BUSINESS, INCLUDING REASONABLE SEVERANCE
COMPENSATION UPON TERMINATION OF EMPLOYMENT, AND (II) REASONABLE DIRECTORS'
FEES, MEETING FEES AND REIMBURSEMENT OF ACTUAL OUT-OF-POCKET EXPENSES INCURRED
IN CONNECTION WITH ATTENDING BOARD OF DIRECTOR MEETINGS;
(F)
EVOLVING SYSTEMS MAY PAY THE TSE CONTINGENT OBLIGATION DUE ON
NOVEMBER 15, 2005 IN AN AMOUNT UP TO $300,000 AND TSE CONTINGENT OBLIGATIONS ON
OR PROMPTLY THEREAFTER THE DAY OF DELIVERY TO AGENT OF QUARTERLY FINANCIAL
STATEMENTS FOR SUCH FISCAL
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QUARTER; PROVIDED, THAT ALL OF THE FOLLOWING CONDITIONS ARE SATISFIED WITH
RESPECT TO EACH SUCH PAYMENT:
(I)
NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR
WOULD ARISE AS A RESULT OF SUCH DISTRIBUTION;
(II)
THE CREDIT PARTIES ARE COMPLIANCE WITH THE FINANCIAL COVENANTS
REFERENCED IN SECTION 7.1(A) AND PROVIDE EVIDENCE TO AGENT TO SUCH EFFECT; AND
(III)
THE AGGREGATE AMOUNT OF SUCH DISTRIBUTIONS SHALL NOT EXCEED
$2,900,000 DURING THE TERM;
(G)
EVOLVING SYSTEMS MAY DECLARE AND MAKE DIVIDEND PAYMENTS OR OTHER
DISTRIBUTIONS PAYABLE SOLELY IN PERMITTED SECURITIES; AND
(H)
THE CREDIT PARTIES AND THEIR SUBSIDIARIES MAY MAKE PAYMENTS
PURSUANT TO AND IN ACCORDANCE WITH THE CROSS LICENSE AGREEMENT AND TRANSFER
PRICING AGREEMENTS.
7.6
TRANSACTIONS WITH AFFILIATES
No Credit Party shall, and no Credit Party shall permit or cause any of its
Subsidiaries to, enter into or consummate any transaction with any Affiliate of
such Person other than:
(A)
AS EXPRESSLY PERMITTED BY, AND SUBJECT TO THE TERMS OF, THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TERM LOAN DOCUMENTS;
(B)
COMPENSATION AND EMPLOYMENT ARRANGEMENTS (INCLUDING PERMITTED
SECURITIES ISSUED AS EQUITY COMPENSATION) WITH EMPLOYEE, OFFICERS AND DIRECTORS
IN THE ORDINARY COURSE OF BUSINESS AND TO THE EXTENT OTHERWISE PERMITTED UNDER
SECTION 7.5(E);
(C)
OTHER TRANSACTIONS PURSUANT TO WRITTEN AGREEMENTS BETWEEN A CREDIT
PARTY OR ITS SUBSIDIARY AND ANY SUCH AFFILIATES THAT ARE ENTERED INTO IN THE
ORDINARY COURSE OF BUSINESS AND PURSUANT TO THE REASONABLE REQUIREMENTS OF THE
BUSINESS OF SUCH CREDIT PARTY; PROVIDED, THAT SUCH TRANSACTIONS AND AGREEMENTS
ARE ON FAIR AND REASONABLE TERMS NOT LESS FAVORABLE TO SUCH PERSON THAN WOULD BE
OBTAINED IN AN ARM'S LENGTH TRANSACTION BETWEEN UNRELATED PARTIES OF EQUAL
BARGAINING POWER;
(D)
TRANSACTIONS BETWEEN OR AMONG (I) EVOLVING SYSTEMS AND ANY OF ITS
WHOLLY OWNED SUBSIDIARIES THAT ARE U.S. SUBSIDIARIES AND CREDIT PARTIES UNDER
AND AS DEFINED IN THE TERM LOAN AGREEMENT AND (II) BETWEEN OR AMONG UK GUARANTOR
AND ITS WHOLLY OWNED SUBSIDIARIES THAT ARE, OR CONCURRENT WITH SUCH TRANSACTION
BECOMES, A CREDIT PARTY;
(E)
THE CROSS LICENSE AGREEMENT AND THE TRANSFER PRICING AGREEMENTS IN
FORM AND SUBSTANCE SATISFACTORY TO THE AGENT IN ITS PERMITTED DISCRETION; AND
(F)
THE AGREEMENTS IDENTIFIED ON SCHEDULE 7.6.
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7.7
TRANSFER OF ASSETS
No Credit Party shall, and no Credit Party shall permit or cause any of its
Subsidiaries to, directly or indirectly, sell, lease, transfer, convey, assign
or otherwise dispose of (whether in a single transaction or a series of
transactions) any Property or any interest therein, or agree to do any of the
foregoing, except that:
(A)