Capital Stock or other equity
or ownership interests or securities, (ii) apply any of its Property to the
acquisition, redemption or other retirement of any of its Capital Stock or other
equity or ownership interests or securities or of any warrants, options or other
rights to purchase or acquire, exchangeable or exercisable for, or convertible
into, any of the foregoing, (iii) make any payment or prepayment of principal,
premium, if any, interest, or fees on any Subordinated Debt, make any sinking
fund or similar payment with respect to any Subordinated Debt, or redeem,
exchange, purchase, retire, defease or setoff against any Subordinated Debt;
(iv) make any payment or prepayment of any TSE Contingent Obligation, make any
sinking fund or similar payment with respect to any TSE Contingent Obligation,
or redeem, exchange, purchase, retire, defease or setoff against any TSE
Contingent Obligation or (v) pay any management, service, consulting,
non-competition or similar fee or any compensation to any Affiliate of any
Credit Party (the items described in clauses (i), (ii), (iii), (iv) and
(v) above sometimes are referred to herein as "Restricted Payments").
Notwithstanding the foregoing:
(A)
ANY WHOLLY-OWNED SUBSIDIARY OF BORROWER MAY
DECLARE AND PAY DIVIDENDS AND OTHER DISTRIBUTIONS TO BORROWER OR TO ANY OTHER
DOMESTIC WHOLLY-OWNED SUBSIDIARY OF BORROWER THAT IS A CREDIT PARTY AND THE
WHOLLY-OWNED SUBSIDIARIES OF EVOLVING SYSTEMS PARTY TO THE REVOLVING LOAN
AGREEMENT MAY DECLARE AND PAY DIVIDENDS PERMITTED UNDER THE REVOLVING LOAN
AGREEMENT;
(B)
EVOLVING SYSTEMS MAY, UPON TERMINATION,
RESIGNATION OR RETIREMENT OF AN OFFICER OR EMPLOYEE OF BORROWER, REDEEM FOR CASH
ANY EQUITY SECURITIES OR WARRANTS OR OPTIONS TO ACQUIRE ANY EQUITY SECURITIES OF
EVOLVING SYSTEMS OWNED BY SUCH OFFICER OR EMPLOYEE, PROVIDED, THAT ALL OF THE
FOLLOWING CONDITIONS ARE SATISFIED WITH RESPECT TO EACH SUCH DISTRIBUTION:
(I)
NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND
IS CONTINUING OR WOULD ARISE AS A RESULT OF SUCH DISTRIBUTION;
(II)
AFTER GIVING EFFECT TO SUCH DISTRIBUTION, THE
CREDIT PARTIES ARE IN COMPLIANCE ON A PRO FORMA BASIS WITH THE FINANCIAL
COVENANTS REFERENCED IN SECTION 7.1(A) (RECOMPUTED FOR THE MOST RECENT PERIOD
FOR WHICH FINANCIAL STATEMENTS HAVE BEEN DELIVERED IN ACCORDANCE WITH THE TERMS
HEREOF AFTER GIVING EFFECT THERETO AS OF THE FIRST DAY OF SUCH PERIOD); AND
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(III)
THE AGGREGATE AMOUNT OF SUCH DISTRIBUTIONS SHALL NOT
EXCEED $175,000 IN ANY FISCAL YEAR OF BORROWER OR $350,000 DURING THE TERM;
(C)
THE REVOLVING BORROWER MAY MAKE
DISTRIBUTIONS TO INTERMEDIATE HOLDCO SOLELY SUFFICIENT TO PERMIT INTERMEDIATE
HOLDCO TO PAY AS AND WHEN DUE AND PAYABLE FRANCHISE TAXES AND OTHER SIMILAR
ORDINARY COURSE LICENSING EXPENSES AND OTHER GENERAL AND CUSTOMARY HOLDING
COMPANY COSTS AND EXPENSES INCURRED IN THE ORDINARY COURSE OF BUSINESS AND
OTHERWISE RELATING TO ACTIVITIES IN WHICH INTERMEDIATE HOLDCO OTHERWISE IS
PERMITTED TO ENGAGE UNDER THE LOAN DOCUMENTS TO THE EXTENT NO DEFAULT OR EVENT
OF DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD ARISE AS A RESULT OF SUCH
DISTRIBUTIONS;
(D)
BORROWER MAY MAKE PAYMENTS ON THE
SUBORDINATED DEBT EVIDENCED BY THE