EXHIBIT 4.5


 


EXECUTION COPY


 


PLEDGE AGREEMENT


 


THIS PLEDGE AGREEMENT (this “Pledge Agreement”), dated as of
this 2nd day of November, 2004 by Evolving Systems, Inc., a Delaware
corporation (“Maker”), in favor of 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”).


 


WITNESSETH:


 


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 in
accordance with the  A Notes (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 in accordance with the A Notes
(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, to induce the Payees to incur the indebtedness under the
Notes, the Maker wishes to grant a security interest in favor of the Collateral
Agent for the benefit of the Payees as herein provided.


 


NOW THEREFORE, for good and valuable consideration and intending to be
legally bound hereby, Maker agrees as follows:


 


Section 1.       Definitions;
Inconsistencies with Notes.


 


(a)   All
capitalized terms used herein without definitions shall have the respective
meanings provided therefor in the Notes. 
If there is a conflict between the terms of this Pledge Agreement and
those of the Notes, the terms of the Notes shall control.


 


 





















 


(b)   The
term “Aggregate Principal Indebtedness” means, as of any date of
determination, the sum of the principal amounts outstanding under the Notes in
effect at such time.


 


(c)   The
term “Code” means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.


 


(d)   The
term “Event of Default” means an “Event of Default” under (and as
defined in) the Notes.


 


(e)   The
term “Guaranty Agreement” means the Guaranty Agreement dated of event
date herewith by the guarantors party thereto in favor of Collateral Agent for
the benefit of Payees, as it may be amended, restated or modified from time to
time.


 


(f)    The
term “Loan Documents” means the Notes, this Pledge Agreement, the
Security Agreement and the Guaranty Agreement and any other documents,
agreements and instruments entered into in connection therewith, all as
amended, restated or modified from time to time; provided, however, that the
term “Loan Documents” shall not include the Stock Purchase Agreement or the
Series B Designation (each as defined in the Notes) or the Investor Rights
Agreement (as defined in the Stock Purchase Agreement) or any other document,
agreement or instrument entered into in connection with the documents referred
to in this proviso, all as amended, restated or modified from time to time.


 


(g)   The
term “Notice Date” means the date on which the Collateral Agent first
receives instructions from the Requisite Payees to enforce rights under this
Pledge Agreement.


 


(h)   The
term “Obligations” means any and all of the indebtedness, obligations
and liabilities of any kind and description arising in any way of the Maker to
the Payees, individual or collective, joint or several, direct or indirect,
absolute or contingent, secured or unsecured, due or to become due, contractual
or tortuous, arising by operation of law or otherwise, now existing or
hereafter arising under or in respect of any of the Loan Documents, whether
incurred by the Maker as principal, surety, endorser, guarantor, accommodation
party or otherwise, including without limitation any future advances, whether
obligatory or voluntary under, or refinancings, renewals or extensions of or
substitutions for, any existing or future debt, principal, interest and fees,
late fees and reasonable out-of-pocket expenses (including, reasonable
attorneys’ fees and costs), or that have been or may hereafter be contracted or
incurred and any and all reasonable out-of-pocket costs, expenses and
liabilities which may be made or incurred by any Payee or the Collateral Agent
in any way in connection with any of the obligations of the Maker under the
Loan Documents, and all interest, fees, costs and expenses that may be owing to
Payees after the commencement of bankruptcy proceedings with respect to the
foregoing obligations of the Maker.


 


(i)    The
term “Person” means any individual, partnership, corporation, trust,
joint venture or unincorporated organization, including any government or
agency or political subdivision thereof.


 


(j)    The
term “Requisite Payees” means, on any given date of determination,
Payees holding at least 50.1% of the Aggregate Principal Indebtedness.


 


(k)   The
term “Security Agreement” means the Security Agreement dated of even
date herewith by Maker in favor of Collateral Agent for the benefit of Payees,
as it may be amended, restated or modified from time to time.


 


(l)    The
term “Statement of Event of Default” means a written statement delivered
by the Requisite Payees to the Collateral Agent referring to any Note stating
that an Event of Default has occurred thereunder.


 





















 


(m)  The
term “Termination Date” means the earlier of (i) indefeasible payment in
full of the Obligations and (ii) the date that the aggregate outstanding
balance of all of the Notes is equal to or less than ten percent (10%) of the
original aggregate principal amount of all of the Notes at the date of
issuance.


 


(n)   The
term “TSE” means Telecom Software Enterprises, LLC, a Colorado limited liability
company.


 


(o)   The
term “ TSE Promissory Notes” means the promissory notes issued by TSE to
Peter McGuire and Lisa Marie Maxson pursuant to the Acquisition Agreement dated
October 15, 2004 by and among the Maker, Peter McGuire and Lisa Marie Maxson.


 


(p)   The
term “TSE Securities” has the meaning given to such term in Section 2.


 


Section 2.       Pledge
of Securities.  Maker hereby assigns,
pledges and grants to Collateral Agent for the benefit of the Payees a security
interest in the shares of capital stock and/or other securities of the
Subsidiaries of Maker now owned by or standing in the name of Maker or in which
Maker has a legal or beneficial interest, which are described on Schedule A
attached hereto and made a part hereof (as the same may from time to time be
amended in writing by the parties hereto), (hereinafter referred to as the “Securities,”
which Securities together with all additions thereto, substitutions or
exchanges therefor, proceeds thereof and distributions thereon shall be
referred to collectively herein as the “Collateral”), as collateral
security for the payment and performance of the Obligations.


 


Notwithstanding the foregoing, “Securities”
shall not include any of the following: (a) capital securities of TSE (the
“TSE Securities”) for so long as any obligations remain outstanding
under the TSE Promissory Notes,  provided
that the security interest in such TSE Securities shall automatically attach
hereunder when and after all obligations under the TSE Promissory Notes have
been paid in full; or (b) capital securities of an issuer that is a Foreign
Subsidiary (as defined below) of Maker (other than a Foreign Subsidiary that
(i) is treated as a partnership under the Code or (ii) is not treated as an
entity that is separate from (A) Maker; (B) any Person that is treated as a
partnership under the Code or (C) any “United States person” (as defined in
Section 7701(a)(30) of the Code)), in excess of 65% of the total combined
voting power of all capital securities of each such Foreign Subsidiary.  As used herein, “Foreign Subsidiary” means
any Subsidiary of Maker that is not organized under the laws of the United
States or any state thereof.


 


Section 3.       Representations
and Warranties.  Maker represents and
warrants that:


 


(a)   Maker
has good title to the Securities free and clear of all liens and encumbrances
except the security interest created hereby; and such Securities constitute the
percentages of the issued and outstanding shares of capital stock of each
Subsidiary set forth on Schedule A.


 


(b)   The
Securities are validly issued, fully paid and nonassessable and, except as
disclosed in Schedule B, are not subject to any charter, bylaw, statutory,
contractual or other restrictions governing their issuance, transfer, ownership
or control except as indicated on the stock certificates for the Securities.


 


(c)   Maker
has delivered to Collateral Agent all stock certificates, promissory notes,
bonds, debentures or other instruments or documents representing or evidencing
the Securities, together with corresponding assignment or transfer powers duly
executed in blank by Maker, and this Pledge Agreement and such powers have been
duly and validly executed and are binding and enforceable against Maker in
accordance with their terms except as such enforcement may be limited by
bankruptcy, insolvency or similar laws of general application relating to the
enforcement of creditors’ rights; and the


 





















 


taking possession by Collateral Agent of all
stock certificates, promissory notes, bonds, debentures or other instruments or
documents representing or evidencing the Securities, together with
corresponding assignment or transfer powers, or the filing of financing
statements with the Secretary of State (or equivalent government official) of
the State in which Maker is organized will perfect, and establish the first
priority of, Collateral Agent’s security interest in the Securities securing
payment of the Obligations. Maker covenants and agrees to take all actions and
steps reasonably requested by Collateral Agent within ten (10) days of the date
hereof to perfect a security interest granted hereunder in the securities of
any Foreign Subsidiary, including any filings with Companies House.


 


(d)   Other
than the filing of financing statements that have been authorized by the Maker
in the appropriate filing offices therefor, no authorization, approval, or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required either (i) for the pledge by Maker of the
Securities pursuant to this Pledge Agreement or for the execution, delivery or
performance of this Pledge Agreement by Maker or (ii) for the exercise by
Collateral Agent of the voting or other rights provided for in this Pledge
Agreement or the remedies in respect of the Collateral pursuant to this Pledge
Agreement (except as may be required in connection with such disposition by
laws affecting the offering and sale of securities generally).


 


Section 4.       Covenants.


 


(a)   Except
as permitted or provided otherwise in the Notes and the other Loan Documents,
Maker covenants and agrees not to (i) sell or otherwise dispose of, or grant
any option with respect to, any of the Collateral, or (ii) create or permit to
exist any lien, security interest, or other charge or encumbrance upon or with
respect to any of the Collateral, except the security interest under this
Pledge Agreement.  Maker agrees to pledge
hereunder, immediately upon acquisition (directly or indirectly) thereof, any
and all additional shares of stock or other securities of any Subsidiary.


 


(b)   Maker
covenants and agrees to take all actions (and execute and deliver from time to
time all instruments and documents) necessary or appropriate or reasonably
requested by Collateral Agent to continue the validity, enforceability and perfected
status of the pledge of Securities hereunder.


 


Section 5.       Dividends;
Distributions.  Prior to the
Termination Date, Collateral Agent shall be entitled to receive, as additional
Collateral any and all additional shares of stock or any other property of any
kind distributable on or by reason of the Securities pledged hereunder, whether
in the form of or by way of stock dividends, warrants, partial liquidation,
conversion, prepayments or redemptions (in whole or in part), liquidation, or
otherwise with the exception of (a) normal, regularly declared cash dividends
or cash interest payments as the case may be and (b) other dividends or
distributions permitted or not otherwise restricted or prohibited by the Loan
Documents (collectively, the “Permitted Distributions”).  If any of such property, other than such
Permitted Distributions, shall come into the possession or control of Maker,
Maker shall hold or control and forthwith transfer and deliver the same to
Collateral Agent subject to the provisions hereof.


 


Section 6.       No
Event of Default.  So long as no
Event of Default has occurred and is continuing:


 


(a)   Maker
shall be entitled to receive and retain any Permitted Distributions on the
Securities pledged hereunder.


 


(b)   Maker
may exercise all voting rights, if any, pertaining to the Securities for any
purpose not inconsistent with the terms hereof or of the Obligations or Loan
Documents.  In the event the Securities
have been transferred into the name of Collateral Agent or a nominee or
nominees of Collateral Agent prior to such Event of Default, Collateral Agent
or its nominee will execute and deliver upon request of Maker an appropriate
proxy in order to permit Maker to vote, if applicable, the same.


 





















 


Section 7.       No
Liability.  Other than as required under
§ 9-207 of the Uniform Commercial Code of the State of Delaware, Collateral
Agent shall be under no obligation to take any actions and shall have no
liability (except for gross negligence or willful misconduct) with respect to
the preservation or protection of the pledged Securities or any underlying
interests represented thereby as against any prior or other parties.  In the event Maker requests that Collateral
Agent take or omit to take action(s) with respect to the Collateral not
required by the terms of this Pledge Agreement, Collateral Agent may refuse so
to do with impunity if Maker does not, upon request of Collateral Agent, post
sufficient, creditworthy indemnities with Collateral Agent which, in Collateral
Agent’s sole discretion, are sufficient to hold it harmless from any possible
liability of any kind in connection therewith.


 


Section 8.       Modification
of Obligations.  With respect to both
the Obligations and the Collateral, the Maker assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security
interest in any Collateral, to the addition or release of any party or person
primarily or secondarily liable, to the acceptance of partial payment thereon
and the settlement, compromising or adjusting of any thereof, all in such
manner and at such time or times as the Collateral Agent may deem advisable.


 


Section 9.       Remedies
after Event of Default.  If an Event
of Default shall have occurred and be continuing:


 


(a)   Collateral
Agent may transfer or cause to be transferred any of the Pledged Securities
into its own or a nominee’s or nominees’ names.


 


(b)   Collateral
Agent shall be entitled to receive and apply in payment of the Obligations any
cash dividends, interest or other payment on the Pledged Securities.


 


(c)   Collateral
Agent shall be entitled to exercise in Collateral Agent’s discretion all voting
rights, if any, pertaining thereto and in connection therewith and at the
written request of Collateral Agent, Maker shall execute any appropriate
dividend, payment or brokerage orders or proxies.


 


(d)   Maker
shall take any action necessary or required or reasonably requested by
Collateral Agent, in order to allow Collateral Agent fully to enforce the pledge
of the Securities hereunder and realize thereon to the fullest possible extent,
including but not limited to the filing of any claims with any court,
liquidator or trustee, custodian, receiver or other like person or party.


 


(e)   Collateral
Agent shall have all the rights and remedies granted or available to it
hereunder, under the Uniform Commercial Code as in effect from time to time in
Delaware, under any other statute or the common law, or under any of the Loan
Documents, including the right to sell the pledged Securities or any portion
thereof at one or more public or private sales upon ten (10) days’ written
notice and to bid thereat or purchase any part or all thereof in its own or a
nominee’s or nominees’ names,  free and
clear of any equity of redemption; and to apply the net proceeds of the sale,
after deduction for any expenses of sale, 
including the payment of all Collateral Agent’s reasonable attorneys’
fees in connection with the Obligations and the sale, to the payment of the
Obligations in any manner or order which Collateral Agent in its sole
discretion may elect, without further notice to or consent of Maker and without
regard to any equitable principles of marshalling or other like equitable
doctrines.


 


(f)    Collateral
Agent may increase, in its sole discretion, but shall not be required to do so,
the Obligations by making additional advances or incurring expenses for the
account of Maker deemed appropriate or desirable by Collateral Agent in order
to protect, enhance, preserve or otherwise further the sale or disposition of
the Collateral or any other property it holds as security for the Obligations.


 





















 


Section 10.     Sale
of Securities.  Maker recognizes that
Collateral Agent may be unable to effect a sale to the public of all or part of
the Securities by reason of certain prohibitions or restrictions in the federal
or state securities laws and regulations (herein collectively called the “Securities
Laws”), or the provisions of other federal and state laws, regulations or
rulings, but may be compelled to resort to one or more sales to a restricted
group of purchasers who will be required to agree to acquire the Securities for
their own account, for investment and not with a view to the further
distribution or resale thereof without restriction.  Maker agrees that any sale(s) so made may be
at prices and on other terms less favorable to Maker than if the Securities
were sold to the public, and that Collateral Agent has no obligation to delay
sale of the Securities for period(s) of time necessary to permit the issuer
thereof to register the Securities for sale to the public under any of the
Securities Laws.  Maker agrees that
negotiated sales whether for cash or credit made under the foregoing
circumstances shall not be deemed for that reason not to have been made in a
commercially reasonable manner.  Maker
shall cooperate with Collateral Agent and shall uses its commercially
reasonable efforts to satisfy any requirements under the Securities Laws
applicable to the sale or transfer of the Securities by Collateral Agent.


 


In connection with any sale or disposition of the Collateral,
Collateral Agent is authorized to comply with any limitation or restriction as
it may be advised by its counsel is necessary or desirable in order to avoid
any violation of applicable law or to obtain any required approval of the
purchaser(s) by any governmental regulatory body or officer and it is agreed
that such compliance shall not result in such sale being considered not to have
been made in a commercially reasonable manner nor shall Collateral Agent be
liable or accountable by reason of the fact that the proceeds obtained at such
sale(s) are less than might otherwise have been obtained.


 


Collateral Agent may elect to obtain the advice of any independent
nationally-known investment banking firm, which is a member firm of the New
York Stock Exchange, with respect to the method and manner of sale or other
disposition of any of the Collateral, the best price reasonably obtainable
therefor, the consideration of cash and/or credit terms, or any other details
concerning such sale or disposition. 
Collateral Agent, in its sole discretion, may elect to sell on such
credit terms which it deems commercially reasonable.


 


Section 11.     Appointment
and Authorization of Collateral Agent.


 


(a)   Grant
of Authority.  Each Payee hereby
designates and appoints Advent International Corporation, a Delaware
corporation, to act as the Collateral Agent for such Payee under this Pledge
Agreement, and each Payee hereby authorizes the Collateral Agent, as Collateral
Agent acting on behalf of and for the benefit of such Payee, to execute and
enter into this Pledge Agreement and to take such action under the provisions
of this Pledge Agreement and all other instruments relating thereto and to
exercise such powers and perform such duties as are expressly delegated to the
Collateral Agent by the terms hereof and thereof, together with such other
powers as are reasonably incidental thereto.


 


(b)   Limited
Agency.  Notwithstanding any
provision to the contrary set forth elsewhere in this Pledge Agreement, the
Collateral Agent shall not have any duties or responsibilities in its capacity
as Collateral Agent except those expressly set forth herein or therein, or any
fiduciary relationship with any Payee, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Pledge Agreement or otherwise exist against the Collateral Agent.


 


Section 12.     Collateral
Agency Provisions.


 


(a)   Delegation
of Duties.  The Collateral Agent may
exercise its powers and execute any of its duties under this Pledge Agreement
by or through employees, agents or attorneys


 





















 


-in-fact and shall be entitled
to take to rely on advice of counsel concerning all matters pertaining to such
powers or duties.  The Collateral Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.  The Collateral Agent may utilize the services
of such Persons as the Collateral Agent in its sole discretion may determine
(acting reasonably) are necessary in connection with the exercise of the
Collateral Agent’s powers and execution of its duties under this Pledge
Agreement, and all reasonable out-of-pocket fees and expenses of such Persons shall
be borne by the Maker pursuant to the terms of the Notes and this Pledge
Agreement.  The only duties and
obligations which the Collateral Agent shall have are those set forth in this
Pledge Agreement.


 


(b)   Exculpatory
Provisions.  The Collateral Agent and
each of its officers, directors, employees, agents, attorneys-in-fact and
affiliates shall not be (i) liable for any action lawfully taken or omitted to
be taken by it or such Person under or in connection with this Pledge Agreement
(except for its personal liability for its own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Payees for any
recitals, statements, representations or warranties made by Maker or any
officer thereof contained in this Pledge Agreement or in any certificate,
report, statement or other document referred to or provided for in, or received
by, the Collateral Agent under or in connection with this Pledge Agreement, or
for the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Pledge Agreement or for any failure of the Maker to perform its
obligations thereunder.  The Collateral
Agent shall not be under any obligation to the Payee to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Pledge Agreement.


 


(c)   Reliance
by Collateral Agent.  The Collateral
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Maker), independent accountants and other experts selected by the Collateral
Agent with reasonable care.  The
Collateral Agent shall be fully justified in failing or refusing to take action
under this Pledge Agreement unless it shall first receive such advice or
concurrence of the Requisite Payees as is contemplated by Section 13 hereof and
it shall first be indemnified to its reasonable satisfaction by the Payees
against any and all liability and expense which may be incurred by it by reason
of taking, continuing to take or refraining from taking any such action.  The Collateral Agent, in all cases, shall be
fully protected in acting, or in refraining from acting, under this Pledge
Agreement in accordance with the provisions of Section 13 hereof and any action
taken or failure to act pursuant thereto shall be binding upon all the Payees.


 


(d)   Notice
of Event of Default.  The Collateral
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Event of Default unless it has received from a Payee a Statement of Event of
Default.  The Collateral Agent may rely
on a Statement of Event of Default without further inquiry.  When the Collateral Agent receives a
Statement of Event of Default, the Collateral Agent promptly (but in any event
within three Business Days of receipt of such notice) shall give notice thereof
to the Payees and shall schedule a meeting of all Payees to be held within five
Business Days of the sending of such notice at a mutually convenient time and
place.  At such meeting the Payees shall
consult with one another in an attempt to determine a mutually acceptable
course of conduct regarding the Maker and the collection of the outstanding
Obligations.  The Collateral Agent shall
take such action with respect to such Event of Default as shall be directed by
the Requisite Payees in accordance with Section 13 hereof, provided that unless
and until the Collateral Agent shall have received such directions, the Collateral
Agent may (but shall not be obligated to) take such action under Section 13(b)
hereof with respect to such Event of Default as it shall deem advisable in the
best interests of the Payees.


 


(e)   Non-Reliance
on Collateral Agent and Other Payees. 
Each Payee expressly acknowledges that neither the Collateral Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to such Payee and that no
act by


 





















 


the Collateral Agent hereinafter taken,
including any review of the affairs of the Maker, shall be deemed to constitute
any representation or warranty by the Collateral Agent to any Payee.  Each Payee represents to the Collateral Agent
that it has, independently and without reliance upon the Collateral Agent or
any other Payee, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and credit-worthiness of
the Makers and made its own decision to incur its indebtedness under the
Notes.  Each Payee also represents that
it will, independently and without reliance upon the Collateral Agent or any
other Payee, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking (or directing the Collateral Agent to
take or not take) action under this Pledge Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Maker.  Except for notices, reports and
other documents expressly required to be furnished to the Payees by the
Collateral Agent hereunder, the Collateral Agent shall not have any duty or
responsibility to provide the Payees with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Maker which may come into the possession of the
Collateral Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.


 


(f)    Indemnification.  The Payees agree to indemnify the Collateral
Agent in its capacity as such (to the extent not reimbursed by the Maker and
without limiting the obligation of the Maker to do so), ratably according to
their respective share of the Aggregate Principal Indebtedness from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, incurred by or asserted against the
Collateral Agent in any way relating to or arising out of actions or omissions
of the Collateral Agent specifically required or permitted by this Pledge
Agreement or by written instructions of the Requisite Payees delivered pursuant
thereto, provided that no Payee shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Collateral Agent’s gross negligence or willful misconduct.  The agreements in this subsection shall
survive the payment of the Obligations.


 


(g)   Successor
Collateral Agent.  The Collateral
Agent may resign as Collateral Agent hereunder upon 90 days’ notice to the
Payees and the Maker and may be removed at any time, with or without cause, by
the Requisite Payees upon 90 days’ notice to the Payees, the Maker and the
Collateral Agent.  If at any time the
Collateral Agent shall resign or be removed as Collateral Agent under this
Pledge Agreement, then the Requisite Payees shall appoint a successor agent for
the Payees, whereupon such successor agent shall succeed to the rights, powers
and duties of the Collateral Agent (any successor agent, a “Successor
Collateral Agent”); provided that, so long as no Event of Default has
occurred and is continuing, the consent of the Maker shall be required prior to
the appointment of any such Successor Collateral Agent, which consent shall not
be unreasonably withheld or delayed.  If
the appointment of such successor shall not have become effective (as hereafter
provided) within such ninety-day period after the Collateral Agent’s
resignation or upon removal of the Collateral Agent, then (i) the Collateral
Agent may assign the security interests granted pursuant to the Pledge
Agreement and its duties hereunder and under the Pledge Agreement to the
Payees, as their interests may appear, and in such case all references herein
to “Collateral Agent” shall be deemed to refer to “Requisite Payees” and (ii)
the Payees may petition a court of competent jurisdiction for the appointment
of a successor Collateral Agent and such court shall, after such notice as it
may deem proper, appoint a successor Collateral Agent meeting the
qualifications specified in this Section 12(g). 
The Payees hereby consent to such petition and appointment so long as
such criteria are met.  The term “Collateral
Agent” shall mean the successor agent effective upon its appointment and upon
its acceptance of such appointment, and the former Collateral Agent’s rights,
powers and duties as Collateral Agent shall be terminated, without any other or
further act


 





















 


or deed on the part of such
former Collateral Agent or any of the parties to this Pledge Agreement, and the
Successor Collateral Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent.  The resigning or removed Collateral Agent
agrees that it shall take all actions and execute all documents which may be
reasonably required by the Payees and the Successor Collateral Agent to give
effect to its replacement as the Collateral Agent hereunder and shall be fully
indemnified under the terms of this Pledge Agreement in so doing.  After the Collateral Agent’s resignation or
removal hereunder as Collateral Agent, the provisions of this Section 12 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Collateral Agent under this Pledge Agreement.


 


Section 13.     Actions
by Collateral Agent.


 


(a)   Requesting
Instructions.  The Collateral Agent
may at any time request directions from the Payees as to any course of action
or other matter relating to the performance of its duties under this Pledge
Agreement, and the Payees shall promptly comply with such request.  Directions given to the Collateral Agent by
the Requisite Payees shall be binding on each of the Payees. The Collateral
Agent, in taking action pursuant to this Section 13, shall be entitled to rely
on instructions given by the Requisite Payees.


 


(b)   Emergency
Actions.  If the Collateral Agent has
asked the Payees for instructions with regard to an Event of Default and if the
Payees have not yet responded to such request, the Collateral Agent shall be
authorized to take such actions with regard to such Event of Default which the
Collateral Agent, in good faith, believes to be reasonably required to promote
and protect the interests of the Payees and to maximize both the value of the
Collateral and the present value of the recovery by each of the Payees on the
Obligations; provided, however, that once instructions have been
received from the Requisite Payees which comply with Section 13(f) hereof, the
actions of the Collateral Agent shall be governed thereby and the Collateral
Agent shall not take any further action which would be contrary thereto.


 


(c)   Release
of Collateral.  The Collateral Agent
shall not release any Collateral without the written consent of all the Payees,
except releases of Collateral as expressly permitted by any of the Loan
Documents.


 


(d)   Expenses
of Release and Reimbursement.  The
Maker shall pay all reasonable out-of-pocket costs and expenses of the
Collateral Agent and the Payees incurred in connection with any release of
Collateral, including but not limited to costs and expenses relating to
financing statement filings and terminations and document review and
preparation, including but not limited to reasonable fees and expenses of
counsel for the Collateral Agent relating to any of the foregoing.


 


(e)   Administrative
Actions.  The Collateral Agent shall
have the right to take such actions, or omit to take such actions, hereunder
and under this Pledge Agreement not inconsistent with the instructions of the
Requisite Payees, or the terms hereof, including without limitation actions the
Collateral Agent deems necessary or appropriate to perfect or continue the
perfection of the liens on the Collateral for the benefit of the Payees or to
protect or insure the Collateral.  Except
as provided above and as otherwise provided pursuant to applicable law, the
Collateral Agent shall have no duty as to the collection or protection of the
Collateral or any income thereon, nor as to the preservation of rights against
prior parties, nor as to the preservation of rights pertaining to the
Collateral beyond the safe custody of any Collateral in the Collateral Agent’s
possession.


 


(f)    Exercise
of Remedies.  Except as otherwise
provided in Section 13(b), the Collateral Agent shall only be authorized to
take such actions under this Pledge Agreement and to enforce or prepare to
enforce the remedies available under this Pledge Agreement as are approved in a
written notice


 





















 


by the Requisite Payees; provided, however,
that no notice to release Collateral (except Collateral which is permitted to
be sold or otherwise disposed of pursuant to the terms hereof and the Notes)
shall be effective unless signed by all of the Payees.  In furtherance of the foregoing, the
Collateral Agent agrees to make such demands and give such notices under this
Pledge Agreement as may be reasonably requested by, and to take such action to
enforce this Pledge Agreement and to foreclose upon, collect and dispose of the
Collateral or any portion thereof as may be directed by the Requisite Payees; provided,
however, that (i) the Collateral Agent shall not be required to take any
action that is in its opinion contrary to law or the terms of the Notes and
this Pledge Agreement and (ii) the Collateral Agent shall not be required to
take any action unless, upon its request, it is indemnified in accordance with
the provisions of Section 12(f) hereof.


 


(g)   Application
of Proceeds.  All amounts owing with
respect to the Obligations shall be secured pro
rata by the Collateral without distinction as to whether some
Obligations are then due and payable and other Obligations are not then due and
payable.  Upon any realization upon the
Collateral by the Collateral Agent, the Payees agree that the proceeds thereof
shall be applied:


 


(i)            first,
to the payment of reasonable out-of-pocket expenses incurred by the Collateral
Agent with respect to maintenance and protection of the Collateral and of
reasonable out-of-pocket expenses incurred with respect to the sale of or
realization upon any of the Collateral or the perfection, enforcement or
protection of the rights of the Payees (including reasonable attorneys’ fees
and expenses);


 


(ii)           second,
to all amounts of interest, expenses and fees constituting a part of the
Obligations according to the aggregate amounts thereof owing to each Payee on
the Notice Date in the same priority of the mandatory prepayments of the Notes;


 


(iii)          third,
to all amounts of principal constituting a part of the Obligations according to
the aggregate amounts thereof owing to each Payee on the Notice Date in the
same priority of the mandatory prepayments of the Notes;


 


(iv)          fourth,
to other amounts then due to the Payee under the Notes (including but not
limited to all fees, expenses and premiums) in the same priority of the
mandatory prepayments of the Notes; and


 


(v)           fifth,
the balance, if any, shall be returned to the Maker or such other Persons as
are entitled thereto.


 


Section 14.     Notes.


 


(a)   Except
as expressly provided in Section 13(g) with respect to the application of
proceeds of Collateral, nothing in this Pledge Agreement shall limit or
otherwise impair the ability of any Payee (i) to proceed to enforce the payment
of all or any sums due such Payee under the Notes against the Maker, whether by
acceleration or otherwise, or to enforce any other legal or equitable right
against the Maker thereunder or (ii) to obtain payment (in whole or in part)
from the Maker or any other source for any amount owing under the Notes,
whether or not an Event of Default shall have occurred and be continuing,
subject in each case to the terms and conditions thereof.  Without limiting the generality of the
foregoing, no Payee shall be required to share any payment received from the
Maker or any other source on account of the Obligations with any other Payee,
whether or not an Event of Default shall have occurred and be continuing,
except as expressly provided in Section 13(f) and in the Notes.


 


(b)   Nothing
in this Pledge Agreement shall limit the right of any Payee to amend,
supplement or otherwise modify the terms and conditions of the Notes in any
manner (including without


 





















 


limitation any such amendment, supplement or
modification that would increase any amounts owing by the Maker thereunder),
subject in each case to the terms of the Notes.


 


Section 15.     Retention
and Investment of Proceeds.


 


(a)   Proceeds
which, due to their nature, due to a restraining order or otherwise are not
permitted to be applied as set forth above, or due to the Collateral Agent
determining it to be impractical to divide and apply such proceeds to the
payment of the Obligations, shall be held by the Collateral Agent or, as the
case may be, the Payee receiving such proceeds as agent for the Payees until
such proceeds (A) are converted into cash, (B) are permitted to be applied or
(C) become practical to divide at which time such proceeds shall be applied in
accordance with the terms of this Pledge Agreement.


 


(b)   Pending
disbursement of any amounts held by the Collateral Agent pursuant to this
Pledge Agreement, the Collateral Agent shall (to the extent the Collateral
Agent deems practical) invest such amounts in Cash Equivalents (as defined in
the Notes).


 


Section 16.     Other
Collateral; Duty to Notify; Cooperation; Marshalling.


 


(a)   Additional
Collateral.  The Payees agree that
all of the provisions of this Pledge Agreement shall apply to any and all
properties, assets and rights of the Maker in which the Collateral Agent, at
any time, acquires a security interest or lien pursuant to this Pledge
Agreement.


 


(b)   Notification
of Event of Default.  Upon the
occurrence of any Event of Default, each Payee with knowledge thereof shall
promptly notify the Collateral Agent thereof, such notice to be given in
accordance with Section 12(d) and Section 17 hereof.


 


(c)   Cooperation;
Accounting.  To the extent that the
exercise of the rights, powers and remedies of the Collateral Agent in
accordance with this Pledge Agreement requires that any action be taken by any
Payee, such Payee shall take such action and cooperate with the Collateral
Agent to ensure that the rights, powers and remedies of all Payees are
exercised in full.  Each of the Payees
will, upon the reasonable request of another Payee, from time to time execute
and deliver or cause to be executed and delivered such further instruments and
do and cause to be done such further acts as may be necessary or proper to
carry out more effectively the provisions of this Pledge Agreement.


 


(d)   Marshalling.  The Collateral Agent shall not be required to
marshal any present or future security for (including, without limitation, the
Collateral), or guarantees of, the Obligations or any of them, or to resort to
such security or guaranties in any particular order; and all of each of such
Person’s rights in respect of such security and guaranties shall be cumulative
and in addition to all other rights, however existing or arising.  To the extent that they lawfully may, the
Payees hereby agree that they will not invoke any law relating to the
marshalling of collateral which might cause delay in or impede the enforcement
of the Payees’ rights under this Pledge Agreement or under any other instrument
evidencing any of the Obligations or under which any of the Obligations are
outstanding or by which any of the Obligations is secured or guaranteed, and to
the extent that they lawfully may, the Payees hereby irrevocably waive the
benefits of all such laws.


 


(e)   No
Other Collateral.  No Payee shall
take any security interest in the personal property or liens upon the real
property of the Maker other than security interests and liens which are
governed by the terms of this Pledge Agreement or the Security Agreement and
held in the name of the Collateral Agent for the benefit of all Payees.


 


(f)    Purchase
of Collateral.  Any Payee may
purchase all or any part of the Collateral at any public or private sale of
such Collateral and may make payment on account thereof by using any


 





















 


claim then due and payable to such Payee from
the Persons which granted a security interest in such Collateral as a credit
against the purchase price to the extent, but only to the extent approved by
the Requisite Payees.  Such Payee shall
comply with Article 9 of the UCC of the relevant jurisdiction as a secured
party, notwithstanding that the Collateral Agent holds the security interest
pursuant to this Pledge Agreement.  Each
of the Payees shall cooperate with each other Payee in order to obtain the
maximum sale price reasonably possible upon any foreclosure or other sale of
all or any part of the Collateral. 
Notwithstanding the foregoing, all sales, transfers and other
dispositions of any Collateral shall be accomplished in a commercially
reasonable manner.


 


Section 17.     Notice.  All notices required to be given to the
Collateral Agent, the Maker or the Payees shall be in writing and shall be
deemed to have been sufficiently given for all purposes when presented
personally to such party or sent by certified or registered mail, return
receipt requested, delivered to such party (i) in the case of the Maker or the
Payees , as set forth in the notice section of each Note and (ii) in the case
of the Collateral Agent, to c/o Advent International plc, 123 Buckingham Palace
Road, London SW1W 9SL United Kingdom. 
Such notice shall be deemed to be given when received if delivered
personally or five (5) business days after the date mailed.  Any notice mailed shall be sent by certified
or registered mail.  Any notice of any
change in such addresses shall also be given in the manner set forth
above.  Whenever the giving of notice is
required, the giving of such notice may be waived in writing by the party
entitled to receive such notice.


 


Section 18.     Expenses.  Maker will pay Collateral Agent the amount of
any reasonable out-of-pocket expenses including reasonable counsel fees and
expenses incurred by Collateral Agent in connection with (i) the administration
of this Pledge Agreement, (ii) the custody, preservation, sale or collection or
realization of the Collateral, (iii) the exercise or enforcement of Collateral
Agent’s rights hereunder, or (iv) the failure of Maker to perform hereunder.


 


Section 19.     Successors
and Assigns.  This Pledge Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors and assigns and
shall be governed as to its validity, interpretation and effect by the laws of
the State of Delaware; and any terms used herein which are defined in the
Uniform Commercial Code as enacted in Delaware shall have the meanings therein
set forth.


 


Section 20.     No
Waiver.  If Collateral Agent shall
waive any rights or remedies arising hereunder or under any applicable law,
such waiver shall not be deemed to be a waiver upon the later occurrence or
recurrence of any of said events.  No
delay by Collateral Agent in the exercise of any right or remedy shall under
any circumstances constitute or be deemed to be a waiver, express or implied,
of the same and no course of dealing between the parties hereto shall
constitute a waiver of Collateral Agent’s rights or remedies.


 


Section 21.     Attorney
in Fact.  Upon the occurrence and
during the continuance of an Event of Default, Maker hereby irrevocably
appoints Collateral Agent as its attorney-in-fact to execute, deliver and
record, if appropriate, from time to time any instruments or documents in
connection with the Collateral, in Maker or Collateral Agent’s names.


 


Section 22.     Entire
Agreement.  This Pledge Agreement,
the Security Agreement and the Notes represent the entire understanding of the
parties with respect to the subject matter and no modification or change herein
shall be effective unless contained in a writing signed by the parties hereto.


 


Section 23.     Governing
Law.  THIS PLEDGE AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ANY CONFLICT
OF LAWS PRINCIPLES.


 





















 


Section 24.     Consent
to Jurisdiction and Service of Process. 
Maker irrevocably appoints each and every owner, partner and/or officer
of Maker as its attorney upon whom may be served, by regular or certified mail
at the address set forth in this Pledge Agreement, any notice, process or
pleading in any action or proceeding against it arising out of or in connection
with this Pledge Agreement.  Maker hereby
consents that any action or proceeding against it may be commenced and
maintained in any court within the State of Delaware or in the United States
District Court for the District of Delaware by service of process on any such
owner, partner and/or officer.  Maker
further agrees that such courts of the State of Delaware and the United States
District Court for the District of Delaware shall have jurisdiction with respect
to the subject matter hereof and the person of Maker and all Collateral.


 


Section 25.     Judicial
Proceeding; Waivers.  EACH OF MAKER AND COLLATERAL AGENT
AGREES THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM,
BROUGHT OR INSTITUTED BY ANY PARTY HERETO OR ANY SUCCESSOR OR ASSIGN OF ANY
PARTY, ON OR WITH RESPECT TO THIS PLEDGE AGREEMENT, ANY OF THE OTHER LOAN
DOCUMENTS, THE COLLATERAL OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR
THERETO SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY.  EACH OF MAKER AND COLLATERAL AGENT HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY SUCH SUIT, ACTION OR PROCEEDING. 
FURTHER, EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN
ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES.  MAKER ACKNOWLEDGES AND AGREES
THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS PLEDGE AGREEMENT
AND THAT THE PAYEE WOULD NOT EXTEND CREDIT IF THE WAIVERS SET FORTH IN THIS
SECTION WERE NOT A PART OF THIS PLEDGE AGREEMENT.


 


Section 26.     Termination
of Pledge Agreement.  This Pledge
Agreement and the security interest created hereby shall terminate upon the Termination
Date and all rights to the Collateral shall revert to the Maker.  Upon such termination, the Collateral Agent
shall at the Maker’s expense (a) deliver to the Maker all 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 Pledge Agreement and to release any lien or security
interest in any Collateral securing the Obligations.


 


[Signature
Page Follows]


 





















 


IN WITNESS
WHEREOF, the undersigned has executed this Pledge Agreement as of the date
first set forth above.


 


	
   

  	
  EVOLVING SYSTEMS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ STEPHEN K. GARTSIDE, JR.

  	
   

  
	
   

  	
  Name :Stephen K. Gartside

  
	
   

  	
  Title:   President and Chief
  Financial Officer

  
	
   

  	
   

  
	
  Acknowledged and Agreed:

  	
   

  
	
   

  	
   

  
	
  COLLATERAL
  AGENT:

  	
   

  
	
   

  	
   

  
	
  Advent
  International Corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ JANET L. HENNESSEY

  	
   

  	
   

  
	
  Name: Janet L. Hennessey

  	
   

  
	
  Title: Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  for the purposes of Section 1 and Section 11 through Section 15:

  	
   

  
	
  PAYEES:

  	
   

  
	
   

  	
   

  
	
  Tertio
  Telecoms Group Ltd.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ NIGEL
  CLIFFORD

  	
   

  	
   

  
	
  Name: Nigel
  Clifford

  	
   

  
	
  Title:
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ D K C GIBBON

  	
   

  	
   

  
	
   

  	
  Name: D KC Gibbon

  	
   

  	
   

  
	
   

  	
  Title: Director