoard of Directors of the Company may exchange the Rights (other than Rightsowned by such person or group which will have become void), in whole or inpart, at an exchange ratio of one Common Share, or, under circumstances setforth in the Rights Agreement, cash, property or other securities of theCompany, including fractions of a Preferred Share (or of a share of a class orseries of the Company’s preferred stock having equivalent designations and thepowers, preferences and rights, and the qualifications, limitations andrestrictions), per Right (with value equal to such Common Shares).

 

AMENDMENTOF RIGHTS

 

Theterms of the Rights generally may be amended by the Board of Directors of theCompany without the consent of the holders of the Rights, except that from andafter such time as the Rights are distributed no such amendment may adverselyaffect the interests of the holders of the Rights (excluding the interest ofany Acquiring Person).

 

ADDITIONALINFORMATION

 

A copyof the Rights Agreement has been filed with the Securities and ExchangeCommission (the “SEC”) as an Exhibit to a Current Report on Form 8-Kdated March 5, 2009 and a copy of the First Amendment to Rights Agreementhas been filed with the SEC as an Exhibit to an Annual Report on Form 10-Kdated December 14, 2009.  A copy ofthe Rights Agreement is available from the Company by writing to: Anita T.Moseley, Evolving Systems, Inc., 9777 Pyramid Court, Suite 100,Englewood, CO 80112.  This summarydescription of the Rights is not intended to be complete and is qualified inits entirety by reference to the Rights Agreement, which is hereby incorporatedherein by reference.

 

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