EXHIBIT 4.6


 


EXECUTION COPY


 


PATENT
SECURITY AGREEMENT


 


PATENT SECURITY AGREEMENT, dated as of this
2nd day of November, 2004, by and between Evolving Systems, Inc., a Delaware
corporation (the “Maker”), and Advent International Corporation, a
Delaware corporation, as collateral agent (in such capacity, “Collateral
Agent”) for the holders of the Notes (defined below) from time to time
(each individually a “Payee” and collectively, the “Payees”).


 


WHEREAS, the Maker has executed and delivered
the following notes in favor of Payees: 
(i) the Senior Secured Note dated of even date herewith in the original
principal amount of $4,000,000 (as the same may be amended, restated, or
modified from time to time, the “Initial Short Term Note”) and (ii) the
Senior Secured Notes dated of even date herewith in the aggregate original
principal amount of $11,950,000 (consisting of a non-escrow note in the
original principal amount of $10,355,000 and an escrow note in the original
principal amount of  $1,595,000) (as the
same may be amended, restated, modified or replaced in substitution from time
to time, the “Initial A Notes”);


 


WHEREAS, the Maker may execute and deliver in
the future the following notes in favor of Payees:  (i) additional Senior Secured Notes to
assignees of the holder of the Initial Short Term Note (as they may be amended,
restated, modified or replaced in substitution from time to time, the “Additional
Short Term Notes” and collectively with the Initial Short Term Note, the “Short
Term Notes”); (ii) additional Senior Secured Notes to assignees of the
holder of the Initial A Notes, including, without limitation, any additional
payment in kind notes as of a later date in the same form (as they may be
amended, restated, modified or replaced in substitution from time to time, the “Additional
A Notes”  and collectively with the
Initial A Notes, the “A Notes”); (iii) additional Senior Secured Notes
in exchange for the A Notes in an aggregate original principal amount to be
determined (as they may be amended, restated, or modified from time to time,
the “B-1 Notes”); and (iv) Senior Secured Convertible Notes in exchange
for the A Notes in an aggregate original principal amount to be determined (as
they may be amended, restated, or modified from time to time, the “Convertible
Notes”, and together with the Short Term Notes, the A Notes and the B-1
Notes, each individually a “Note” and collectively the “Notes”);
and


 


WHEREAS, the Maker, now owns or holds or may
hereafter acquire or hold “Patents” (defined as all of the following:
all United States and foreign patents and patent applications, whether now
existing or hereafter arising or acquired and all reissues, continuations,
continuations-in-part, divisions, re-examinations or extensions thereof)
including, without limitation, the published patent applications and issued
patents listed on Schedule A annexed hereto and the unpublished patent
application listed on Schedule B annexed hereto, as such Schedules may be
amended from time to time by the addition of Patents subsequently filed, issued
or otherwise adopted or acquired; and


 


WHEREAS, pursuant to the terms of the
Security Agreement, dated on or about the date hereof (the “Security
Agreement”), the Maker has granted to the Collateral Agent (for the benefit
of itself and the Payees) a security interest in all right, title and interest
of the Maker in and to all personal property whether now owned, presently
existing or hereafter acquired or created, including, without limitation, all
right, title and interest of the Maker in, to and under all Patents whether now
owned, presently existing or hereafter arising, acquired or created, and all
proceeds thereof or income therefrom, to secure the payment and performance of
the “Obligations” (as defined in the Security Agreement).


 





















 


NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Maker does, as security for the Obligations, hereby grant to the Collateral
Agent (for the benefit of itself and the Payees) a continuing security interest
in all of the Maker’s right, title and interest in, to and under the following
(all of the following items or types of property being collectively referred to
herein as the “Patent Collateral”), whether presently existing or
hereafter arising or acquired:


 


(i)            each Patent, including,
without limitation, each Patent referred to in Schedule A and Schedule B annexed
hereto; and


 


(ii)           all products and proceeds of,
and income from, any of the foregoing, including, without limitation, any claim
by the Maker against third parties for past, present or future infringement or
dilution of any Patent.


 


The Maker agrees to deliver updated copies of
Schedule A and Schedule B to the Collateral Agent at the end of any fiscal
quarter in which the Maker applies for the registration of, registers or
otherwise acquires any Patent not listed on Schedule A or Schedule B hereto,
and to execute and deliver to the Collateral Agent a supplemental Patent
Security Agreement in form and substance reasonably satisfactory to the
Collateral Agent, modified to reflect such subsequent acquisitions and
registrations.  The Maker further agrees, upon the reasonable request of the Collateral
Agent and at the Collateral Agent’s option, to take any and all other actions
as the Collateral Agent may determine to be necessary or useful for the
attachment, perfection and first priority of, and the ability of the Collateral
Agent to enforce, the Collateral Agent’s security interest in any and all of
the Patent Collateral.


 


Upon the occurrence and during the
continuance of an Event of Default (as defined in the Security Agreement), the
Maker agrees that if any person, firm, corporation or other entity shall do or
perform any acts which the Collateral Agent believes constitute an infringement
of any Patent which is the subject of this Patent Security Agreement, or
violate or infringe any right of the Maker or the Payees therein or if any
person, firm, corporation or other entity shall do or perform any acts which
the Collateral Agent believes constitute an unauthorized or unlawful use
thereof, then, the Collateral Agent may and shall have the right to take such
steps and institute such suits or proceedings as the Collateral Agent may deem
advisable or necessary to prevent such acts and conduct and to secure damages
and other relief by reason thereof, and to generally take such steps as may be
advisable or necessary or proper for the full protection of the rights of the
parties.  The Collateral Agent may take
such steps or institute such suits or proceedings in its own name or in the
name of the Maker or in the names of the parties jointly.


 


This security interest is granted in
conjunction with the security interests granted to the Collateral Agent (for
the benefit of itself and the Payees) pursuant to the Security Agreement.  The Maker does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent (for the benefit of
itself and the Payees) with respect to the security interest in the Patent
Collateral made and granted hereby are subject to, and are more fully set forth
in, the Security Agreement, the terms and provisions of which are incorporated
by reference herein as if fully set forth herein.


 


This Patent Security Agreement is made for
collateral purposes only.  Until the
Termination Date (as defined in the Security Agreement), the Collateral Agent
(on behalf of itself and the Payees) shall execute and deliver to the Maker, at
the Maker’s expense, without representation, warranty or recourse, all releases
and reassignments, termination statements and other instruments as may
reasonably be requested in order to terminate the security interest of the
Collateral Agent (for the benefit of itself and the Payees) in the Patent
Collateral, subject to any disposition thereof which may have been made by the
Collateral Agent pursuant to the terms hereof or of the Security Agreement.


 





















 


So long as no Event of Default shall have
occurred and be continuing, and subject to the provisions of this Patent
Security Agreement, the Security Agreement and the Notes, the Maker may use,
license and exploit the Patent Collateral in any lawful manner not otherwise
prohibited hereunder, under the Security Agreement and under the Notes.


 


THIS PATENT SECURITY AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ANY CONFLICT
OF LAWS PRINCIPLES.


 


This Patent Security Agreement and
the security interest created hereby shall terminate upon the Termination Date
and all rights to the Patent Collateral shall revert to the Maker.  Upon such termination, the Collateral Agent
shall at the Maker’s expense (a) deliver to the Maker all Patent Collateral in
the Collateral Agent’s possession or control and all instruments of assignment
executed in connection therewith, free and clear of the liens hereof and (b)
take such other actions and execute and deliver such other documents and
instruments, as may be reasonably requested by the Maker, in order to evidence
the termination of this Patent Security Agreement and to release any lien or
security interest in any Patent Collateral securing the Obligations.


 


In the event of a conflict between this
Patent Security Agreement and the Security Agreement, the provisions of the
Security Agreement will govern.


 


[Signature Page Follows]


 





















 


IN WITNESS WHEREOF, the Maker has caused this
Patent Security Agreement to be duly executed as the date first above written.


 


	
   

  	
  EVOLVING
  SYSTEMS , INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ STEPHEN
  K. GARTSIDE, JR.

  	
   

  
	
   

  	
  Name:
  Stephen K. Gartside, Jr.

  
	
   

  	
  Title:
  President and CEO

  
	
   

  	
   

  
	
  Acknowledged and Agreed:

  	
   

  
	
   

  	
   

  
	
  Advent International Corporation, as
  Collateral Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ JANET L. HENNESSY

  	
   

  	
   

  
	
   

  	
  Name: Janet L. Hennessy

  	
   

  	
   

  
	
   

  	
  Title: Vice President

  	
   

  	
   

  



 





















 


 


	
  STATE OF KINGDOM
  OF  ENGLAND

  	
  )

  	
   

  
	
   

  	
  :

  	
  ss.:

  
	
  COUNTY OF CITY
  OF LONDON

  	
  )

  	
   

  



 


On the 2nd day of November, in the year 2004,
before me personally came Stephen Krone Gartside, Jr., to me known, who, being
by me sworn, did say that s/he is the President of Evolving Systems,
Inc., which corporation is described in, and which corporation executed the
above instrument, and that s/he signed his/her name by order of the Board of
Directors of said corporation.


 


	
   

  	
    /s/
  E.F.F. FOGAN

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
   

  
	
   

  	
  Notary
  Public of London, England

  
	
   

  	
   

  
	
   

  	
  (My
  commission expires at death)

  
	
   

  	
   

  
	
   

  	
   

  
	
  (SEAL)