Exhibit 10.1(i)


 


GUARANTY


 


November 14, 2005


 


CapitalSource Finance LLC,
as Agent

4445 Willard Avenue, 12th Floor

Chevy Chase, Maryland  20815


 


Re:                               (i) Evolving Systems, Inc., a
Delaware corporation (“ESI”) (ii) Telecom Software Enterprises,
LLC, a Colorado limited liability company (“Telecom”), and (iii) Evolving
Systems Holdings, Inc., a Delaware corporation (“Holdings”, and
together with ESI and Telecom, each, a “Guarantor” and collectively, “Guarantors”)


 


Ladies and Gentlemen:


 


Pursuant to the Revolving Facility
Agreement (as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced from time to time, the “Loan
Agreement”), dated as of November 14, 2005 among CapitalSource Finance
LLC, as Agent (“Agent”), CSE Finance, Inc. and the other Lenders
from time to time a party thereto, Evolving Systems Ltd., a company
incorporated under the laws of England & Wales with registration
number 2325854 (“Borrower”) and Evolving Systems Holdings Ltd., a
company incorporated under the laws of England & Wales with
registration number 5272751 (“U.K. Guarantor,” and, together with
Borrower, individually a “Credit Party” and collectively, the “Credit
Parties”), the Lenders have agreed to make available to Borrower a Revolving
Facility and other advances (collectively, the “Loans”).  As a condition to Lenders entering into the
Loan Agreement and funding the Loans, the Lenders are requiring that the
above-referenced Guarantors execute and deliver this Guaranty (the “Guaranty”)
in favor of Agent and the Lenders.


 


Due to the close business
and financial relationships between the Guarantors and the Credit Parties, in
consideration of the benefits which will accrue to Guarantors and as an
inducement for and in consideration of the Lenders making loans and advances
and providing other financial accommodations to Borrower or any other Credit
Party pursuant to the Loan Agreement and other Loan Documents, Guarantors
hereby agree in favor of Agent and the Lenders as follows:


 


1.                                       Definitions.  As used herein the following
terms shall have the following meanings. Initially capitalized terms used
herein without definitions shall have the meanings given in the Loan Agreement.


 


(a)                                  “Security Agreement” shall have the
meaning set forth in Section 3 hereof.


 


(b)                                 “Obligor” and “Obligors” shall
have the meanings set forth in Section 4(a) hereof.


 


2.                                       Guaranty.


 


(a)                                  Each Guarantor absolutely, unconditionally
and irrevocably guarantees and agrees to be liable for the full and
indefeasible payment and performance when due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise, of the
following (all of


 





















 


which are collectively referred to herein as the “Guaranteed
Obligations”):  (i) all Obligations
of Borrower and/or any other Credit Parties to Agent or any Lender, now or
hereafter existing under the Loan Agreement or any other Loan Document,
including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise, and
whether arising before, during or after the initial or any renewal term of the
Loan Agreement or after the commencement of any case with respect to Borrower
or any other Credit Party under any Debtor Relief Laws (including, without
limitation, the payment of interest and other amounts, which would accrue and
become due but for the commencement of such case, whether or not such amounts
are allowed or allowable in whole or in part in any such case), whether direct
or indirect, absolute or contingent, joint or several, due or not due, primary
or secondary, liquidated or unliquidated, secured or unsecured, and however
acquired by Agent or such Lender and (ii) all costs and expenses
(including, without limitation, reasonable attorneys’ fees and legal expenses)
incurred by Agent or any Lender in connection with the preparation, execution,
delivery, recording, administration, collection, liquidation, enforcement and
defense of Borrower’s and/or any other Credit Party’s Obligations as aforesaid
to Agent or any Lender, the rights of Agent or any Lender in any collateral securing
the Obligations or under this Guaranty, the Security Agreement and all other
Loan Documents or involving claims by or against Agent or any Lender directly
or indirectly arising out of or related to the relationships between Borrower, any
Guarantor or any other Credit Party and Agent or any Lender under this
Agreement, the Loan Agreement, any other Loan Documents or any other document
executed in connection therewith, whether such expenses are incurred before,
during or after the initial or any renewal term of the Loan Agreement and the
other Loan Documents or after the commencement of any case with respect to any
Credit Party under any Debtor Relief Laws; provided, however,
that no Guarantor shall be required to pay or reimburse Agent or any Lender for
any costs or expenses incurred by Agent or such Lender in connection with any
action, claim or proceeding which is determined in a final, nonappealable
judgment by a court of competent jurisdiction binding on such party to have
arisen as a result of the gross negligence or willful misconduct of such party;
provided, further, that each Guarantor shall only be liable under
this Guaranty for the maximum amount of such liability that can be hereby
incurred without rendering this Guaranty, as it relates to such Guarantor,
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer, and not for any greater amount. 
Without limiting the generality of the foregoing, each Guarantor’s
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by Borrower or any other Credit Party to Agent
and Lenders under any Loan Document but for the fact that they are
unenforceable or not allowable due to the existence of any proceeding under any
Debtor Relief Laws involving Borrower or any other Credit Party.


 


(b)                                 This Guaranty is a guaranty of payment and
not of collection.  Each Guarantor agrees
that Agent need not attempt to collect any Guaranteed Obligations from Borrower,
any other Credit Party, any other Guarantor or any other Obligor or to realize
upon any collateral or other security granted in favor of Agent for the
Guaranteed Obligations, but may require Guarantors to make immediate payment of
all of the Guaranteed Obligations to Agent, for the benefit of the Lenders,
when due, whether by maturity, acceleration or otherwise, or at any time
thereafter.  Agent shall apply any
amounts received in respect of the Guaranteed Obligations to the Guaranteed
Obligations in such order as Agent may elect.


 


(c)                                  Payment by Guarantors shall be made in U.S.
dollars to Agent at the office of Agent from time to time on demand as
Guaranteed Obligations become due. 
Guarantors shall make all payments to Agent on the Guaranteed
Obligations without deduction or withholding for or on account of, any setoff,
counterclaim, defense, Taxes, Other Taxes or conditions of any kind.  One or more successive or concurrent actions
may be brought hereon against any Guarantor either in the same action in which Borrower,
any other Credit Party or any other Obligor is sued or in separate
actions.  In the event any claim or
action, or action on any judgment, based on this Guaranty is brought against any
Guarantor, such Guarantor agrees not to deduct or set-off any amounts which are
or may be owed by Agent or any Lender to any Guarantor or make any counterclaim
or seek recoupment in any action.


 


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3.                                       Grant and Perfection of Security Interest.


 


(a)                                  Grant of Security Interest.  To
secure payment and performance of the Guaranteed Obligations, each Guarantor has
granted to Agent, for the ratable benefit of the Lenders, a continuing security
interest in and Lien upon, all such Guarantor’s personal property and assets
referred to therein, whether now owned or hereafter acquired or existing, and
wherever located (together with all other collateral security for the
Guaranteed Obligations at any time granted to or held or acquired by Agent or
any Lender, the “Collateral”) pursuant to that certain Security
Agreement (the “Security Agreement”), dated as of the date hereof, among
Guarantors and Agent.


 


4.                                       Waivers and Consents.


 


(a)                                  With respect to the obligations and
liabilities of the Guarantors under this Guaranty in their capacity as
Guarantors, notice of acceptance of this Guaranty, the making of loans and
advances and providing other financial accommodations to Borrower or any other
Credit Party and presentment, demand, protest, notice of protest, notice of
nonpayment or default and all other notices to which Borrower or Guarantors or
any other Credit Party is entitled are hereby waived by Guarantors.  Each Guarantor also waives notice of and
hereby consents to (i) any amendment, modification, supplement, waiver,
extension, renewal, or restatement of the Loan Agreement and any of the other
Loan Documents, including, without limitation, extensions of time of payment of
or increase or decrease in the amount of any of the Guaranteed Obligations, the
interest rate, fees, other charges, or any collateral, and the guarantee made
herein shall apply to the Loan Agreement and the other Loan Documents and the
Guaranteed Obligations as so amended, modified, supplemented, renewed, restated
or extended, increased or decreased, (ii) the taking, exchange, surrender
and releasing of collateral or guaranties now or at any time held by or
available to Agent or any Lender for the obligations of Borrower, any other
Credit Party or any other party at any time liable on or in respect of the
Guaranteed Obligations or who is the owner of any property which is security
for the Guaranteed Obligations (individually, an “Obligor” and
collectively, the “Obligors”), (iii) the exercise of, or refraining
from the exercise of any rights against Borrower, any other Credit Party or any
other Obligor or any collateral, (iv) the settlement, compromise or
release of, or the waiver of any default with respect to, any of the Guaranteed
Obligations and (v) any financing by Agent or any Lender of Borrower under
the applicable provisions of any Debtor Relief Laws.  Each Guarantor agrees that the amount of the
Guaranteed Obligations shall not be diminished and the liability of any Guarantor
hereunder shall not be otherwise impaired or affected by any of the foregoing.


 


(b)                                 No invalidity, irregularity or
unenforceability of all or any part of the Guaranteed Obligations shall affect,
impair or be a defense to this Guaranty, nor shall any other circumstance which
might otherwise constitute a defense available to or legal or equitable
discharge of Borrower or any other Credit Party in respect of any of the
Guaranteed Obligations, or any Guarantor in respect of this Guaranty (other
than the irrevocable and indefeasible payment in full in cash of the Guaranteed
Obligations), affect, impair or be a defense to this Guaranty.  Without limitation of the foregoing, the
liability of Guarantors hereunder shall not be discharged or impaired in any
respect by reason of any failure by Agent to perfect or continue perfection of
any lien or security interest in any collateral or any delay by Agent in
perfecting any such lien or security interest. 
As to interest, fees and expenses, whether arising before or after the
commencement of any case with respect to Borrower or any other Credit Party
under any Debtor Relief Laws, Guarantors shall be liable therefor, even if
Borrower’s or any other Credit Party’s liability for such amounts does not, or
ceases to, exist by operation of law.  Each
Guarantor acknowledges that neither Agent nor any Lender has made any
representations to Guarantors with respect to Borrower, any other Credit Party,
any other Obligor or otherwise in connection with the execution and delivery by
Guarantors of this Guaranty and no Guarantor is in any respect relying upon
Agent or any Lender or any statements by Agent or any Lender in connection with
this Guaranty.


 


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(c)                                  Each Guarantor hereby irrevocably and
unconditionally waives and relinquishes, until the irrevocable and indefeasible
payment in full in cash of the Guaranteed Obligations, all statutory,
contractual, common law, equitable and all other claims against Borrower or any
other Credit Party, any collateral for the Guaranteed Obligations or other
assets of Borrower, any other Credit Party or any other Obligor, for
subrogation, reimbursement, exoneration, contribution, indemnification, setoff
or other recourse in respect to sums paid or payable to Agent or any Lender by
Guarantors hereunder and each Guarantor hereby further irrevocably and
unconditionally waives and relinquishes, until the irrevocable and indefeasible
payment in full in cash of the Guaranteed Obligations, any and all other
benefits which such Guarantor might otherwise directly or indirectly receive or
be entitled to receive by reason of any amounts paid by or collected or due
from such Guarantor, Borrower, any other Credit Party or any other Obligor upon
the Guaranteed Obligations or realized from their property.  The foregoing waiver of rights is made in
favor of Agent and the Lenders only and shall not be deemed a waiver of such
rights for the benefit of Borrower, any other Guarantor, any other Credit Party
or any other Obligor, or any other creditors of Borrower, Guarantors, any other
Credit Party or any other Obligor.


 


(d)                                 Each Guarantor hereby irrevocably and
unconditionally waives and relinquishes any right to revoke this Guaranty that
Guarantors may now have or hereafter acquire.


 


(e)                                  Without limiting the generality of any other
waiver or other provision set forth in this Guaranty, each Guarantor hereby
irrevocably and unconditionally waives all rights and defenses arising out of
an election of remedies by Agent, even though that election of remedies, such
as a nonjudicial foreclosure with respect to security for a Guaranteed
Obligation, has destroyed such Guarantor’s rights of subrogation and
reimbursement against Borrower or any other Credit Party.


 


(f)                                    Without limiting the generality of any other
waiver or other provision set forth in this Guaranty, each Guarantor waives all
rights and defenses that such Guarantor may have because the Guaranteed
Obligations are secured by real property. 
This means, among other things: (i) Agent may collect from
Guarantor without first foreclosing on any real or personal property collateral
pledged by Borrower or any other Credit Party; and (ii) if Agent
forecloses on any real property collateral pledged by Borrower or any other
Credit Party: (A) the amount of the Guaranteed Obligations may be reduced
only by the price for which that collateral is sold at the foreclosure sale,
even if the collateral is worth more than the sale price and (B) Agent may
collect from Guarantors even if Agent, by foreclosing on the real property
collateral, has destroyed any right Guarantors may have to collect from Borrower
or any other Credit Party.  This is an
unconditional and irrevocable waiver of any rights and defenses Guarantors may
have because the Guaranteed Obligations are secured by real property.


 


(g)                                 Without limiting the generality of any other
waiver or other provision set forth in this Guaranty, each Guarantor hereby
irrevocably and unconditionally waives and relinquishes, to the maximum extent
such waiver or relinquishment is permitted by applicable law, all rights to
interpose any claims, deductions, setoffs or counterclaims of any nature (other
than compulsory counterclaims) in any action or proceeding with respect to this
Guaranty, each Guarantor’s obligations hereunder, the Collateral or any matter
arising from or related to the foregoing.


 


5.                                       Subordination.  Each
Guarantor hereby agrees that, after the occurrence and during the continuance
of a Default or Event of Default, the payment of all amounts due with respect
to any indebtedness now or hereafter owed to any Guarantor by Borrower or any
other Credit Party is hereby subordinated in right of payment to the
indefeasible payment in full to Agent, for the benefit of the Lenders, of the
Guaranteed Obligations and, after the occurrence and during the continuance of
a Default or Event of Default, all such amounts that are received in violation
of this Section 5 are hereby assigned to Agent, for the ratable benefit of
the Lenders, as security for the Guaranteed Obligations.


 


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6.                                       Acceleration. 
Notwithstanding anything to the contrary contained herein or any of the
terms of any of the other Loan Documents, the liability of Guarantors for the
entirety of the Guaranteed Obligations shall mature and become immediately due
and payable, upon the acceleration of the Guaranteed Obligations.


 


7.                                       Account Stated.  The
books and records of Agent showing the account between Agent, the Lenders and Borrower
shall be admissible in evidence in any action or proceeding against or
involving Guarantors as prima facie evidence of the existence and amounts of
the obligations and indebtedness therein recorded and, in the absence of
manifest error, shall be binding on Guarantors.


 


8.                                       Representations and Warranties.  Each
Guarantor hereby represents and warrants to Agent and the Lenders the following
(which shall survive the execution and delivery of this Guaranty):


 


(a)                                  Security Agreement.  Each
of the representations and warranties made by such Guarantor in the Security
Agreement is true and correct.


 


(b)                                 Survival of Warranties; Cumulative.  All
representations and warranties contained in this Guaranty, the Security
Agreement and each of the Loan Documents to which any Guarantor is a party
shall survive the execution and delivery of this Guaranty and shall be
conclusively presumed to have been relied on by Agent and the Lenders
regardless of any investigation made or information possessed by Agent or any
Lender.  The representations and
warranties set forth herein shall be cumulative and in addition to any other
representations or warranties which Guarantor shall now or hereafter give, or
cause to be given, to Agent or any Lender.


 


(c)                                  Each Guarantor has knowledge of the Borrower’s
and each other Credit Party’s financial condition and affairs and has adequate
means to obtain from the Borrower and each other Credit Party on an ongoing
basis information relating thereto and to the Borrower’s and such other Credit
Party’s ability to pay and perform its obligations under the Loan Documents,
and agrees to assume the responsibility for keeping, and to keep, so informed
for so long as this Guaranty is in effect. 
Each Guarantor acknowledges and agrees that the Lenders and the Agent
shall have no obligation to investigate the financial condition or affairs of
any Obligor for the benefit of Guarantors nor to advise Guarantors of any fact
respecting, or any change in, the financial condition or affairs of Borrower,
any other Credit Party or any other Obligor that might become known to the
Agent or any Lender at any time, whether or not the Agent or such Lender knows
or believes or has reason to know or believe that any such fact or change is
unknown to Guarantors, or might (or does) materially increase the risk of any Guarantor
as guarantor, or might (or would) affect the willingness of any Guarantor to
continue as a guarantor of the obligations of Borrower or any other Credit
Party under the Loan Documents.


 


(d)                                 It is in the best interests of Guarantors to
execute this Guaranty inasmuch as Guarantors will derive substantial direct or
indirect benefits from the loans, advances and other financial accommodations
made from time to time to the Borrower or any other Credit Party by the Lenders
pursuant to the Loan Agreement, and each Guarantor agrees that the Lenders and
the Agent are relying on this representation in agreeing to make loans,
advances and other financial accommodations to the Borrower and the other
Credit Parties.


 


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9.                                       Affirmative and Negative Covenants. Each Guarantor hereby reaffirms and
confirms each of the affirmative and negative covenants, as applicable to such Guarantor and with all
applicable grace or cure periods, set forth in the Security Agreement and the Loan
Agreement, all of which are incorporated herein by this reference.


 


10.                                 Events of Default and Remedies.


 


(a)                                  Events of Default.  The
occurrence or existence of any Event of Default under the Loan Agreement is
referred to herein individually as an “Event of Default”, and
collectively as “Events of Default”.


 


(b)                                 Remedies.


 


(i)                                     At any time an Event of Default exists or has
occurred and is continuing, Agent shall have all rights and remedies provided
in this Guaranty, the Security Agreement, the other Loan Documents to which any
Guarantor is a party, the Uniform Commercial Code and other applicable law, all
of which rights and remedies may be exercised without notice to or consent by
Guarantors or any Obligor, except as such notice or consent is expressly
provided for hereunder, in the Loan Agreement or any other Loan Document to
which any Guarantor is a party, or required by applicable law.  All rights, remedies and powers granted to
Agent hereunder, under any of the other Loan Documents or the Security
Agreement to which any Guarantor is a party, the Uniform Commercial Code or
other applicable law, are cumulative, not exclusive and enforceable, in Agent’s
discretion, alternatively, successively, or concurrently on any one or more
occasions, and shall include, without limitation, the right to apply to a court
of equity for an injunction to restrain a breach or threatened breach by any Guarantor
of this Guaranty, the Security Agreement or any of the other Loan Documents to
which any Guarantor is a party.  Agent
may, at any time or times, proceed directly against any Guarantor to collect
the Guaranteed Obligations without prior recourse to any other Obligor or any
of the Collateral.


 


(ii)                                  Without limiting the foregoing, at any time
an Event of Default exists or has occurred and is continuing, in addition to
the rights granted to Agent under the Security Agreement or the Loan Agreement,
Agent may, in its discretion and without limitation, accelerate the payment of
all Guaranteed Obligations and demand immediate payment thereof to Agent (provided
that, upon the occurrence of any Event of Default described in Article VIII(g) or
(h) of the Loan Agreement, all Guaranteed Obligations shall
automatically become immediately due and payable).


 


11.                                 Termination.  This Guaranty is continuing,
unlimited, absolute and unconditional. 
All Guaranteed Obligations shall be conclusively presumed to have been
created in reliance on this Guaranty.  This
Guaranty may not be terminated and shall continue so long as either (a) the
Loan Agreement shall be in effect (whether during its original term or any
renewal, substitution or extension thereof) or (b) any non-contingent
Guaranteed Obligations shall be outstanding.


 


12.                                 Reinstatement.  If
any payment of any Guaranteed Obligations is invalidated, declared to be
fraudulent or preferential, set aside, rescinded, or if after receipt of any
payment of, or proceeds of Collateral applied to the payment of, any of the
Guaranteed Obligations, Agent or any Lender is required to surrender, return or
otherwise restore such payment or proceeds to any Person for any reason, then
the Guaranteed Obligations intended to be satisfied by such payment or proceeds
shall be reinstated and continue and this Guaranty shall continue in full force
and effect as if such payment or proceeds had not been received by Agent or
such Lender.  Guarantors shall be liable
to pay to Agent and the Lenders, and do indemnify and hold Agent and the
Lenders harmless for the amount of any payments or proceeds rescinded, invalidated,
surrendered or returned.  This Section 12
shall remain effective notwithstanding 


 


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any contrary action which may be taken by Agent or any Lender in
reliance upon such payment or proceeds. 
This Section 12 shall survive the termination of this Guaranty.


 


13.                                 Amendments and Waivers. 
Neither this Guaranty nor any provision hereof shall be amended,
modified, waived or discharged orally or by course of conduct, but only by a
written agreement signed by an authorized officer of Agent and otherwise in
accordance with the terms of the Loan Agreement, and as to any amendments or
modifications, or any waivers in favor of Agent or any Lender, as also signed
by an authorized officer of Guarantors. 
Agent shall not by any act, delay, omission or otherwise be deemed to
have expressly or impliedly waived any of its or any Lender’s rights, powers
and/or remedies unless such waiver shall be in writing and signed by an
authorized officer of Agent.  Any such
waiver shall be enforceable only to the extent specifically set forth
therein.  A waiver by Agent of any right,
power and/or remedy on any one occasion shall not be construed as a bar to or
waiver of any such right, power and/or remedy which Agent or any Lender would
otherwise have on any future occasion, whether similar in kind or otherwise.


 


14.                                 Governing Law; Choice of Forum; Service of
Process; Jury Trial Waiver.


 


(a)                                  The validity, interpretation and enforcement
of this Guaranty and any dispute arising out of the relationship between
Guarantors, Agent and the Lenders pursuant to this Guaranty or the other Loan
Documents to which any Guarantor is a party, whether in contract, tort, equity
or otherwise, shall be governed by the internal laws of the State of New York
without giving effect to its choice of law provisions.


 


(b)                                 Guarantor hereby irrevocably consents and
submits to the non-exclusive jurisdiction of the state and federal courts
located in the Montgomery County in the State of Maryland or the Borough of Manhattan
in the State of New York, whichever Agent may elect, and waives any objection
based on venue or forum  non  conveniens with respect to any
action instituted therein arising under this Guaranty or any of the other Loan
Documents to which any Guarantor is a party or in any way connected with or
related or incidental to the dealings of Guarantors, Agent and the Lenders in
respect of this Guaranty or any of the other Loan Documents to which any Guarantor
is a party or the transactions related hereto or thereto, in each case whether
now existing or hereafter arising and whether in contract, tort, equity or
otherwise, and agrees that any dispute arising out of the relationship between
Guarantors, Borrower or any other Credit Party and Agent and the Lenders pursuant
to this Guaranty or the other Loan Documents to which any Guarantor is a party or
the conduct of any such Persons in connection with this Guaranty, the other
Loan Documents to which any Guarantor is a party or otherwise in connection
with the transactions contemplated by the Loan Documents shall be heard only in
the courts described above (except that Agent shall have the right to bring any
action or proceeding against any Guarantor or its property in the courts of any
other jurisdiction having jurisdiction which Agent deems necessary or
appropriate in order to realize on any collateral at any time granted by Borrower,
any other Credit Party or any Guarantor to Agent or to otherwise enforce its or
the Lenders’ rights against any Guarantor or its property).


 


(c)                                  Each Guarantor hereby waives personal service
of any and all process upon it and consents that all such service of process
may be made by certified mail (postage prepaid, return receipt requested)
directed to its address set forth on the signature page hereof and service
so made shall be deemed to be completed five (5) days after the same shall
have been so deposited in the U.S. mails, or, at Agent’s option, by service
upon Guarantors in any other manner provided under the rules of any such
courts.


 


(d)                                 EACH GUARANTOR HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING
UNDER THIS 


 


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GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH SUCH GUARANTOR IS
A PARTY OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF GUARANTORS AND AGENT OR ANY LENDER IN RESPECT OF THIS GUARANTY OR
ANY OF THE OTHER LOAN DOCUMENTS TO WHICH ANY GUARANTOR IS A PARTY OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.  EACH GUARANTOR HEREBY AGREES AND CONSENTS
THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY
COURT TRIAL WITHOUT A JURY AND THAT SUCH GUARANTOR OR AGENT OR ANY LENDER MAY FILE
AN ORIGINAL COUNTERPART OF A COPY OF THIS GUARANTY WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF GUARANTORS AND AGENT AND LENDERS TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.


 


(e)                                  Neither Agent nor any Lender shall have any
liability to Guarantors (whether in tort, contract, equity or otherwise) for
losses suffered by Guarantors in connection with, arising out of, or in any way
related to the transactions or relationships contemplated by this Guaranty, or
any act, omission or event occurring in connection herewith, unless it is
determined by a final and non-appealable judgment or court order binding on
such Person that the losses were the result of acts or omissions constituting gross
negligence or willful misconduct of such Person (as determined pursuant to a
final, non-appealable order of a court of competent jurisdiction).  Except as prohibited by law, each Guarantor
waives any right which it may have to claim or recover in any litigation with
Agent or any Lender any special, exemplary, punitive or consequential damages
or any damages other than, or in addition to, actual damages.  Each Guarantor:  (i) certifies that none of Agent, any
Lender or any of their respective representatives, agents or attorneys acting
for or on behalf of such Person has represented, expressly or otherwise, that
such Person would not, in the event of litigation, seek to enforce any of the
waivers provided for in this Guaranty and (ii) acknowledges that in entering
into this Guaranty and the other Loan Documents, Agent and the Lenders are
relying upon, among other things, the waivers and certifications set forth in
this Section 14 and elsewhere herein and therein.  Except as prohibited by law, (A) each
Guarantor and (B) by acceptance if this Guaranty, Agent and each Lender
agree that no such party shall be liable to any other party with respect to
this Guaranty on any theory of liability for any special, indirect,
consequential or punitive damages.


 


15.                                 Notices.  All notices, requests and
demands hereunder shall be made in accordance with the Loan Agreement to the
addresses of the parties on the signature page hereto.


 


16.                                 Partial Invalidity.  If
any provision of this Guaranty is held to be invalid or unenforceable, such
invalidity or unenforceability shall not invalidate this Guaranty as a whole,
but this Guaranty shall be construed as though it did not contain the
particular provision held to be invalid or unenforceable and the rights and
obligations of the parties shall be construed and enforced only to such extent
as shall be permitted by applicable law.


 


17.                                 Entire Agreement.  This
Guaranty represents the entire agreement and understanding of the parties
concerning the subject matter hereof, and supersedes all other prior
agreements, understandings, negotiations and discussions, representations,
warranties, commitments, proposals, offers and contracts concerning the subject
matter hereof, whether oral or written.


 


18.                                 Successors and Assigns.  This
Guaranty shall be binding upon Guarantors and their respective successors and
assigns and shall inure to the benefit of Agent, each Lender and their
respective successors, and transferees and assigns permitted under the Loan
Agreement.  The liquidation, dissolution or
termination of any Guarantor shall not terminate this Guaranty as to such
entity or as to such Guarantor.


 


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19.                                 Counterparts.  This
Guaranty may be executed by the parties hereto in several counterparts, each of
which shall be deemed an original and all of which shall constitute together
but one and the same agreement.  Delivery
of an executed counterpart of a signature page to this Guaranty by
facsimile shall be effective as delivery of a manually executed counterpart of
this Guaranty.


 


20.                                 Interpretive Provisions.


 


(a)                                  All references to the plural herein shall
also mean the singular and to the singular shall also mean the plural unless
the context otherwise requires.


 


(b)                                 All references to Guarantors, Agent and any
Lender pursuant to the definitions set forth in the recitals hereto, or to any
other Person herein, shall include their respective successors and assigns permitted
under the Loan Agreement (including, without limitation, any receiver, trustee
or custodian for such person or any of its assets or such person in its
capacity as debtor or debtor-in-possession under the United States Bankruptcy
Code).


 


(c)                                  The words “hereof”, “herein”, “hereunder”, “this
Guaranty” and words of similar import when used in this Guaranty shall refer to
this Guaranty as a whole and not any particular provision of this Guaranty and
as this Guaranty now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.


 


(d)                                 The word “including” when used in this
Guaranty shall mean “including, without limitation”.


 


(e)                                  An Event of Default shall exist or continue
or be continuing until such Event of Default is waived in accordance with Section 13
or is waived or cured as provided in the Loan Agreement.


 


(f)                                    In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including”, the words “to” and “until” each mean “to but excluding” and the
word “through” means “to and including”.


 


(g)                                 Unless otherwise expressly provided herein, (i) references
herein to any agreement, document or instrument shall be deemed to include all
subsequent amendments, modifications, supplements, extensions, renewals,
restatements or replacements with respect thereto, but only to the extent the
same are not prohibited by the terms hereof, and (ii) references to any
statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, recodifying, supplementing
or interpreting the statute or regulation.


 


(h)                                 The captions and headings of this Guaranty
are for convenience of reference only and shall not affect the interpretation
of this Guaranty.


 


(i)                                     This Guaranty may use several different
limitations, tests or measurements to regulate the same or similar
matters.  All such limitations, tests and
measurements are cumulative and shall each be performed in accordance with
their terms.


 


(j)                                     This Guaranty is the result of negotiations
among and has been reviewed by counsel to Agent, counsel to each Lender and
counsel to Guarantors, and is the product of all parties.  Accordingly, this Guaranty shall not be
construed against Agent or any Lender merely because of their involvement in
its preparation.


 


9





















 


IN WITNESS WHEREOF,
Guarantors have executed and delivered this Guaranty as of the day and year
first above written.


 


	
   

  	
  EVOLVING SYSTEMS, INC., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian R. Ervine

  	
   

  
	
   

  	
  Name: Brian R. Ervine

  
	
   

  	
  Title: Executive Vice
  President, Chief Financial &

  Administrative Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
  9777 Pyramid Court, Suite 100

  
	
   

  	
  Englewood, Colorado 80112

  
	
   

  	
  Attention:

  	
  Anita T. Moseley, General Counsel

  
	
   

  	
  Telephone:

  	
  (303) 802-2599

  
	
   

  	
  FAX:

  	
  (303) 802-1138

  
	
   

  	
  E-Mail:

  	
  atm@evolving.com

  
	
   

  	
   

  	
   

  
	
   

  	
  TELECOM SOFTWARE
  ENTERPRISES, LLC, a
  Colorado limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian R. Ervine

  	
   

  
	
   

  	
  Name: Brian R. Ervine

  
	
   

  	
  Title: Executive Vice
  President, Chief Financial &

  Administrative Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
  9777 Pyramid Court, Suite 100

  
	
   

  	
  Englewood, Colorado 80112

  
	
   

  	
  Attention:

  	
  Anita T. Moseley, General Counsel

  
	
   

  	
  Telephone:

  	
  (303) 802-2599

  
	
   

  	
  FAX:

  	
  (303) 802-1138

  
	
   

  	
  E-Mail:

  	
  atm@evolving.com

  
	
   

  	
   

  	
   

  
	
   

  	
  EVOLVING SYSTEMS
  HOLDINGS, INC., a

  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian R. Ervine

  	
   

  
	
   

  	
  Name: Brian R. Ervine

  
	
   

  	
  Title: Executive Vice
  President, Chief Financial &

  Administrative Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
  9777 Pyramid Court, Suite 100

  
	
   

  	
  Englewood, Colorado 80112

  
	
   

  	
  Attention:

  	
  Anita T. Moseley, General Counsel

  
	
   

  	
  Telephone:

  	
  (303) 802-2599

  
	
   

  	
  FAX:

  	
  (303) 802-1138

  
	
   

  	
  E-Mail:

  	
  atm@evolving.com

  
					



 


10





















 


Accepted and Agreed this


14 day of November, 2005


 


CAPITALSOURCE FINANCE LLC,


a Delaware limited liability
company,

as Agent


 


 


	
  By:

  	
  /s/ Steven A. Museles

  	
   

  
	
  Name: Steven A. Museles

  
	
  Title: Senior Vice
  President

  



 


Address:


4445 Willard Avenue, 12th
Floor


Chevy Chase, Maryland  20815


Attention:  Corporate Finance Group, Portfolio Manager


Fax: (301) 841-2313


Phone:  (301) 841-2700


 


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